Apple Earnings Beat Fails to Boost Stocks

Wednesday Market Recap

Asset Current Value Daily Change
S&P 500 2467 -0.20%
DAX 12181 -0.55%
WTI Crude Oil 49.45 -2.42%
GOLD 1271.00 0.15%
Bitcoin 2707 -0.73%
EUR/USD 1.1904 0.85%

Apple surprised analysts and investors in a positive manner yesterday, as the better than expected report coupled with an optimistic outlook propelled the most valuable public company to a new all-time high. The DOW breached the 22,000 level for the first time thanks to the jump in the stock, but the broader market is headed lower today, as the NASDAQ is still trading near the lows of the mini flash-crash of last Thursday. The Euro is on the rise yet again, hitting another 2-year high against the Dollar and weighing on European equities throughout the day.

Apple (AAPL), Daily Chart Analysis

Gold and oil also slightly higher again, after their slight correction, while the Pound also remained strong amid the summer-like low trading volumes. The US political fights are in the center of attention, but the market mostly ignores the tensions with the most major benchmarks still being just a hair below their all-time highs, despite the obvious divergences. The ADP employment report delivered another blow to the Dollar, as traders are waiting for Friday’s government report, trying to judge the extent of the slowdown in the US economy.

Dollar Index (DXY), 4-Hour Chart Analysis

Cryptocurrencies

The Bitcoin fork dominated the newsflow in the segment, with most of the altcoins gaining ground thanks to the return of confidence. Bitcoin and Bitcoin Cash are still choppy, and with all the technical challenges of the fork and the SegWit activation, trading might remain tricky in the coming days, although the trend in BTC is still clearly positive. The smaller coins are in the green as well today, but the gains are limited, as Ethereum remains stuck in the long-term correction that started in June. That said, the technical prospects are still encouraging and as the dust settles, further upside is likely in the sector.

Bitcoin, Daily Chart Analysis

Technical Picture

The Euro keeps on hitting new highs every day against the Dollar, as the European economy is outgrowing the US as of now, the ECB, at least in rhetoric, joined the tightening party, and as the currency attracted momentum players with after breaking a series of long-term resistance levels. The long-term chart of the currency pair is definitely overbought, and traders should wait with new long positions as risks are now skewed towards a correction. In 2015 and 2016 there were also strong Euro rallies which ended up being major bull traps. If the pair can hold above 1.1650 in the coming correction that might signal a major trend change, but for now we would lean on the short-side until a consolidation.

EUR/USD, Daily Chart Analysis

Key Economic Releases on Wednesday

Time, CET Country Release Actual Expected Previous
3:30 AUSTRALIA Building Approvals 10.9% 1.1% -5.6%
10:30 UK Construction PMI 51.9 54.2 54.8
10:30 US ADP Employment Change 178,000 187,000 158,000
16:30 US Crude Oil Inventories -1.5 mill -3.2 mill -7.2 mill

Key Economic Releases on Thursday

Time, CET Country Release Expected Previous
3:30 AUSTRALIA Trade Balance 1.77 bill 2.47 bill
10:30 UK Services PMI 53.7 53.4
13:00 UK BOE Rate Decision 0.25% 0.25%
13:00 UK BOE Statement
14:30 US Initial Jobles Claims 242,000 244,000
16:00 US ISM Non-Manufacturing PMI 56.9 57.4
16:00 US Factory Orders 2.7% -0.8%

Featured image from Shutterstock

Author:
Trader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.