Daily Analysis: An Epic Finish for an Epic Week

Friday Market Recap

Asset Current Value Daily Change
S&P 500 2621 1.09%
DAX 12,107 -1.25%
WTI Crude Oil 59.06 -3.42%
GOLD 1318.00 -0.61%
Bitcoin 8580 3.48%
EUR/USD 1.2250 -0.04%

A heaven for traders, but a headache for the average investor. That is probably true for the this week’s market that had everything that “action-junkies” could ask for. Today’s session was yet again nothing short of spectacular in stocks and all the major asset classes, with the only unlikely exception of cryptocurrencies.

Volatility remained very high, especially after the months of record low level of risk perception among investors, as the major US indices full percentages in both directions in a matter of minutes. Compare that to the “no 1% daily moves in the indices for full months” era of the previous period, and you will understand how false the illusion of safety was amid the bull run.

VIX, 4-Hour Chart Analysis

US stocks re-tested the Monday crash-lows today in late trading, while European and Asian equities still lagged, but that was not the end of the week’s story, as the last hours brought about a classic short-squeeze into the close form oversold readings. While some traders will call it the Plunge Protection Team’s doing, these furious rallies are part of bearish trends, even if some stock investors forgot how those look like.

S&P 500 Futures, 4-Hour Chart Analysis

Forex markets were also very active today, although yet again, the end-of-the-day moves were muted compared to the hectic intraday action. The Dollar index edged higher, but it was well off the daily highs at the closing bell, with the EUR/USD pair finishing virtually unchanged near 1.2250 after touching 1.22 earlier on. The safe haven Yen was among the winners of the day even after the late-day dip, while the Pound suffered again after yesterday’s brief BOE induced rally attempt.

DXY (Dollar index), 4-Hour Chart Analysis

Commodities were lagging the other asset classes, and that is usually a sign of systemic selling pressure, with crude oil receiving another huge blow. The WTI contract is now back below the $60 level following the bearish US production data, as the shale-cap on the price of the crucial commodity seems to be working. Gold had a relatively quiet session, despite the turmoil in risk assets, as the precious metal is likely concluding its overbought correction.

WTI Crude Oil, 4-Hour Chart Analysis

Cryptocurrencies

The crypto segment continued to impress amid the broad chaos in traditional assets, as the bullish consolidation that started mid-week continued, and the major coins were trading near or at the post-Monday selloff highs. A lot of coins made technical progress, scoring new bounce highs in the quiet environment, and as the rotation continued in the sector, new leaders emerged yet again, with ETC, Cardano, Stellar, EOS, Ripple, and IOTA all outperforming the average.

Stellar, 4-Hour Chart Analysis

Bitcoin itself continues to hover around the $8650 level, with an eye on the $9000-$9200 resistance zone before the weekend, and as Ethereum, Litecoin, and Ripple are all pulling their weight, the majority of the market capitalization on the segment is in the relatively strong group.

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.