U.S. Equity Markets closed mixed after a volatile trading session. CPI showed inflation cooled slightly in January – 6.4% year over year (“YOY”), down from 6.5% YOY in December – as higher energy and household costs prevented further declines. The NFIB Survey for January showed improving sentiment as worries about inflation eased, outweighing lingering concern about labour shortages. Federal Reserve Bank of Philadelphia President Patrick Harker said that the central bank is getting close to its peak terminal rate in its attempt to achieve price stability. Dallas President Lorie Logan said that there is a real possibility that the central bank will need to ultimately raise rates higher than what is widely expected in order to beat inflation. U.S. Secretary of State Antony Blinken and Chinese State Councillor Wang Yi were said to be considering meeting at the Munich Security Conference later this week. Within the S&P 500 Index, seven of the 11 sectors finished lower. European Markets closed higher. The Bank of England will make a final 25-basis-point increase to borrowing costs next month to combat double-digit inflation, according to a Reuters poll. ECB Governing Council member Mario Centeno said plans for peak interest rates will become more obvious in March with the release of economic projections. The ECB said sustained inflation growth is likely to weigh on regional economic growth, boosting the need for rate hikes and price stability. Euro-Zone Preliminary Fourth Quarter Economic Output grew at a meagre 0.1%, narrowly avoiding a recession despite consistently high energy costs and weakening confidence. In Asia, Japanese Prime Minister Fumio Kishida nominated university professor Kazuo Ueda to be the next Bank of Japan governor, likely portending a shift away from easy-money policies. Chinese Agriculture Minister Tang Renjian said the government in Beijing is encouraging financial institutions to increase rural-development lending to bolster economic growth. Japan’s Fourth Quarter GDP was lower than anticipated as household spending slowed, while Australian Consumer Confidence for February fell to one of its lowest levels since the COVID-19 pandemic on concerns that continued interest-rate hikes will weigh on demand. Elsewhere, Oil fell 1.31% while after a volatile session Gold closed flat.
To mark my 2700th 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 620 points yesterday and is now ahead by 2294 points for February after closing January with a gain of 4687 points, while 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 0.03% lower at a price of 4136
The Dow Jones Industrial Average closed 156 points lower for a 0.46% loss at a price of 34,089.
The NASDAQ 100 closed 1.60% higher at a price of 12,502.
The Stoxx Europe 600 Index closed 0.23% higher.
This morning, the MSCI Asia Pacific fell 0.8%.
This morning, the Nikkei closed 0.37% lower at a price of 27,501.
Currencies
The Bloomberg Dollar Spot Index closed 0.3% lower.
The Euro closed 0.2% higher at $1.0735.
The British Pound closed 0.3% higher at 1.2177.
The Japanese Yen fell 0.3% closing at $133.01.
Bonds
Germany’s 10-year yield closed 6 basis points higher at 2.44%.
Britain’s 10-year yield closed 11 basis points higher at 3.52%.
U.S.10 Year Treasury closed 2 basis points higher at 3.75%.
Commodities
West Texas Intermediate crude closed 1.31% lower at $79.05 a barrel.
Gold closed 0.12% higher at $1855.10 an ounce.
This morning on the Economic Front we already had the release of U.K. CPI which rose 10.1% versus +10.3% y/y expected. At 10.00 am we have Euro-Zone Trade Balance and Industrial Production. This is followed by U.S. MBA Mortgage Applications at 12.00 pm. At 1.30 pm we have Retail Sales and the New York Empire State Manufacturing Index. Next we have a speech from ECB President Lagarde at 2.00 pm followed by Industrial Production and Capacity Utilisation at 2.15 pm. Finally, at 3.00 pm we have Business Inventories and the NAHB Housing Market Index.
Cash S&P 500
Despite the S&P only closing lower by one Handle it was the most volatile session of the month so far – up down up down before finally closing flat. Despite the insane volatility, the VIX (volatility Index) closed lower by 7% at a price of 18.91. This makes no sense given yesterday’s price action, showing what a complicated market we are in where patience is the key. My S&P plan worked well as after the market hit my 4099 buy level we rallied 40 Handles. As I had a number of open positions I covered this long position too early at 4109 and I am now flat. You know my game plan. I will be an aggressive seller from 4215/4230. This is where the Monthly 20 MA and Weekly 100 MA come in, with a wider 4251 ‘’Closing Stop’’ if triggered. The S&P has short-term support from 4065/4082 where I will be a small buyer with a 4049 ‘’Closing Stop’’. I will continue to be an aggressive buyer from 4020/4035 with no stop or T/P level for now as I want to give this trade some room on any test. Please note that I am flying to Miami later this morning. Aer Lingus emailed to say they will have no WIFI on board. As a result, it will be unlikely that I will be able to send any updates to my Platinum Members.
EUR/USD
No Change. The Euro having traded above 1.08 following the CPI print sold off to close at 1.0735 and I am still flat. I will continue to be a buyer on any dip lower to 1.0600/1.0670 with the same 1.0545 ‘’Closing Stop’’.
March Dollar Index
My Dollar plan worked well as the Dollar sold off to my 102.60 buy level before rallying to my revised 103.10 T/P level and I am now flat. Today I will again be a buyer on any dip lower to 101.90/102.50 with a lower 101.35 ‘’Closing Stop’’.
Cash DAX
No Change. The price action continues to see strong buying on any dip. Despite the DAX being extremely overbought there is no point in trying to go short. For me to turn bearish I need the DAX to break and close below 15,000 for two consecutive trading sessions. The DAX has short-term support from 15160/15240. I will continue to be a buyer in this range with the same 15085 ‘’Closing Stop’’.
Cash FTSE
The FTSE closed at yet another new all-time high as the market is now within touching distance of 8000 resistance level. I am still flat as the market again missed my buy range. I will now raise my buy level to 7850/7920 with a tight 7795 ‘’Closing Stop’’. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
Incredible price action in the Dow yesterday as the market rallied to my 34470 sell level before selling off over 600 points, hitting my 33980 buy level with a low of 33840. My short position was exited at my 34270 T/P level while my long position I exited at my revised 34140 T/P level and I am now flat. The Dow will have strong support at its 50 Day Moving Average (33635) where I would expect a decent bounce on any initial test. I will now be a buyer from 33450/33650 with a tight 33295 ‘’Closing Stop’’. My only interest in selling the Dow is still on a rally higher to 34400/34650 with the same 34855 ‘’Closing Stop’’.
Cash NASDAQ 100
My NDX plan worked well as the market traded lower to my initial 12350 buy level before rallying to my 12460 T/P level and I am now flat. The NDX rallied a further 100 points after my T/P level was triggered. This was impressive given 10-year Treasury Yields are now at 3.75%. Today, I will again be a buyer from 12250/12400 with a higher 12145 ‘’Closing Stop’’. I still do not want to be short the market at this time.
March BUND
The Bund got hit hard yesterday following the higher-than-expected U.S. CPI print. This latest move lower has me long at 135.70. I will add to this position at 135.00 while leaving my 134.55 ‘’Closing Stop’’ unchanged. I will now lower my T/P level to 136.20. If any of the above levels are hit I will be back with a new update form my Platinum Members.
Gold Rolling Contract
Gold is under pressure this morning, now trading in my buy range as I go to press. I have bought Gold here at 1837. I will add to this position at 1825. I will lower my T/P level to 1847 while leaving my 1817 ‘’Closing Stop’’ unchanged.
Silver Rolling Contract
No Change. Silver has traded sideways since we saw the market fall 3% on Thursday. I am still convinced that it is only a matter of time before Silver takes out the key 24.00/25.00 resistance area. Remember in May 2011, Silver was trading above $50. I am still long at an average rate of 23.10 with the same no stop policy. I will leave my T/P level unchanged at 23.50. If any of the above levels are hit I will be back with a new update for my Platinum Members.
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