Market Shaken as Tech Tumbles, Bitcoin Rises and Banks Shine | October 15, 2024
The semiconductor sector was hit hardest, with Nvidia falling over 5%, dragging down the NASDAQ. While tech stocks struggled, financials held steady with positive or neutral movement. There’s concern with Nvidia’s chart as a double top may be forming. Still, today’s broader market message wasn’t too bad. Regional banks outperformed, showing strength, and consumer discretionary stocks did surprisingly well despite a bond market rally after weaker Empire State data hinted at slower growth. This strength in cyclical stocks suggests resilience in the economy, hinting at a potential pro-cyclical shift as the post-Fed cut environment takes shape.
Bonds also made notable moves today. After the Fed cut, yields initially widened, but some flattening is emerging, signaling that the economic path forward might be uneven. More improvement is needed.
Regional banks seem poised for a breakout. There’s some hesitation, seen in the long upper wick on the candle, but the potential is there. This situation reminds me of Bitcoin, which has been trying to break higher but faces resistance. Speculative risk-on plays, like crypto assets, are being sidelined, signaling a market shift towards something more grounded if the data holds up.
JB Hunt’s earnings weren’t great, but the market seemed to take them as “good enough,” adding to the soft-landing narrative. While the trailing numbers had negatives, the fact they weren’t worse was a relief for investors.
Oil prices dropped 1.43%, while gold inched up slightly as investors shifted to safer assets. Bitcoin made an interesting move, briefly spiking to $68,000 before quickly falling below $65,000, settling around $66,900. The quick reversal suggests watching for either consolidation (bullish) or a more extended pullback (bearish) over the next few days.
In the chip sector, ASML’s news caused a sharp market reaction, with the stock seeing a steep drop around 10 AM. The price continued falling, with a small rally near the close. There’s some interest around $697 as a potential buy level, but it hasn’t been reached yet.
The SMH ETF saw a significant sell-off, but it’s still holding above the summer highs, keeping the uptrend alive for now. A rebound in semiconductors is crucial, as today’s performance was rough, and the broader market’s recovery hinges on it, with Nvidia playing a key role.
For the NASDAQ, today’s sell-off highlights the market’s sensitivity to geopolitical and regulatory news, especially in sectors like semiconductors dominated by giants like Nvidia and ASML.
Bitcoin made an interesting move today, briefly spiking up to $68,000 before quickly falling below $65,000. This sudden rise and drop was likely caused by investors locking in profits. Bitcoin was near its previous highs, leading to a sell-off after the brief surge. It settled at around $66,900, hitting resistance at that upper band. The quick reversal within 30 to 40 minutes suggests we should watch for either a consolidation (bullish) or a more extended pullback (bearish) over the next few days. This fits the expected volatility patterns for this time of year, where corrections often occur before more upward movement. The quick price fluctuations were also driven by traders and algorithms reacting to large liquidity orders.
Gold and silver didn’t make big moves, with gold slightly up. Silver remains on track for a possible run to $29. Oil continued to fall, while natural gas was flat. There’s little to act on here until clearer signs emerge regarding these prices.
In short, today’s market action highlights the importance of letting charts guide decisions rather than reacting to headlines. Sticking to key technical levels and watching price reactions will be crucial in navigating current volatility. The next few days will be important, especially for the semiconductor sector. If they don’t bounce back, it will be tough for the broader market to gain momentum, with Nvidia playing such a critical role.
