Daily Analysis: Nasdaq Leads Bull Stampede on Wall Street

Friday Market Recap

Asset Current Value Daily Change
S&P 500 2782 1.58%
DAX 12,346 -0.07%
WTI Crude Oil 62.09 3.28%
GOLD 1324.00 0.17%
Bitcoin 9,070 -3.61%
EUR/USD 1.2308 -0.02%

A new all-time high in the Nasdaq concluded a hectic week on Wall Street, as the tech benchmark defied negative divergences, rising yields, and trade war fears alike and rocketed higher after the “Goldilocks” Jobs Report that came out before the opening bell.

Nasdaq Futures, 4-Hour Chart Analysis

The Volatility Index (VIX) got crushed, finishing at the lowest level, near 15, since the crash in early February. The Dow and the S&P 500 followed the leading index higher after a short-term buy signal, while small caps were also on board, and both of the benchmarks are above the key levels that we have been monitoring since the initial bounce, leaving short-term bulls in control.

Volatility Index (VIX), 4-Hour Chart Analysis

So who in the world cares about divergences? Well, those who are not invested in only the 5 stocks not surprisingly Apple, Google (Alphabet), Microsoft, Amazon, and Intel, which account for more than 50% of the recovery, leaving a huge part of the market behind (and Europe, Asia and so on…). Only 60% of stocks on the NYSE are currently in a long-term uptrend, as measured by the 200-day Moving Average, which is a far cry from a healthy bull.

Dollar Index Gathers Strength Despite Risk Rally

USD/CAD, 4-Hour Chart Analysis

Treasury yields remained stable with a positive bias after the mixed employment report, as healthy payroll growth was accompanied by an uptick in the Unemployment Rate and weak wage growth. The Dollar held on to most of its gains against the Yen and the Euro, while losing ground throughout the US session compared to the main risk-on currencies, which still diverge substantially from US equities.

Commodities also followed risk assets higher, even gold, and coupled with the weakness in European and Asian, one might wonder how, and when the sharp performance gap will close. The uptrend in the Yen and gold, the main safe-haven assets is also something to watch, as apart from the global leaders, everything seems to be rolling over, or best case going nowhere.

Cryptocurrencies

The segment has turned very volatile and bearish in recent days, amid the horrible news flow, which included the Mt. Gox whale and regulatory issues in the US and Japan. The top coins all declined by around 20% off their recovery highs.

BTC/USD, 4-Hour Chart Analysis

The decline took BTC below a key support zone amid a short-term panic, and although most of the majors were also pushed below key levels, others should promise today, including LTC, Ripple, and the recently battered Ethereum Classic. The short-term trend is still bearish, although momentum is oversold, but we are still sticking with the “continued recovery” scenario.

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.

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