U.S. Equity Markets were mixed Monday in choppy, Superbowl-thinned trade ahead of the January CPI report this afternoon. The major Indices initially rallied in the New York morning with Bitcoin surging towards USD 50,000 and NYCB extending its Friday recovery. However, NYCB shares faded their gains later on, while the S&P 500 and NASDAQ 100 saw a big tech-led pullback in the absence of an obvious catalyst, although there was some attention on a Goldman note warning about extended positioning in the tech sector which may have made a mark in otherwise quiet trade. Note the equal-weight S&P 500 and the small-caps Russell 2000 Indices both held onto gains, particularly the latter. Meanwhile, Treasuries closed slightly firmer, also in very choppy and thin trade, after rejecting a breakout to fresh Year-To-Date peaks in yields ahead of the CPI data. The Dollar was flat with no major moves in the G10 pairs. Oil prices were choppy amid Middle East woes, a choppy Dollar, and Saudi jawboning. There was no tier 1 data in the U.S. but we did see the New York Fed’s latest survey of consumer inflation expectations, which saw the one-year- and five-year-ahead gauges left unchanged, although the three-year ahead saw another move lower. Little new in today’s Fed Speak from Barkin, nor did Bank of England’s Bailey rock the boat in his speech on UK banks, although there was more attention on ECB’s Panetta’s dovish comments from the weekend. The NY Fed’s survey of consumer inflation expectations saw the one-year- and five-year-ahead gauges unchanged, whilst the three-year-ahead expectations saw a decline, however, the uncertainty over all those expectations did increase “slightly”. One-year inflation expectations were unchanged M/M at 3%, which remains the lowest since January 2021 and is nearing the series’ pre-2020 average of 2.8% (inception in 2014); the gauge never rose above 3% between August 2014 and February 2021. Three-year expectations fell to 2.4% from 2.6%, now the lowest since March 2020 and comfortably beneath the pre-2020 series average of 2.9%. Five-year expectations, which were introduced in January 2022, were unchanged at 2.5%, the lowest since March 2023 and in the middle of the series’ range of 2.00-3.00%. Median year-ahead expected price changes declined for all goods tracked in the survey, where the reading for the expected price change of gas is now at the lowest since December 2022, while those for food and rent were the lowest since March 2020 and December 2020, respectively. Elsewhere in the consumer survey, the share of people who believe their financial situation will be better in a year rose to its highest level since March 2020, whilst those who say it is harder to get a loan fell to its lowest level since May 2022. Oil closed 0.6% higher while Gold again closed flat.
To mark my 2950th 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 315 points yesterday and is now ahead by 642 points for February after closing January with a gain of 3675 points. December saw a gain of 1890 points after finishing November with a gain of 1734 points. October ended with a gain of 3184 points, after closing September with a small gain of 228 points, after finishing August with a gain of 1485 points, following a small gain of 285 points gain in July, after closing June with a gain of 2683 points. May closed with a gain of 3205 points. April saw a gain of 3354 points while March closed with a gain of 6168 points. The Platinum Service made a record 9619 points last October. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1900 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 0.09% lower at a price of 5021.
The Dow Jones Industrial Average closed 125 points higher for a 0.33% gain at a price of 38,797.
The NASDAQ 100 closed 0.44% lower at a price of 17,882.
The Stoxx Europe 600 Index closed 0.54% higher.
Yesterday, the MSCI Asia Pacific closed 0.6% higher.
Yesterday, the Nikkei closed 0.09% higher at a price of 36,897.
Currencies
The Bloomberg Dollar Spot Index closed 0.02% higher.
The Euro closed 0.1% lower at $1.0770.
The British Pound closed 0.1% lower at 1.2623.
The Japanese Yen fell 0.1% closing at $149.32.
Bonds
Germany’s 10-year yield closed 5 basis points lower at 2.33%.
Britain’s 10-year yield closed 3 basis points lower at 4.06%.
U.S.10 Year Treasury closed 8 basis points lower 4.08%.
Commodities
West Texas Intermediate crude closed 0.08% higher at $76.90 a barrel.
Gold closed 0.2% lower at $2019.10 an ounce.
The morning on the Economic Front we have U.K. Unemployment and Average Earnings at 7.00 am. Next, we have German and Euro-Zone ZEW Surveys at 10.00 am, followed by U.S. NFIB Small Business Optimism Index at 11.00 am. Finally, we have American CPI at 1.30 pm.
Cash S&P 500
The S&P has closed higher for 14 of the past 15 weeks. Yesterday it looked like we were going to start week 16 in positive territory but a 0.44% fall in the NDX saw the S&P just about close in the red. It is no wonder that last week was positive as bank reserves increased by $75bn for a year-to-date increase of $438bn while the Fed’s balance had zero reduction last week for a year-to-date total of just $50bn. With markets looking for rate cuts at a time when financial conditions are looser now than they were before the Global Financial Crisis of 2008 just makes absolutely no sense to me. There is a market statistician that I follow who made the following scary observation about the S&P: The S&P is within 0.1% of all-time highs yet fewer than 40% of its components are above their 10-day Moving Average, fewer than 60% above their 50-Day MA and fewer than 70% above their 200 Day MA. Since 1928, this has only happened once before, on August 8, 1929. Yes scary 1929. What did markets do with these horrid breadth readings in August of 1929? They rallied another 10% first before it all fell apart. I am not calling for a 1929 repeat crash here, but I just want to warn you that this is not a healthy market especially given the level of Global Debt. After the S&P rallied to my 5040 sell level, we sold off to my 5026 T/P level as emailed to my Platinum Members. Subsequently, I went short the S&P again at the same 5026 price level before covering this position at 5016 after the close and I am now flat. Today, I will again be a seller from 5038/5056 with a higher 5071 ‘’Closing Stop’’. I no longer want to be long the S&P at this time. If this view changes, I will be back with a new update for my Platinum Members.
EUR/USD
No Change: I am still long from last Friday at an average rate of 1.0808. I will leave my 107.15 ‘’Closing Stop’’ unchanged. I will also leave my T/P level unchanged at 1.0835. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dollar Index
The Dollar traded in just a 20 point range yesterday. This has got to be one of the lowest trading ranges in history. Hopefully, following today’s CPI data, two-way price action will resume. The Dollar has strong resistance from 104.60/105.20 where I will again be an aggressive seller with the same 105.85 ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 104.20.
Cash DAX
No Change: I will not chase the DAX higher, leaving my 16700/16790 buy level unchanged with the same 16595 ‘’Closing Stop’’. If triggered, I will have a T/P level at 16850. I still do not want to be short the DAX at this time. If this view changes, I will be back with anew update for my Platinum Members.
Cash FTSE
I am still long the FTSE from last week at an average rate of 7595. Ahead of U.S. CPI, I will now lower my T/P level to 7620. Meanwhile, I will leave my 7515 ‘’Closing Stop’’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
Although the Dow closed higher yesterday, it continues to trade below last week’s all-time high which is no surprise given the chaos in the banking stocks. The Dow has short-term support from 38250/38500. I will continue to be a buyer on any dip in the Dow to this area as I am reluctant to chase the market higher. I will leave my 38055 tight ‘’Closing Stop’’ unchanged. I still do not want to be short the Dow at this time. If this view changes, I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
Frustrating! The NDX missed yesterday’s 18050 sell level by just eight points before falling almost 200 points into the close. I am still flat. I will now lower my sell level to 18000/18150 with a lower 18255 ‘’Closing Stop’’. Given how extended the NDX is trading, I do not want to be long the market at this time. If this view changes, I will be back with a new update for my Platinum Members.
March BUND
No Change: I am still flat the Bund as the market just fell shy of yesterday’s buy range. I will not chase the Bund higher, leaving my 132.20/132.90 buy level unchanged with the same 131.55 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 133.45.
Gold Rolling Contract
My Gold plan worked well as the market sold off to my 2012 buy level before rallying to my revised 2019.50 T/P level as emailed to my Platinum Members and I am now flat. Gold has support from 1993/2008 where I will again be a buyer with a lower 1979 wider ‘’Closing Stop’’.
Silver Rolling Contract
No Change. The boring price action shows no sign of ending unfortunately. I still believe in the bull case for this precious metal. I will continue to hold my 24.40 average long position with no stop or T/P level for now. This morning, Silver is trading higher at a price of 22.75. I will continue to look to add to my existing long position on any further move lower to 21.50. If this view changes, I will be back with a new update for my Platinum Members.
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