Market Analysis Today[2024.04.15]: Why Everything Feels so Bearish?

It’s Monday, 3rd week of April 2024. Let’s dive into our market analysis today.

Key Events Today

Nothing really serious but we have Retail Sales Report coming out this morning.

And these stocks have earnings today.

FOREX

Regarding EURUSD, we’re seeing a clear downward trend. There are still six FOMC meetings scheduled for this year. Last month, the inflation rate, measured by CPI, rose to 3.5%. Initially, the market anticipated rate cuts, but now it seems unlikely. The Federal Reserve, an independent entity, makes decisions without much questioning. It’s possible they might even raise rates again in the future. This suggests that the USD will likely strengthen in the near future, as anticipated by many. A stronger USD typically means EURUSD will fall.

In the 1-hour chart, the price is undergoing a correction within a bearish trend. If the price breaks below the support line, it signals the end of the correction and a continuation of the downtrend. Strong resistance is observed at 1.07000 and 1.07260. The price is likely to rebound from either of these levels, or it could rebound before reaching them. For those considering trading EURUSD, the safest approach would be to wait for it to break below the lower support line at 1.06200 before taking any action.

CRYPTO

Regarding BTC, it’s currently exhibiting a sideways trend, indicating potential for a significant move. The key resistance level is around 73800, its all-time high, while the strongest support sits at approximately 60000. During this sideways movement, we can anticipate price mean-reverting. Once it breaks either of these levels, the direction of the price and the trend will likely be determined. The probability of an upward breakout is higher due to widespread expectations. Hence, it’s advisable to wait for the breakout to initiate momentum strategy positions or capitalize on mean reversion by entering and exiting trades whenever the price nears these key levels.

STOCK

Regarding the SPY, it appears that the uptrend has ended and the price is entering a bearish phase. However, it’s crucial to understand that when a trend changes abruptly, such as transitioning from an uptrend to a downtrend, the new downtrend typically doesn’t persist for as long as when the market transitions from an uptrend to a sideways trend before moving into a downtrend. This distinction is vital.

Currently, after the break of the upward channel, it seems like the price has indeed started a downtrend. However, it’s premature to confirm this because there haven’t been enough trading days to ascertain whether the price movement is downwards or sideways. Therefore, we need to exercise patience and monitor the market to determine the duration of this trend. At present, the SPY can be considered officially bearish.

Observing the 1-hour chart, it’s noticeable that there’s somewhat of a sideways trend going on. The main support sits at 508, while the strongest support stands at 524, which marks its highest level ever. These movements might suggest a correction phase for SPY.

What’s most advisable at this point is to monitor if the price drops below 508, indicating a downtrend, which we can follow. Conversely, if the price surpasses its all-time high at 524, it signals an uptrend. In the meantime, the price may show signs of mean reversion momentum. So, the wisest approach is to wait for a breakout before making any significant moves.

Oh man, last Friday was tough on everything. It looks like only Apple and a few others made it through okay. All the sectors took a hit.

Overall, all sectors experienced negative performance. The worst performing sector was consumer cyclical, with a decline of nearly 2%. Basic materials and technology followed closely behind, both experiencing declines of over 1.7%. even energy sector also took a hit.

Consumer Staples:

Consumer staples (XLP) are definitely in a bearish trend. You can see that the channel has been broken, and the price is moving downward. Today, we can anticipate the price to drop even more because it attempted to move back up to the channel but couldn’t. This is a strong bearish sign. Let’s see how it plays out today.

Energy:

After a lengthy period of growth, the energy sector (XLE) faced a setback on friday. The most robust support for the price stands around 93. If the price drops below this level, it’s a significant sign of a bearish trend. I believe the energy sector might need a correction, but we can’t be certain just yet. So, let’s wait and see how things unfold today.

Materials:

Materials (XLB) are also showing a bearish trend, which is quite evident. The most robust support for the price is around 86. This level is critical for XLB, and if the price breaks below it, we are in trouble. Today, we can anticipate the price to decline. Let’s observe what unfolds.

Industrial:

The reason is that the entire market suffered a setback. Every sector in the market was affected, including Industrials (XLI). It’s facing a similar situation, where the sideways trend has been broken, and the price is moving downward. The most robust support level for the price is around 120. We can anticipate the price to drop today. Let’s wait and see what happens.

Consumer Discretionary:

The most robust support level for the consumer discretionary sector (XLY) is around the 174 range. This level is crucial to monitor because if the price falls below it, it’s a significant bearish signal. Currently, the price is moving downward, similar to other sectors. These lines represent support levels for the price, where it might find support or break through and continue falling.

Healthcare:

Regarding the Healthcare sector (XLV), it had already been declining before the market experienced a setback on Friday. Currently, the price is hovering around a support level. Today, we can anticipate the price to either rebound from this level or break through it and continue downward. Therefore, it’s advisable to wait for a breakout to occur to confirm the direction of the trend.

Financials:

The financial sector (XLF) is experiencing a similar situation. Currently, the price is trading around a support level. If the price breaks below this level, it signals a continuation of the downtrend. However, there’s also a possibility that the price could bounce back up from this level. Therefore, it’s prudent to wait for confirmation before making any decisions.

Technology:

The Technology sector (XLK) is evidently in a sideways trend, and it’s currently close to its strongest support level. We might anticipate the price to bounce back from this level. However, if it manages to break through, we can expect a sharp decline in the sector. Therefore, the critical level to monitor here is around 204. Keep a close watch on this range, as a break will indicate the next move.

Communications:

It appears that the uptrend for the communication sector (XLC) is possibly over, as it has broken the trend line. Today, we can anticipate either a continuation of the price decline or a corrective phase where the price touches the broken trend line before resuming its fall.

Utilities:

The uptrend in the utilities sector (XLU) seems to have ended, and the price has undergone some correction near the trend line. We can anticipate the price to continue falling today, although the correction phase might still be in progress. It’s important to closely monitor the trend line for further developments.

Real Estate:

The Real Estate sector (XLRE) has been in a bearish trend for some time now, and currently, the price is at its strongest support level. As you know, the price will either rebound from this level or break through it and continue downward. Therefore, it’s important to wait for confirmation before making any decisions.

Disclaimer

The information provided in this market analysis is for educational and informational purposes only. It should not be construed as financial advice or a recommendation to buy, sell, or hold any securities or investments.

All investments involve risk, and past performance is not indicative of future results. The analysis provided may not be suitable for all investors and should be used at their own discretion.

These analyses are here to help you grasp how to analyze the market. They’re not about giving buy or sell signals. It’s simply about observing market behavior. I don’t focus much on recommending when to buy or sell because trading doesn’t work that way. You need a strategy to guide your decisions about when to enter or exit positions. That’s the key to making consistent profits in the financial markets over time.

I discussed these sectors and markets because when the entire market or sector goes through certain movements, most of the stocks within that market will also experience similar movements. So, by understanding what the market is doing, you can conduct your own analysis on specific coins or stocks.

Readers are encouraged to conduct their own research.

Trading and investing in financial markets carry inherent risks, including the risk of losing invested capital. It is important to carefully consider your investment objectives, risk tolerance, and financial situation before making any investment decisions.