U.S. Equity Markets tried to break their losing streak, ending yesterday’s trading session mixed as the S&P closed with a tiny gain of 0.13%, while the NASDAQ 100 closed just 0.22% lower, reversing an earlier 4% fall. Markets declined again, with Interest Rates in focus. Rising interest rates mean that it may be more expensive for companies to borrow money to grow their businesses. In testimony before Congress today, Federal Reserve Chairman Jerome Powell struck a positive tone while also reiterating support for the economy. He also said that inflation is not expected to reach troubling levels, while adding that the U.S. economy could grow 6% this year. However, he did say that the labour market’s pace of recovery has slowed. This fits in with his past comments. Economic data were also positive. Consumer Confidence rose more than expected, as respondents became more optimistic on the present economic outlook. And home prices continued to rise, showing strength in the housing market. These positive economic signals helped markets rally off their lows throughout the day. European Markets closed lower. Bank of France Governor François Villeroy de Galhau said Financing Rates will remain favorable, and he sees no risk of excessive inflation in the Euro-Zone. European Central Bank President Christine Lagarde said it is closely monitoring activity in the bond market, implying the central bank is prepared to purchase bonds and drive yields down. A survey from Germany’s IFO Institute showed exporters’ optimism hit the highest level since September 2018, boosted by economic rebounds in China and the U.S. European Union coronavirus vaccinations rose to 27.2 million yesterday, with a daily average of 770,000 doses administered over the last week. Elsewhere, Bitcoin sold off sharply after New York cracked down on two cryptocurrency companies, closing 12% lower, while Oil gained 0.44% as Bank of American echoed Goldman Sachs’ call of $70 crude by the summer.
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For anyone following my Platinum Service it made 340 points yesterday and is still ahead by 2387 points for February, having finished January with a gain of 2077 points, 2273 points in December, 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 0.13% higher at a price of 3881.
The Dow Jones Industrial Average closed 15 points higher for a 0.05% gain at a price of unchanged a price of 31,537.
The NASDAQ 100 closed 0.22% lower at a price of 13,194.
The Stoxx Europe 600 Index closed 0.4% lower.
The MSCI Asia Pacific Index fell 0.2%.
This morning the Nikkei closed 1.61% lower at a price of 29,671.
The Bloomberg Dollar Spot Index closed 0.1% lower.
The Euro closed 0.1% higher at $1.2161.
The British Pound closed 0.3% higher at $1.4115.
The Japanese Yen closed 0.2% higher at 105.41 per dollar.
Germany’s 10-year yield closed one basis points lower at -0.33%.
Britain’s 10-year yield closed three basis points higher at 0.72%.
US 10 Year Treasury closed one basis points higher at 1.33%.
West Texas Intermediate crude closed 0.44% higher at $60.85 a barrel.
Gold closed 0.23% lower at $1,804.80 an ounce.
This morning on the Economic Front we already had the release of German Q4 Final GDP, which printed +0.3% versus +0.1% expected. At 12.00 pm we have U.S MBA Mortgage Applications, followed by New Home Sales at 3.00 pm. At the same time Fed Chairman Powell has his second day of Testimony to Congress. Finally, we have speeches from Fed Members Brainard and Clarida at 3.30 pm and 6.00 pm respectively.
March S&P 500
Incredible two-way volatility yesterday. At one stage the VIX was trading 15% higher as the S&P tested its 50 Day Moving Average (3800) with a 3805 low print before rallying over 80 Handles into the close. This move higher saw the VIX close lower by 1.50%. Now you can see why I prefer to use a ‘’Closing Stop’’ only, for trading. After the S&P hit my 3865 average buy level I used the late rally to exit my long position for a breakeven and I am now flat. If the S&P can hold the 3836/3851 support area and build value above the 3870/3888 pivot area then we can test last week’s highs near 3960. I will be a buyer from 3838/3854 with a 3825 stop. Value below 3840 will target the 50 Day MA and I will be an aggressive buyer from 3791/3806 with a 3778 ‘’Closing Stop’’. I do not want to be short the S&P at this time.
The Euro traded lower to my 1.2145 buy level before having a small rally to my 1.2160 revised T/P level and I am now flat. The Euro has strong support from 1.2100/1.2140 where I will again be a buyer with a 1.2045 stop. I still do not want to be short the Euro at this time.
March Dollar Index
I am still flat and I will continue to be a seller from 90.30/90.70 with the same 91.10 stop.
Yet again the DAX held the key 13800 support area, trading at 13900 this morning, having hit an intra-day low of 13655. After the DAX traded the whole of my buy range for 13785 average long position, I covered this position at my 13810 revised T/P level and I am still flat. Today, I will again be a buyer from 13730/13810 with the same 13665 stop. I still do not want to be short the DAX at this time.
My FTSE plan worked well with the market trading the whole of my buy range for a 6530 average long position before rallying back to 6590. I covered at my 6555 revised T/P level as so many of my calls hit at the same time and I am still flat. With Cable trading at multi year highs near 1.42 this morning, the FTSE is trading heavy. However, I still would not go short and my buy level today will be from 6460/6510 with a 6405 stop.
Dow Rolling Contract
After the Dow hit my initial 31420 buy level we saw a small bounce which allowed to cover at 31535 and I am still flat. So far, the Dow is holding in but a break and close below 31250 will open up the possibility of a move lower to 30500. I will be a small buyer from 31100/31260 with a tight 30995 stop. I still do not want to be short the Dow at this time.
What day for the NASDAQ. Shortly after I posted the market traded the whole of my buy range for a 13160 average long position. Subsequently we tested and broke the 50 Day MA (13101) to hit a low of 12758, before turning around and rallying over 450 points into the close. This move higher enabled me to exit this long position at my 13210 revised T/P level as emailed earlier to my Platinum Members and I am now flat. Today, I will be a small buyer from 12920/13020 with a 12845 ”Closing Stop”. If I am taken long I will have a T/P level at 13090.
Unfortunately, the Bund missed my 173.75 buy level by five points before rallying to sit at 174.40 this morning after ECB President Lagarde said the ECB would buy more bonds to prevent Yields from rising. They have no choice given the level of debt in the Euro-Zone. I will now raise my buy level to 173.50/173.90 with a wider 172.95 stop.
Gold Rolling Contract
My Gold plan worked well with the market trading lower to my 1795 buy level before rallying to my 1803 T/P level and I am still flat. Today, I will again be a buyer from 1775/1790 with a 1763 stop.
Silver Rolling Contract
Silver traded lower to my 27.45 buy level before rallying overnight to my 27.75 T/P level and I am now flat. As long as Silver does not break and close below 26.00, I will continue to be a buyer of dips. looking for Silver to test this month’s 30.20 high print. Today, my buy level will be from 26.60/27.30 with a wider 25.95 stop.