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Downtrend for Dow Jones, S&P 500, Nasdaq Closed Over 10,000

Following the decision of the Federal Reserve not to change the interest rate, Dow Jones and S&P 500 experienced consecutive losses. Other market indicators got a boost to show different market response.

Market performances remain two-faced as the Dow Jones Industrial Average (INDEXDJX: .DJI) and the S&P 500 (INDEXSP: .INX) experienced back to back losses on Wednesday. Different rushes have gripped the market in the wake of the reopening of the economy. Stocks of in-demand companies particularly those in the tech space are skyrocketing creating little room for the Dow Jones, the S&P 500, and other stocks that were expected to benefit from the reopening of the economy such as the country’s major airlines. The Dow declined by a further 1% while the S&P 500 closed 0.5% lower at 3190.17.

Meanwhile, Nasdaq Composite (INDEXNASDAQ: .IXIC) has managed not only to hit 10,000 for the first time ever but also to close above this level. Yesterday it closed at 10,020.35 (+0.67%).

Expectations from the Federal Reserve Meeting

The Federal Reserve held a two-day meeting spanning Monday and Tuesday to discuss further measures to help the rebounding economy. As investors anticipated the outcome of the meeting, the federal reserve believed changing rates will not impact the market due to the fragility of the current state of the economy. 

The Fed said in a statement said they “expect to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals.”

With no plans to change interest rates, the Federal Reserve is tasked with helping the economy bounce back with other palliatives.

The Federal Reserve helps to control the economy through market rates that affect borrowing, credit cards, and even mortgages. The current fed fund rate is capped in the range of 0% to 0.25% as reported by CNBC. With these low rates, institutions can have access to funds especially those targeted at helping to rebuild the economy. With the rates left unchanged, the access to credit facilities will be improved which can impact financial institutions as well

The economy is still very fragile and the Fed understands that access to funds is crucial in helping to rebuild, at least, this Fed fund rate status quo may remain so until 2021.

Dow and S&P 500 Down, Why Some Stocks Are Tumbling?

In addition to losses posted by the Dow and S&P 500, companies like Citigroup Inc (NYSE: C) lost 6.1%, JPMorgan Chase & Co. (NYSE: JPM) posted a 4.1% loss while airlines like American Airlines Group Inc (NASDAQ: AAL), JetBlue Corporation (NASDAQ: JBLU) and United Airlines Holdings Inc (NASDAQ: UAL) all traded below 11%. 

The overall market outlook may differ among companies but all are expected to wedge through these early stages of rebuilding the economy with renewed market offerings capable of attracting investors. 

The tech space is among those profiting from the market. Their overall performance has impacted historically on Nasdaq hitting a record high of 10,000 on Monday.

Business News, Indices, Market News, News, Stocks

Benjamin Godfrey , 2020-06-11 11:03:39

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While Bitcoin’s price seemingly moves without rhyme or reason — collapsing by dozens of percent and embarking on face-melting rallies on a whim — the cryptocurrency market is filled to the brim with fractals.

Related Reading: Analyst: Bitcoin Price Likely to Fall to Low-$8,000s as Chart Remains Weak

A brief aside: A fractal, in the context of technical analysis and financial markets anyway, is when an asset’s price action is seen during a different time. This form of analysis isn’t that popular, but it has proven to be somewhat valuable in analyzing Bitcoin.

One recent fractal popularized by a well-known cryptocurrency trader is implying that BTC is going to return to the low-$7,000s in the coming days.

Bitcoin Fractal Implies Retracement to Low-$7,000s

A well-known crypto trader going by “Tyler Durden” on Twitter recently posted the chart below, which shows that a Bitcoin price fractal may be playing out. The fractal has four phases: horizontal consolidation marked by one fakeout, a surge above the consolidation phase, a distribution, then a strong drop to fresh lows.

If the fractal plays out in full, BTC could reach the low-$7,000s again, potentially as low as $7,100. This would represent a 20-odd percent collapse from the current price point of $8,800.

It isn’t only a fractal that is hinting Bitcoin has the potential to visit its lows. As we reported on Saturday, Bloomberg believes that if the GTI Vera Convergence Divergence Indicator flips red, a downtrend could push the cryptocurrency back to $7,300.

Related Reading: Stephen Colbert Pokes Fun at Bitcoin in Monologue: Mainstream Gone Wrong?

Can Bulls Step In?

But again, many believe it is irrational to have such bearish interpretations of the cryptocurrency’s chart at the moment. As reported by NewsBTC earlier, Popular crypto trader Mayne recently noted that the “people waiting for $6,000” are irrational. He quipped that Bitcoin retracing and consolidating after its fourth-biggest bull move in history ($7,300 to $10,500, a 42% gain) is perfectly par for the course, but noted that it’s totally possible we can go lower from $8,800.

The medium-term technicals support this.

Trader and CoinTelegraph contributor FilbFilb found that by the end of November or start of December, the 50-week and 100-week moving averages will see a “golden cross,” which he claims is far more significant” for the Bitcoin market that other technical crosses.

Also, a Bitcoin price model created using Facebook Prophet machine learning found that the leading cryptocurrency is likely to end the year at just over $12,000. What’s notable about this model is that it called the price drop to $8,000 months in advance, and forecasted a ~$7,500 price bottom for BTC.

To put a cherry on the cryptocurrency cake, Crypto Thies observed that when Bitcoin bottomed at $7,300, it bounced decisively off the 0.618 Fibonacci Retracement of the move from $3,000 to $14,000, which correlates with the two-week volume-weighted moving average. He added that summer 2019’s consolidation was marked by Bitcoin flipping major resistances into support levels, implying that a bullish reversal and subsequent continuation is likely possible in the coming weeks.

Featured Image from Shutterstock

Nick Chong , 2019-11-10 12:00:38

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