US Indices were hit hard on Tuesday, albeit settling off troughs, as weakness in mega-cap names (NVDA, AVGO, META, MSFT, AMZN) weighed on the tech-heavy NASDAQ 100, which unsurprisingly saw Tech as the clear sectoral laggard. Communications and Discretionary were the next worst hit, while Energy, Materials, Consumer Staples, and Utilities all saw gains in excess of 1%. Supporting the former was strength in the crude complex after heightened US/Iran rhetoric, despite seemingly easing in the last couple of days. The Wall Street Journal reported that Iranian gunboats approached a US oil tanker in the Strait of Hormuz early Tuesday and ordered it to stop, and in response, the US military shot down an Iranian drone that approached a US Navy aircraft carrier in the Arabian Sea. Separate reports suggested that, ahead of the Iran/US meeting, Iran reportedly wants to change venue [Oman from Istanbul) and the format of nuclear talks with the US. Amid the continued risk-off sentiment, precious metals saw hefty gains and reversed some of their extensive losses since the Warsh Fed Chair nomination. Bitcoin saw extensive losses and tested $73,000 to the downside. In FX, the Dollar was broadly weaker against G10 peers, as the Swiss Franc gained from broader risk-off sentiment, while Antipodeans, and in particular the Australian Dollar, benefitted from the RBA hiking rates by 25 basis points early yesterday morning. Treasuries saw marginal gains across the curve, albeit in very tight ranges, ahead of QRA on Wednesday. Lastly, the US House approved funds to end the partial government shutdown and sent them to US President Trump for signing into law (which is a given), but it still means the US payrolls report on Friday is delayed, with ING writing this week’s data may be published next week. Fed Member Barkin said the policy rate is now at the higher end of the neutral rate estimate. He described recent economic data as encouraging on the demand side, employment and inflation, but remains concerned about risks to employment and inflation. Barkin is open to a conversation about any aspect of the balance sheet or other Fed operations. Meanwhile, he said it is still an open question about when inflation will fall to 2% and expects progress on inflation, which remains above target. On jobs, he noted a world of no job growth is ‘uncomfortable’ even if the unemployment rate stays low; firms say demand is fine and are not doing layoffs at scale. Barkin does not know Kevin Warsh well, but said he seems capable and charismatic. Elsewhere, Oil closed higher by 1% while Gold surged ending Tuesday’s session with a 6% gain.
To mark my 3325th 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 50 points yesterday and is now ahead by 1195 points for February, after ending January with a gain of 4757 points, 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 0.84% lower at a price of 6917.
The Dow Jones Industrial Average closed 166 points lower for a 0.34% loss at a price of 49,240.
The NASDAQ 100 closed 1.55% lower at a price of 25,338.
The Stoxx Europe 600 Index closed 0.10% higher.
This Morning, the MSCI Asia Pacific closed 0.3% higher.
This Morning, the Nikkei closed 0.78% lower at a price of 54,293.
Currencies
The Bloomberg Dollar Spot Index closed 0.26% lower.
The Euro closed 0.24% higher at $1.1818.
The British Pound closed 0.23% higher at $1.3696.
The Japanese Yen fell 0.02% closing at $155.68
Bonds
U.K.’s 10-Year Gilt closed 2 basis points higher at 4.53%.
Germany’s 10-Year Bund Yield closed 2 basis points higher at 2.89%
U.S.10 Year Treasury closed 2 basis points higher at 4.29%.
Commodities
West Texas Intermediate crude closed 1.0% higher at $62.76 a barrel.
Gold closed 5.73% higher at $4926.10 an ounce.
This morning on the Economic Front we have German, Euro-Zone and U.K. Composite PMI at 8.55 am, 9.00 am and 9.30 am respectively. Next, we have Euro-Zone CPI and PPI at 10.00 am. This is followed by U.S. MBA Mortgage Applications at 12.00 pm and Composite PMI at 2.45 pm. Finally, we have ISM Manufacturing at 3.00 pm.
Cash S&P 500
Stocks fell sharply on Tuesday, even though the S&P 500 finished the day down just 0.85%. Technology and software stocks were hit the hardest, pushing the NASDAQ 100 down more than 1.5% and dragging the XLK ETF lower by over 2%. The damage in the software sector has been undeniable, with some stocks now trading below their 2022 lows. Adobe, for example, closed at its lowest level since October 2019. In some respects, this is similar to the transition from 2021 to 2022. The key difference is that the Federal Reserve is now cutting rates, whereas it was raising them at that time. Oil was also surging toward $100 at the time, whereas today it is struggling to hold above $60. Still, it is easy to see that the Software ETF, IGV, peaked well before the S&P 500 and helped lead the broader market lower, as did several other segments of the market. Additionally, pressure on private equity stocks has returned, with many now trading below the lows reached in November. In the meantime, consumer staples, as represented by XLP, are surging to all-time highs in a rather violent move. This supports the idea that the market is undergoing a re-rating of risk. That shift could be tied to expectations that multiple compression is now beginning, either because a new Fed chair may prove less market- or liquidity-friendly, or because the market is starting to distinguish between winners and losers in the AI race. I tend to view this primarily as a re-rating of risk and the early stages of multiple compression. Microsoft’s P/E ratio appears to support that view. Tuesday was a frustrating session for my S&P calls. The market fell shy of my initial 7015 sell level before falling 140 Handles. I had a buy order at 6860 as emailed to my Platinum Members with the market hitting a low at 6863 before rallying to sit at 6935 as I go to post. Today, I will lower my sell level to 6980/7005 with a lower 7027 ‘Closing Stop’. The S&P has short-term support from 6855/6880 where I will be a buyer with a 6839 tight ‘Closing Stop’. If I am taken short, I will have a T/P level at 6957. If I am taken long, I will have a T/P level at 6908. If these views change I will be back with a new update for my Platinum Members.
EUR/USD
I am still flat as the Euro never came close to Tuesday’s buy range. The Euro has support below from 1.1680/1.1760 where I will continue to be a buyer with the same 1.1615 ‘Closing Stop’. If I am taken long, I will have a T/P level at 1.1825.
Dollar Index
I am still flat. Today, I will continue to be a buyer on any further dip lower to 96.00/96.80 with the same 95.35 ‘Closing Stop’. If I am taken long, I will have a T/P level at 97.30.
Russell 2000
I am still flat as the Russell never came close to Tuesday’s sell range. I will now lower my sell level to 2675/2745 with the same 2805 ‘Closing Stop’. If I am taken short, I will have a T/P level at 2630.
FTSE 100
My latest average short 10315 position worked well as the market traded lower to my 10265 T/P level and I am now flat. Today, I will again be a seller from 10340/10440 with a higher 10505 ‘Closing Stop’. If I am taken short, I will have a T/P level at 10270. I still do not want to be long the FTSE at this time.
Dow Rolling Contract
The Dow continues to trade in wide ranges and I am still flat. Given valuations I am finding it hard to be a buyer even though buying the market last week worked well. I would prefer to see a more sustained sell-off before putting on a macro long position. This morning the Dow is trading at a price of 49360 as I go to post. With 50,000 ‘’close by’’ it would make sense for this round number pivot point to get tagged first before a meaningful sell-off ensues. Today, I will continue to be a seller from 49800/50100 with the same 50305 ‘Closing Stop’. If I am taken short, I will have a T/P level at 49560.
Cash NASDAQ 100
I am still flat. The NDX dropped shortly after I posted, hitting an afternoon low at 25115 before rallying 300 points. Today, I will lower my sell level to 25700/25900 with a lower 26055 ‘Closing Stop’. I still do not want to be long the NDX at this time. If I am taken short, I will have a T/P level at 25515. If this view changes I will be back with a new update for my Platinum Members.
December BUND
The Bund finally hit my 127.50 buy level. I am still long with the same 128.05 T/P level. I will continue to look to add to this position at 126.70 while leaving my 126.15 ‘Closing Stop’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Gold Rolling Contract
Both Gold and Silver are giving little opportunity to get long as both metals have had vicious rallies since Monday’s lows. Overnight both of the metals have rallied further. I will now raise my Gold buy level to 4650/4730 where I will be a strong buyer with a higher 4495 ‘Closing Stop’. Given the volatility, both Gold and Silver may not be for everyone. Due to the wide stops I will only be trading in very small size. If I am taken long, I will have a T/P level at 5010. If this view changes I will be back with a new update for my Platinum Members.
Silver Rolling Contract
Silver never came close to Tuesday’s buy range before accelerating higher into the New York close and again overnight, trading at a price of 89.80 as I go to press. Today, I will raise my Silver buy level to 79.30/83.30 with a higher 77.55 ‘Closing Stop’. If triggered, I will have a T/P level at 86.30. If this view changes, I will be back with a new update for my Platinum Members.
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