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Daily Analysis: Stocks Rebound as US Policy Worries Loom

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Daily Analysis: Stocks Rebound as US Policy Worries Loom

Introduction

This article was posted on Friday, 18:51, UTC.

Friday Market Recap

Asset Current Value Daily Change
S&P 500 2430 0.05%
DAX 12165 -0.31%
WTI Crude Oil 48.38 2.72%
GOLD 1293.00 0.05%
Bitcoin 4174 -2.89%
EUR/USD 1.1753 0.23%

The major US indices showed weakness yesterday for the second day in a row, as investors got spooked by the weakening position of the Trump administration and the uncertainty regarding the planned reforms and the Spanish terror attacks. Stocks rallied today after a weak overnight session, as the short-term oversold readings led to the usual dip-buying strategies to kick in, while the trigger of the rally is Steve Bannon’s firing from Trump’s staff. While the internal weakness in the markets would justify a meaningful correction, the current rising trend could remain intact until September when market activity will pick up.

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S&P 500, 4-Hour Chart Analysis

Currency markets remained very choppy, as the central bank related speculations continued to push the major currencies around. Safe haven flows also intensified, as it is apparent in the strength of the Japanese Yen and Gold. The Shiny Metal broke above the $1300 level amid the stock sell-off, but it failed to sustain the break-out, as the commodity is overbought and the upper boundary of the long-standing trading range means strong resistance at the current levels. Oil surged higher during the US session on a favorable production release, and the WTI contract quickly surged back to the $49 per barrel level after one week of losses, pushing commodity currencies higher against the Greenback.

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Gold, 4-Hour Chart Analysis

Cryptocurrencies

The more established coins are little changed today, with a bearish bias as the ongoing Bitcoin consolidation is weighing on the segment. Dash is trading lower after yesterday’s strong move, while Litecoin is the best performing coin of the day. Bitcoin is still just 5% off its all-time high, and although the long-term picture is clearly overbought the short-term momentum might still carry the currency to new highs in the coming day. The weekend could once again bring strong moves, as speculative interest in the segment is at all-time highs.

BTC/USD, 4-Hour Chart Analysis

Technical Picture

The tech benchmark followed the other major indices lower on Thursday, and the relative strength that it showed previously vanished amid the broad correction. Today’s bounce carried the index back above crucial short-term support, but the NASDAQ is not out of the woods yet, as the short-term rising trend is clearly in danger. The 5800 and 5750 levels will likely stay in focus in the coming days, with the rising trendline being only slightly below at 5700. A breakdown could trigger a sell-off towards the 5600 level.

NASDAQ, 4-Hour Chart Analysis

Key Economic Releases on Friday

Time, CET Country Release Actual Expected Previous
14:30 CANADA CPI Index 0.0% 0.0% -0.1%
16:00 US UOM Cinsumer Sentiment 97.6 94.0 93.4

Key Economic Releases on Monday

Time, CET Country Release Expected Previous
14:30 CANADA Wholesale Sales 0.6% 0.9%

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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.

Comments
  • user

    AUTHOR Chris G

    Posted on 2:58 am August 19, 2017.

    Cheering broke out on the floor of the New York Stock Exchange as news of Steve Bannon’s exit spread today …

  • View Comments (1) ...
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