Pre-Market: US Stocks at Make-or-Break Levels as Euro Tests 40-Month Highs

Thursday Market Recap

Asset	Current Value	Daily Change
S&P 500	2734	1.38%
DAX	12,354	0.14%
WTI Crude Oil	61.45	1.40%
GOLD	1355.00	-0.17%
Bitcoin	10050	8.52%
EUR/USD	1.2501	0.41%

It’s been a hectic day yet again in traditional financial assets amid the cryptocurrency rally, with yesterday’s trends generally continuing.  The Dollar got weaker against its largest peers, while being stable compared to the risk-on complex despite the strong bounce in crude oil. Stocks had a positive overnight session that was followed by a rather abrupt “shake-out”, which didn’t change the technical setup, especially as the major indices rallied back to, or over their overnight highs.

The only important benchmark that made technical progress is the Apple-led Nasdaq, giving a buy-the-dip buy signal, and although that’s usually a bullish sign, the persistent divergences make us think that the correction is not over.

The divergences include all the major international indices, not a surprise given the Dollar weakness, while small caps and all the broader NYSE benchmarks are also slightly behind the tech-index form a short-term technical standpoint. That said, the S&P 500 and the Dow are close to giving a buy signal too, but those traders who think that a re-test or a new low is ahead might be close to an ideal short-entry point.

S&P 500 Futures, 5-Minute Chart

Fundamental news was better than yesterday, although the US Producer Price Index also beat expectations just like the Consumer indicator, while US industrial production disappointed, and the European releases were in line with expectations.

Forex and other markets are strongly focused on US releases, as the Treasury yields move the markets without a doubt. The rise in 30-year rates halted, while shorter-term yields continued to increase, and the relatively small moves helped the late rally in stocks.

10-Year Treasury Yield, 4-Hour Chart Analysis

As the Yen, the primary safe-haven currency remained strong, gold also held on to its recent gains, consolidating below the recent rally high. Crude oil benefited from the improving sentiment, although it remains well below its recent highs, still lagging equities and gold.

Gold, 4-Hour Chart Analysis

Cryptocurrencies

The crypto segment registered another broadly positive session, with almost all of the majors scoring gains. Ethereum Classic was rather flat, but after such a huge rally, that’s understandable, as a normal short-term correction is underway in the coin. The rest of the segment was led higher by non-other than Bitcoin, as the most valuable coin didn’t look back after yesterday’s break-out and rallied above $10,000, as expected.

BTC, 4-Hour Chart Analysis

Ethereum, Ripple, and NEO are still the most notable laggards, while Monero, Litecoin, IOTA, and Dash are among the leaders, even as LTC will now probably follow ETC into a short-term correction, with the whole segment looking a bit stretched from a short-term standpoint.

Featured image from Shutterstock

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