Date: October 9th 2023
Market Basic Overview
In the ever-evolving world of finance, understanding where the money flows is the key to deciphering global trends. This week, we witnessed a whirlwind of activity in the markets, driven by a PAN (Panic) selloff sparked by a sudden spike in bond yields. While this may have rattled some, it’s essential to dissect these price actions to uncover the underlying story.
Dollar’s Tempting Dance
The week began with the dollar making strides, but it swiftly retraced its entire move, leaving behind its first red candle in 13 weeks. For technical analysts, this bearish inverted hammer candle raises questions. Is it a mere short-term pullback, or will the dollar continue its ascent? Money is still pouring into the dollar, and it might have room to climb even higher, potentially reaching the 110 mark.
US10Y’s Steady Exodus
Another notable trend this week was the relentless rise in yields, signalling a substantial shift of capital away from 10-year bonds. This exodus from bonds is a critical indicator of market sentiment.
SPX500’s Rollercoaster Ride
The SPX500 experienced an overall decline but displayed an intriguing lower wick before retracing upwards. Despite this rally, it couldn’t fully recover from the earlier week’s sell-off. The question that looms is whether this is merely profit-taking or if the selloff has truly concluded.
Gold’s Glint of Hope
Gold seemed to have found its footing as the sell-off temporarily halted. The yellow metal staged an impressive rally, indicating a substantial influx of capital into commodities and metals. However, unlike the stock indices, gold didn’t fully retrace its initial dip. Could this be the bottom for gold, paving the way for a significant upward move?
Oil’s Rocky Road
Oil witnessed a substantial pullback, retracing the gains from the previous four weeks. This decline was somewhat expected but found support as it hit a supply zone towards the end of the week. The oil market is in flux, and traders must watch for potential opportunities in this rollercoaster.
Bitcoin: The Enigma Unfolds
Bitcoin, in a break from correlation with other assets, exhibited a flat performance for the week. Amid the PAN selloff across various markets, Bitcoin’s stability raises intriguing questions. Is this a lack of demand for the cryptocurrency, or could it signify underlying strength? Bitcoin continues to be a standout asset, warranting close observation in the coming week.
What This Means for Us Traders
For traders, this week’s market movements underscore the importance of tracking capital flows. Whether you’re a buyer or a seller, understanding the prevailing direction can help identify potential continuation plays, particularly in intraday trading. At this juncture, risk remains off, with capital steadily exiting most markets and flowing into the dollar. However, Bitcoin remains an outlier, making it a focal point for traders seeking to navigate these turbulent waters. As we move forward, the evolving landscape of money flows will be a compass for traders seeking their next strategic move. Stay vigilant and adaptable as you navigate these ever-changing financial currents.
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