Final rejection, then what

Monica Kingsley Monicakingsley

I duly didn‘t trust S&P 500 upswing, and downside reversal midsession followed – the divergence indicating daily lack of breadth (low cyclicals participation) provided one of the hints – while Nasdaq overcame mid Oct highs, S&P 500 clearly did not, and Russell 2000 was trading very subdued on top.

5,912 didn‘t come nearly close, and semiconductors stopped working in Nasdaq‘s favor midsession as well. Market breadth and the percentage of stocks trading above their 50-day moving averages is at risk of giving the sellers green light, yet at the same time, the compressing, wedge-approximating price action is characterized by less forceful pushing to the downside. In other words, the signs are mixed, and I outline the resolution I favor in the client section.

Checking the bond market, the steepening yield curve and decent economy recognition (XLY is doing well) can be taken as accounting for rising future inflation, but in the near term, the low, disinflationary view is winning, and that makes earnings growth perception positive – this applies to long-term view with non-Mag 7 characteristics becoming more appealing with breadth to broaden, and that will have positive influence on equal weighted S&P 500 and valuations in general alike.

Author

Monica Kingsley

Monicakingsley

Monica Kingsley is a trader and financial analyst serving countless investors and traders since Feb 2020.

AUD/USD sticks to positive bias above 0.7100; lacks bullish conviction

AUD/USD trades with a positive bias for the second straight day, holding above 0.7100 in the Asian session on Friday as softer US bond yields keep US Dollar bulls on the back foot. Furthermore, hawkish RBA Governor Bullock's comments boost rate hike bets and support the Aussie. However, the Fed's hawkish outlook, along with geopolitical uncertainties, limits USD losses and caps the pair.

USD/JPY holds firm above 157.00 ahead of Ueda's presser

USD/JPY holds the uptick above 157.00 in the European session on Friday as the Japanese Yen remains under intense selling pressure despite the Bank of Japan's (BoJ) interest rate hike to 1.25% and a somewhat hawkish Monetary Policy Statement, as two dissents against the rate hike weigh. All eyes now remain on BoJ Governor Ueda's press conference for further trading impetus.

Gold advances to fresh weekly top; eyes $$4,400 as softer US bond yields cap USD gains

Gold attracts some follow-through buying for the second straight day, and touches a fresh weekly high heading into the European session. US bond yields retreat further from multi-year highs as the recent pullback in crude oil prices helped alleviate immediate fears of runaway inflation. This caps gains for the US Dollar and supports the bullion.

Bitcoin extends recovery, Ethereum eyes $2,500, XRP holds $1.30

Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP) extend their recovery, trading above $76,700, $2,400 and $1.300, respectively, on Friday. These top three cryptocurrencies now face key technical levels that could determine whether their recoveries extend further or pull back.

Cardano extends gains on bullish derivatives

Cardano (ADA) extends its recovery, trading above $0.210 at the time of writing on Friday, after finding support around a key zone earlier this week. Improving derivatives positioning and supporting technical indicators indicate growing bullish sentiment among ADA traders. Derivatives data shows a bullish tilt among Cardano traders.

How Japan became the World's Banker and why that era may be ending

Japan's ultra-low interest rates helped finance trillions of dollars in global investments for more than a decade, making the Japanese Yen one of the world’s cheapest sources of funding. With the Bank of Japan expected to tighten policy again this week, that advantage may be entering a new phase. While most major economies raised interest rates, Japan remained the world's outlier.