Wall Street Ends in Green on Another Volatile Day

The highly volatile and generally bearish drift continued today during the US market, but this time, the pendulum swung in favor of bulls at the end of the day. The major indices all finished more than 1.5% higher after yesterday’s late-session rout, and after Facebook’s mixed earnings report, they are holding on to most of their gains in after-hours trading.

S&P 500 Futures, 4-Hour Chart Analysis

The pre-market earnings reports helped the intraday rally on Wall Street, as Pfizer (PFE), Mastercard (MA), and Coca-Cola (KO) all beat the consensus estimates, continuing the record-breaking quarter with regards to the bottom lines of the largest companies. On the other hand, the outlook for most of the firms is deteriorating, and that duality added to the volatility of the current earnings season.

Russel 2000 Index CFD, 4-Hour Chart Analysis

On a positive note, small caps continued to outperform, and as the Russell 2000 led the way lower during the current correction, today’s bounce could mean that the US markets are joining their European peers in their weak counter-trend move.

Dollar and Yen To Remain in Focus

DXY (Dollar Index), 4-Hour Chart Analysis

The Dollar Index closed on its highest level since mid-2017, while getting close to its intraday highs from August as well. The EUR/USD pair is also close to hitting a more than 16-month low, and as Treasury yields rallied together with stocks, the Dollar will remain in the center of attention, given the crucial economic releases and central bank meetings.

USD/JPY, 4-Hour Chart Analysis

We will have a very busy day regarding economic releases tomorrow starting with the Bank of Japan’s monetary meeting, which will be followed by several important European indicators, such as the Eurozone CPI, the Spanish GDP, and German Retail Sales.

The ADP jobs report is tomorrow’s most important US release before Friday’s government employment report, and analysts expect a non-farm payroll growth of 190,000, slightly below last month’s 230,000 reading. The Chicago PMI will also be out tomorrow, together with the weekly crude oil inventory release.

Copper Futures, 4-Hour Chart Analysis

WTI crude oil hit a more than 2-month low today, before a late-day bounce, getting close to the $65 per barrel price level, while gold and copper also suffered amid the broad Dollar rally. While gold is testing the key $1220 support as we speak, copper’s move was already significant from a technical perspective, since it ended a lengthy consolidation period.

Copper violated primary support at $2.70, and quickly moved close to the next key level at $2.67. Should the broader downtrend resume in the industrial metal, it could mean that Chinese assets could get under pressure again given the strong correlation of the recent months and that, in turn, could be a blow to emerging markets and risk-assets in general.

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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.