U.S. Equity Markets closed lower led by the 1.40% fall in the Small Cap Russell 2000. This move lower saw the VIX close higher by 6% while the McClellan Oscillator also closed lower with a -21 print last night. Political tensions with China rose to start the week following the U.S. military’s action to shoot down a suspected Chinese spy balloon. Secretary of State Antony Blinken postponed his previously scheduled trip to China. Bond Yields rose on renewed concerns of a more hawkish Federal Reserve following Friday’s unexpectedly strong jobs report. Treasury Secretary Janet Yellen said a path for avoiding a U.S. recession this year would rely on inflation continuing its downward trend and a resilient job market. Investors and analysts remain sceptical over the January Jobs Report, citing that seasonal adjustment factors are the primary catalyst for the better-than-expected figure, rather than organic job growth. Within the S&P 500 Index, nine of the 11 sectors finished lower. European Markets closed lower. Euro-Zone Economic Confidence figures for February improved by 9.5 points and “a recession is off the table for the time being,” according to data-analytics firm Sentix, while German Factory Orders for December showed higher-than-expected growth –the latest signal that Europe’s largest economy might avoid an economic downturn. Adding to the gloom was the weaker than expected Euro-Zone Retail Sales for December contracting more than expected – a sign that consumers are still hurting from elevated pricing pressures despite recent easing. Markets finished lower following a hot U.S. jobs report on Friday caused investors to rethink the Fed’s rate-policy timeline (namely, whether it will keep rates higher for longer). The European Central Bank’s (“ECB”) Robert Holzmann said that inflation remains far too high in the Euro area for the central bank to consider changing its current rate-tightening policy. In Asia, Japanese Prime Minister Fumio Kishida is said to have approached Bank of Japan Deputy Governor Masayoshi Amamiya about becoming the next Governor, which could continue the central bank’s easy-money policies. The Reserve Bank of Australia raised Interest Rates overnight by 25 basis points to 3.6%, leading to a bounce in the Australian Dollar. Australia-China trade relations are reportedly on the mend after Australia’s Minister for Trade, Tourism, and Investment Don Farrell and China’s Minister of Commerce Wang Wentao held virtual talks to discuss lifting the current trade embargo. Elsewhere, Oil rose 1.46% while Gold closed lower by 0.20%.
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 email@example.com for details
For anyone following my Platinum Service it made 370 points yesterday and is now ahead by 972 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
The S&P 500 closed 0.61% lower at a price of 4111
The Dow Jones Industrial Average closed 35 points lower for a 0.10% loss at a price of 33,891.
The NASDAQ 100 closed 0.87% lower at a price of 12,464.
The Stoxx Europe 600 Index closed 0.80% lower.
This morning, the MSCI Asia Pacific rose 0.8%.
This morning, the Nikkei closed 0.03% lower at a price of 27,685.
The Bloomberg Dollar Spot Index closed 0.9% higher.
The Euro closed 0.7% lower at $1.0721.
The British Pound closed 0.3% lower at 1.2021.
The Japanese Yen fell 0.8% closing at $132.15.
Germany’s 10-year yield closed 11 basis points higher at 2.30%.
Britain’s 10-year yield closed 19 basis points higher at 3.24%.
U.S.10 Year Treasury closed 11 basis points higher at 3.63%.
West Texas Intermediate crude closed 1.46% higher at $74.46 a barrel.
Gold closed 0.20% lower at $1872.10 an ounce.
This morning on the economic front we already had the release of German Industrial Production which fell 3.1% versus -0.7% expected. Next, we have speeches from Bank of England Members Ramsden and Pill at 9.00 am and 10.15 am respectively. This is followed by U.S. NFIB Business Optimism at 11.00 am and the Trade Balance at 1.30 pm. Finally, at 5.40 pm we have a speech from Fed Chair Powell.
Cash S&P 500
My S&P plan worked really well yesterday as the market sold off to my 4095 aggressive buy level before rallying to my 4112 T/P level. Subsequently, I emailed my Platinum Members to buy the S&P again at 4094 before rallying to my second T/P level at 4112 and I am now flat. It is no surprise that we found resistance last Thursday as this was the day that saw the heaviest single day of short-covering ever. The high was 4195, which is just below the Monthly 20 EMA at 4215. With the S&P trading outside the Weekly Bollinger Band and a 14-day RSI at 70, it was no wonder we had a decent sell-off. The big question is how long this correction will last. The Weekly 5 EMA, 50 MA and 5 EMA are all coinciding in the 4020/4035 area. I will be an aggressive buyer on any dip to this area with no stop or Take Profit level if triggered. With the $NYSI EVEN MORE OVERBOUGHT which is a red flag if ever there was one as every time this key indicator gets this overbought we tend to get at least a 5% correction which would tie in with my 4020/4035 support area above. Similarly on Thursday the VIX hit a major support line, suggesting a rebound in this key signal which in turn will imply lower stock prices going forward. This afternoon we have a speech from Fed Chair Powell. If Powell clarifies his financial conditions comments from last week to more closely reflect reality, perhaps these support levels could also come about in a hurry. This move lower this week coincides with the seasonal chart, expecting a sell-off in the first week of Feb before another ramp higher into April. Today, I will be a small buyer from 4072/4087 with a 4059 ‘’Closing Stop’’. Ahead of Powell I do not want to be short the S&P.
Thursday’s reversal continued over the past 24 hours as the Euro traded lower to my 1.0735 buy level. I will add to this position at 1.0675 with a now lower 1.0595 ‘’Closing Stop’’. I still do not want to be short the Euro at this time, despite the 300-point fall in the past few days.
March Dollar Index
The Dollar rose a further 0.8% yesterday and I am still flat. This is no surprise as the Dollar found support on Thursday at the Monthly 20 EMA, having risen over 12% since the October low. I am still flat. I will now raise my buy level to 101.80/102.60 with a higher 101.25 ‘’Closing Stop’’.
No Change. I am still flat. I will now lower my sell level to 15490/15590 with a lower 15675 ‘’Closing Stop’’. My only interest in buying the market is from 15050/15130, with the same tight 14975 ‘’Closing Stop’’.
Finally, we saw some prof-taking in the FTSE yesterday. This move lower saw my 7810-buy level triggered before rallying this morning to my 7850 T/P level and I am now flat. Today, I will again be a buyer on any further dip lower to 7740/7800 with the same 7695 ‘’Closing Stop’’ unchanged.
Dow Rolling Contract
It was an exceptionally boring day for the Dow yesterday as the market traded in a narrow range and I am still flat. All eyes are now focussed on Powell’s speech this afternoon. The 50 Day Moving Average for the Dow comes in at 33665 this morning. Any test of this level will attract some short-term buying. As a result, I will be a buyer from 33370/33620 with a 33195 ‘’Closing Stop’’. My only interest in selling the Dow is still on a further rally to 34250/34500 with a lower 34645 ‘’Closing Stop’’.
Cash NASDAQ 100
After the NDX hit my 12440 buy level we had a small rally enabling me to cover this position at my revised 12505 T/P level and I am now flat. The NDX did hit an afternoon high at 12550 before trading sideways to lower for the rest of the session. This morning the NDX is trading at 12475 as I go to press. We have support from 12220/12370 where I will be a strong buyer with a 12045 ‘’Closing Stop’’. I still do not want to be short the NDX at this time.
Wrong! I was stopped out of my latest 137.80 long position at 136.95 and I am now flat. The Bund is now oversold having fallen over 400 points in the past 10 days. The Bund has support below from 135.50/13620 where I will be a strong buyer with a 134.95 ‘’Closing Stop’’.
Gold Rolling Contract
Following Fridays near 3% fall, Gold traded in a narrow range yesterday and I am still flat. This morning Gold is trading at 1876. We have support from 1839/1854 where I will be a strong buyer with an 1825 higher ‘’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.