- Â US MarketsÂ
The S&P 500 slid in yesterday’s session, down 1.56%, closing at $6,538. The Nasdaq 100 also fell 2.38% in yesterday’s session. Nvidia’s strong Q3 results had at one point led the indices higher, with the S&P 500 up 1.9%, but the rally ultimately cooled as a broader downturn in stocks took place. The Nasdaq 100 swung 1000 points, about 4.76% down from its intraday highs, marking its biggest intraday swing since April 9, during the tariff mayhem. Meanwhile, Wall Street’s fear gauge, the Cboe Volatility Index VIX, posted its highest close since April 24.
Investors have worried about lofty technology valuations amid concerns over steep artificial intelligence spending and circular vendor spending, with the Nasdaq now sharply off its October high. In addition, data showed the U.S. unemployment rate rose in September even as employers added more jobs than economists had expected. That has led to more uncertainty over whether the Federal Reserve will cut interest rates again in December.
On the technical front, the SPX was rejected at the 21 day SMA, and took a sharp reversal, closing a little below its 100 day SMA, and is currently stabilising around it. Momentum is weak with the RSI at 35. The index is currently trading above the strong support of $6,550. A break below could open further downside to $6,500. Immediate resistance is at $6,640.
- Dollar Index (DXY)
DXY is slightly down today by 0.12% Â to 100.094.
The dollar index has recently broken above an important level of 100 and its 200 Day SMA, signaling a decisive move from its earlier stages of consolidation. Nonetheless, its upward movement has lost steam due to conflicting trends emerging in the job market and subsequent changes in Federal Reserve expectations.
The recent payroll figures illustrate the uncertainty, although job growth is strong, rising unemployment and manufacturing data cast doubt, with the CME Â watch tool showing a December cut possibility of 35% from nearly 97% Â last month.
Technically, on the 4-hour chart, market actions demonstrate an indecisive market at around the 100 level. Resistance is evident at 100.430. While support lies at 99.940, falling below may accelerate further weakness towards 99.750. Conversely, a break above 100.430, further advances towards 101. For now, the dollar is set to consolidate around current high.
As for the EUR/USD it increased by 0.15% to 1.1577, still below all moving averages with Potential resistance near 1.159 and support near 1.150.
- Crude OilÂ
WTI closed 1.11% lower on Thursday and is down 1.27% today, as Russia-Ukraine peace talks take further shape.
Ukrainian President Zelenskiy agreed to work on a peace plan, as US sanctions on two Russian oil giants took effect on Friday. Proposals include Ukraine ceding territory and the removal of sanctions. This would add more supply to a market facing a large surplus next year, having a negative impact on oil prices.
From a technical perspective, WTI is trading below the 9 SMA on the daily chart, with RSI near 41, indicating a strong bearish bias. On the 4-hour chart, immediate support is at the 22nd October breakout level of $57.4. Below this level, the next support is seen at $56.7. Resistance is seen at $58.5, followed by the key level of $59.1. Brent has immediate support at the $61.9 level and resistance at $63.4.
- Gold & SilverÂ
Gold remained steady in yesterday’s session and formed a doji candlestick as traders doubted the Fed would cut interest rates next month. The jobs report released yesterday topped expectations, with nonfarm payrolls rising by 119k, above consensus expectations of 50k month on month. Meanwhile, the unemployment rate rose to the highest level in four years. The CME Fedwatch confirms the probability of a rate cut has reduced to 30% from 45% at the beginning of the week. In today’s session, gold is down by 1%, following the comments from Chicago Fed President Austan Goolsbee signaling that rates should be held steady. However, gold has rallied by almost 50% this year, and remains on track for its best annual performance since 1979. Inflows to ETFs and central bank purchases have mainly supported these gains. The gold ETF (GLD) added 89,881 troy ounces of gold to its holdings in the last trading session, bringing this year’s net purchases to 14 million ounces. Additionally, South Korean investors are also increasing their allocation to gold ETFs amidst sharp swings in their equity markets.
Technically, the commodity is trading at $4,036 and is holding above the $4,026 level, which is the higher end of the range ($3,931- $4,026) it broke out from earlier this month. On the 4-hour charts, it’s still forming a bigger symmetrical triangle pattern connecting the highs of $4,356.5 and $4,171.2; and the lows of $3,886.4 and $3,997.8. A breakout from the 9-day SMA level at $4,100 and $4,120 will confirm the resumption of bullish momentum in the metal. In the current session, it’s taking support at the lower trendline of the triangle at $4,024.8. A breakdown below will resume the consolidation phase seen earlier in the month, with $3,931 a critical level to watch for any trend reversal.
Silver is trading at $49.36 and has declined by almost 2.5% in today’s session. On the 4-hour charts, it appears to be forming a cup-and-handle pattern, with the neckline at $54.44. A break above this level will propel the metal towards $60. Conversely, strong support is seen at $48.98 levels, followed by the 50-day SMA at $48.29. A breakdown below this will resume consolidation, as seen earlier, between $47 and $48.98. Market participants will closely monitor the $47 level, as a breakdown would signal a trend reversal.
