Equity Markets rallied on Monday in a relatively quiet news flow session (from a macro perspective) with the NASDAQ leading the charge ahead of the Nvidia (NVDA) GTC event after the close. However, both the Index and Nvidia closed well off best levels as participants positioned into the event. There was additional bullish momentum behind big tech stocks after Bloomberg reported Apple (AAPL) is to integrate Google’s (GOOGL) Gemini AI app. Tesla (TSLA) and EV names also did well amid President Biden’s latest environmental endeavour. The Russell 2000 saw notable weakness, however, while the equal weighted S&P was slightly lower. There was no major US data, although we did get a surprise rise in the NAHB Housing Market Index. Treasuries continued to tumble with little catalysts ahead of the Bank of Japan overnight and FOMC tomorrow evening, and on the former, note a new Nikkei sources article that the BoJ set to end yield curve control, ETF purchases, and end NIRP on Tuesday. That Nikkei article saw some fleeting strength in the Yen in an otherwise muted session for FX volatility. Even the solid Chinese Industrial Production and Retail Sales figures could not sustain any strength in the Yuan, nor the antipodeans, albeit it did support oil’s continued breakout higher. On Friday we had the New York Fed Manufacturing survey that saw a notable decline in March, falling to -20.9 from -2.9, deeper than the -7.0 forecast – it is worth remembering this data can be extremely volatile. The downside was led by a decline in New Orders (-17.2 from -6.3), while employment also eased deeper into contractionary territory (-7.1 from -0.2). The price paid component also eased but remains expansionary at 28.7, down from February’s 33.0. Looking ahead, the six-month business conditions index was broadly unchanged at 21.6 (prev. 21.5). The report summarises “Demand softened as new orders declined significantly, and shipments were lower. Unfilled orders continued to shrink, and delivery times were little changed. Inventories declined. Labor market indicators weakened, as employment and hours worked both decreased. The pace of input price increases moderated somewhat, while the pace of selling price increases held steady. Firms expect conditions to improve over the next six months, though optimism remained subdued.” Last Thursday, we had the release of U.S. Producer Prices. PPI came in much hotter than expected in February, adding fuel to the fire after the hot CPI figures earlier in the week. Headline Producer Prices rose 0.6% vs January, well above the expected and prior 0.3% pace, driven by energy price increases (particularly gasoline) as well as food price inflation accelerating, with the headline Y/Y rising 1.6%, also well above the expected 1.1% and the prior 1.0%, now at the highest rate since September 2023. The core figure (ex-food and energy) rose 0.3% M/M, which was down from January’s 0.5% increase but above the expected +0.2%, while the Y/Y rate was unchanged at +2.0% despite expectations for a fall to +1.9%. Transportation & warehouse services, alongside airline passenger services, were notable upward drivers for the core figures. As far as Core PCE is concerned (which is scheduled for release on March 29th), after the CPI and PPI figures (we get the import price data on Friday), the growing consensus appears to be for a 0.3% M/M print, which would mark a slowing from last month’s +0.4% print. Analysts note the inputs from PPI into Core PCE were mixed with a reversal back lower from January’s spike in inpatient care services and investment-related financial services (which were key drivers for the increase in Jan PCE), although the contribution from insurance prices picked up in February, as did health and medical care insurance, which fell in January. Elsewhere, Oil closed 2.18% higher while a stronger Dollar saw Gold close lower by 0.7%. Overnight, The BoJ will announce the outcome of its crucial two-day policy meeting in which participants will be eyeing whether the central bank exits its negative interest rate policy as money markets are pricing a near coin flip between the central bank maintaining its rate at the current level of -0.10% or if it hikes this by 10bps to 0%. Furthermore, a recent Reuters poll showed that 35% of economists expect the BoJ to end negative rates in March and 62% think April, while participants will also await the central bank’s decision regarding its QQE with YCC and if there are any adjustments to its other measures such as ETF purchases with 31% of economists expecting the BoJ to end YCC in March and 62% think April.
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 205 points yesterday and is now ahead by 1817 points for March. February closed with a gain of 1606 points, 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 0.63% higher at a price of 519.
The Dow Jones Industrial Average closed 75 points higher for a 0.20% gain at a price of 38,790.
The NASDAQ 100 closed 0.99% higher at a price of 17,985.
The Stoxx Europe 600 Index closed 0.17% lower.
Yesterday, the MSCI Asia Pacific closed 0.8% higher.
Yesterday, the Nikkei closed 2.67% higher at a price of 39,740.
Currencies
The Bloomberg Dollar Spot Index closed 0.18% higher.
The Euro closed 0.6% lower at $1.0868.
The British Pound closed 0.4% lower at 1.2725.
The Japanese Yen fell 0.8% closing at $149.03.
Bonds
Germany’s 10-year yield closed 9 basis points higher at 2.46%.
Britain’s 10-year yield closed 7 basis points higher at 4.19%.
U.S.10 Year Treasury closed 14 basis points higher at 4.34%.
Commodities
West Texas Intermediate crude closed 2.18% higher at $82.81 a barrel.
Gold closed 0.7% lower at $2160.10 an ounce.
This morning on the Economic Front we have the Bank of Japan Rate Announcement – no time given as I go to press. Next, we have the German and Euro-Zone ZEW Surveys at 10.00 am, followed by U.S. Housing Starts and Building Permits at 12.30 pm. Finally, we have the Long-Term TIC Flows at 8.00 pm.
Cash S&P 500
I mentioned last Thursday that last week’s Investors Intelligence Advisors’ Survey shows a near capitulation to the Bull Market. The percentage of bulls jumped to 60.9, which is the highest reading since the Summer of 2021. On top of this the Advisor and Investor Model (AIM Index), which is the aggregate measure of the popular advisor and investor surveys offers further evidence of an off the chart optimism on the part of these two cohorts. History shows that when the AIM Index approaches a reading of 1.00, advisors and investors are dangerously one-sided in their expectation of higher stock prices. Last July, when the AIM Model hit a reading of 0.99, the Dow fell 10% withing a few days of this reading. We now have five readings over 0.94 since the beginning of February to the middle of March. Five readings of this magnitude are unheard of in the 53-year history of SentimenTrader’s AIM data. The only issue is the timing of when this market finally rolls over. With the Weekly 14 Day RSI at 74 I just cannot justify long positions in the S&P at current prices. This rally has gone on for so long without even a 2% pullback with everything so extended it is crying out for a correction. Given the positive April seasonality in a Presidential Election year, I am not looking for a major sell-off. Even a move lower to a number of support levels that come in between 4900/4935 will see me be an aggressive buyer on a first test. I am still flat the S&P. I will now lower my sell level to 5180/5196 with a lower 5211 ‘’Closing Stop’’. The S&P has short-term support from 5042/5058 where I will continue to be a strong buyer with the same 5025 ‘’Closing Stop’’. If this view changes, I will be back with a new update for my Platinum Members.
EUR/USD
Apart from a small move in the Yen, FX volatility has been non-existent over the past few days. However, the Euro did have a small 50-point sell-off to my 1.0875 buy level. I am still long with a now lower 1.0910 T/P level. I will continue to look to add to this position at 1.0805 while leaving my 1.0745 ‘’Closing Stop’’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dollar Index
The Dollar rallied to my 103.40 sell level. I am still short with a now higher 103.05 T/P level. I will add to this position on any further move higher to 103.90 while leaving my 104.45 ‘’Closing Stop’’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash DAX
The DAX has traded in a narrow 120-point range since Thursday’s commentary, and I am still flat. Ahead of tomorrow’s FOMC Meeting, I will now lower my sell level to 18080/18180 while leaving my wider 18305 ‘’Closing Stop’’ unchanged. If I am If I am taken short, I will have a T/P level at 17990.
Cash FTSE
The FTSE continues to trade in narrow ranges Daily. Given how much the FTSE has underperformed, I am still happy to be a buyer of the market on dips. This view will hold as long as long as the market does not close below 7570. On Thursday the FTSE traded lower to my 7720-buy level before rallying on Friday morning to my revised 7750 T/P level and I am still flat. Today, I will be a buyer from 7610/7680 with a lower 7550 ‘’Closing Stop’’. I still do not want to be short the FTSE at this time. If this view changes, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
Frustratingly, the Dow missed Thursday’s 39240 initial sell level by just 10 points before falling 500 points and I am still flat. I will now lower my sell level to 39050/39300 with a lower 39505 ‘’Closing Stop’’. I still do not want to be long the Dow at this time. If I am taken short, I will have a T/P level at 38860.
Cash NASDAQ 100
My NDX plan worked well as the market sold off to my revised 17920 buy level as emailed to my Platinum Members, before the NDX rallied to my 18010 T/P level. Subsequently, I emailed my Platinum Members to buy the NDX again on Friday at a price of 17840 before rallying to my conservative 17925 T/P level and I am now flat. Post last nights close was all about the conference call with the CEO of Nvidia. The NDX has support below from 17650/17800 where I will again be a buyer with a lower and wider 17495 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 17910. I no longer want to be short the NDX at this time.
March BUND
Despite Treasury yields soaring 16 basis points since Thursday, the sell-off in the Bund has been contained so far. The Bund did hit my buy range and I am now long at 131.94 with a now lower 132.45 T/P level. I will continue to add to this position on any further move lower to 131.20 while leaving my 130.55 ‘’Closing Stop’’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Gold Rolling Contract
Gold just missed my initial 2142 buy level before having a small rally into the New York close. Ahead of this week’s key data on both sides of the Atlantic, I will now lower my Gold buy level to 2120/2136 with a lower 2105 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 2147.
Silver Rolling Contract
No Change. Despite Gold trading lower since Thursday, Silver has eked out a small gain. I am extremely bullish of Silver over the medium term as I believe that Silver is one of the cheapest asset classes in the market. I still retain 50% of the original 100% stake that I put into my pension last year. Today, I will continue to be a buyer on any dip lower to 23.80/24.60 with no ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 25.70.
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