With U.S. Markets closed for the MLK Holiday, it is no surprise that we have seen little or no price action across most asset classes since my Daily Commentary went to post yesterday morning. Normal service should resume when the Cash Equity Markets open at 2.30 pm. Last Friday I discussed the important distinctions between flexible and sticky inflation, noting that sticky inflation was the key to unlocking a Fed pivot in policy direction. Consequently, the U.S. Bureau of Labour Statistics released its Consumer Price Index for December on Friday afternoon. The reading showed that sticky inflation has not yet reached its peak. According to the Federal Reserve Bank of Atlanta, it rose 6.7% year over year (“YOY”). This is up from 6.6% YOY in November. But while the annual figures still show slight growth, the three-month annualised sticky CPI has now fallen to 5.5%, down from 6.5% in November and 7.2% in October. This means that while sticky inflation is still growing, it is losing momentum quickly. Currently, we appear to be closing in on peak sticky CPI, while already having passed the peak for flexible and headline CPI. This is important because historically in times of high inflation, the greatest returns occur not after flexible inflation has peaked, but after sticky inflation has peaked. The difference in market performance from these two starting points is most notable within the first year of each. Within the first three months following peak sticky CPI, returns are nearly equivalent to the long-term average annual returns of the market. Meanwhile, the 12-month return doubles that figure. The bottom line is that investors still have more than enough time to capture value through investments this year. Now I am not saying that 2023 won’t have volatility, because it will. But the point is, opportunities are ripe for the taking this year following a tumultuous 2022 for investors.
To mark my 2700th 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 was flat yesterday and is still ahead by 2320 points for January, after finishing December with a gain of 2054 points. November ended 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 0.40% higher at a price of 3999
The Dow Jones Industrial Average closed 112 points higher for a 0.33% gain at a price of 34,302.
The NASDAQ 100 closed 0.71% higher at a price of 11,541.
The Stoxx Europe 600 Index closed 0.41% higher.
This morning, the MSCI Asia Pacific fell 0.6%.
This morning, the Nikkei closed 1.14% lower at a price of 25,822.
Currencies
The Bloomberg Dollar Spot Index closed 0.3% lower.
The Euro closed 0.1% lower at $1.0816.
The British Pound closed 0.3% lower at 1.2188.
The Japanese Yen fell 0.5% closing at $128.54.
Bonds
Germany’s 10-year yield closed 3 basis points higher at 2.17%.
Britain’s 10-year yield closed 3 basis points higher at 3.40%.
U.S.10 Year Treasury closed 4 basis points higher at 3.50%.
Commodities
West Texas Intermediate crude closed 1.70% higher at $79.77 a barrel.
Gold closed 1.25% higher at $1917.10 an ounce.
This morning on the economic front we have German CPI and U.K. Average Earnings at 7.00 am. This is followed by the German and Euro-Zone ZEW Surveys at 10.00 am. Finally, we have the New York Empire State Manufacturing Index and Canadian CPI at 1.30 pm.
Cash S&P 500
No Change. Friday, saw similar price action to Thursday as the initial dip got bought as bears were again slammed after a further epic crash in the VIX to 12 month lows saw the S&P make a new recovery high above 4000. The VIX is now sitting close to an important trendline at 17.50. A break and close below here indicates a further melt-up in the S&P back to the post December CPI high above 4100. However, if the VIX finds strong support at 17.50 then the VIX could rip higher leading to an aggressive sell-off in the S&P. This latter scenario is favoured by me at this stage given the fact that the McClellan Oscillator again closed at +300. This has been a great start to the year for my Members as buying the dip has worked well each trading session so far this year. Today, I will continue to be a seller on any further rally to 4010/4028 with the same 4041 ‘’Closing Stop’’. My only interest in buying the S&P is on a further dip lower to 3935/3953 with a 3919 ‘’Closing Stop’’.
EUR/USD
No Change. I am still flat as the Euro took a rest from last week’s aggressive move higher. I will not chase the Euro higher, leaving my 1.0680/1.0750 buy level unchanged with the same 1.0615 ‘’Closing Stop’’.
March Dollar Index
I am still long from last Thursday at an average rate of 102.10. I will leave my 101.55 ‘’Closing Stop’’ unchanged while lowering my T/P level to 102.60. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash DAX
The DAX traded in a narrow range yesterday and I am still flat. Given how overbought the DAX is trading I will continue to look to sell rallies. The DAX has resistance from 15210/15300 where I will again be a seller with a 15370 tight ‘’Closing Stop’’.
Cash FTSE
The FTSE again closed over 7850 and I am still flat. Today, I will continue to be a buyer on any dip lower to 7700/7770 with the same 7635 ‘’Closing Stop’’.
Dow Rolling Contract
No Change. With the MO closing at +300 I have no interest in buying the Dow. We have further resistance from 34420/34670 where I will again be a seller with a 34825 higher ‘’Closing Stop’’.
Cash NASDAQ 100
Frustrating! The NDX missed yesterday’s 11410 initial buy level by 30 points before rallying to sit at 11530 as I go to press. With the MO closing at +300 on Friday I am reluctant to chase the NDX higher from here. As a result, I will leave my 11260/11410 buy level unchanged with the same 11045 ‘’Closing Stop’’.
March BUND
No Change. I am still flat and will continue to be a buyer on any dip lower 136.20.136.90 with the same 135.45 ‘’Closing Stop’’.
Gold Rolling Contract
No Change. Gold consolidated last week’s move higher closing last night again above $1900 at a price of 1915. I am still flat and as mentioned yesterday I am reluctant to buy Gold at these levels. Today, I will continue to be a buyer on any dip lower to 1970/1885 with a tight 1845 ‘’Closing Stop’’.
Silver Rolling Contract
Yesterday, Silver traded lower to my 24.00 buy level. I am still long. I will add to this position at 23.30 with the same no stop policy. I will now lower my T/P level on this position to 24.60. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
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