U.S. Equity Markets finished yesterday’s session mixed as the Dow closed flat while the NASDAQ 100 fell 0.84% after a more subdued trading environment. Investors are in “wait and see” mode, with 83 S&P 500 companies reporting earnings this week and the release of January’s CPI data on Thursday. So many of the week’s catalysts are still ahead of us. Markets briefly rallied after the European trading finished, before selling off hard into the close. Yesterday, markets did not have much direction throughout the afternoon. Tech shares underperformed as interest rates moved higher. (Remember, higher interest rates indicate higher borrowing costs, making it more expensive for tech companies to fund growth with debt.) Meta Platforms (FB) also weighed on the tech and communications sectors, on reports that it had threatened to pull Facebook and Instagram out of Europe if the EU did not continue to allow data transfer between the U.S. and Europe. On the positive side, Bank of America strategists highlighted that rate hikes would not hurt the economy for a while. Fourth-quarter earnings growth continued to move higher as more companies reported (sitting at 29%, up from 22%). Despite the mainly negative headlines (and tech sell-off), the advances outnumbered the declines in the S&P 500. Amazon (AMZN) provided a boost for markets, tacking on another day of solid gains after its earnings report last week. And Tyson Foods (TSN) shares rose on a strong Fourth-quarter earnings report. Within the S&P 500, seven of the 11 sectors finished lower. European Markets closed higher. European Central Bank President Christine Lagarde testified before the Committee on Economic and Monetary Affairs of the European Parliament, where investors looked for any clues on rate hikes. She said that inflation risks are on the rise, though inflation could fall back to normal levels. But they may have already gotten a clue on rate hikes… ECB Governing Council member Klaas Knot said he thinks it could raise interest rates as soon as the Fourth quarter, with a second hike coming in the spring of 2023. The U.S. and Iran appeared to make progress in talks aimed at reviving the 2015 nuclear accord, potentially boosting global oil supplies. Euro-Zone Investor Sentiment hit the highest level since July, as strong Purchasing Managers’ Index (“PMI”) and German economic data boosted optimism. In Asia, The Bank of Japan was said to prepare an emergency bond purchase programme in an attempt to halt the recent increase in yields and counter speculation it will raise interest rates. Markit/Caixin’s China Composite PMI data for January weakened compared with December as New Orders fell into contraction territory. Australia’s Prime Minister Scott Morrison said Parliament will debate reopening the country’s borders this week, with action likely close behind. South Korean Prime Minister Kim Boo-kyum said the government was discussing an extra-budget increase to support small businesses hurt by coronavirus restrictions. Elsewhere, Oil fell 1% on profit taking after rising above $90 for the first time in eight years, while Bitcoin jumped 9% as CoinShares data showed inflows into crypto investment products for the third-straight week.
To mark my 2475th 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 257 points yesterday and is now ahead by 1685 points for February, after ending January with a gain of 3878 points, more than making up for December’s 932 points loss, 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, after ending March with an impressive gain of 3769 points. 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 0.37% lower at a price of 4487.
The Dow Jones Industrial Average closed 2 points higher for a 0.01% gain at a price of 35,091.
The NASDAQ 100 closed 0.84% lower at a price of 14,571.
The Stoxx Europe 600 Index closed 0.7% higher.
Yesterday, the MSCI Asia Pacific Index fell 0.4%.
Yesterday, the Nikkei closed 0.70% lower at a price of 27,248.
Currencies
The Bloomberg Dollar Spot Index closed 0.1% higher.
The Euro closed 0.1% lower at $1.1437.
The British Pound closed 0.1% higher at 1.3531.
The Japanese Yen rose 0.1%, closing at $115.08.
Bonds
Germany’s 10-year yield closed three basis points higher at 0.23%.
Britain’s 10-year yield closed one basis points higher at 1.42%.
US 10 Year Treasury closed two basis points higher at 1.93%.
Commodities
West Texas Intermediate crude closed 1% lower at $91.25 a barrel.
Gold closed 0.81% higher at $1,821.10 an ounce.
This morning on the Economic Front we have German Industrial Output at 8.00 am. This is followed by U.S. NFIB Business Optimism Index at 11.00 am and the Trade Balance at 1.30 pm. Finally, we have a three-year Treasury Auction at 6.00 pm and this will be important given the rise in Bond Yields over the past week.
Cash S&P 500
The S&P traded in a narrow range before a late sell-off saw the market hit my 4472 buy level before rallying to my 4488 T/P level and I am now flat. Ahead of Thursday’s key CPI data I would expect the S&P to hold steady or have a small rally given the fact that the expectation is for a rise of 7.3% which is high. Sentiment is bearish and another reason not to press the downside at this time. We have support from 4450/4468 where I will again be an aggressive buyer with a 4433 stop. Ahead of CPI on Thursday I am reluctant to be short as in my opinion the S&P is setting itself up for a large move higher as most long-term charts are still oversold after the carnage in January. The S&P has resistance from 4570/4590 where I will be a small seller with a 4608 stop. If I am taken long I will have a T/P level at 4484. If I am taken short I will have a T/P level at 4554.
EUR/USD
My Euro plan worked well with the market trading lower to my 1.1420 buy level before rallying to my 1.1455 T/P level and I am now flat. The Euro has support from 1.1350/1.1410 where I will again be a buyer with a tight 1.1305 stop. I still do not want to be short the Euro at this time.
March Dollar Index
No Change. I will continue to look to sell the market from 95.80/96.30 with the same 96.55 tight stop.
Cash DAX
No Change. I refuse to chase the DAX higher, thus leaving my 14900/14980 buy level unchanged with the same 14815 stop. If I am taken long I will have a T/P level at 15050.
Cash FTSE
I am still flat. The FTSE fell shy of yesterday’s buy range before rallying 80 points off its 7501 low print. Today, I will raise my buy level to 7470/7530 with a tight 7425 stop. I no longer want to be short the FTSE at this time.
Dow Rolling Contract
Unfortunately, the Dow missed my 34900 buy level by 33 points before rallying to an afternoon high above 34300 and I am still flat. The Dow subsequently fell over 250 points into the close. I will not chase the Dow higher, leaving my 34700/34900 buy level unchanged where I will be an aggressive buyer with the same 34495 stop. I still do not want to be short the Dow at this time.
Cash NASDAQ 100
It took a while but finally the NDX traded lower to my 14540 buy level before rallying after the close to my 14607 revised T/P level and I am still flat. The NDX has strong support from 14420/14520 where I will continue to be a strong buyer with no stop. If I am taken long I will have a T/P level at 14605.
March BUND
Yesterday, the Bund sold off to my second buy level at 165.50 for a now 166.26 average long position. The Bund had a small rally into the close (165.80) and I will continue to hold this position with no stop given how oversold this market is. I will now lower my T/P level to 166.50 and if this level is hit I will be back with a new update for my Platinum Members.
Gold Rolling Contract
Gold consolidated Friday’s move above 1800 on little news and I am still flat. Today, I will raise my buy level to 1788/1803 with a tight 1777 stop. If I am taken long I will have a T/P level at 1811.
Silver Rolling Contract
My patience paid off as finally Silver rallied to my 22.95 T/P level on last week’s 22.65 latest long position. I am still bullish Silver believing a breakout to the upside is close. Today, I will again be a buyer on any dip lower to 22.20/22.80 with no stop. If I am taken long I will have a T/P level at 23.25.
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