Market Pulse: Market Resilience Shines as Bitcoin Stumbles | October 10, 2024
Today was a solid session for stocks. We hit new all-time highs, and even though there was some pressure early on, the market held strong. Buying activity picked up, with Nvidia standing out, catching a nice bid. The trend stayed intact, which is key as we move forward.
Jobless claims were also higher than expected, at 258,000 compared to the forecast of 231,000. Combined with the CPI data, this raises concerns that inflation might stick around while the economy starts to slow, leading to potential stagflation. On the S&P 500, we saw a drop on the CPI news, followed by a brief recovery before closing down again. Investors seem to be brushing off the data for now, viewing it as a one-off. But there’s a wedge pattern forming on the daily chart. If we break below the lower trend line, a near-term pullback could be on the table, but the bigger uptrend remains as long as key support levels hold.
Even though economic data missed — inflation came in a bit hot, and jobs were weaker than expected — the overall trend of positive economic surprises continues. Bonds also kept their upward trend, following the rise in yields. While it wasn’t a perfect day, the market’s strength showed, and that’s what matters right now.
Bitcoin, however, was the real story today, slipping back below the $61,000 mark. This level is crucial for Bitcoin, and falling under it shows clear weakness. Despite holding its pivot line for most of the week, it finally broke below it today. If this break is confirmed, the next logical downside target is around $52,000. This underperformance, especially while equities are holding up or even rallying, raises a red flag for those holding Bitcoin. With tech stocks like Nvidia performing so well, Bitcoin’s struggles are even more obvious. There’s a big contrast between the stock market’s strength and crypto’s sluggish behavior.
After the initial buzz from the ETF, Bitcoin has had a rough time. The technicals are now in control, and Bitcoin is stuck in a downtrend. It got rejected again at the top of the channel, reinforcing the bearish outlook. Its usual correlation with equities has faltered, which could indicate a shift in sentiment or increased selling pressure. Until Bitcoin breaks out and makes a meaningful higher high, the trend stays negative. Traders should keep a close eye on whether the pivot break holds, as it could signal more bearish moves in the near future.
Meanwhile, Nvidia’s RSI is picking up again, showing strength. This is what the market is focused on: real profit growth, especially in sectors like AI.
JP Morgan is at an important technical point with earnings coming up. A head and shoulders pattern is forming, and if the neckline breaks, it could push the stock toward $180. Earnings will be key to watch for confirmation of this move.
First Solar has been hit hard, down almost 10%, and breaking a major trend line that’s been in place all year. If this breakdown holds, the next targets could be around $160 or $140. The technical breach makes it a chart to watch closely.
Celsius has been a bright spot, up 14% today after a 6% gain yesterday. The trend line support held, and we saw a big rebound. On the flip side, Carvana’s extended move looks unsustainable and could see a pullback soon. Both stocks highlight the difference in technical setups right now.
Gold and silver had strong days, with gold bouncing after a recent decline, but the bigger trend still points lower. Oil also bounced after two rough days, though the long-term outlook suggests more downside into next year, potentially falling to $50 a barrel.
Natural gas had a notable drop, leading to some profit-taking as it hit oversold levels. In volatile markets like this, it’s important to manage risk and take profits when the opportunity is right because there’s always another trade ahead.
In the past year, we’ve seen a big shift. Investors are choosing quality over speculation. Stocks with solid earnings, cash flow, and dividend potential are leading the way. We’re no longer seeing the speculative froth that used to drive markets. This is a sign of a healthier, more rational environment after rate hikes.
Bitcoin’s struggles fit into this broader trend. As investors prioritize quality and real returns, the appeal of speculative assets like Bitcoin fades. Until Bitcoin can break its downtrend, the outlook remains weak, especially as the market rewards profitable, growing companies.
