U.S. Equity Markets closed lower following a volatile trading session that saw the VIX surge nearly 8%. The NASDAQ 100 led the declines, closing lower by 2.09%. Monday’s economic landscape was rather sparse, but investors look forward to the week’s macro calendar heating up this afternoon. The Federal Reserve is expected to further slow the pace of rate hikes Wednesday with only a 25-basis-point increase. However, we also have the rate decisions from the ECB and Bank of England on Thursday ahead of the earnings reports from the main technology companies starting after Thursday’s close. Meanwhile, the Dallas Fed Manufacturing Index posted better-than-expected figures but remained in negative territory for the ninth straight month. New orders and the outlook index both showed sizeable improvement. Within the S&P 500 Index, 10 of the 11 sectors finished lower. European Markets also closed lower. Spain’s preliminary CPI Index growth for January was unexpectedly higher following a five-month period of easing, with consumer prices growing by 5.8% from a year ago. Germany’s advanced Fourth Quarter GDP data showed that Europe’s largest economy shrank by 0.2% and is likely entering into a recessionary period, while the EU’s Sentiment Index beat expectations in January due to a positive outlook in employment and easing prices. The Times Newspaper reported that the Bank of England (“BOE”) will upgrade its economic outlook at its policy meeting Thursday. In Asia, China Consumer Spending rebounded during the Lunar New Year holiday, with the Ministry of Culture reporting that consumer travel reached 90% of pre-pandemic levels. Japan and the Netherlands are reportedly the latest nations to join the U.S. in restricting chip exports to China. The People’s Bank of China said on Sunday that it will continue to use three key lending tools to sustain support for certain sectors and boost economic activity. China reported a sharp drop in new COVID-19 cases over the weeklong holiday, despite a ramp-up in domestic travel. Elsewhere, Oil fell 2.47% while a stronger Dollar saw Gold close lower by 0.37%.
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For anyone following my Platinum Service it made 229 points yesterday and is now ahead by 3932 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 1.3% lower at a price of 4017
The Dow Jones Industrial Average closed 260 points lower for a 0.67% loss at a price of 33,717.
The NASDAQ 100 closed 2.09% lower at a price of 11,912.
The Stoxx Europe 600 Index closed 0.17% lower.
This morning, the MSCI Asia Pacific fell 0.6%.
This morning, the Nikkei closed 0.39% lower at a price of 27,327.
Currencies
The Bloomberg Dollar Spot Index closed 0.3% higher.
The Euro closed 0.2% lower at $1.0851.
The British Pound closed 0.3% lower at 1.2357.
The Japanese Yen fell 0.5% closing at $130.45.
Bonds
Germany’s 10-year yield closed 9 basis points higher at 2.32%.
Britain’s 10-year yield closed 2 basis points higher at 3.34%.
U.S.10 Year Treasury closed 3 basis points higher at 3.54%.
Commodities
West Texas Intermediate crude closed 2.47% lower at $77.71 a barrel.
Gold closed 0.37% lower at $1918.10 an ounce.
This morning on the economic front we already had the release of German Retail Sales. It was a shocker coming in at -5.3% versus -.02% expected. At 8.55 am we have the German Unemployment Change, followed by ECB Bank Lending Survey. Next, we have U.K. Mortgage Approvals and Consumer Credit at 9.30 am, followed by Euro-Zone GDP at 10.00 am. This is followed by U.S. Employment Cost Index at 1.30 pm and the Housing Price Index at 2.00 pm. Finally, we have Chicago Purchasing Managers’ Index and Consumer Confidence at 2.45 pm and 3.00 pm respectively.
Cash S&P 500
The early Monday morning sell-off in the S&P continued for most of yesterday and again overnight with the market now trading 30 Handles lower than where I marked prices 24 hours ago at 4015. As I have mentioned over the past few days with the $NYSI maximum overbought it is hard to justify a macro long position in the S&P until we see a more meaningful correction. However, it is difficult to be short giving the ferocity of the intra-day rallies. If you look at the DAX which has been on a tear despite awful economic data, resulting in all sell-offs’ being aggressively bought. The seasonality chart says that we will have an early dip in February before ripping higher until the end of April. This chart has been spot on for most of the past 12 months. This is a huge week for markets with three Central Bank rate decisions, important earnings from tech companies on Thursday and Friday and of course the Non-Farm Payrolls on Friday at 1.30 pm. Yesterday my S&P plan worked well with the market trading lower to my 4030 buy level before rallying to an early afternoon high at 4063, enabling me to cover this position at my 4042 T/P level and I am now flat. The 200 and 50 Day Moving Averages for the S&P come in at 3955 and 3943 respectively. Any test of these key supports will attract aggressive buying. Today, I will be a small buyer from 3987/4002 with a tight 3979 ‘’Closing Stop’’. I will be an aggressive buyer from 3945/3965 with a 3929 ‘’Closing Stop’’. Ahead of the FOMC tomorrow, I do not want to be short the S&P.
EUR/USD
The Euro rallied to my initial 1.0910 sell level before selling off to sit at 1.0845 this morning. I covered this short position too early at 1.0885 and I am now flat. Today, I will continue to be a buyer from 1.0710/1.0780 with the same 1.0645 ‘’Closing Stop’’. The Euro has resistance from 1.0910/1.0980 where I will again be a strong seller with a 1.1035 ‘’Closing Stop’’.
March Dollar Index
No Change. I am still long at an average rate of 102.10 with the same 101.35 ‘’Closing Stop’’. I will leave my T/P level unchanged at 102.45. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash DAX
No Change. The DAX continues to struggle above 15200. I am reluctant to be a seller given the positive price action over the past three months. The DAX has support from 14880/14960. I will continue to be a buyer in this area with the same 14795 ‘’Closing Stop’’. If I am taken long I will have a T/P level at 15030.
Cash FTSE
My latest 7715 long FTSE position worked well as the market rallied to my 7755 T/P level and I am now flat. Today, I will again be a buyer of the FTSE on any dip lower to 7650/7710 with a 7595 ‘’Closing Stop’’. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
No Change. Today, I will continue to be a buyer from 33350/33600 with the same 33195 tight ‘’Closing Stop’’. The Dow has resistance from 34050/34300 where I will be a small seller with a 34505 ‘’Closing Stop’’.
Cash NASDAQ 100
The NDX gave up some of last week’s impressive gains, closing lower by over 2%. The late sell-off saw some positive divergence on the 15-minute chart as the market hit my 11890 buy level with a 11865 low print. I will add to this position at 11740 while leaving my 11595 ‘’Closing Stop’’ unchanged. I will also lower my T/P level to 11980 and if any of the above levels are hit I will come back with an update for my Platinum Members.
March BUND
The Bund continues to sell-off having found strong support at last week’s 2% test. This morning the Bund Yield is higher at 2.33%. This is a big move. Yesterday’s sell-off saw the Bund trade the whole of my buy range for a now 136.80 average long position. I will now lower my T/P level to 137.30 while leaving my wider 135.75 ‘’Closing Stop’’ unchanged.
Gold Rolling Contract
No Change. Gold continues to outperform Silver and I am still flat. Gold continues to find strong resistance above 1940. I will not chase the market higher leaving my 1890/1905 buy level unchanged with the same 1879 ‘’Closing Stop’’.
Silver Rolling Contract
Yesterday’s initial rally in Silver saw me email my Platinum Members to exit my 23.30 long position at 23.74 and I am now flat. This morning Silver is trading lower at 23.30. I will continue to be a buyer of dips believing that it is only a matter of time before we break the key 24.00/25.00 resistance area. Today, my buy level will be from 22.60.23.20 with the same no stop.
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