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Daily Analysis: Correction Continues on Wall Street as Ethereum Shoots to the Moon

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Daily Analysis: Correction Continues on Wall Street as Ethereum Shoots to the Moon

Introduction

This article was posted on Monday, 15:59, UTC.

Monday Market Recap

Asset Current Value Daily Change
S&P 500 2422 -0.21%
DAX 12703 -0.85%
WTI Crude Oil 46.34 1.17%
GOLD 1268.00 -0.25%
Bitcoin 2780 -3.23%
EUR/USD 1.1202 0.07%

The scary correction that took place on Friday afternoon in the biggest tech names in the US, continued to affect global financial markets today. Apple (losing more than $50 billion in market value), Amazon, Facebook, Netflix, and Google (the so-called FAANGs) all dipped below their “flash-crash” lows today in early trading, dragging the broader market and international stocks down. The NASDAQ erased almost two-months of gains in no more than one trading day. The other major benchmarks are holding up better before Wednesday’s Fed decision, but volatility might further increase towards the end of the week.

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The Great British Pound remained under pressure following last week’s snap election and it fell to a new 6-week-low compared to the US Dollar, and to year-to-date low against the Euro. The Yen and the Swiss Franc are among the strongest currencies as risk-off sentiment dominates the day so far.  Gold is lagging other safe-haven assets as it tries last week’s smash-down is still affecting the metal’s market. Oil has rebounded after its recent rout, and the WTI contract is back above the $46 per barrel level, although the short-term trend is still negative.

Cryptocurrencies

Crypto-coins are having a volatile and mixed session, so far, as Ethereum’s continued rally and Bitcoin’s relative weakness are the two significant trends of the day. ETH hit the $400 level just two days after rising above $300 for the first, defying all overbought readings, with the help of new capital swarming in the currency. Dash, Monero, Litecoin, and Ethereum Classic all experienced volatile swings, while Ripple continues to be under pressure, as it drifts toward the $0.25 level. The overall value of the crypto-market is relatively stable amid the volatile conditions, signalling that the current moves are more the consequence of reallocations than capital flight.

Ethereum, 4-Hour Chart Analysis

Technical Picture

The NASDAQ’s technical structure was ripped apart by the flash-crash on Friday. The tech benchmark declined by almost 5% and it’s now trading right at the short-term support near 5675 that we have been monitoring. A short-term bounce to 5725 is expected, but another leg lower to test the 5600 support and the rising long-term trendline is likely in the coming days.

NASDAQ, 4-Hour Chart Analysis

Key Economic Releases on Monday

Time, CET Country Release Actual Expected Previous
3:30 JAPAN PPI Index 2.10% 2.20% 2.10%
3:30 US Federal Budget Balance 182.4 bill 182.4 bill

Key Economic Releases on Tuesday

Time, CET Country Release Expected Previous
3:30 AUSTRALIA NAB Business Confidence 13
10:30 UK CPI Index 2.7% 2.7%
11:00 GERMANY Zew Economic Sentimetn 21.8 20.6
14:30 US PPI Index 0.1% 0.5%

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Mate Cser

Mate Cser

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.

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