Bitcoin And Crude Oil Join Bullish Sentiment, Gold Retreats

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

  1. Moving the market

Equities advanced this morning, buoyed by Trump’s announcement of a finalized trade deal between the U.S. and the United Kingdom. “It’s a full and comprehensive one,” he elaborated, “which will cement the relationship between our countries for many years to come.”

Tech shares received a boost from news that the current administration will rescind the Biden-era AI chip controls, which were set to take effect later this month. Nvidia, Intel, and AMD all climbed, joined by Amazon and Tesla.

Although the Fed’s announcement to hold rates steady is now behind us, concerns persist that “soft” data like sentiment and confidence will eventually impact “hard” data such as retail sales, GDP, and employment. However, this concern has not yet materialized.

Overall, today’s market news was positive, with more favorable developments than negatives. This optimism reduced rate-cut expectations as “soft” data showed signs of improvement.

Small Caps outperformed, driven by a massive short-squeeze, which also benefited the Mag7 basket, despite surging bond yields. The dollar returned to one-week highs, causing gold to retreat, with the precious metal finding support at $3,300.

Bitcoin continued its rally, surpassing the $101k level for the first time since February. Crude oil joined the bullish sentiment, erasing yesterday’s losses.

While our International TTI has signaled a “Buy,” based on today’s action, the Domestic TTI may not be far behind.

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Fed Holds Rates Steady Amid Elevated Economic Uncertainty

Ulli Uncategorized Contact

[Chart courtesy of MarketWatch.com]

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Stocks received an early boost after Disney reported an unexpected jump in streaming subscribers, pushing its stock up by 10%.

Adding to the early bullish sentiment was news that Treasury Secretary Bessent and a top trade official will meet their Chinese counterparts this week in Switzerland. Traders viewed this as a potential de-escalation on the trade front, which had previously caused chaotic market action.

Later in the day, the Federal Reserve’s decision on interest rates was highly anticipated, with nearly 100% certainty that the bank would hold rates steady. Equally important was Fed Chair Powell’s press conference, which provided further insights into the direction of interest rates.

Today’s session was choppy, with major indexes fluctuating due to various headlines. Positive news included scheduled China trade talks for Sunday and Trump’s announcement to rescind global chip curbs. Negative news involved Apple considering replacing the Google search engine and Trump’s refusal to preemptively lower China’s tariffs.

As expected, the Fed held rates steady, and Powell’s press conference was summarized by one economist as a “nothingburger,” with rate-cut expectations slipping. Powell highlighted several key points:

– Inflationary effects of policies could be short-lived.

– Uncertainty about the path of the economy is extremely elevated.

– No slowdown is evident in actual economic data yet.

– Costs of waiting are fairly low.

Bond yields pulled back, Bitcoin jumped but retreated from its intraday highs, gold remained stagnant, the dollar showed signs of life, and crude oil slipped again.

With the Fed decision out of the way, headline-driven market volatility will likely continue tomorrow.

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Gold Glows Amid Market Uncertainty; Bitcoin Recovers

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

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Equities started the day on a downward trend as traders eagerly awaited the Fed’s policy decision tomorrow.

They were also tracking global news for any signs of progress on potential trade deals. Tech giants Nvidia and Meta, along with Tesla, saw declines. Tesla’s new car sales in Britain and Germany fell to their lowest levels in over two years, despite increasing demand for electric vehicles.

The Fed began its two-day meeting today, with a decision expected tomorrow. Anxiety remains high on Wall Street, even though a rate cut is not anticipated. The focus will be on Powell’s comments regarding the current state of the economy and his outlook.

The S&P 500, along with the broader market, faces a significant challenge at its 200-day moving average (200DMA), which has been providing strong overhead resistance. If the attempt to break through this level is unsuccessful, we may see a reversal towards the lows made in April.

With low trading volume across the board, all attempts to rally above the unchanged lines failed, and the major indexes ended the session in the red.

Bond yields slipped, the dollar continued its decline, and Bitcoin recovered from an early drop to climb back above $95,000. Gold had another impressive performance, gaining over 3% and reclaiming its $3,400 level.

The markets are at a crossroads and could break either way. As ZH pointed out, price action is mainly driven by short-term headlines and speculation on the evolving US tariffs story.

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Gold Shines Amid Market Selloff And Mixed Economic Data

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

  1. Moving the market

The markets pulled back early in the session as hopes for new trade deals diminished following President Trump’s announcement of surprise levies on movies made outside the U.S.

He elaborated on negotiations with various countries, emphasizing that he is setting the terms of any agreement. Additionally, he made it clear that there are no plans to talk to China, which affected traders’ expectations of progress.

This week, the Fed’s two-day policy meeting begins tomorrow, with a rate decision expected on Wednesday. Futures indicate only a 3.2% chance of a rate cut, but traders will be closely analyzing any commentary from Fed Chair Powell.

Despite efforts by traders and algorithms to maintain a nine-day winning streak, the market closed in the red due to a last-hour selloff. Mixed economic data lowered rate-cut expectations, and the dollar continued to weaken.

Mega-tech stocks and the Mag7 basket managed to recover from early losses but still ended the day in the red. Bond yields rose moderately, oil prices plunged, and Bitcoin retreated.

The standout performer of the day was gold, which rallied 3% and nearly reached the $3,350 level.

Does this indicate that its recent correction is over?

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Weekly StatSheet For The ETF Tracker Newsletter – Updated Through 05/01/2025

Ulli ETF StatSheet Contact

ETF Data updated through Thursday, May 1, 2025

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: SELL— effective 4/4/2025

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 below its long-term trend line (red) by -3.42% and has moved into “Sell” mode as of 4/4/2025.

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Bitcoin Surges To $97k As Equities Rebound

Ulli Uncategorized Contact

[Chart courtesy of MarketWatch.com]

  1. Moving the market

The tech sector led this morning’s positive opening, driven by strong quarterly results from Microsoft and Meta.

Both companies exceeded expectations, easing fears that the tariff war and a downturn in the U.S. economy might threaten the AI trade. It appears AI is less impacted than traders initially believed.

Adding to the bullish sentiment was Microsoft’s optimistic guidance, which further alleviated concerns about tech companies’ performance in the coming months. Microsoft’s shares rose by 7.6%, Meta’s by 4.2%, and Nvidia’s by 2.5% in sympathy.

Despite a negative reading of weekly jobless claims jumping to 241,000 versus an estimated 225,000, bullish sentiment remained strong. This is despite increased concerns about the economy following the recent negative first-quarter GDP report.

The major indexes started May with moderate gains, even though macro data declined. Bond yields surged, pushing the dollar higher and gold lower, while rate-cut expectations decreased. Bitcoin continued its ascent, reaching $97k today, its highest level since February.

Interestingly, equities have rebounded despite a weakening global economy, a negative GDP reading, and falling oil prices, which put the U.S. at risk of sliding into a recession. This points to shrinking earnings in corporate America.

As ZH noted, even a mild 5% contraction in earnings from 2024 would leave the aggregate earnings per share of the S&P 500 basket at $225, roughly corresponding to a value of $3,874 on the index. The S&P 500 is almost 2,000 points higher than that level.

Will the markets continue to live in denial a little while longer?

On a personal note, I will be out tomorrow, so there will be no Friday post or Saturday Cutline report.

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