US Indices saw losses as participants returned from the US market holiday, with sentiment continuing to be hit by the ever-growing EU-US tensions, and how President Trump wants Greenland. Today, Trump threatened to impose 200% tariffs on French wines and Champagne following France’s intention to decline the invitation to join his ‘Board of Peace’. Further, a White House official said the President will not travel to Paris for the emergency G7 summit in Paris. Davos is currently ongoing with highlights on Wednesday, including several Trump appearances and NVIDIA CEO Huang. All sectors, aside from Staples, were in the red with mega-cap sectors Tech, Discretionary, and Communications the laggards, and all Mag-7 names in the red. Micron (MU) (+0.8%) was one of the sole points of green and seemingly buoyed by a couple of PT upgrades. There was no Fed speak due to blackout and a lack of tier 1 US data, although the weekly ADP printed 8k (prev. 11.75k). In FX, the Dollar is pressured to the benefit of G10 peers, with the haven Swiss Franc the outperformer, and the Japanese Yen the relative laggard given the ongoing domestic political woes. Treasuries saw losses across the curve and saw knee-jerk weakness as Danish pension fund Akademikerpension is set to exit the US, although they later claimed the decision to divest US Treasuries is rooted in poor US government finances, not directly related to the ongoing rift between the US and Europe. Before that, global fixed income was already in the red and taking lead from notable pressure in JGBs on fiscal concerns driving Japanese Yen price action. The crude complex was firmer and saw tailwinds from the temporary suspension of output at Kazakhstan’s oil fields, as Chevron’s Tengizchevroil cancelled loading of five CPC blend oil cargoes scheduled for January to February, with oil production reportedly remaining shut for an additional 7-10 days amid the supply issues. Away from the EU/US, the Russian press reported that US Envoy Witkoff remarked talks with Russian Envoy Dmitriev were “very positive” at Davos, and Dmitriev echoed this, noting dialogue was constructive with US envoys, and more and more people understand the fairness of the Russian position. Precious metals saw gains with spot gold printing another all-time -high closing over $4700 at a price of 4760 while Oil ended Tuesday’s session with a 1.9% gain.
To mark my 3300th 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 630 points yesterday and is now ahead by 3487 points for January having closed December with a gain of 2599 points, after ending the month of November with a gain of 4542 points, after ending October with a nice gain of 5110 points after closing September with a gain of 3774 points while ending August with a gain of 3362 points after closing July with a gain of 3753 points after closing June with a gain of 3530 points, having closed May with a gain of 3606 points, after closing April with a gain of 7685 points after closing March with a gain of 2254 points while closing February with a gain of 4180 points. January ended with a gain of 2768 points while 1997 points were gained in December. October ended with a gain of 2179 points, after closing September with a gain of 4402 points, following a loss of 301 points in August. July gained 1908 points while June saw a gain of 2074 points. The Platinum Service made a record 9619 points in October 2022. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 2300 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 2.06% lower at a price of 6796.
The Dow Jones Industrial Average closed 876 points lower for a 1.76% loss at a price of 48,488.
The NASDAQ 100 closed 2.12% lower at a price of 24,987.
The Stoxx Europe 600 Index closed 0.70% lower.
This Morning, the MSCI Asia Pacific closed 0.8% lower.
This Morning, the Nikkei closed 1.11% lower at a price of 52,991.
Currencies
The Bloomberg Dollar Spot Index closed 0.61% lower.
The Euro closed 0.61% higher at $1.1716.
The British Pound closed 0.06% higher at $1.3433.
The Japanese Yen fell 0.15% closing at $158.22
Bonds
U.K.’s 10-Year Gilt closed 4 basis points higher at 4.46%.
Germany’s 10-Year Bund Yield closed 2 basis points higher at 2.86%
U.S.10 Year Treasury closed 5 basis points higher at 4.28%.
Commodities
West Texas Intermediate crude closed 1.52% higher at $60.24 a barrel.
Gold closed 1.95% higher at $4762.10 an ounce.
This morning on the Economic Front we already had the release of UK CPI which rose versus expected. Next, we have a speech from ECB President Lagarde at 7.30 am, followed by U.S. MBA Mortgage Applications at 12.00 pm. At 3.00 pm we have Construction Spending and Pending Home Sales. Finally, we have a 20 Year Treasury Auction at 6.00 pm.
Cash S&P 500
The S&P closed sharply lower on Tuesday. The main headlines centered on Greenland, but in reality, I think it had much more to do with Japan. JGB yields surged Tuesday morning, with the 30-year rate rising by almost 32 basis points to 3.91%. We have discussed Japan and its problems at length, and there is nothing new here, except that Japan continues to push for more stimulative policy while the Bank of Japan sits on its hands. Basically, the market is now doing what the BOJ has failed to do: raising rates. At this point, the BOJ either needs to raise rates at this week’s meeting or resume bond buying; otherwise, the Prime Minister may need to follow in Liz Truss’s footsteps, because the market clearly is not in agreement. But I am not an expert on Japan, and this is merely an outsider’s view. Not surprisingly, the 30-year rate in the US rose by 9 basis points to close at 4.93%. Again, at this point, 5% is close, and the only question that remains is whether 5% will be a floor or a ceiling. I fear that rates can go much higher from here. Clearly, the S&P 500 broke through major support levels today at 6840 and the 50-day moving average. That means both are now in resistance, and support now lies around 6,750. The rising wedge is broken and, in theory, could return to the origin near 6,500. A lot of what happens from this point will depend on how quickly implied volatility rises and where interest rates go. At this point, the market is also in a negative regime with those pinning effects from last week’s OPEX now well behind. Additionally, I think CTA and Vol Control funds are sellers at this point; if not, they are probably very close to sellers. The other issue is not just equity market volatility but also bond market volatility, because VXTLT is still at very suppressed levels. This means stress in the bond market is still fairly low. The continued deterioration in fiat currencies amid soaring government globally remains as a catalyst for the best assets that protect from the declining value of money; Gold and Silver. Both soared to record highs yesterday while overnight Gold has surged a further 1.6% sitting at a price of $4840 as I go to post. The S&P was hit hard yesterday, dropping 2% as the heavily weighted tech stocks (‘’Mag 7’’) all plunged lower with the broader market. My S&P plan worked well with the market trading the whole of my buy range for a 6828 average long position before rallying to my revised 6854 T/P level. Subsequently a late sell-off into the close saw the S&P hit my next buy range of 6805 as emailed to my Platinum Members. I will have a ‘Closing Stop’ at 6783 on this position while my T/P level will be at 6825 which is just below the 50 Day Moving Average which comes in at a price of 6829. If my T/P level is triggered, I will again look to buy the S&P on any further move lower to 6750/6775 with a lower 6735 ‘Closing Stop’. If this buy level is executed, I will have a T/P level at 6810. If any of these views change, I will be back with a new update for my Platinum Members.
EUR/USD
The weakness in the Dollar saw the Euro hit my sell range for a now 1.1710 short position. I will now add to this trade on any further move higher to 1.1780 while raising my ‘Closing Stop’ to 1.1835. I will also raise my T/P level to 1.1650. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dollar Index
Tuesday’s weaker Dollar saw the market hit my second buy level at 98.30 for a now 98.70 average long position. I will now lower my T/P level to 99.20. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Russell 2000
I am still flat. I will continue to be a seller on any further rally to 2680/2750 with the same 2805 ‘Closing Stop’. If I am taken short, I will have a T/P level at 2630. Given how overbought the Russell is trading at this time, I have no interest in being long the market.
FTSE 100
Shortly after I posted on Tuesday the Dow traded lower to my 10130 T/P level on last week’s 10165 short position and I am still flat. Today, I will again be a seller from 10160/10260 with a higher 10335 ‘Closing Stop’. If I am taken short, I will have a T/P level at 10090.
Dow Rolling Contract
The Dow has traded heavy over the past two weeks. Bank stocks are a large reason for the underperformance. As we know big banks have lots of money and therefore a lot of market sway. Their performance offers clues about where the broader financial sector is heading. Following earnings from JP Morgan, Citibank and Bank of America the share prices of these stocks have gapped lower which is a large reason for the Dow weakness. I will be monitoring the banking sector closely as we head into the first set of important time factors – late January/early February. Yesterday my long 48700 Dow position worked well as the market rallied to my revised 48885 T/P level and I am still flat. This morning, the Dow is trading lower at 48600. The Dow has short-term support from 48100/48350 where I will again be a buyer with a lower 47895 ‘Closing Stop’. If I am taken long, I will have a T/P level at 48620. I still do not want to be short the Dow at this time.
Cash NASDAQ 100
My NDX plan worked well. After the market hit my 25010-buy level the NDX rallied over 250 points. This move higher saw my revised 25160 T/P level triggered and I am now flat. The NDX has support below from 24650/24850 where I will be a strong buyer with a lower 24495 wider ‘Closing Stop’. If I am taken long, I will have a T/P level at 25030.
December BUND
No Change: I am still flat as the Bund continues to trade in very narrow ranges. Despite the higher PPI print on Wednesday the Bund followed Treasury prices higher. Remember a market that cannot sell-off on bad news has to be respected. Today, I will continue to be a buyer from 126.80/127.50 with a lower 126.15 ‘Closing Stop’. If I am taken long, I will have a T/P level at 128.10. I still do not want to be short the Bund at this time.
Gold Rolling Contract
No Change: I am still flat Gold and I am going to stay flat as I still have no edge at these price levels. If this view changes, I will be back with a new update for my Platinum Members.
Silver Rolling Contract
Frustrating! Silver missed my initial 96.00 sell level with a 95.93 high print before falling 250 points and I am still flat. Today, I will now lower my sell level to 95.70/97.70 while leaving my wider 100.05 ‘Closing Stop’ unchanged. If I am taken short, I will have a T/P level at 93.80.
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