Following another volatile trading session, U.S. Equity Markets re-couped earlier losses to end yesterday’s session higher, led by the NSASDAQ 100 closing with a gain of 1.47%. Federal Reserve Chairman Jerome Powell’s Testimony before Congress – and other central bank commentary – was the big story of the day. In his prepared statement, Powell said that the central bank will take action to ensure higher inflation does not become “entrenched.” The hawkish tone was carried on by other Fed presidents, with San Francisco Fed President Mary Daly saying she wants to see the Fed wind down its balance sheet quickly. Atlanta Fed President Raphael Bostic Joined the chorus of Fed members calling for three rate hikes this year, with the first coming in March. Still, markets headed higher despite the hawkish tone, led by the technology sector. We could see the beginning of a continued move higher in tech after the sector tumbled sharply at the end of 2021. Within the S&P 500, eight of the 11 sectors finished higher. European Markets closed higher. Like the U.S., central bank policy was in focus. European Central Bank President Christine Lagarde said its commitment to price stability is “unwavering” and it will use appropriate policy to keep inflation anchored around 2%. ECB Chief Economist Philip Lane said a rate hike in 2022 is unlikely, adding that he believes inflation will fall below the central bank’s 2% target by 2023. Elsewhere, Spain’s Industrial Production numbers for November were much higher than anticipated on strength in pharmaceutical and machinery manufacturing. In Asia, Chinese Premier Li Keqiang told cabinet members at a State Council meeting the government wants to speed up investment projects in an effort to stabilise economic growth. Japanese Prime Minister Fumio Kishida said the government will extend a foreign entry travel ban until the end of February to limit the infection’s spread. Bank of Korea data indicated exports for November rose 6.4% month over month to $59.7 billion, as demand for technology-related goods remained strong. Australian Retail Sales figures for November were stronger than expected, hitting the quickest rate of growth since May 2020. Elsewhere, Oil rose 3.06% as investors remained bullish on the demand outlook, while Gold rose 1.29% on Dollar weakness.
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For anyone following my Platinum Service it made 320 points yesterday and is now ahead by 534 points for January, after ending December with a loss of 932 points, 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 0.92% higher at a price of 4713.
The Dow Jones Industrial Average closed 183 points higher for a 0.51% gain at a price of 36,252.
The NASDAQ 100 closed 1.47% higher at a price of 15,844.
The Stoxx Europe 600 Index closed 0.6% higher.
Yesterday, the MSCI Asia Pacific Index fell 0.5%.
Yesterday, the Nikkei closed 0.9% lower at a price of 28,222.
Currencies
The Bloomberg Dollar Spot Index closed 0.3% lower.
The Euro closed 0.3% higher at $1.1367.
The British Pound closed 0.4% higher at 1.3634.
The Japanese Yen fell 0.1%, closing at $115.31.
Bonds
Germany’s 10-year yield closed one basis points higher at -0.02%.
Britain’s 10-year yield closed two basis points lower at 1.17%.
US 10 Year Treasury closed three basis points lower at 1.73%.
Commodities
West Texas Intermediate crude closed 3.06% higher at $81.22 a barrel.
Gold closed 1.29% higher at $1,822.10 an ounce.
This morning on the Economic Front we have German Wholesale Price Index at 7.00 am, followed by Euro-Zone Industrial Production at 10.00 am. At 12.00 pm we have U.S. MBA Mortgage Applications. Finally, we have the all-important CPI at 1.30 pm where the consensus is for a 7% print.
Cash S&P 500
My S&P plan worked well with the market trading lower to my 4643 buy level before rallying 70 Handles off this intra-day low into the close. This move higher saw my 4659 T/P level executed and I am now flat. Thankfully, we had no sell level in any of the Five Equity Index Markets as they all surged from earlier losses. The S&P is now comfortably trading above its 50-Day Moving Average and this price of 4678 should attract plenty of buying on any test. If CPI comes in with a ‘’6’’ Handle this afternoon then I would expect follow through on yesterday’s rally. The S&P has support from 4664/4679 where I will be a buyer with a 4649 stop. The S&P has resistance from 4745/4760 where I will be an aggressive seller with a 4776 stop.
EUR/USD
The Euro just missed my 1.1290 buy level before following Equity Markets higher into the New York close and I am still flat. I will now raise my buy level to 1.1290/1.1340 with a higher 1.1245 stop If I am taken long I will have a T/P level at 1.1375. I still do not want to be short the Euro at this time.
March Dollar Index
I am still flat. I will now lower my buy level slightly to 94.75/95.25 with the same 94.45 tight stop. If I am taken long I will have a T/P level at 95.55.
Cash DAX
The positive price action for the DAX continues as this market refuses to break the key 15700/15800 support area. I am still flat and I will now raise my buy level to 15800/15880 with a higher 15735 stop. I still do not want to be short the DAX at this time.
Cash FTSE
The FTSE again traded in a narrow range and I am still flat. Today, I will now raise my buy level to 7410/7460 with a tight 7375 stop. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
My Dow plan worked well with the market trading lower to my 35800 buy level before rallying 500 points off its afternoon low into the close. Unfortunately, I covered this position too early at 35890 and I am still flat. Ahead of this afternoon’s CPI release I am reluctant to go short the Dow unless we traded back to the 37000 area over the coming days. The Dow has support from 35820/36020 where I will be a small buyer with a 35625 wider stop. If I am taken long I will have a T/P level at 36170.
Cash NASDAQ 100
My NDX plan again worked well with the market trading lower to my 15520 buy level (low of 15516) before turning around and rallying 300 points into the close, hitting my 15590 T/P level in the process and I am now flat. Both the NASDAQ and Russel 2000 have fallen by 10% and 15% respectively off recent highs to Monday’s low prints. This is a significant correction resulting in aggressive buying in both of these Indexes over the past 36 hours. Today, I will look to buy the market again on any dip lower to from 15420/15650 with a 15295 wider stop. The 50 Day MA comes in above the market at 16146 and this area should act as strong resistance on any initial attempt. For this reason I will be an aggressive seller from 16080/16200 with a 16305 stop.
March BUND
No Change. I am still a small buyer on any further dip lower to 168.90/169.40 with the same 168.55 stop. If I am taken long I will have a T/P level at 169.80.
Gold Rolling Contract
Gold rallied over 1% on Dollar weakness, closing above 1822 and I am still flat. I will now raise my buy level to 1788/1803 with a higher 1775 stop.
Silver Rolling Contract
Silver again missed my buy level and I am still flat. I will now raise my buy level to 21.70/22.40 with a higher 21.15 stop. If I am taken long I will have a T/P level at 22.75.
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