Despite a late rally into the close, U.S. Equity Markets finished yesterday’s session lower, led by the NASDAQ 100 closing with a loss of 1.04%. The catalyst for yesterday’s decline was Producer Price Index (“PPI”) data for November coming in at 9.6%, beating the expectation for a 9.2% rise and the prior month’s upwardly revised 8.8% bump. That marked a record high for PPI, which the U.S. Bureau of Labour Statistics has been tracking since 2009. That fuelled investor concerns that inflation will continue to come in hot, forcing quicker-than-expected action from the Federal Reserve. This is not what Wall Street wants to hear or see… The COVID-19 Omicron variant continued to make headlines, with a study out of South Africa showing that two doses of Pfizer’s (PFE) vaccine are 70% effective at preventing hospitalisations. Pfizer also said that its COVID-19 treatment pill was 89% effective in preventing hospitalisations, while the company said that the pill would likely still work against the Omicron variant. These are positive signs that the new variant likely won’t be as bad as previous variants, given the new treatments. But the concerns around inflation were the talking point yesterday, outweighing any optimism. Within the S&P 500, 10 of the 11 sectors finished lower. European Markets closed sharply lower. Euro-Zone Industrial Production data for October was in line with expectations, coming in higher than September’s data, and was driven by increasing output in Germany. However, Germany may not be a bright spot in the economy for much longer. Germany’s Ifo Institute lowered its Gross Domestic Product forecast for 2021, citing continued supply-chain bottlenecks and a fourth wave of COVID-19 cases. The German government also lowered its growth forecasts for the year. In Asia, A Beijing-based think tank that includes the People’s Bank of China’s deputy governor called on the government to cut interest rates and spur growth. And the Asian Development Bank lowered its 2022 growth outlook slightly, expressing concern about the global rise in COVID-19 infections. Central bank action also grabbed headlines, as the Bank of Japan offered to add roughly $97 billion to the financial system via short-term bond purchases to try and stem a recent rise in interest rates. Elsewhere, Oil fell 1.18% as the International Energy Agency said that Omicron would hurt crude demand, while Gold fell 1% on Dollar strength.
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 lost 55 points yesterday, and is now down by 871 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 0.75% lower at a price of 4634.
The Dow Jones Industrial Average closed 106 points lower for a 0.30% loss at a price of 35,544.
The NASDAQ 100 closed 1.04% lower at a price of 15,914.
The Stoxx Europe 600 Index closed 1.2% lower.
This morning, the MSCI Asia Pacific Index rose 0.1%.
This morning, the Nikkei closed 0.09% higher at a price of 28,459.
Currencies
The Bloomberg Dollar Spot Index closed 0.2% higher.
The Euro closed 0.1% lower at $1.1272.
The British Pound closed 0.3% higher at 1.3243.
The Japanese Yen fell 0.1%, closing at $113.68.
Bonds
Germany’s 10-year yield closed one basis points higher at -0.37%.
Britain’s 10-year yield closed two basis points higher at 0.72%.
US 10 Year Treasury closed one basis points higher at 1.44%.
Commodities
West Texas Intermediate crude closed 1.18% lower at $71.01 a barrel.
Gold closed 1% lower at $1,770.10 an ounce.
This morning on the Economic Front we already had the release of U.K. CPI which rose 5.1% versus 4.7% expected. At 12.00pm we have U.S. MBA Mortgage Applications, followed by Retail Sales and the Import Export Price Index at 1.30 pm. Next, we have Business Inventories and the NAHB Housing Market Index at 3.00 pm. Finally, at 7.00 pm we have the FOMC Statement and the Powell press conference at 7.30 pm. It promises to be another wild trading session.
December S&P 500
From Monday’s 4731 S&P Futures high the S&P hit a low yesterday afternoon at 4706 before a late rally saw the market close at 4635. This move lower saw the whole of my S&P range hit for a 4644 average long position before rallying to my 4653 revised T/P level. Subsequently I bought the S&P again at a price of 4634 which I still hold and again, at 4618, which I exited at 4622 as we wait for the Fed this evening. Yesterday’s low print almost closed the 4600 ‘’Open Gap’’ from two weeks ago. The S&P has strong support from 4595/4615 where I will be an aggressive buyer with a 4579 stop. The S&P is rallying as I go to press and I have now exited my 4634 long position at 4645 and I am now flat. If I am taken long I will have a T/P level at level at 4629, I still do not want to be short the S&P at this time.
EUR/USD
I am still flat the Euro. I will now lower my buy level to 1.1160/1.1210 with a tight 1.1095 stop. The Euro has resistance from 1.1350/1.1400 where I will be a small seller with the same 1.1441 stop.
March Dollar Index
The Dollar traded lower to my 96.10 T/P level on my 96.25 short position and I am now flat. The Dollar has resistance from 96.75/97.25 where I will again be a seller with a 97.61 tight stop.
December DAX
The DAX got hit hard yesterday, hitting my initial 15540 buy level before rallying to my 15560 revised T/P level and I am now flat. The DAX has strong support from 15300/15380 where I will be a buyer with a 15235 stop. If I am taken long I will have a T/P level at 15440.
December FTSE
Despite the weak Pound the FTSE sold off again yesterday, hitting my initial 7220 buy level. I am still long and I will add to this position on any further move lower to 7160 while leaving my 7128 stop unchanged. I will now lower my T/P level to 7240 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
Dow Rolling Contract
Unfortunately, the Dow just missed my 35820 T/P level before selling off shortly after I posted yesterday morning, stopping me out of my 35790 long position at 35595 and I am now flat. The Dow has initial support at its 50-Day Moving Average (35470) and we bounced off this support into the close. The Dow has strong support from 35050/35250 where I will be an aggressive buyer with a34895 stop. If I am taken long I will have a T/P level at 35480. I still do not want to be short the Dow at this time.
December NASDAQ
My latest 16220 long NDX position did not work well as I was stop out of this trade shortly after I posted yesterday morning at a price of 16055 and I am still flat. The NDX again led the decline yesterday. I am going to stay flat unless the NDX trades lower to 15450/15300 where I will be an aggressive buyer with a 15195 wider stop. If I am taken long I will have a T/P level at 15580.
March BUND
The Bund traded lower to my 174.25 T/P level on my latest 174.45 short position and I am still flat. With a yield of -37 basis points it is extremely difficult to be long the Bund especially with inflation running over 5% . This morning the Bund is trading higher at 174.45. We have resistance from 174.80/175.30. where I will be an aggressive seller with a 175.71 stop. I still do not want to be long the Bund at this time.
Gold Rolling Contract
Gold fell 1% yesterday and I am still flat. With a lot of traders still trapped long $100 above current prices I will now lower my buy level ahead of the FOMC Statement to 1730/1745 with a tight 1719 stop. If I am taken long I will have a T/P level at 1756.
Silver Rolling Contract
No Change. I am still an aggressive buyer on any dip lower to 20.95/21.55 with a 19.95 higher stop.
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