Daily Analysis: Stocks Close One of the Best Octobers Ever

Tuesday Market Recap

Asset Current Value Daily Change
S&P 500 2572 -0.03%
DAX 13,229 0.09%
WTI Crude Oil 54.59 0.39%
GOLD 1271.00 -0.08%
Bitcoin 6410 4.89%
EUR/USD 1.1649 0.03%

In the face of the most hostile monthly seasonality, equities closed widely higher, concluding the 7th straight month with gains in the US. While today’s momentum was less than stellar, all of the major indices were hovering around their all-time highs, with no sign of fear or any bearish trigger on the horizon. That said the positive price action of the indices is still mostly due to only a handful of mega cap stocks, with a significant portion of the market not joining the party. That, coupled with the striking valuation levels still points to elevated risk levels from an investment standpoint.

Dow, 4-Hour Chart Analysis

Economic releases and the Bank of Japan took center stage today before tomorrow’s Fed meeting, and the Asian central bank mostly fulfilled expectations, providing only a slight dovish surprise. The US Consumer Confidence index and the Chicago PMI both came in above the consensus estimate, while European numbers were mixed, with the Eurozone CPI report disappointing traders, while the flash GDP reading beating expectations by a hair.

Despite the busy calendar, currencies had a relatively quiet day, as only the Yen’s weakness was apparent. Commodities had a mixed session, with oil adding to its recent gains while gold drifting lower in the calm environment.

USD/JPY 4-Hour Chart Analysis

Cryptocurrencies

Bitcoin was in the spotlight yet again, as the most valuable cryptocurrency climbed back to new all-time highs, breaching the $6400 level for the first time in history, boosted by the news about the first BTC futures contract on the CME exchange. Altcoins drifted slightly lower in low-volatility, low-volume trading, with only NEO showing increased activity, spiking above the key $30 level again, just to turn lower in the second half of the session. IOTA was the weakest major of the day, losing more than 4%, while Dash, Monero, Litecoin, and Ripple traded in narrow ranges throughout the session, and Ethereum Classic faded after an encouraging session.

BTC/USD, 4-Hour Chart Analysis

Key Economic Releases on Tuesday

Time, CET Country Release Actual Expected Previous
14:30 CHINA Manufacturing PMI 51.6 52.2 52.4
14:30 CHINA Non-Manufacturing PMI 54.3 55.4
14:30 JAPAN BOJ Rate Decision -0.10% -0.10% -0.10%
16:00 JAPAN BOJ Press Confererence
16:00 EUROZONE CPI 1.4% 1.5% 1.5%
16:00 EUROZONE Flash GDP 0.6% 0.5% 0.6%
16:00 CANADA GDP -0.1% 0.1% 0.0%
15:45 US Chicago PMI 66.2 60.2 65.2
16:00 US CB Consumer Confidence 125.9 121.1 119.8

Key Economic Releases on Wednesday

Time, CET Country Release Expected Previous
11:30 UK Manufacturing PMI 55.8 55.9
14:15 US ADP Payrolls 202,000 135,000
16:00 US Manufacturing PMI 59.5 60.8
16:30 US Crude Oil Inventories -1.5 mill 0.9 mill
20:00 US Fed Rate Decision 1.25% 1.25%
20:00 US Fed Statement 0.8% 0.1%

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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.