U.S. Equity Markets closed in the red on Monday, extending on Friday losses as the pullback from recent All-Time-Highs continues. There were few fresh drivers for the downside but the overhang of tariffs and uncertainty on geopolitics continues to weigh. US President Trump noted in late trade that tariffs are still going ahead, and the US is on track to implement them by their respective deadlines. On Geopolitics, Trump said that talks are proceeding well regarding Russia and Ukraine, while Russian President Putin said he does not see anything wrong with European participation in the negotiations on Ukraine. Ukrainian President Zelensky said he would be willing to step down if it meant Ukraine could join NATO (if such a proposal was offered). Sectors were mixed, with tech underperforming ahead of NIVIDIA earnings on Wednesday, while there were mixed reports about Microsoft (MSFT) cancelling leases for data centers, bringing into question the large CapEx expectations from the tech sector as they look to bolster AI technology. Health Care outperformed on haven properties while Financials were buoyed by Berkshire Hathaway earnings. Elsewhere, the Dollar saw mild upside with Euro upside post-German election fading by the end of the US session. CDU/CSU came out on top and look set to make a grand coalition with the SPD, although this would still lack the two-thirds majority required for any constitutional reform (like the debt break). Oil prices settled green with upside supported by fresh US sanctions targeting Iranian oil while geopolitics remains in focus, as does supply from Iraq and resumption of Kurdish oil exports. T-notes caught a bid across the curve, supported by falling equity prices with attention turning to more supply on Tuesday and Wednesday after a solid 2 Year Auction yesterday, ahead of GDP on Thursday and PCE on Friday. Elsewhere, Oil closed higher by 0.3% while Gold ended Monday with a further 0.7% gain.
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For anyone following my Platinum Service it made 160 points yesterday and is now ahead by 2925 points for February. January ended with a gain of 2768 points while 1997 points were gained in December. October ended with a gain of 2179 points, after closing September with a gain of 4402 points, following a loss of 301 points in August. July gained 1908 points while June saw a gain of 2074 points. The Platinum Service made a record 9619 points in October 2022. 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 0.50% lower at a price of 5983.
The Dow Jones Industrial Average closed 33 points higher for a 0.08% gain at a price of 43,461.
The NASDAQ 100 closed 1.21% lower at a price of 21,352.
The Stoxx Europe 600 Index closed 0.08% lower.
Yesterday, the MSCI Asia Pacific closed 0.3% lower.
Yesterday, the Nikkei closed 1.41% lower at a price of 38,231.
Currencies
The Bloomberg Dollar Spot Index closed 0.2% higher.
The Euro closed 0.1% higher at $1.0473.
The British Pound closed 0.05% higher at 1.2638.
The Japanese Yen fell 0.5% closing at $150.10.
Bonds
Germany’s 10-year yield closed 4 basis points higher at 2.49%.
Britain’s 10-year yield closed 1 basis points lower at 4.57%.
U.S.10 Year Treasury closed 4 basis points lower at 4.38%.
Commodities
West Texas Intermediate crude closed 0.3% higher at $70.70 a barrel.
Gold closed 0.7% higher at $2950.10 an ounce.
This morning on the Economic Front we have German GDP at 7.00 am. This is followed by the U.K. CBI Trends Survey at 11.00 am. Next, we have the U.S. Housing Price Index and Composite PMI at 2.00 pm. At 3.00 pm we have Consumer Confidence and the Richmond Fed Manufacturing Index. Finally, at 6.00 pm we have a Five Year Treasury Auction and a speech from Fed Member Barkin.
Cash S&P 500
The chop has been brutal and continues to be as markets have chopped in a range for months now. A day trading environment at best not a swing entry environment still at this stage. Friday’s vicious sell- off took out 10 days of smaller range chop and so far validating my strategy of waiting for a larger correction before putting on a long position, looking for a more sustainable rally. Seasonality favors more weakness and frankly March is setting up for a minefield with news, from tariffs, a possible government shutdown, liquidity impacts from RRP draining, a new Fed meeting, and of course any updates on inflation and economic growth which shows signs of slowing. Now one could argue that as long as earnings hold up nothing matters and markets will just drift higher. Nothing matters until we see a larger market trend break, but my technical sensibilities tell me one is eventually coming, as no trend lasts forever. Currently the S&P is bouncing off the November highs, but yet the S&P has not gone anywhere since. I note the most recent up trend was broken on Friday, question now whether the MA’s above and trend line can remain resistance and set up new lows. While we are short term oversold, we are not at all oversold on the structural charts, like the $NYSI which is still maximum overbought. Monday’s late sell-off saw the S&P join the other main Indexes and close below its 50-Day Moving Average (6008). I am afraid to sell the market on this break given the number of failed breaks over the past two years. Today, I will continue to be a buyer on any dip lower to 5940/5960 with the same 5925 ‘’Closing Stop’’. I will continue to be a small seller on any further rally to 6058/6078 with a lower 6095 ‘‘Closing Stop’’.
EUR/USD
No Change. I am still flat the Euro. I will continue to be a buyer on any further dip lower to 1.0340/1.0410 with the same 1.0255 ‘’Closing Stop’’. I still do not want to be short the Euro at this time.
Dollar Index
I am still long the Dollar from last week at a price of 106.60 with the same 107.10 T/P level. I will add to this position on any further move lower to 106.00 while leaving my 105.55 ‘’Closing Stop’’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Russell 2000
Despite Treasury Yields have fallen over 20 basis points in the past week it is not giving any respite to the Russell Index. I am still long at a price of 2210 with the same 2115 ‘’Closing Stop’’. I will continue to look to add to this position at 2150 while lowering my T/P level to 2240. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash FTSE
The FTSE never came close to Monday’s buy range, and I am still flat. I will not chase the market higher, leaving my 8460/8540 buy level unchanged with the same 8395 tight ‘’Closing Stop’’. If triggered, I will have a T/P level at 8605. I no longer want to be short the FTSE at this time.
Dow Rolling Contract
No Change: Friday’s aggressive sell-off saw the Dow close below its 50 Day Moving Average (43715) and this pivot point should act as resistance on any bounce. However, following last week’s 4% drop the Dow is close to oversold. The Dow has left a large ‘’Open Gap’’ below the market from 42500/42700 where I will be an aggressive buyer on any tag with no stop. Meanwhile, the Dow has short-term support from 42900/43150 where I will again be a buyer with a tight 42755 ‘’Closing Stop’’. If triggered, I will have a T/P level at 43390.
Cash NASDAQ 100
My NDX plan worked well as the morning sell-off saw the NDX hit my 21420-buy level before rallying to my 21580 T/P level and I am now flat. Monday’s weakness saw the NDX close below its 50-Day Moving Average (21517) which if not re-captured in the next few days could lead to an aggressive move lower. Nvidia’s earnings tomorrow will determine the next major move. Short-term the NDX is oversold. We have support below from 21110/21270 where I will again be a buyer with a lower 20995 ‘’Closing Stop’’. If triggered, I will have a T/P level at 21400.
December BUND
Just before the New York close the Bund traded lower to my initial 131.70 buy level with a 131.62 low print. I am still long with a 132.20 T/P level. I will add to this position at 131.00 while leaving my 130.25 ‘’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 traded in a narrow price range yesterday and I am still flat. Gold is short-term overbought. We have resistance from 2980/3000. I will now raise my sell level to this area with a higher 3019 ‘’Closing Stop’’. I still do not want to be long Gold at this time. If this view changes, I will be back with a new update for my Platinum Members.
Silver Rolling Contract
Silver traded lower to my 32.20 buy level. I am still long, and I will look to add to this position at 31.30 while leaving my 29.95 ‘’Closing Stop’’ unchanged. I will now lower my T/P level to 32.80. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
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