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Market Watch review. 09.11.2020

In today's release, we’ll cover the following topics:

  • S&P 500 at historical high.
  • Bitcoin has updated highs since January 2018.
  • Oil market in the accumulation zone.

I will start today's review with good news for traders and investors – the main US stock indices are showing steady growth. So the S&P 500 and Nasdaq 100 indices came close to their historical highs, completely returning all the losses of the previous weeks. The reason for optimism among investors was the victory of Joe Biden.

But despite all this optimism, it is extremely difficult to completely eliminate the risk of a sell-off in the stock market. First, Donald Trump plans to challenge the election results and seek a recount in some states. Secondly, we observe the formation of the "triple top" figure. The appearance of this figure on the uptrend of the S&P 500 index increases the probability of resuming the downward movement. Therefore, without the appearance of a very strong bullish fundamental factor, it is extremely difficult to count on further growth.

I will also pay attention to the rapid growth of Bitcoin. It is noteworthy that the demand for BTC and the inflow of investments exceeds the interest in gold-based ETFs. As a result, the price of the main cryptocurrency reached its highest level since January 2018, coming close to 16,000 USD per BTC. Experts from JPMorgan note an increase in demand among institutional investors who provided the necessary support to the cryptocurrency market.

Shifting to the US trading session, I will note a significant decrease in trading activity on the black gold market. US WTI crude is trading at $38 a barrel. Further growth in oil prices may occur in the event of a general decrease in oil production in the United States against the background of a nationwide priority in favor of alternative energy sources.

Further growth of US stock indices will also contribute to the growth of oil prices. First, the growth of stocks contributes to the weakening of the US dollar, and secondly, the cheaper the US currency is, the more expensive everything that can be bought for it – including oil. Given all this, we should not exclude the risk of further growth in oil prices. At the same time, I would like to draw your attention to the lack of high-quality trading signals for the purchase of "black gold".

Closely monitor the news background and be prepared for all the surprises of the market.


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