U.S. Equity Markets closed higher yesterday following a volatile trading session which saw plenty of two-way price action, before a late rally saw the Small Cap Russell 2000 Index lead the way with a gain of 2.95%. Investors plowed back into risk assets after three straight days of declines. That is a clear example of the “buy the dip” mentality in markets. In terms of COVID-19, fears of the virus’s spread eased a little on news that the White House was going to begin distributing at-home testing kits. These kits could make testing easier, keeping positive cases off the street and slowing the spread of the virus. President Biden will give more commentary on the virus in a speech today. Meanwhile, there were reports that the FDA would soon approve COVID-19 treatment pills from Merck and Pfizer, giving the U.S. more treatment options. These positive developments helped fuel the market’s rally. Within the S&P 500, nine of the 11 sectors finished higher. European Markets closed higher. European Central Bank Vice President Luis de Guindos said inflation may not be as temporary as expected, but added it will still fall to normal levels by the end of next year. British Prime Minister Boris Johnson said the government is willing to tighten social-distancing restrictions further in an attempt to stop rising coronavirus infections. An Imperial College of London preliminary study said the COVID-19 Omicron variant’s reinfection risk is higher while symptoms show no signs of being milder. In Asia, China’s state-run media called on the People’s Bank of China to reduce the country’s benchmark loan prime rate further in 2022 to support economic growth. South Korea’s preliminary exports for December maintained 20% growth despite difficult year-over-year comparisons on steady semiconductor demand from abroad. Japanese technology companies rallied following the upbeat demand outlook from Micron Technologies, which reported better-than-expected first-quarter earnings and sales, and guided higher for the second quarter, citing strong demand. Reserve Bank of Australia’s minutes from its most recent policy meeting showed the central bank expects the economic recovery to continue, supporting a May end to the current stimulus. Elsewhere, Oil rose 4.12%, rebounding with risk assets, while Gold fell 0.33% 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 made 236 points yesterday, and is now ahead by 88 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 1.78% higher at a price of 4649.
The Dow Jones Industrial Average closed 560 points higher for a 1.60% gain at a price of 35,492.
The NASDAQ 100 closed 2.29% higher at a price of 15,986.
The Stoxx Europe 600 Index closed 0.9% higher.
This morning, the MSCI Asia Pacific Index rose 0.1%.
This morning, the Nikkei closed 0.16% higher at a price of 28,562.
Currencies
The Bloomberg Dollar Spot Index closed 0.2% higher.
The Euro closed 0.1% lower at $1.1269.
The British Pound closed 0.4% higher at 1.3254.
The Japanese Yen fell 0.2%, closing at $114.01.
Bonds
Germany’s 10-year yield closed five basis points higher at -0.31%.
Britain’s 10-year yield closed nine basis points higher at 0.87%.
US 10 Year Treasury closed four basis points higher at 1.47%.
Commodities
West Texas Intermediate crude closed 4.12% higher at $71.12 a barrel.
Gold closed 0.33% lower at $1,783.10 an ounce.
This morning on the Economic Front we already had the release of U.K YoY GDP which rose 6.6% versus 6.4% expected. At 12.00 pm we have U.S. MBA Mortgage Applications, followed at 1.30 pm by GDP, PCE and the Chicago Fed National Activity Index. Finally, we have Existing Home Sales and Consumer Confidence at 3.00 pm.
Cash S&P 500
The S&P reversed all of Monday’s sell-off as the ‘’Open Gap’’ left from Monday was filled. After the S&P hit my initial 4613 sell level we saw a quick 20 Handle sell-off, enabling me to cover this position at my 4607.50 revised T/P level and I am now flat. Internally, yesterday’s rally was strong as shown by the McClellan Oscillator which improved from Monday’s -163 print to close last night at -27. This morning the S&P is trading higher at 4645. The 50-Day Moving Average is now below at 4613 and will offer support on any test. I will now raise my buy level to 4608/4623 with a 4693 stop. We have resistance from 4665/4683 where I will be a small seller with a 4701 wider stop. If I am taken short I will have a T/P level at 4653. If I am taken long I will have a T/P level at 4635.
EUR/USD
No Change. The Euro has support from 1.1190/1.1240 where I will again be a buyer with a 1.1145 stop. I will not chase the Euro lower, leaving my 1.1405/1.1455 sell level unchanged with the same 1.1501 stop.
March Dollar Index
No Change. I am still short at a price of 96.50. I will add to this position at 97.00 with a now higher 97.31 stop. I will also raise my T/P level to 96.30 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
Cash DAX
The DAX rallied yesterday and I am still flat. I will now raise my sell level to 15560/15630 where I will be a small seller with a 15705 higher stop. I no longer want to be long the DAX at this time.
Cash FTSE
The FTSE just missed my 7210 buy level with a 7235 low print before rallying to sit higher at 7300 this morning. I will now raise my buy level to 7185/7245 with a tight 7135 stop. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
The volatility in the Dow in points terms is incredible. It makes it impossible to have a ‘’Fixed Stop’’ in the Dow as it is almost guaranteed to be hit. You are better off in my opinion trading the Dow in small size with a ‘’Mental Stop’’ only. My Dow plan worked well yesterday with the market hitting my 35275 sell level before falling over 120 points, enabling me to cover this position at my revised 35205 T/P level. Subsequently I sold the Dow again at 35450 before covering this short position for a small gain at 35425 and I am now flat. We have resistance from 35610/35790 where I will be a small seller with a 35945 stop. The Dow has strong support from 34980/35150 where I will again be an aggressive buyer with a 34825 stop.
Cash NASDAQ 100
Late in yesterday’s session the NDX rallied to hit both my sell levels at 15870 and 15970. I emailed my Platinum Members to exit the second short position at 15924. I will add to my 15870 existing short position at a price of 16040 while leaving my 16105 stop unchanged. I will continue to be an aggressive buyer on any dip lower to 15500/15350 with the same 15225 stop. If I am taken long I will have a T/P level at 15620. If any of the above levels are hit I will be back with a new update for my Platinum Members.
March BUND
The Bund got hit hard yesterday, never coming close to my sell range. The break and close below 174.00 is bearish. I will now lower my sell level to 173.90/174.40 with a 174.81 stop.
Gold Rolling Contract
I am still flat. I will now lower my buy level to 1752/1767 with a lower 1739 stop. If I am taken long I will have a T/P level at 1775.
Silver Rolling Contract
My latest 22.20 long Silver position worked well as the market rallied to my 22.60 T/P level and I am now flat. Silver has support from 21.40/22.10 where I will be an aggressive buyer with a 20.85 stop. If I am taken long I will have a T/P level at 22.50.
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