U.S. Equity Markets finished Monday higher after a late rally saw the Dow lead the rally with a gain of 1.58%. Markets started the week on a high note, with investors gearing up for a big week of macroeconomic events. Namely, they are awaiting this afternoon’s U.S. Bureau of Labour Statistics’ Consumer Price Index (“CPI”) data for November and expected interest rate increases from the Federal Reserve, European Central Bank (“ECB”), and Bank of England (“BOE”) this week. The latest New York Fed Survey of Consumer Expectations showed one-year inflation expectations fell, furthering the dovish Fed narrative. Along with the rate-hikes, Retail Sales and December flash Purchasing Managers’ Index data will come out later this week. Within the S&P 500 Index, all 11 sectors finished higher. European Markets closed lower. Euro-Zone markets ended the day lower – despite a quiet macro-news front – as investors anticipate this week’s U.S. CPI reading and key central bank policy decisions. While the consensus is for a 50-basis-point ECB rate hike, analysts are largely predicting a split decision among the BOE’s key voting members. Investors are keen on watching inflation data for Europe as solidified terminal rates from the BOE and ECB are far from decided. Meanwhile in the U.K., the latest housing data showed a further decline in home prices while the latest quarterly GDP data showed a 0.3% decline to October. In Asia, Asian markets ended lower, as macro-growth concerns still plague investors. However, positive momentum continues to build from China’s sudden pivot on its zero-COVID policy. China’s top respiratory disease expert, Zhong Nanshan, downplayed the virus, comparing its mortality rate to the common flu. In Japan, top Bank of Japan board member Hajime Takata said the economy still has yet to meet the conditions necessary to debate pivoting from its easing strategy. Investors are waiting on new manufacturing and production data later this week for an updated assessment of economic activity. Elsewhere, Oil rose 3.37% after another volatile session while Gold fell 1%.
To mark my 2675th issue of TraderNoble Daily Commentary I am offering a special 2-Year Rate of Euro 2750 for my Platinum Service which includes 1 to 4 updated emails throughout the trading day to demonstrate this value, a monthly subscription over the same period would cost 4440 euro in total This offer represents a 38% discount and is open to both new and existing members. If anyone is interested in this offer can you please email me on bryan@tradernoble.com for details
For anyone following my Platinum Service it made 160 points yesterday and is now ahead by 1481 points for December after closing November with a gain of 4789 points, while finishing October with a record gain of 9619 points, making 6660 points in September, after closing August with a gain of 2228 points, having made 2660 points in July, following a gain of 3371 points in June. The Service made 3651 points in May, after making 762 points in April, following a gain of 5883 points in March. The Platinum Service made an impressive 5324 points in February, after ending January with a gain of 3878 points, more than making up for December’s 932 points loss. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points. I have a YouTube Channel which contains recent interviews I have given This can be viewed by clicking HERE Please subscribe to this for new interview notification
Equities
The S&P 500 closed 1.43% higher at a price of 3990
The Dow Jones Industrial Average closed 528 points higher for a 1.58% gain at a price of 34,005.
The NASDAQ 100 closed 1.24% higher at a price of 11,706.
The Stoxx Europe 600 Index closed 0.49% lower.
This morning, the MSCI Asia Pacific Index rose 0.7%.
This morning, the Nikkei closed 0.54% higher at a price of 27,954.
Currencies
The Bloomberg Dollar Spot Index closed 0.3% higher.
The Euro closed 0.1% higher at $1.0541.
The British Pound closed 0.2% higher at 1.2282.
The Japanese Yen fell 0.8% closing at $137.47.
Bonds
Germany’s 10-year yield closed 11 basis points higher at 1.95%.
Britain’s 10-year yield closed 11 basis points higher at 3.20%.
U.S.10 Year Treasury closed 14 basis points higher at 3.60%.
Commodities
West Texas Intermediate crude closed 3.37% higher at $73.17 a barrel.
Gold closed 0.99% lower at $1780.10 an ounce.
This morning on the Economic Front we already had the release of German Final CPI which came in as expected at +10%. Also released was U.K. November Payrolls Change which rose 107K versus +74K expected. At 10.00 am we have the German and Euro-Zone ZEW Survey, followed by the U.S. NFIB Business Optimism Index at 11.00 am. Next, we have the all-important CPI release at 1.30 pm. Finally, we have a 30-Year Treasury Auction at 6.00 pm.
Cash S&P 500
A totally different session to normal as all correlations broke down. Both the Dollar and Bond Markets closed higher, while the VIX ended the day with a gain of 9.5%. This really was a surprise given the fact that American Indexes all closed over 1% higher. I do not ever remember this happening before. Perhaps it was a mass of protection buying ahead of CPI this afternoon, resulting in shorts getting squeezed following Friday’s late sell-programme. There is no doubt we are facing a large gap opening following the CPI release. JP Morgan has a 70% probability of a 2% move in the S&P. The late rally in the S&P was impressive as we have now closed above the Daily, Weekly, Monthly and Quarterly 5 EMAs. Technically, this gives the bulls the advantage here. Thankfully we had no sell levels in any of the American Indexes yesterday as short positions were again obliterated. The S&P having missed my 3912 buy level by 9 Handles is now trading higher at 3995 this morning. I will now raise my buy level to 3942/3960 in small size with a higher 3929 ‘’Closing Stop’’. I still do not want to be short the market at this time.
EUR/USD
Unfortunately, the Euro again just missed yesterday’s 1.0480 buy level by a few points before having a small rally into the New York close. The Euro is overbought and due a correction. For this reason I will not chase the market higher. In fact, ahead of CPI I will now lower my buy level to 1.0370/1.0440 with a lower 1.0295 ‘’Closing Stop’’.
March Dollar Index
No Change. I am still a buyer on any dip lower to 103.40/104.10 with the same 102.95 ‘’Closing Stop’’.
Cash DAX
I am still flat the DAX as the market continues to trade in a narrow range. I still do not like the price action given that we are still overbought following November’s massive move higher. If it was not for the seasonal strong period of the year I would be looking to put on a Macro short position. However, this will have to wait until next month. Ahead of CPI I will not chase the DAX higher, leaving my 14140/14220 buy level unchanged with the same 14075 ‘’Closing Stop’’.
Cash FTSE
No Change. The boring sideways action in the FTSE shows no sign of ending. Today, I will continue to be a seller on any further rally 7570/7640 with a 7705 ‘’Closing Stop’. The FTSE has support from 7340/7410 where I will again be a buyer with a lower 7285 ‘’Closing Stop’’.
Dow Rolling Contract
The Dow never came close to yesterday’s buy range before ending the day with a gain of over 500 points. This rally completely reversed Friday’s late sell-off and I am still flat. Today, will be tricky. A benign CPI near 7% will see the Dow explode higher while a 7.6% print and higher will see a similar reaction to last Thursday’s PPI print. The Dow has support from 33600/33820 where I will be a small buyer with a 33455 tight ‘’Closing Stop’’. I still do not want to be short the Dow at this time.
Cash NASDAQ 100
The NDX which had traded heavy for most of yesterday’s session, finally caught a bid in the last hour of trading. This move higher saw my 11660 T/P level triggered on last Friday’s 11580 long position and I am now flat. It was surprising that the NDX ended the day with a gain of 1% given the large sell-off in Treasury Bonds. Today, I will again be a buyer from 11470/11620 with a tight 11395 ‘’Closing Stop’’.
March BUND
Late yesterday, the Bund sold off, following the Treasury Markets lower, hitting my second buy level at 140.10 for a now 140.50 average long position. I will leave my 139.45 ‘’Closing Stop’’ unchanged while lowering my T/P level to 140.80. If any of the above levels are hit I will be back with a new update for my Platinum Members.
Gold Rolling Contract
My Gold plan worked well with the market trading lower to my 1779 buy level before rallying to my revised 1787 T/P level as emailed to my Platinum Members this morning and I am now flat. Today, I will again be a buyer on any further dip lower to 1759/1774 with a lower 1747 ‘’Closing Stop’’.
Silver Rolling Contract
Silver continues to outperform Gold and I am still flat as the market just missed yesterday’s 23.00 buy level with a 23.09 low print. I will now raise my buy level to 22.50/23.25 with no stop. Remember, Silver has strong resistance from 24.00/25.50 which needs to be broken before I can set higher targets levels.
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