On 01/12/2021 TraderTalent.com is bringing you another guest post from Bryan Noble.
After a volatile trading session, U.S. Equity Markets closed lower, led by the S&P breaking 4600, to close with a loss of 1.90%. Yesterday was the best ever trading session for my Platinum Service, generating over 950 points. In testimony before Congress, Fed Chair Powell suggested that the Fed retire the term “Transitory” when it comes to inflation. He is signalling that he thinks inflation is not going away any time soon. He elaborated that high inflation will likely last into mid-2022. In addition, Powell stated the Fed must “ensure higher inflation does not become entrenched.” He added that the Fed can “consider wrapping up the taper a few months sooner.” The statement signals the asset purchases are finished by the end of March instead. The implication is the central bank will begin increasing interest rates by the end of next year. It also means there is an increased possibility of two rate hikes in 2022. The change in tone is scaring investors who are already worried about the growth outlook There were also concerns around the Omicron variant, after Moderna’s (MRNA) CEO said that the new variant could pose an issue for the current vaccines. However, this was shot down by both Oxford University and BioNTech. Both have said that the vaccines should continue to prevent serious illness from the Omicron variant. Within the S&P 500, all 11 sectors finished lower. European Markets closed lower. Euro-Zone preliminary Consumer Price Index (“CPI”) data for November was higher than anticipated, as energy price gains continued. European Central Bank Vice President Luis de Guindos said it will likely keep buying bonds throughout next year to support the economy but could wind the programme down in 2023. Chairwoman of the South African Medical Association Angelique Coetzee said COVID-19 Omicron variant infections appear mild compared to Delta’s. Robert Habeck, Germany’s soon to be Vice Chancellor made a statement on possible COVID-19 restrictions., saying that only vaccinated citizens or anyone recovered from the virus should have access to “public settings” In Asia, China’s official Manufacturing Purchasing Managers’ Index (“PMI”) figures for November were stronger than anticipated, rising back into expansion territory. Japan’s preliminary industrial production for October was weaker than anticipated, but rebounded versus September, as social-distancing restrictions eased. South Korea’s industrial production data for October disappointed, declining at the quickest rate since last May, as automobile and metals production slowed. Australia’s third-quarter shipments abroad expanded once more following second-quarter contraction, as demand for raw materials increased. Elsewhere, Oil fell to its lowest level since March with a decline of 4.52%, while Bitcoin fell 2% on little news.
To mark my 2425th 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 protected] for details
For anyone following my Platinum Service it made 963 points yesterday, to close November with a gain of 2466 points, after ending October with a gain of 1028 points, 2866 points in September, 1543 points in August, and 996 points in July. The Platinum Service made 1366 points in June, 1439 points in May, 1244 points in April, having ended March with an impressive gain of 3769 points, 3286 points in February, 2077 points in January, and 2273 points last December. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points
The S&P 500 closed 1.90% lower at a price of 4567.
The Dow Jones Industrial Average closed 652 points lower for a 1.86% loss at a price of 34,483.
The NASDAQ 100 closed 1.61% lower at a price of 16,135.
The Stoxx Europe 600 Index closed 1.2% lower.
Yesterday, the MSCI Asia Pacific Index fell 1.8%.
Yesterday, the Nikkei closed 1.63% lower at a price of 27,821.
The Bloomberg Dollar Spot Index closed 0.3% higher.
The Euro closed 0.2% lower at $1.1278.
The British Pound closed 0.2% lower at 1.3298.
The Japanese Yen fell 0.3%, closing at $113.65.
Germany’s 10-year yield closed three basis points lower at -0.34%.
Britain’s 10-year yield closed five basis points lower at 0.83%.
US 10 Year Treasury closed seven basis points lower at 1.45%.
West Texas Intermediate crude closed 4.52% lower at $66.40 a barrel.
Gold closed 0.70% lower at $1,771.10 an ounce.
This morning on the Economic Front we have German Retail Sales at 7.00 am. This is followed by German, Euro-Zone and U.K. Markit Manufacturing PMI at 8.55 am, 9.00 am and 9.30 am respectively. Next, we have U.S. MBA Mortgage Applications at 12.00 pm and the ADP Employment Report at 1.15 pm. At 3.00 pm we have ISM Manufacturing and Construction Output. Finally, at 7.00 pm we have the Fed’s Beige Book.
December S&P 500
It took just one word from Powell ‘’Transitory’’ and that was the end of any potential rally as U.S. Indexes got slammed, trapping a lot of investors who are long above 4650. Earlier comments from Moderna CEO saying that the vaccine would not work against the new variant Omicron saw the S&P hit a morning low of 4583 before we rallied after the Cash Markets opened to an afternoon high of 4645. Subsequently, the S&P fell almost 90 Handles into the close. My S&P plan worked well as overnight the market traded lower to my 4645 T/P level on Monday’s 4658 short position before trading the whole of my buy range for a 4602 average long position. The S&P then rallied to my 4618 revised T/P level. I emailed my Platinum Members to buy the S&P again at 4580 before the market hit my 4596 T/P level and I am now flat. The S&P has initial support at the 50-Day MA which comes in at 4535 this morning while the September high of 4545 should offer further support, As a result I will be a strong buyer from 4541/4557 with a wider 4523 ‘’Closing Stop’’. If I am taken long I will have a T/P level at 4572. Given how oversold the S&P is trading I do not want to be short the market at this time.
The Euro traded in a wide range, hitting my 1.1350 sell level before trading lower to my 1.1240 buy level after Powell’s ‘’Transitory’’ comment. I covered my short position at 1.1305 and my long position at 1.1275. Both T/P levels were from yesterday’s Daily Commentary. The Euro has resistance from 1.1370/1.1420 where I will be a seller with a tight 1.1461 stop. We have short-term support at yesterday’s low and I will be a buyer from 1.1190/1.1240 with the same 1.1145 stop. If I am taken short I will have a T/P level at 1.1330. If I am taken long I will have a T/P level at 1.1275.
December Dollar Index
My Dollar plan worked well with the market trading higher to my 96.50 sell level before selling off to my 96.20 T/P level and I am now flat. Today, I will again be a seller on any further rally to 96.20/96.70 with a 97.11 stop If I am taken short I will have a T/P level at 95.90.
As most Members know the DAX officially trades from 7.00 am London time until 9.00 pm. I do not trade the overnight DAX that the spread betters make as in my opinion none of these prices are not valid. At 7.00 am the DAX was trading near the bottom of my buy range at 15005 where I bought the market before we rallied to my revised 15132 T/P level with a rebound high of 15190 and I am now flat. The DAX is oversold. We have support from 14830/14980 where I will again be a buyer with a 14795 wider stop. I still do not want to be short the DAX at this time. If I am taken long I will have a T/P level at 15060.
The FTSE traded the whole of my buy range for a 7020 average long position before rallying to my revised 7066 T/P level and I am now flat. The FTSE has strong support from 6960/7020 where I will again be a buyer with a 6895 stop. If I am taken long I will have a T/P level at 7060.
Dow Rolling Contract
The Dow rallied to an afternoon high of 36055, before getting crushed by 600 points. The Dow bottomed above its 200 Day Moving Average (34348) and is current trading slightly higher at 34600 as I go to press. With the McClellan Oscillator closely weak at -261, I am happy to buy the dip. Today, my buy level will be from 34280/34460 with a wider 34095 ‘’Closing Stop’’. Given how oversold the Dow is trading I do not want to be short the market at this time. Remember every time the MO closes below -230 we tend to see a ferocious rally within a couple of days. If I am taken long I will have a T/P level at 34610.
It took a while but finally the NDX traded lower to my 16220 T/P level on Wednesday’s average 16265 short position and I am still flat. The NDX continues to trade over 650 points above its 50 Day Moving Average (15585) and any test of this level should see a strong bounce. The NDX has resistance from 16340/16440 where I will be a seller with a 16545 ‘’Closing Stop’’. The NDX has short-term support at last month’s 15905 low print. I will be a small buyer from 15870/15970 with a 15785 ‘’Closing Stop’’. If I am taken short I will have a T/P level at 16270. If I am taken long I will have a T/P level at 16050.
My Bund plan worked well with the market hitting my 172.65 sell level before trading lower to my 172.30 T/P level and I am now flat. With German Inflation at 5.2% it is hard to see the Bund rally further from here. The Bund has resistance from 172.95/173.45 where I will be a seller with a 173.91 stop. If I am taken short I will have a T/P level at 172.60.
Gold Rolling Contract
I am still flat. I will again lower my buy level to 1738/1753 with a tight 1725 stop. If I am taken long I will have a T/P level at 1764.
Silver Rolling Contract
No Change. I am still long at 23.05 with a now lower 23.30 T/P level. I will add to this position at 22.45 while leaving my 21.95 stop unchanged.
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