U.S. Stocks Rally, Safe-Havens Mixed
Shain Vernier • 2 min read
With only a few hours left in the trading day, U.S. stocks continue to rally higher. Strong intrasession uptrends are once again being posted by the DJIA DOW (+222), S&P 500 SPX (+16), and NASDAQ (+73). As we roll toward late-week trade, one has to wonder if the DJIA is preparing to test the vaunted 30,000 handle.
On the news front, there are several key stories dominating the headlines. Here is a brief recap of each fundamental market driver:
- Coronavirus: The latest coronavirus news isn’t good, but it isn’t as bad as expected. According to China’s National Health Commission, 2,015 new cases of the virus have been reported over the past 24 hours. While the spread of the coronavirus is still a major concern, it appears to be slowing.
- Powell Testimony: All in all, FED Chair Jerome Powell’s Congressional testimony came off without a hitch. Economic growth appears sustainable and current FED policy is appropriate. About the only eyebrow-raiser was Powell stating that the FED will “aggressively use quantitative easing (QE) to combat the next downturn.”
- Sanders Wins New Hampshire: On the U.S. political front, Democratic candidate Bernie Sanders appears to have won the New Hampshire primary. This backs up a strong showing in Iowa and has made Sanders the Democratic frontrunner. According to predictit.org, Sanders has a 48% chance of winning the party’s nomination.
So, although these three items aren’t exactly good news for stocks, the bulls continue to dominate market sentiment.
Stocks Rally, Safe-Havens Mixed
Today’s action in safe-haven assets is slightly mixed. For the session, GOLD (+$1.00) is up modestly, while the JPY and CHF are lagging vs the Greenback. Ultimately, it is “risk-on” as investors dive into U.S. stocks.
Here are a few levels to watch in the USD/JPY for the near future:
- Resistance(1): Swing High, 110.28
- Support(1): Bollinger MP, 109.55
- Support(2): Daily SMA, 109.30
Overview: From a macro standpoint, there is a key resistance level on the horizon for the USD/JPY. The 78% Fibonacci retracement of 2019’s April to August sell-off is 110.64. If we see U.S. stocks continue to rally and safe-haven currencies lose market share, a shorting opportunity from this level may come into play relatively soon.