Following another volatile trading session, U.S. equity markets finished the day mixed as the Dow closed higher by 0.59% while the NASDAQ 100 ended yesterday’s session with a loss of 1.35%. Headline economic data missed estimates, providing a reason for the selling. December ISM Manufacturing data fell to the lowest level since January 2021. But the release also showed that pricing pressures eased. Job Openings fell, indicating that fewer businesses are looking to higher to meet the demand created from the economic rebound. There was also some focus on bond yields, with yields rising for the second straight day. Wall Street bears could be (again) trying to push the narrative that higher bond yields could choke off the economic recovery, especially among technology companies. Out of Washington D.C., Sen. Joe Manchin (D-WV) said he has not had any talks to revive President Joe Biden’s Build Back Better plan, meaning that the president’s budget bill likely won’t pass anytime soon. Within the S&P 500, six of the 11 sectors finished lower. European Markets closed higher, French preliminary Consumer Price Index (“CPI”) figures for December were weaker than expected, falling compared with November as energy prices eased. German Retail Sales numbers for November unexpectedly gained, reversing October’s decline due to a surge in clothing and technology demand. The Organisation of Petroleum Exporting Countries (“OPEC”) was said to stick to its production increase plan, as the cartel sees Omicron only having a mild impact on crude demand. In Asia, The People’s Bank of China withdrew roughly $41 billion worth of liquidity from the financial system, reversing the recent trend of adding funds ahead of year-end. Bank of Korea Governor Lee Ju-yeol called on financial companies to manage risks, saying the COVID-19 Omicron variant was the biggest economic threat in the face of monetary policy normalization. Markit Japan’s final manufacturing Purchasing Mangers’ Index (“PMI”) data for December rose versus the initial reading, marking the eleventh consecutive month of expansion. Markit Caixin’s China manufacturing PMI numbers for December were stronger than expected, hitting the highest level since June of last year. Elsewhere, Oil rose 1.20% as OPEC stuck to its production increase plan, indicating that the cartel is confident that oil demand will remain strong, while Gold rose 0.82%, jumping back above $1800.
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 138 points yesterday on the first trading session for January, after ending December with a loss of 932 points, 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 0.06% lower at a price of 4793.
The Dow Jones Industrial Average closed 214 points higher for a 0.59% gain at a price of 36,799.
The NASDAQ 100 closed 1.35% lower at a price of 16,279.
The Stoxx Europe 600 Index closed 0.7% higher.
This morning, the MSCI Asia Pacific Index rose 0.1%.
This morning, the Nikkei closed 0.1% higher at a price of 29,332.
Currencies
The Bloomberg Dollar Spot Index closed 0.1% lower.
The Euro closed 0.1% higher at $1.1298.
The British Pound closed 0.4% higher at 1.3515.
The Japanese Yen fell 0.2%, closing at $115.92.
Bonds
Germany’s 10-year yield closed one basis points lower at -0.13%.
Britain’s 10-year yield closed 12 basis points higher at 1.09%.
US 10 Year Treasury closed three basis points higher at 1.66%.
Commodities
West Texas Intermediate crude closed 1.20% higher at $76.99 a barrel.
Gold closed 0.82% higher at $1,811.10 an ounce.
This morning on the Economic Front we have German and Euro-Zone Markit Services PMI at 8.55 am and 9.00 am respectively. This is followed by U.S. ADP Employment Change at 1.15 pm. Finally at 2.45 pm we have Markit Services PMI, followed by the December FOMC Minutes at 7.00 pm.
Cash S&P 500
My S&P plan worked well with the market trading higher to my 4814 sell level before selling off to my 4782 buy level with a low of 4773. This move lower saw my 4799 T/P level filled before emailing my Platinum Members to exit any long position at 4787.50 and I am now flat. Although the S&P made yet another new all-time high for the 14th consecutive month, it came against a back- drop of strong negative divergence. Historically when we see such a scenario it does not end well. We have two more months before the Fed stops tapering so it is possible that the Fed’s Balance Sheet expands during this time which could see higher prices as mentioned in yesterday’s commentary. The S&P has resistance from 4805/4821 where I will again be a seller with a 4839 Stop. The S&P has short-term support from 4743/4758 where I will be a small buyer with a 4729 Stop. If I am taken short I will have a T/P level at 4793. If I am taken long I will have a T/P level at 4769.
EUR/USD
No Change. I am still a buyer on any dip lower to 1.1200/1.1250 with the same 1.1155 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
The Dollar again traded in a narrow range and I am still flat. The Dollar has support from 95.40/95.80 where I will be a buyer with the same 94.95 stop. If I am taken long I will have a T/P level at 96.10.
Cash DAX
There is no sign of any pause in the DAX as the market surged again yesterday, hitting my initial 16150 sell level with a 16200 high print. The sell-off in the NDX saw some profit taking in the DAX and I used this move lower to exit any short position at 16132 and I am now flat. The DAX is severely overbought. It is difficult to be short given the insane QE Policy from the ECB which unlike the Fed has no intention of stopping any-time soon. The DAX has further resistance from 16260/16340 where I will be a small seller with a 16415 tight stop.
Cash FTSE
The FTSE made a new 23 month high yesterday, hitting my 7495 initial sell level. This morning, the FTSE is trading slightly lower and I have now exited this short-position here at 7485. The FTSE has further resistance from 7535/7585 where I will be a seller with a 7625 tight stop. Meanwhile, I will leave my 7320/7370 buy level unchanged with the same 7265 stop.
Dow Rolling Contract
The Dow traded to a new all-time high at 36935 yesterday before falling 200 points. This move higher saw my initial 36900 sell level hit before emailing my Platinum Members to exit any short position at 36830 and I am now flat. The Dow has strong resistance from 37000/37250 where I will be again be an aggressive seller with a 37455 wider stop. I will now raise my buy level to 36520/36350 with a higher 36195 stop.
Cash NASDAQ 100
My NASDAQ plan did not work out as the market traded the whole of my buy range for a 16360 average long position before stopping me out of this trade at 16195 and I am now flat. The NDX has strong support below from 16075/15900 where I will be an aggressive buyer with a 15795 stop. If I am taken long I will have a T/P level at 16170. I will now lower my sell level to 16500/16650 with a 16805 stop. If I am taken short I will have a T/P level at 16410.
March BUND
No Change. The Bund is now oversold and has support from 169.60/170.10 where I will be a buyer with a lower 169.15 stop.
Gold Rolling Contract
I am still flat. Ahead of the FOMC Minutes I am reluctant to chase the Gold price higher. Therefore, I will leave my 1767/1782 buy level unchanged with the same 1755 stop.
Silver Rolling Contract
No Change. I am still an aggressive buyer from 21.60/22.40 with a higher 20.95 stop. If I am taken long I will have a T/P level at 22.85.
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