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Daily Analysis: NASDAQ on New High Again as Tech Giants Report Blowout Numbers

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Daily Analysis: NASDAQ on New High Again as Tech Giants Report Blowout Numbers

Introduction

Friday Market Recap

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Asset Current Value Daily Change
S&P 500 2388 0.25%
DAX 12470 0.14%
WTI Crude Oil 49.36 0.96%
GOLD 1266.00 0.26%
Bitcoin 1317 -0.08%
EUR/USD 1.0918 0.42%

 

Google’s parent company Alphabet and Amazon both posted great first-quarter numbers yesterday and the NASDAQ surged to new highs again overnight. The leaders of the current bull market remain very strong, although, on a negative note, only 5 companies (Facebook, Apple, and Microsoft are the other three) account for almost one-third of the whole market’s gains this year. This “narrowing” of the rally is typical late cycle behavior, giving an early warning sign for long-term investors. On the economic front, the prelim US GDP number came in at 0.7%, well below the expected 1.3%, which is the lowest number in three years.

The Dollar got weaker compared to the major European currencies again, as the Pound continues its quiet rise towards the 1.30 level. The Euro was helped by the slightly higher than expected Eurozone inflation number, while the Yen remained under pressure, following the Bank of Japan’s monetary statement. Oil bounced back strongly yesterday afternoon, but remains below the $50 level, while gold is still stuck just above the $1262 support that we have been monitoring for a week now. Safe-haven assets are still weak, but gold is relatively strong despite the broadly positive sentiment.

GBP/USD, 4-Hour Chart Analysis

Crytpocurrencies continue to be in the center of attention, as Bitcoin continues to trade near is new highs, while most of the majors are also pushing higher. Volatility and rotation are the names of the game today, as Ripple, Dash, Ethereum, and Monero are among the gainers, while the previously strong Ethereum Classic and NEM are in a short-term correction, and Litecoin is virtually unchanged for the day. Ethereum has held on to its break-out gains well, as it now trades near the $65 level.

Ethereum, 4-Hour Chart Analysis

Technical Picture

The DAX has been suspiciously weak following the “French Election Rally”, as it failed to follow the NASDAQ higher in the second half of the week. The benchmark is still well within the rising trend channel, despite the recent consolidation, holding above the previous top at 12,375. The 12,500 level could be in focus in the coming days, but the current weakness suggests a swing lower towards the lower boundary of the trend channel next week. The MACD is signaling a bearish cross in overbought territory, providing a warning for short-term bulls.

DAX, 4-Hour Chart Analysis

Key Economic Releases on Friday

Time, CET Country Release Actual Expected Previous
10:30 UK Prelim GDP 0.30% 0.40% 0.60%
8:00 GERMANY Retail Sales 0.10% 0.10% 1.80%
14:30 US Advance GDP 0.70% 1.30% 2.10%

 

Key Economic Releases on Monday

Time, CET Country Release Expected Previous
13:45 UK Treasury Sec Mnuchin Speech
14:30 GERMANY Personal Spending -0.10% 0.20%
16:00 US ISM Manufacturing PMI 56.6 57.2
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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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