Daily Analysis: Stocks Retreat from Record Highs as Dollar Rebounds

Monday Market Recap

Asset Current Value Daily Change
S&P 500 2852 -0.67%
DAX 13324 -0.12%
WTI Crude Oil 65.35 -0.42%
GOLD 1345.00 -0.21%
Bitcoin 11,124 -5.59%
EUR/USD 1.2376 -0.30%

US stocks had a surprisingly bearish day, without no real negative catalysts, as bonds had a volatile session that weighed on equity prices as well. As US yields spiked higher across the board, stock markets got spooked globally, and forex markets were very active too.

The Dollar remained in the center of attention thanks to the sizeable move in yields, and the Greenback was pushing higher against its major peers almost all-day long. Although the reserve currency ended the day on a negative note, it remained above last week’s lows, as the EUR/USD pair closed under 1.24, while the GBP/USD pair pulled back below the 1.41 level.

EUR/USD, 4-Hour Chart Analysis

Among stocks, the weakness in the shares of Apple (AAPL) made headlines, and on an interesting note, Google parent Alphabet (GOOG) is edging closer to the worlds most valuable public company yet again. The two giants are now less than 10% apart regarding total market capitalization, and although the search and advertising behemoth already took over Apple briefly as the largest company, this time around the narrowing of the value gap is more organic and less momentum induced.

Apple, Google Daily Chart Comparison

Commodities were mixed amid the hectic forex trends, as crude oil, precious metals, and industrial metals all were under pressure for most of the session. Gold experienced a stronger bounced in late trading and after-hours, but the metal stayed below the key $1350 level, with the short-term correction firmly being intact. Rising yields usually directly hurt the valuation of precious metals, and despite the pull-back of the last few days, the resilience of gold is a bullish sign.

Gold, 4-Hour Chart Analysis

Cryptocurrencies

The major coins started out the week in a negative fashion, with only a few tokens staying strong after the fizzling out of the broad weekend rally in the segment. As of now, only NEO and IOTA are positive this week among the most traded coins, while even the recently strong Ethereum is following BTC and the other altcoins lower.

NEO is trading in a short-term uptrend, edging past the resistance zone near the $150 price level, in the face of the strong headwinds in the sector. That said, the coin remains in a bearish setup, and traders should remain cautious as the segment-wide correction will likely drag the long-term overbought coin lower too.

NEO/USD, 4-Hour Chart Analysis

Bitcoin is trading right at the crucial $11,300 support/resistance level following the Monday session, and the coin remains in a clear short-term downtrend, as the bounce of the crash-lows seems more like a counter-trend correction than the start of a durable rally.

Having said that, the daily momentum indicators are now nearing oversold territory, and the currency could be close to a tradable bottom in time, although another surge in volatility, and at least a test of the crash-lows is likely before the end of the current cycle.

BTC/USD, 4-Hour Chart Analysis

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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.