U.S. Equity Markets closed mixed despite the huge 3.56% rally in the NASDAQ 100 as the Dow closed lower by 0.11%. Even though the McClellan Oscillator closed higher at +202 last night, the VIX also rose, closing higher by 5% at a price of 18.73. Jobless Claims fell to their lowest level in nine months – down to 183,000, while the Challenger Report showed U.S.-based employers unleased a fury of job cuts to start the year. Total job cuts for January rose north of 102,000 – a 440% increase year over year. Meta Platforms (META) kicked off the tech sector’s big earnings week by outperforming on earnings and forward guidance. After the bell Futures Markets are lower following disappointing earnings from Google and Apple. Within the S&P 500 Index, seven of the 11 sectors finished higher. European Markets surged. The Bank of England raised interest rates by 50 basis points to 4% but indicated it may pause or slow the pace to 25 basis points at its next meeting in March. The ECB raised interest rates by another 50 basis points to 2.50% while signalling it will take similar action in March to combat high inflation, before pausing, helping the DAX to close higher by over 2%.  German Export Figures for December showed a 6.3% decline from the prior month as high inflation and economic uncertainty continued to outweigh fading supply-chain problems. The Bank of England’s Governor Andrew Bailey presented new inflation and growth forecasts which showed a shallower recession than initially anticipated. The  latest data from the German Ifo Institute showed that manufacturers are still struggling with material shortages as they continue to work through higher-than-average backlogs of work. In Asia, Australia’s Business Confidence for the final quarter of 2022 remained positive, but future sentiment was downgraded significantly over rising concerns of slowing global and domestic economic growth. The Bank of Japan’s Deputy Governor Masazumi Wakatabe reiterated his support for policy easing to achieve desired levels of inflation. Research from the Bank of Japan based on Tankan data concluded that numerous corporations are passing on rising producer costs to consumers as raw material and other input prices surge. Chinese President Xi Jinping called for further efforts to support economic consumption as the world’s second-largest economy attempts to rebound post-pandemic. Elsewhere, Oil fell 0.80% while Gold closed 1.25% lower on following a rebound in the Dollar.

 

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 235 points yesterday and is now ahead by 702 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 1.47% higher at a price of 4179

The Dow Jones Industrial Average closed 39 points lower for a 0.11% loss at a price of 34,053.

The NASDAQ 100 closed 3.56% higher at a price of 12,803.

The Stoxx Europe 600 Index closed 1.35% higher.

This morning, the MSCI Asia Pacific rose 0.6%.

This morning, the Nikkei closed 0.39% higher at a price of 27,509.

Currencies 

The Bloomberg Dollar Spot Index closed 0.9% higher.

The Euro closed 0.8% lower at $1.0901.

The British Pound closed 1.2% lower at 1.2212.

The Japanese Yen rose 0.1% closing at $128.55.

Bonds

Germany’s 10-year yield closed 20 basis points lower at 2.08%.

Britain’s 10-year yield closed 30 basis points lower at 3.01%.

U.S.10 Year Treasury closed 1 basis points lower at 3.38%.

Commodities

West Texas Intermediate crude closed 0.80% lower at $75.80 a barrel.

Gold closed 1.25% lower at $1916.10 an ounce.

This morning on the economic front we have German, Euro-Zone and U.K. Composite Services PMI at 8.55 am, 9.00 am and 9.30 am respectively. This is followed by Euro-Zone PPI at 10.00 am. Next, we have the U.S. Non-Farm Payrolls, including the Unemployment Rate and Average Earnings at 1.30 pm. Finally, we have Services PMI at 2.45 pm and ISM Services PMI at 3.00 pm.

 

Cash S&P 500

Yesterday, witnessed another epic squeeze as short positions got slammed especially in tech and the S&P but the rest of the market was not as hot. The S&P fell shy of my 4200-target level with a 4195 high before falling after the close to sit at 4142 this morning. Helping the S&P to fall was the surge in the VIX which defended a well-defined trendline. The 14-Day RSI closed at 70 which is another reason why not to be long this severely overbought market. Remember the $NYSI and $NYMO are still max overbought. I have no interest in being long at these levels given what the signal charts are saying. Helping equity markets to fall overnight was the reversal in the Dollar. With the S&P also trading outside the top of its Bollinger Band, it is time for a correction which is also what the seasonal chart is looking for before the next rip higher. Yesterday’s move higher saw the S&P trade the whole of my sell range for a 4165 average short position before selling off after the close to my revised 4152 T/P level and I am now flat. The S&P has strong resistance from 4183/4200 where I will be an aggressive seller with a wider 4221 ‘’Closing Stop’’. My only interest in buying the S&P is on a move lower to 4080/4095 with a tight 4069 ‘’Closing Stop’’.

EUR/USD

My 1.0970 average short Euro position worked well as the market sold off to my 1.0920 T/P level on the Lagarde Press Conference. There is no doubt we are close to the end of this cycle of rate hikes as governments cannot afford rates to rise much further given the level of Global Debt which will now have to be financed at higher prices. The Euro has resistance from 1.0980/1.1050 where I will again be a seller with a 1.1115 ‘’Closing Stop’’. I no longer want to be long the Euro at this time.

March Dollar Index

I am still flat the Dollar as the market just missed my buy level before rallying 1%. I will now raise my buy level to 100.40/101.10 with a higher 99.75 ‘’Closing Stop’’.

Cash DAX

The DAX surged yesterday. It is now higher than where it was a year ago. The entire loss has been erased despite rate hikes, QT, Energy crisis, Economic slowdown and anything else you can think of as every bear has been taken out. This morning the DAX is trading at 15400, having closed at 15500 last night. The DAX is severely overbought, has resistance from 15520/15620 where I will be a small seller with a 15705 ‘’Closing Stop’’. My only interest in buying the market is at yesterday’s buy range from 15050/15130, with the same tight 14975 ‘’Closing Stop’’.

Cash FTSE

Gilt yields fell a massive 30 basis points yesterday after BoE Governor Bailey signalled that we are close to the end of rate hikes. However, the FTSE is struggling to move higher despite all the positive news. I am still flat as the FTSE as the market never came close to yesterday’s buy range. We have support from 7670/7740 where I will be a buyer with a higher 7605 ‘’Closing Stop’’. I still do not want to be short the FTSE at this time.

Dow Rolling Contract

The Dow has struggled the last two sessions even though the NDX has rallied 6% in the same timeframe. This is what I call negative divergence as the market looks to take a breather after its huge move up so far in 2023. I will now lower my sell level to 34300/34550 with a lower 34705 ‘’Closing Stop’’.

Cash NASDAQ 100

With $Meta rallying over 20% yesterday following excellent earnings. Helping the stock to surge was the $40bn buyback programme. This move higher saw the NDX close higher by over 3% as the 14 Day RSI closed at an unstainable 74 print last night. The NDX closed massively above its Weekly Upper Bollinger Band which is not a place where Indexes like to hang out for too long. At yesterday’s 12895 high print, the NDX had rallied over 2200 points since its late December Low. These vertical moves are not sustainable and weaker than expected earnings after the close sees the NDX trading lower at 12540 as I go to press. Yesterday the NDX traded the whole of my changed sell range per my email to my Platinum Members for a 12675 average short position before selling off after the close to my revised 12620 T/P level and I am still flat. With the NDX closing at 12803 last night we now have a massive gap. I would expect some of this gap to be filled especially after the NFP is released. As a result, I have bought the market here for a ‘’Punt’’ at 12540. I will add to this trade at 12390 with a tight 12295 ‘’Closing Stop’’. My T/P level will be 12640. If any of the above levels are hit I will be back with a new update for my Platinum Members.

March BUND

I am still flat as the Bund never came close to yesterday’s buy range following a 200-point rally. This morning the Bund is trading at 139.10. We have support from 137.60/138.30. I will move my buy level to this area with a higher 136.95 ‘’Closing Stop’’.

Gold Rolling Contract

Gold reversed Wednesday’s gains, selling off to hit my 1918 buy level. I am not comfortable in being long at this price given the extent of the reversal over the past 24 hours. I will add to this position at 1902 with a 1889 ‘’Closing Stop’’. I will now lower my T/P level to 1926.

Silver Rolling Contract

Yet again Silver found aggressive selling above $24. This move lower saw my 23.50 buy level triggered. I will add to this position at 22.70 with the same no stop policy. I will now lower my T/P level to 24.10.