Daily Analysis: Stocks Continue Lower as Bitcoin Rebounds

Monday Market Recap

Current Value Daily Change
S&P 500 2319 -1.10%
DAX 11092 -0.95%
WTI Crude Oil 47.19 -1.71%
GOLD 1260.50 0.93%
Bitcoin 1025.00 7.39%
EUR/USD 1.0894 0.91%

Negative sentiment ruled the European session on financial markets today, as the global correction remains intact following the weak bounce at the end of the week. US futures lead the decline this morning after Friday’s failure regarding the healthcare bill of the new administration. As the major US indices hit new 6-weeks lows, European stocks outperformed, helped by the better than expected German Ifo business climate index.

Safe-haven assets benefited from the pessimistic sentiment once again, as the Japanese Yen, gold, and the Swiss Franc remained strong. Gold is getting close to 1262 level that marked the February top for the metal. The Euro also gained ground on the Dollar surging to levels not seen since November above the 1.0850 resistance, with the reserve currency being hurt by the unwinding of the “Trump-trade”. Oil is still facing selling pressure, starting the week near its 4-month low after the recent break-down, despite the weekend rumors of a possible extension of the OPEC’s production cut.

Bitcoin finally shows some strength after nearing the crucial 880 level over the weekend, and touching the dominant long-term trend-line. Other cryptocurrencies have a mostly negative day so far, as last week’s star Ethereum consolidates just below its recent highs. Dash dipped below the 100 level during the weekend, and it’s trading below 90 currently. Ripple might be getting ready for a major move, as it continues to hover around 0.01.

Technical Picture

S&P 500 Index, Hourly Chart

The most watched stock index hit new lows today on the hourly chart, and the lower boundary of the dominant trend channel is now in play, as the weak bounce failed to penetrate even the short-term resistance at 2360. A strong support zone is found between 2321 and the 61.8% Fibonacci-retracement at 2317 that could be a good point profit-taking point for traders with short positions. The MACD had a bearish cross providing a short-term sell signal overnight.

Key Economic Releases on Monday

Time, CET Country Release Actual Expected Previous
9:00 EUROZONE German IFO Business Climate 112.4 111.2 111.0

The economic sentiment indicator hit the highest level since mid-2011, the start of the European banking crisis, as managers are more confident in the sustainability of growth in the Eurozone. The positive surprise gave a boost to European equities and the common currency.

Key Economic Releases on Tuesday

Time, CET Country Release Expected Previous
16:00 US CB Consumer Confidence 113.9 114.8
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.