U.S. Equity Markets closed were mixed on Tuesday with the NASDAQ 100 outperforming and Russell 2000 lagging. The S&P 500 and NDX gradually gained throughout the US session while the Dow Jones and Russell 2000 sold off after the open before paring somewhat throughout the session but failing to close in positive territory. Consumer Staples, Communication Services and Technology outperformed, while Real Estate, Consumer Discretionary and Industrials lagged. Industrials were hit on a steep downside in MMM and GE post earnings but somewhat offset by gains in Airlines after a strong UAL report seeing JETS +2%, as well as a strong report from RTX. Communication was supported by a strong VZ report. Elsewhere, China stocks performed particularly well on a slew of support measures seen early Tuesday morning. Elsewhere, fixed income was sold globally in the wake of the Bank of Japan press conference which saw BoJ Governor Ueda allude towards an eventual exit of NIRP, although the BoJ Meeting itself was all as expected. The Chinese Yuan outperformed on the aforementioned China measures while the Dollar was bid with Dollar Index closing 0.35% higher at a price of 103.50. The Japanese Yen gave up its initial Ueda gains as the Dollar advanced with US Treasury yields firmer across the curve in a steeper fashion with eyes on supply this week; the 2yr auction on Tuesday was in line with averages but with strong indirect demand. Oil prices were choppy but ultimately saw marginal weakness from the surge seen on Monday ahead of inventory data. Meanwhile, Richmond Fed composite index fell to -15 in December from -11 in January. Of its three component indices, shipments marginally improved to -15 (prev. -17) while New Orders edged down to -16 (prev. -14), and Employment notably fell to -15 from -1. On the inflationary footing, prices paid slightly improved to 4.19 (prev. 4.24) with prices received more-or-less unchanged at 2.80 (prev. 2.79), while firms expect both to moderate over the next 12 months. The Report adds that firms remained somewhat pessimistic about local business conditions, as the Index increased slightly but remained in negative territory. The Index for future local business conditions increased to 0 (prev. -5). In addition, backlog and capacity utilisation fell further into negative territory, while vendor lead time fell to -3 (prev. +1). Overall, the Richmond Fed, like Philly Fed, declined but was well within recent ranges further alleviating some concerns after the New York Fed survey plunged to the lowest level since COVID. The Bank of Canada is expected to keep Interest Rates on hold at 5% and it will likely maintain language in its Statement that it is prepared to raise rates further if required, despite this increasingly becoming unlikely with many expecting rate cuts from April/June. The latest hot core inflation print saw calls for rate cuts pushed back slightly but there are some concerning signs on the labour market and growth. The most recent jobs report was soft with no net jobs added to the economy while the Q4 business outlook survey was rather sombre. Elsewhere, Oil closed 0.48% lower while Gold traded in a narrow range before a late rally saw Gold end Tuesday with a 0.4% gain.
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For anyone following my Platinum Service it was flat yesterday and is still head by 2811 points for January. December saw a gain of 1890 points after finishing November with a gain of 1734 points. October ended with a gain of 3184 points, after closing September with a small gain of 228 points, after finishing August with a gain of 1485 points, following a small gain of 285 points gain in July, after closing June with a gain of 2683 points. May closed with a gain of 3205 points. April saw a gain of 3354 points while March closed with a gain of 6168 points. The Platinum Service made a record 9619 points last October. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1900 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 0.29% higher at a price of 4864.
The Dow Jones Industrial Average closed 96 points lower for a 0.25% loss at a price of 37,905.
The NASDAQ 100 closed 0.43% higher at a price of 17,404.
The Stoxx Europe 600 Index closed 0.28% lower.
Yesterday, the MSCI Asia Pacific closed 1.1% higher.
Yesterday, the Nikkei closed 0.08% lower at a price of 36,517.
Currencies
The Bloomberg Dollar Spot Index closed 0.35% higher.
The Euro closed 0.3% lower at $1.0840.
The British Pound closed 0.2% lower at 1.2674.
The Japanese Yen fell 0.3% closing at $148.45 following a volatile trading session that witnessed plenty of two-way price action.
Bonds
Germany’s 10-year yield closed 6 basis points higher at 2.35%.
Britain’s 10-year yield closed 8 basis points higher at 3.99%.
U.S.10 Year Treasury closed 5 basis points higher 4.15%.
Commodities
West Texas Intermediate crude closed 0.48% lower at $74.40 a barrel.
Gold closed 0.4% higher at $2030.10 an ounce.
This morning on the Economic front we have German, Euro-Zone and U.K. Manufacturing PMI at 8.30 am, 9.00 am and 9.30 am respectively. This is followed by U.S. MBA Mortgage Applications at 12.00 pm and Manufacturing PMI at 2.45 pm. Finally, we have the Bank of Canada Rate Announcement at 3.00 followed a press conference with the Governor at 3.30 pm.
Cash S&P 500
As I mentioned in yesterday’s commentary this is one of the trickiest markets to read in many years. With all three American Indexes at or close to all-time highs the $NYSI Stochastic is maximum oversold. When you consider markets have closed higher for 12 of the past 13 weeks and the $NYSI is max oversold, it is bizarre. Shorts have been obliterated on this latest move higher with the NDX rallying a huge 850 points since Thursday’s lows. The S&P has a huge 10 ‘’Open Gaps’’ below which is almost unprecedented. As we have had a nice start to the year we can afford to be patient waiting for markets to hit our buy/sell levels without having to chase moves. Despite Interest Rate cut odds for March having fallen over the past week, markets do not seem to care, nor do they seem to worry about the recent carnage in Crypto Currencies which continued again yesterday with Bitcoin now trading below $39,000. I can make a case that the S&P has a test of 4900 before generating a more meaningful correction. For this reason, I will now raise my sell level to 4890/4906 with a wider 4921 ‘’Closing Stop’’. I will also raise my buy level to 4823/4838 with a higher 4809 ‘’Closing Stop’’.
EUR/USD
The higher Dollar saw the Euro traded lower to my second buy level at 1.0840 for a now 1.0895 average long position. I will now lower my T/P level to 1.0920 while leaving my 1.0795 tight ‘’Closing Stop’’ unchanged. If any of the above levels are hit, I will be back with a new update form my Platinum Members.
Dollar Index
I am still flat the Dollar as the market again fell shy of yesterday’s buy range despite rising 0.35% on the day. My only interest in selling the Dollar is still on a rally to 104.10/104.80 with the same 105.35 ‘’Closing Stop’’. I no longer want to be long the Dollar at this time. If this view changes, I will be back with a new update for my Platinum Members.
Cash DAX
No Change: Another quiet session for European Indexes as the market waits for tomorrow’s ECB Rate announcement. I will continue to be a small buyer on any further dip lower to 16400/16490 with the same 16335 ‘’Closing Stop’’.
Cash FTSE
For a change the FTSE outperformed the other European Indexes following another extremely quiet trading session. I cannot remember a time when the FTSE had such little daily price movement, a theme that has been going on for over six weeks now. I will now raise my buy level to 7400/7470 with a higher 7335 ‘’Closing Stop’’. I still do not want to be short the FTSE at this time. If this view changes, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
I am still flat the Dow as the market continues to trade near its 38,000 all-time high. Today, I will continue to be a small buyer on any dip lower to 37480/37730 with the same 37295 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 37920. If this view changes, I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
In after hours trading better than expected Netflix earnings saw the NDX spike to my sell range for a now 17450 short position. The late rally into the Chicago close saw the 14-Day RSI closed at a severely overbought reading of +74. With the RSI so high and the NDX trading outside the top of its Bollinger Band I am comfortable with my latest short position. I will add to this position on any further move higher to 17600 while leaving my 17705 ”Closing Stop” unchanged. I will now raise my T/P level to 16340. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
March BUND
Higher Treasury Yields saw the Bund hit my 133.95 buy level. I am still long, and I will add to this position on any further move lower to 133.35 while leaving my 132.85 ‘’Closing Stop’’ unchanged. I will now lower my T/P level to 134.50 which is just below yesterday’s high print. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Gold Rolling Contract
I am still flat Gold. As I am still long both the Euro and Silver, I will leave my Gold buy level unchanged at 1989/2004 with the same 1975 ‘’Closing Stop’’.
Silver Rolling Contract
No Change. I still believe in the bull case for this precious metal. I will continue to hold my 24.40 average long position with no stop or T/P level for now. This morning, Silver is trading slightly higher at a price of 22.37. I will look to add to my existing long position on any further move lower to 21.50. If this view changes, I will be back with a new update for my Platinum Members
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