U.S. Equity Markets closed higher following a volatile trading session. Federal Reserve Chair Jerome Powell said that additional interest-rate increases will be needed to cool inflation and that peak rates may need to move higher if the strong jobs market persists. All eyes were on President Joe Biden’s State of the Union address to Congress overnight, with investors paying close attention to the president’s legislative agenda and economic priorities. President Biden announced his ambition to quadruple the levy on corporate stock buybacks and to renew his intentions for a minimum tax on billionaires. However, both initiatives are likely to fail in a split Congress. Federal Reserve President Neel Kashkari said that explosive jobs growth in January is evidence that the central bank needs to tighten rates further to tame inflation. The Used Vehicle Value Index rose 2.5% month over month in January, marking the first increase since last May and the biggest since late 2021. However, the index is still down 12.8% compared with last year. Within the S&P 500 Index, eight of the 11 sectors finished higher. European Markets closed mixed. German Industrial Production data for December was lower than expected, coming in at a 3.1% decline month over month. The drop was largely due to weakness among energy-driven sectors. U.K. Retail Sales data for January slowed to an annual growth rate of only 4.2%, falling from December’s nearly 7% figure and much lower than inflation. Former Bank of England policymaker Danny Blanchflower said that collapsing house prices will push the U.K. central bank into a “pivot” scenario that would require rate cuts. ECB board member Isabel Schnabel said the bank’s record pace of monetary-policy tightening has had little effect so far on inflation and other economic data. In Asia, the Reserve Bank of Australia raised its benchmark cash rate target by another 25 basis points to 3.35% and said decisions going forward will be dependent on economic output. Japanese wage growth in December was stronger than expected, rising compared with November, and put more pressure on the central bank to end easy-money policies. The Chinese city of Wuhan said it would lift a three-year-old ban allowing families to buy second homes “within reason” in an attempt to support the local economy. Japanese Minister of Finance Shunichi Suzuki said the government has not approached Bank of Japan Deputy Governor Masayoshi Amamiya about taking over the official role of governor. Elsewhere, Oil surged 4.33% while Gold was quiet closing higher by 0.18%.
To mark my 2700th 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 187 points yesterday and is now ahead by 1159 points for February after closing January with a gain of 4687 points, while finishing December with a gain of 2054 points. November ended with a gain of 4789 points, while finishing October with a record gain of 9619 points, making 6660 points in September, after closing August with a gain of 2228 points, having made 2660 points in July, following a gain of 3371 points in June. The Service made 3651 points in May, after making 762 points in April, following a gain of 5883 points in March. The Platinum Service made an impressive 5324 points in February, after ending January with a gain of 3878 points, more than making up for December’s 932 points loss. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 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 1.29% higher at a price of 4164
The Dow Jones Industrial Average closed 266 points higher for a 0.78% gain at a price of 34,156.
The NASDAQ 100 closed 2.12% higher at a price of 12,728.
The Stoxx Europe 600 Index closed 0.23% higher.
This morning, the MSCI Asia Pacific rose 0.9%.
This morning, the Nikkei closed 0.29% lower at a price of 27,606.
Currencies
The Bloomberg Dollar Spot Index closed 0.1% higher.
The Euro closed 0.1% lower at $1.0705.
The British Pound closed 0.1% lower at 1.2004.
The Japanese Yen rose 0.6% closing at $131.40.
Bonds
Germany’s 10-year yield closed 4 basis points higher at 2.34%.
Britain’s 10-year yield closed 8 basis points higher at 3.32.
U.S.10 Year Treasury closed 5 basis points higher at 3.68%.
Commodities
West Texas Intermediate crude closed 4.33% higher at $77.32 a barrel.
Gold closed 0.18% higher at $1876.10 an ounce.
This morning on the economic front we have no data of note from either the Euro-Zone or U.K. At 12.00 pm we have U.S. MBA Mortgage Applications. This is followed by Wholesale Inventories at 3.00 pm. Finally, we have speeches from Fed Members Williams at 2.20 pm and Waller at 6.45 pm.
Cash S&P 500
Frustratingly, the S&P missed my initial 4085 buy level twice before having big rallies off its 4094 morning low and 4088 evening low and I am still flat. The S&P was flat as Powell was ready to speak before rallying 50 Handles, followed by a 70 Handle dump and then an 85 Handle rip into the close. Powell was interpreted by markets as dovish as bears’ efforts to reverse the rally again failed at support. With the $NYSI max overbought I just cannot chase the S&P higher. I will still be a strong buyer from 4020/4035 where the Weekly 5 EMA, 50 MA and 5 EMA are all coinciding. I will be an aggressive buyer on any dip to this area with no stop or Take Profit level if triggered. Any sell-off will likely be contained ahead of the April traditional bullish month where history tell us not to be short. The appetite to buy dips is huge as we saw yesterday given the extent of the two rallies off the above lows. In my opinion the risk/reward is still a break to the downside given the number of technical signals that are still overbought. The rally in Bond Yields and the Dollar also suggest a break to the downside is coming ahead of the next rip higher. Patience is the name of the game at this time. The S&P has support from 4105/4120. I will move my buy level higher to this area with a 4089 higher ‘’Closing Stop’’. The S&P has strong resistance at the Monthly 20 MA and Weekly 100 MA at 4220. As a result, I will be an aggressive seller from 4215/4235 with a wider 4251 ‘’Closing Stop’’.
EUR/USD
The Euro traded lower to my second buy level at 1.0675 for a 1.0705 average long position. Subsequently, we rallied to my revised 1.0752 T/P level as emailed to my Platinum Members and I am now flat. The Euro has support from 1.0610/1.0680 where I will be an aggressive buyer with a lower 1.0545 ‘’Closing Stop’’. The 50 Day Moving Average is at 1.0680 this morning and will offer support on any initial test.
March Dollar Index
No Change. I am still flat. I will continue to be a strong buyer on any dip lower to 101.80/102.60 with the same 101.25 ‘’Closing Stop’’.
Cash DAX
No Change. I am still flat. I will now raise my sell level to 15550/15650 with a higher 15745 ‘’Closing Stop’’. My only interest in buying the market is from 15050/15130, with the same tight 14975 ‘’Closing Stop’’.
Cash FTSE
The FTSE continues to ignore all political and economic woes as the market just fell shy of Friday’s all-time high. I am still flat. I will now raise my buy level to 7780/7850 with a higher 7715 ‘’Closing Stop’’.
Dow Rolling Contract
The Dow rallied off its 50 Day Moving Average as expected but unfortunately missed my 33620 buy level by 10 points before rallying just before the close to my initial 34250 sell level. This was a 600 point rip in just one hour of trading. After the close the Dow had a small sell-off, enabling me to cover this position at my 34110 revised T/P level and I am now flat. The Dow has further resistance from 34350/34600 where I will again be a seller with a 34755 ‘’Closing Stop’’. The Dow has support from 33650/33900. I will move my buy level to this area with a higher 33495 ‘’Closing Stop’’.
Cash NASDAQ 100
The NDX led the rally yesterday, closing higher by over 2%. Unfortunately, the NDX just fell shy of yesterday’s buy range before rallying over 300 points. This was an impressive rally given the move higher in Bond Yields. The 14-Day RSI closed at 68, so one more move higher will see me look to set up a short position. We have resistance from 13050/13200 where I will be a seller with a 13305 ‘’Closing Stop’’. My only interest in buying the NDX is from 12400/12550 with a higher 12295 ‘’Closing Stop’’.
March BUND
The Bund saw planet of two-way price action after hitting my 136.10 buy level. I am still long with a now lower 136.60 T/P level. I will add to this position at 135.40 while lowering my ‘’Closing Stop’’ to 134.75. If any of the above levels are hit I will be back with a new update for my Platinum Members.
Gold Rolling Contract
Gold tried to rally off its morning 1860 low before selling off again into the New York close following another reversal in the Dollar. I am still flat. My only interest in buying Gold is still on a dip lower to 1839/1854 with the same 1825 ‘’Closing Stop’’.
Silver Rolling Contract
No Change. I am still long at an average rate of 23.10 with the same no stop policy. I will leave my T/P level unchanged at 23.10. If any of the above levels are hit I will be back with a new update for my Platinum Members.
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