U.S. Equity Markets resumed last week’s sell-off, finishing yesterday’s session lower, led by the 1.23% decline in the Dow. The heavy selling across the board saw the VIX close higher by just 6%, reversing the earlier 25% spike. The Omicron variant continues to dominate headlines. U.S. COVID-19 cases hit the highest daily level in four months, with several states marking all-time highs in cases. Naturally, the concern here is that consumers will pull back on spending – or even worse, the government reinstitutes lockdowns – which would be a huge headwind to both U.S. and global growth. These trends, plus President Joe Biden’s upcoming announcement on the pandemic, caused a risk-off sentiment among investors. So they sold out of risk assets like stocks. Fiscal spending was also in focus, after Senator Joe Manchin (D-WV) said he could not support the White House’s current budget proposal. This ended the chances of President Biden’s Build Back Better plan being passed before 2022. And it forced Goldman Sachs to lower its GDP forecasts on the lack of fiscal stimulus. Within the S&P 500, nine of the 11 sectors finished lower. European Markets closed lower. German Health Minister Karl Lauterbach said he did not expect the government to impose a hard lockdown before or after the holidays. But Italy’s government was said to consider new COVID-19 restrictions, including a vaccination passport to access public venues and mandatory mask usage, in an attempt to curb infections. European Central Bank Governing Council member Robert Holzmann said it will adjust monetary policy if upside risk to the inflation forecast materialises. In Asia, China’s one-year loan prime rate was lowered from 3.85% in November to 3.8% in December, as the government in Beijing said it will do more to support small-sized businesses. Bank of Japan Governor Haruhiko Kuroda told parliament it is not time to consider monetary policy normalisation as inflation remains persistently low. China’s government was said to be considering a regulatory crackdown on online brokerages that allow mainland clients to invest in offshore markets. Taiwan and Indian commenced trade-agreement talks, which would include incentives for the construction of a semiconductor-manufacturing plant in India. Elsewhere, Oil closed 3.71% lower at 68.23, as the Omicron variant weighed on global growth optimism, while Gold dropped below $1800 with a loss of 0.85%.
To mark my 2450th 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 417 points yesterday, and is now down by 148 points for December, having made 2466 points in November, 1028 points in October, 2866 points in September, 1543 points in August, and 996 points in July. The Platinum Service made 1366 points in June, 1439 points in May, 1244 points in April, having ended March with an impressive gain of 3769 points, 3286 points in February, 2077 points in January, and 2273 points last December. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points
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Equities
The S&P 500 closed 1.14% lower at a price of 4568.
The Dow Jones Industrial Average closed 423 points lower for a 1.23% loss at a price of 34,932.
The NASDAQ 100 closed 1.10% lower at a price of 15,627.
The Stoxx Europe 600 Index closed 1.1% lower.
This morning, the MSCI Asia Pacific Index rose 0.9%.
This morning, the Nikkei closed 2.08% higher at a price of 28,517.
Currencies
The Bloomberg Dollar Spot Index closed 0.3% lower.
The Euro closed 0.2% higher at $1.1274.
The British Pound closed 0.1% lower at 1.3198.
The Japanese Yen fell 0.2%, closing at $113.74.
Bonds
Germany’s 10-year yield closed two basis points higher at -0.36%.
Britain’s 10-year yield closed one basis points higher at 0.78%.
US 10 Year Treasury closed four basis points higher at 1.43%.
Commodities
West Texas Intermediate crude closed 3.71% lower at $68.23 a barrel.
Gold closed 0.85% lower at $1,788.10 an ounce.
This morning on the Economic Front we already had the release of German GFK Consumer Confidence Survey, which collapsed coming in at -6.8 versus -2.7 expected. At 9.00 am we have U.K. CPI and this is followed by U.S. Current Account at 1.30 pm. Finally, we have Euro-Zone Consumer Confidence at 3.00 pm.
Cash S&P 500
The S&P’s Gap opening to the downside, was the second lower gap in a row, creates a bearish island reversal pattern, similar to the Dow. Yesterday’s selling pressure was stronger than Friday’s selling pressure. Breadth was negative 1.44-to-1 on Friday and negative 4.33-to-1 yesterday. A full 83.6% of the S&P stocks comprising the S&P 500 Index closed lower on the day. This was a broad based decline that is trying to be reversed somewhat this morning with the Futures Contract trading 36 Handles higher. Yesterday, my S&P plan worked very well as the market traded lower to my 4544.50 buy level before rallying to my 4559 T/p level. Subsequently, I emailed my Platinum Members to buy the S&P again at 4542 before we rallied to my too tight 4550 T/P level and I am now flat. The S&P was trading at 4545 at 8.30 pm before a late rally saw a spike into the close which as I mentioned above has carried overnight, trading at 4605. We have resistance from 4612/4632 where I will be a small seller with a 4649 stop. The S&P has support from 4550/4565 where I will be a buyer with a 4529 wider stop. If I am taken short I will have a T/P level at 4599. If I am taken long I will have a T/P level at 4579.
EUR/USD
The Euro rallied to my 1.1297 revised T/P level on Friday’s 1.1270 long position and I am now flat. The Euro has support from 1.1190/1.1250 where I will again be a buyer with a 1.1145 stop. I will not chase the Euro lower, leaving my 1.1405/1.1455 sell level unchanged with the same 1.1501 stop.
March Dollar Index
No Change. I am still short at a price of 96.50. I will add to this position at 97.00 with a now higher 97.31 stop. I will also raise my T/P level to 96.30 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
Cash DAX
The DAX just missed yesterday’s 15060 buy level by 20 points before rallying to sit higher at 15430 this morning. The DAX has resistance from 15520/15600 where I will be a small seller with a 15675 stop. The DAX has support from 15000/15080 where I will be a strong buyer with a 14935 stop.
Cash FTSE
Just before the New York close, the FTSE rallied to my 7205 T/P level on my 7190 average long position and I am now flat. This morning, the FTSE is trading higher at 7275. We have support from 7150/7210 where I will again be a buyer with a 7095 stop. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
The volatility in the Dow in points terms is incredible. It makes it impossible to have a ‘’Fixed Stop’’ in the Dow as it is almost guaranteed to be hit. You are better off in my opinion trading the Dow in small size with a ‘’Mental Stop’’ only. My Dow plan worked well yesterday with the market hitting my 34850 buy level before rallying to my 34970 T/P level and I am still flat. The Dow made a low of 34662 yesterday before surging to sit higher at 35200 this morning. We have resistance from 35275/35450 where I will be a small seller with a 35625 stop. The Dow has strong support from 34680/34850 where I will again be a strong buyer with a 34495 stop.
Cash NASDAQ 100
Frustratingly, the NDX hit my 15500 buy level with a 15498 low print but ETX did not fill me on this position, before the market surged to sit at 15800 this morning and I am still flat. The NDX has resistance from 15870/15970 where I will be a small seller with a wider 16105 stop. I will continue to be an aggressive buyer on any dip lower to 15500/15350 with the same 15225 stop. If I am taken long I will have a T/P level at 15620.
March BUND
The rally in equity markets saw the Bund trade lower to my 174.50 T/P level on my 1740.80 short position and I am still flat. This morning the Bund is trading at 174.32. We have resistance from 174.75/175.20 where I will again be a seller with a 175.51 stop.
Gold Rolling Contract
I am still flat. I am still a small buyer on any dip lower to 1765/1779 with a tight 1753 stop. If I am taken long I will have a T/P level at 1786.
Silver Rolling Contract
Silver traded lower to my 22.20 buy level. I am still long with a now lower 22.60 T/P level. I will add to this position at 21.60 while leaving my 20.95 stop unchanged.
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