U.S. Equity Markets recovered earlier losses to close higher in what turned out to be a volatile trading session. The Russell 2000 led the market higher with a gain of 1.77%. Positive Federal Reserve commentary buoyed markets in the morning. Federal Reserve Bank of Dallas President Robert Kaplan said he expects domestic economic growth of 5% this year, with unemployment dropping to a range of 4.5% to 4.75%. And Federal Reserve Bank of Atlanta President Raphael Bostic said he anticipates the U.S. economy will rebound quickly. But Fed speakers were not in agreement over the tapering of asset purchases. This signals uncertainty over whether the Fed will pull its support from the economy faster than markets anticipate. Job Openings beat estimates, indicating that more businesses are hiring than the market expected. But Job Openings fell from the prior month, sparking fears of a deceleration in the labour market’s recovery. There was also news on the vaccine front, on reports that the Trump administration would speed up the rate of COVID-19 vaccinations. More Lockdown worries saw European Indices close lower. German Chancellor Angela Merkel told government officials she anticipates Coronavirus lockdowns will be extended until mid-April as new restrictions went into place Monday. British Prime Minister Boris Johnson warned the government may tighten COVID-19-related restrictions further if individuals failed to stay home and act responsibly. The Federation of German Industry said it expects the domestic economy to grow 3.5% in 2021 and could reach pre-crisis levels by the first half of 2022. French Finance Minister Bruno Le Maire said reaching the government’s goal of 6% growth this year will be a challenge. Elsewhere, Oil closed 1.68% higher on reports that Oil-producing nations were committed to keeping supply capped, while Bitcoin recovered some of Monday’s hefty sell-off with a gain of 2.03%.
To mark my 2225th 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 firstname.lastname@example.org for details
For anyone following my Platinum Service it made 210 points yesterday and is now ahead by 441 points for January, having finished December with a gain of 2273 points, 2025 points in November, 2779 points in October, 3042 points in September, 2383 points in August, 3128 points in July, 2580 points in June, 2456 points in May, 4773 points in April, and an incredible 9264 points in March. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points
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The S&P 500 closed 0.04% higher at a price of 3801.
The Dow Jones Industrial Average closed 60 points higher for a 0.19% gain at a price of 31068.
The NASDAQ 100 closed 0.08% lower at a price of 12892.
The Stoxx Europe 600 Index closed 0.5% lower.
The MSCI Asia Pacific Index rose 0.2%.
This morning the Nikkei is closed 1.04% higher at a price of 28,456.
The Bloomberg Dollar Spot Index closed 0.2% lower.
The Euro closed 0.4% higher at $1.2198.
The British Pound closed 1.1% higher at $1.3650.
The Japanese Yen closed 0.4% higher at 103.70 per dollar.
Germany’s 10-year yield closed unchanged at -0.48%.
Britain’s 10-year yield closed four basis points higher at 0.35%.
US 10 Year Treasury closed four basis points lower at 1.11%.
West Texas Intermediate crude closed 1.68% higher at $52.29 a barrel.
Gold closed 0.25% higher at $1,857.20 an ounce.
This morning on the Economic Front we already had the release of German December Wholesale Price Index which rose 0.6% versus +0.1% expected. At 9.00 am we have a speech from ECB President Lagarde and this is followed at 10.00 am by Euro-Zone Industrial Production. Next, we have U.S MBA Mortgage Applications at 12.00 pm, followed by CPI at 1.30 pm. Finally, at 6.00 pm we have a speech from Fed Member Brainard.
March S&P 500
At the moment all dips in the S&P are being bought by Day Traders. Yesterday the S&P traded lower to my 3773 buy level with a 3768 low print before rallying back above 3800 this morning. I used this move higher to exit my long position at my revised 3785 T/P level and I am still flat. The US Indices are seriously overvalued as shown by the near vertical move in all Indices since the lows in late October ahead of the November 3 Presidential Election. Prices are so far away from 5 Day Exponential Moving Averages (EMA) on longer term time frames, it is scary. On top of this we have the most ‘’Open Gaps’’ since the latest move higher on record. Ironically the Yearly S&P 5 Day EMA comes in well below the market at a price of 3255. Why Ironic? Because hitting this level would imply filling all the ‘’Open Gaps’’ from November. I do not know when this ”up move” will end but this is the type of correction that I am looking for. Today I will again be a buyer from 3767/3782 with a 3759 stop. I will continue to be a strong seller from 3827/3847 with the same 3861 ‘’Closing Stop’’.
Frustratingly, the Euro missed my 1.3130 buy level by just two points before surging to sit at 1.2200 this morning. I will now raise my buy level to 1.2110/1.2155 with a higher 1.2075 stop. Meanwhile, I will leave my 1.2270/1.2310 sell level unchanged with the same 1.2365 stop.
March Dollar Index
This morning the Dollar has traded lower to my 89.90 buy level. I will continue to add to this trade on any further move lower to 89.50 with the same 88.95 wide stop. I will now lower my T/P level to 90.15 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
My DAX plan worked well with the market trading lower to my 13840 buy level before rallying to my 13880 revised T/P level. Today, I will again be a small buyer from 13750/13820 with a 13695 stop.
The FTSE traded the whole of my buy range for a now 6710 average long position. The renewed strength in Sterling is hampering the FTSE’s progress at this time. I will now lower my T/P level on this position to 6720 while raising my stop to 6675. If any of the above levels are hit I will be back with a new update for my Platinum Members.
Dow Rolling Contract
No Change. I am still a strong buyer from 30520/30750 with the same 30325 ‘’Closing Stop’’. Meanwhile, I will continue to be a seller from 31340/31520 with the same 31635 tight stop.
My NASDAQ plan worked well with the market selling off to my 12850 buy level before rallying to sit at 12925 this morning. This move higher enabled me to cover this long position at my revised 12890 T/P level and I am still flat. Today, I will again be a strong buyer from 12760/12840 with the same 12695 tight stop. If stopped I will be an aggressive buyer from 12475/12375 with a 12295 stop.
Initially the Bund was weak with the market trading lower to my second buy level at 176.40 for a 176.60 average long position. A stronger than expected 10 year Auction of U.S Treasuries saw the U.S Bond Market rally, thus preventing a seventh consecutive lower close. The rebound in the Bund enabled me to cover this long position at 176.75 and I am still flat. Today, I will again be a buyer from 176.10/176.65 with a 175.75 tight stop. If I am taken long I will have a T/P level at 177.05.
Gold Rolling Contract
Gold continues to build value above Monday’s early 1810 low print. I am still flat and I will now raise my buy level to 1813/1827 with a 1799 stop.
Silver Rolling Contract
I am still flat and I will now raise my buy level to 24.30/24.90 with a higher 23.85 stop.