Nasdaq, S&P and Dow all slaughtered, Gold did nothing, oil dropped – only Crypto showed stability
I trade the Futures market along with Forex and Crypto. Today was the craziest day trading the NQ (E-mini Nasdaq Futures) since Trump’s election. Like, it was insane. It’s still dropping after hours. 5.29% drop – nuts. But that wasn’t the only thing that was nuts. By the way – I wrote about this drop happening back on September 14th – Hooray for Financial Astrology and the Venus Retrograde Cycle!
Really weird price action – kind of freaky really
People may or may not know this, but when US equities are falling down hard, what is one thing that shows strength? Gold. What did gold do today? Nothing. It gained $5. Like, pitiful. It couldn’t even regain the key $1200 level. You know what else was odd? Oil! Oil dropped. 40% of the Gulf of Mexico refineries are down due to the hurricane and oil still dropped. EU equity markets were down hardcore as well. The only thing that was showing ‘normal’… even bonds fell. Hell, even Treasuries were trading down – so damn strange. And only one other market showed some resiliency among the craziness of Wednesday’s trading:
Surprising resilience in cryptos
Throughout the US session, cryptocurrencies showed pretty flat trading in Bitcoin and Ethereum. The altcoin markets actually saw heavy volume and participation – showing some evidence of increased future volatility. Bitcoin and Ethereum also showed some resilience, which is surprising given the fake out to the downside that cryptos had during overnight trading. There were some big drops in Bitcoin and Ethreum last night. The cryptocurrency exchange, Bitstamp, saw the biggest drop with Bitcoin falling from 6547 down to 6387 – a move that happened in a 5-minute timeframe. However, it was quickly bought back up. There was no follow-through selling on a move which should have triggered significant selling pressure from bears and from scared bulls – there was not even a hint of a stop run. Instead, there has been a strong and deliberate move higher. The altcoin markets also did not experience a strong selloff – in fact, a great number of the altcoins that were showing >5% gains held those gains and maintained a stable position. The move overnight may have been a poor attempt at a bear trap or just an attempt to test the conviction of the bears.
Breakout still ahead
Given the strong buying pressure that happened overnight, the outlook for the future has not changed – we should still see a breakout here very soon. The fact that Bitcoin was bought back up so soon and so quickly is a testament to the strength of the bottom being in for this market. Now, there is still a case for a further move down! There is certainly a case that can be made for another bear move – but it’s not nearly as high of a probability as the bullish side of the trade.