U.S. Equity Markets saw sizeable losses on Tuesday with the losses in Big Tech extending, seeing Nasdaq underperform. The malaise was heightened with Apple (AAPL) weighed on by reports of poor China iPhone metrics, Tesla (TSLA) extending losses amid a fire and resulting production halt at its Berlin plant, and AMD (AMD) facing U.S. restrictions on its chip sales to China. The Big Tech weakness obfuscated the better performance seen elsewhere with the equal-weight S&P holding up much better than the market cap-weighted benchmark. Target (TGT) was a standout outperformer after its strong earnings report. The Indices did manage to close off the lows with thanks to a strong recovery in names such as SMCI and NVDA. However, the reverse was true for Bitcoin and related stocks, after the crypto currency managed to eclipse its prior record highs to make new peaks above USD 69k earlier in the session only to tumble into the close back beneath the USD 60k mark. Spot Gold also hit new all-time-highs above USD 2,140/oz but faded somewhat into the close. Elsewhere, Treasuries rallied to multi-week highs after a deeper fall than expected in ISM Services, which included a fall in the prices paid component but also the employment sub-index ahead of Friday’s NFP, attention now on Wednesday’s ADP employment and JOLTS. Ahead of Powell in Congress on Wednesday, Fed pricing now sees 90bps of cuts across 2024 vs 85bps before the ISM Services. There were even greater gains in Gilts and EGBs ahead of the UK budget (Wednesday) and ECB (Thursday). FX was more muted, with the Dollar Index flat on the session, while the Japanese Yen saw standout gains thanks to the lower RoW yield environment, not to mention the hotter-than-expected Tokyo CPI figures ahead of Japanese wage figures on Thursday. The Yuan was flat after China announced its 5% GDP growth target after the Two Sessions, although there is some disappointment over the degree of fiscal stimulus that has been offered, with those concerns weighing on oil prices. ISM Services fell to 52.6 in February from 53.4 and beneath the expected 53.0. Internally, Prices Paid encouragingly fell to 58.6 from 64.0 and business activity lifted to 57.2 (prev. 55.8). Employment dipped back into contractionary territory (48.0 from 50.5) while New Orders rose to 56.1 (prev. 55.0). Supplier deliveries slipped back below 50.0, while inventories delved deeper into contracting territory. The backlog of orders remained above 50, albeit just, at 50.3 (pre. 51.4) and new export orders and imports declined to 51.6 (prev. 56.1) and 54.3 (prev. 59.9), respectively. As the report notes, “the past relationship between the Services PMI and the overall economy indicates that the Services PMI corresponds to a 1.2% increase in real GDP on an annualised basis.” Overall, Pantheon Macroeconomics expects a gradual slowdown in services sector activity over the coming quarters as the Fed’s rate hikes start to weigh more heavily, particularly now that the excess savings built up by consumers during the pandemic have mostly been spent. Elsewhere, Oil fell 0.74% while despite a late sell-off in Gold, it still ended Tuesday with a 0.60% gain.
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For anyone following my Platinum Service it made 225 points yesterday and is now ahead by 667 points for March. February closed with a gain of 1606 points, after closing January with a gain of 3675 points. 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 1.02% lower at a price of 5078.
The Dow Jones Industrial Average closed 404 points lower for a 1.04% loss at a price of 38,585.
The NASDAQ 100 closed 1.80% lower at a price of 17,897.
The Stoxx Europe 600 Index closed 0.23% lower.
Yesterday, the MSCI Asia Pacific closed 0.8% lower.
Yesterday, the Nikkei closed 0.03% lower at a price of 40,097.
Currencies
The Bloomberg Dollar Spot Index closed 0.07% lower.
The Euro closed 0.1% higher at $1.0858.
The British Pound closed 0.1% higher at 1.2706.
The Japanese Yen rose 0.3% closing at $149.95.
Bonds
Germany’s 10-year yield closed 8 basis points lower at 2.32%.
Britain’s 10-year yield closed 11 basis points lower at 4.11%.
U.S.10 Year Treasury closed 8 basis points lower at 4.14%.
Commodities
West Texas Intermediate crude closed 0.74% lower at $78.16 a barrel.
Gold closed 0.6% higher at $2129.10 an ounce.
This morning on the Economic Front we have the German Trade Balance at 7.00 am, followed by U.K. Construction PMI at 10.00 am and U.S. MBA Mortgage Applications at 12.00 pm. At 3.00 pm we have JOLTS Job Openings, Wholesale Inventories and Fed Chair Powell’s Testimony before Congress all at 3.00 pm. Finally, we have the Beige Book at 7.00 pm. Meanwhile, Fed Members, Daly and Kashkari are speaking at 5.00 pm and 9.15 pm respectively.
Cash S&P 500
There is no doubt that the 14 Day RSI is the best technical signal for picking a short-term sell-off in the S&P. Yesterday’s sell-off saw the S&P hit a low at 5057 before buyers drove the market higher by 25 Handles into the close. The 5 EMA support level at 5060 was tagged helping the market to have a small recovery into the close. Apple shares closed 3% lower yesterday. The total fall in Apple is now 15% off its $200 high. I have never seen Apple close entirely below its Daily Bollinger Band not even during COVID. At the same time the RSI reading is the lowest since 2019. As a result, I will now look to buy both the S&P and NDX on any further dips from here. Yesterday’s sell-off saw the S&P hit my 5114 T/P level on my latest 5126 average short position and I am now flat. With Powell testifying to Congress at 3.00 pm we can expect some volatility. The S&P has support from 5040/5056 where I will be a small buyer with a 5027 tight ‘’Closing Stop’’. I no longer want to be short the S&P at this time. If this view changes, I will be back with a new update for my Platinum Members.
EUR/USD
The Euro again traded in a narrow range, and I am still flat. I will leave my 1.0740/1.0810 buy level unchanged with the same 1.0675 ‘’Closing Stop’’. If triggered, I will have a T/P level at 1.0860.
Dollar Index
No Change. I am still flat the Dollar. I will continue to be a seller from 104.35/105.05 with the same 105.65 ‘’Closing Stop’’. I still do not want to be long the Dollar at this time.
Cash DAX
No Change. Just like the FTSE above, yesterday’s NDX sell-off did not have any major negative effect on the DAX. I have no edge in the DAX at this time. The RSI is fried to the upside. I just cannot justify a long position here while I still have no interest in been short, as I prefer to sell the American Indexes. If this view changes I will be back with a new update for my Platinum Members.
Cash FTSE
Despite the U.S. Indexes closing over 1% lower yesterday, the FTSE again traded in a narrow range. As I am now long the Dow, to reduce risk, I covered my latest 7630 long FTSE position at my revised 7655 T/P level and I am now flat. Today, I will again be a buyer of the FTSE on any dip lower to 7550/7610 with a lower 7495 ‘’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
The Dow had its worst day in points losses since late December. This move lower saw the Dow trade the whole of my buy range for a now 38640 average long position. Ahead of Powell’s Testimony this afternoon, I would expect at least a small bounce. I will now lower my T/P level to 38720. Meanwhile, I will leave my 38395 ‘’Closing Stop’’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
The NDX hit a late afternoon low at 17805 – 535 points below Monday’s latest new all-time high. This is a huge move in just 24 hours. Given how far both Apple and Google are trading outside the bottom of their respective Bollinger Bands, I will now look to buy the NDX on any dip from here. I said on Monday, that we may only get a shallow sell-off and already after just a one -day fall, I am seeing some positive divergences in both the NDX and S&P. Tuesday’s move lower saw the NDX hit my revised 18030 T/P level on last Friday’s 18110 average short position and I am now flat. The NDX has strong support from 17670/17820 where I will be a strong buyer with a 17555 wider ‘’Closing Stop’’.
March BUND
Weaker U.S. Economic data saw the Bund rally 80 points yesterday and I am still flat as the market never came close to my buy range. I will now raise my buy level to 131.90/132.70 with a higher 131.15 ‘’Closing Stop’’. I still do not want to be short the Bund at this time.
Gold Rolling Contract
I am still flat Gold as the market made a new all-time high at 2142 before having a small sell-off into the New York close. Ahead of Powell, I will not chase the market higher, leaving my 2082/2097 buy level unchanged with the same 2069 ‘’Closing Stop’’.
Silver Rolling Contract
No Change: I have said a number of times this year that ‘’Patience’’ is required in order to make sustained points in 2024. I am glad that I have stuck to the long side in Silver, despite e been offside on my latest 24.24 average long position for the past month. Thankfully, Silver rallied 3% on Monday and is now trading just below my entry point at 23.92 this morning. I will now have a T/P level on this position at 25.10. I will continue to hold this position with no stop. If this view changes, I will be back with a new update for my Platinum Members.
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