Bitcoin Nears $100K As Major Indexes Recover From Early Losses

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

  1. Moving the market

Geopolitical tensions between Ukraine and Russia initially dragged the markets down, exacerbated by the U.S. administration’s approval for Ukraine to use American weapons to strike inside Russia, raising fears of a potential World War III scenario.

Despite this, the Nasdaq was the first of the three major indexes to recover, buoyed by a 2.4% rise in Nvidia’s stock ahead of its earnings release.

However, the persistent escalation of war rhetoric and uncertainty about the incoming administration’s response could lead to further market volatility.

By the end of the day, the major indexes rebounded, partly due to headlines suggesting that Iran is seeking to de-escalate tensions, which helped stabilize the markets.

On the economic front, Walmart’s stock surged 5% on strong earnings and an improved outlook on discretionary spending. Tesla also added another 2%, bringing its month-to-date rally to 38%, marking its best month since January 2023.

Additionally, the most shorted stocks were squeezed higher, the Mega-Cap Tech basket rebounded, bond yields slipped due to disappointing U.S. macroeconomic data, and gold prices increased.

Bitcoin continued its ascent towards the $100,000 mark, climbing above $94,000 to set a record high before pulling back slightly at the close.

Will $100,000 present a glass ceiling for Bitcoin, or will it break through this milestone?

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Gold Rebounds, Crude Oil Recovers As Major Indexes Show Mixed Results

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

  1. Moving the market

The major indexes ended the day with mixed results, as only the S&P 500 and Nasdaq managed to close in the green. The Nasdaq received a significant boost from Tesla, which surged approximately 7% following news of potential regulatory easing for self-driving vehicles.

Traders are now turning their attention to Wednesday’s earnings release from chip giant Nvidia, which could influence the market’s near-term direction. Additionally, upcoming reports from key retailers are expected to provide valuable insights into consumer behavior and the broader economy.

Last week was challenging for the major indexes, which retreated from their post-election highs due to concerns about the Federal Reserve’s interest rate trajectory. Despite the Fed’s accommodative stance, having lowered rates by 0.5% and then 0.25%, the markets reacted negatively, with the 10-year yield rising sharply instead of falling.

Bond yields initially spiked but then lost momentum, reversing course, and closing lower. Bitcoin underwent a volatile session, trading within a range and ending slightly higher, maintaining its post-election gains. Gold, after a recent sell-off, rebounded with a 1.7% gain, while crude oil also recovered, reclaiming the $69 level.

Interestingly, Bitcoin and gold, which had been rallying in tandem, diverged after the election. Bitcoin surged higher, while gold faced profit-taking.

Will they be able to sync up again?

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ETFs On The Cutline – Updated Through 11/15/2024

Ulli ETFs on the Cutline Contact

Do you want to know which ETFs are hot and which ones are not? Then you need my High-Volume ETF Cutline report. It tells you how close or far each of the 311 ETFs I follow is from its long-term trend line (39-week SMA). These are the ETFs that trade more than $5 million a day, so they are not some obscure funds that nobody cares about.

The report is split into two parts: The winners that are above their trend line (%M/A), and the losers that are below it. The yellow line is the line of shame that separates them. You can see how many ETFs are in each group and how they have changed since the last report (245 vs. 196 current).

Take a peek:

The HV ETF Master Cutline Report

If you are confused by some of the terms we use, don’t panic. I have a helpful Glossary of Terms for you.

If you want to learn more about the Cutline method and how it can make you rich (or at least less poor), read my original post here.

ETF Tracker Newsletter For November 15, 2024

Ulli ETF Tracker Contact

ETF Tracker StatSheet          

You can view the latest version here.

FED’S CAUTIOUS STANCE HALTS POST-ELECTION RALLY

[Chart courtesy of MarketWatch.com]

  1. Moving the market

The major indexes opened lower as the post-election rally came to an abrupt halt following Fed Chair Powell’s comments yesterday that he is “in no hurry” to continue cutting rates.

This statement put significant pressure on equities, casting doubt on the foundation of the recent market surge and accelerating the trend reversal seen early on.

It appears that last week’s rate cut may be the final one for this year, as hopes for another cut in December have dissipated.

Equities surrendered some of last week’s substantial gains, but traders remain optimistic that this pullback will be limited due to strong seasonal trends, as I highlighted in yesterday’s chart.

The eagerly anticipated retail sales report showed a 0.4% increase in October, surpassing the 0.3% forecast. However, this increase reflects higher prices rather than increased consumer activity, indicating that consumers are paying more for the same goods due to inflation.

The “good news” of improved US macroeconomic data turned into “bad news” as both inflation and growth surged, which is not the kind of data the Fed prefers to see. This development has significantly reduced expectations for further rate cuts.

For the week, energy and financials were the only sectors to end in the green, while healthcare performed the worst. Mega-cap stocks lost all their post-election gains, as noted by ZH.

The most shorted stocks underwent a round trip during the first half of November, while bonds continued their trend towards higher yields, with the 10-year yield touching 4.5% before pulling back at the close.

Gold also dropped, experiencing its worst week since June 2021, falling to two-month lows due to the dollar’s strength, which was bolstered by higher yields.

Meanwhile, Bitcoin had its best two-week run since March, hitting new records and maintaining its $91k level, making it the top performer with a gain of over 36% in the last 30 days.

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Weekly StatSheet For The ETF Tracker Newsletter – Updated Through 11/14/2024

Ulli ETF StatSheet Contact

ETF Data updated through Thursday, November 14, 2024

How to use this StatSheet:

  1. Out of the 1,800+ ETFs out there, I only pick the ones that trade over $5 million per day (HV ETFs), so you don’t get stuck with a lemon that nobody wants to buy or sell.
  1. Trend Tracking Indexes (TTIs)

These are the main indicators that tell you when to buy or sell Domestic and International ETFs (section 1 and 2). They do that by comparing their position to their long-term M/A (Moving Average). If they cross above, and stay there, it’s a green light to buy. If they fall below, and keep going, it’s a red light to sell. And to make sure you don’t lose your shirt if things go south, I also use a 12% trailing stop loss on all positions in these categories.

  1. All other investment areas don’t have a TTI and should be traded based on the position of each ETF relative to its own trend line (%M/A). That’s why I call them “Selective Buy.” In other words, if an ETF goes above its own trend line, you can buy it. But don’t forget to use a trailing sell stop of 12%, or less if you’re feeling nervous.

If some of these words sound like Greek to you, please check out the Glossary of Terms and new subscriber information in section 9.

  1. DOMESTIC EQUITY ETFs: BUY— since 11/21/2023

Click on chart to enlarge

This is our main compass, the Domestic Trend Tracking Index (TTI-green line in the above chart). It has broken above its long-term trend line (red) by +8.37% and is in “Buy” mode as posted.

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Stocks And Cryptos Retreat As Traders Eye Inflation Data

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

  1. Moving the market

The rally in stocks and cryptocurrencies came to a halt and reversed as traders grappled with recent record highs, shifting their focus to the October Producer Price Index (PPI).

The PPI headline number matched forecasts with a 0.2% month-over-month increase, while September’s figure was revised upward from 0.0% to 0.1%. On an annual basis, the PPI rose by 2.4%, surpassing the expected 2.3%, with the previous month’s figure also revised higher from 1.8% to 1.9%.

These figures indicate that inflation is not moving towards the Federal Reserve’s 2% target but rather in the opposite direction, prompting traders to question the likelihood of a December rate cut.

This data reinforces my belief that inflation is far from over and may worsen, potentially leading to the much-dreaded condition of stagflation.

JP Morgan CEO Jamie Dimon echoed these concerns, stating:

– *DIMON: THINK THE CHANCE OF SOFT LANDING LESS THAN OTHERS THINK

– *DIMON: “NOT SO OPTIMISTIC” THAT INFLATION WILL GO AWAY QUICKLY

– *DIMON: GROWTH IS BEST POLICY TO FIX DEFICIT PROBLEM

– *DIMON: TRUMP INHERITING INFLATION THAT MAY NOT GO AWAY QUICKLY

Federal Reserve Chair Jerome Powell also acknowledged in his remarks that “the Fed is in no hurry to cut rates… and inflation is on a bumpy path.” Powell’s comments accelerated the market downturn, with small-cap stocks bearing the brunt of the sell-off as heavily shorted stocks were pushed lower, erasing recent gains.

Despite this, traders are holding onto historical seasonality patterns, which suggest a rally into the inauguration during election years, followed by a peak in February.

The dollar rebounded after a midday slump, as did gold, although the precious metal slipped again. Bitcoin, after an early bounce, found support at the $88,000 level.

Will tomorrow’s retail sales report add even more volatility to the markets?

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