A Gloomy Wednesday. Indices Paint a Bearish Picture
27 September 2023
Hello traders, as we welcome another trading day this Wednesday, the market’s temperament appears to be taking a dip. The atmosphere darkens with each trading session, predominantly evident within the indices. Reflecting on Tuesday, the Dow Jones suffered its most significant one-day blow since March. A glance across the major indices reveals a trend of descent: the S&P 500 is on the brink of challenging its long-term uptrend line, the Nasdaq has dipped below its August lows—now at its nadir since June—and the DAX is plumbing depths unseen since late March. In summary, the sentiment leans heavily bearish.
Turning to the currency market, yesterday's champions were unmistakably the American dollar and the Japanese yen. Their reign continues today, setting the stage for the EURUSD to etch new mid-term lows, all while persistently navigating the down-channel. Concurrently, the USDCHF pairing celebrates fresh mid-term peaks.
Pivoting to commodities, we observe a stark contrast in trajectories. Precious metals, particularly gold, are feeling the weight. With gold now trading sub-$1900, a significant psychological threshold, and silver setting its sights on the lower confines of a symmetric triangle pattern, the outlook seems grim. However, there's a silver lining in the form of oil. Tuesday’s session was transformative—opening on a subdued note but rallying to close higher, ultimately fashioning a hammer candle. Today’s momentum suggests we might be on the cusp of observing new long-term peaks.
Regarding economic indicators, it’s suggested that the indices' dismal performance stems from underwhelming U.S. CB consumer confidence data and disappointing new home sales statistics. Yet, pinning the blame solely on these figures might be an oversimplification. Underlying market sentiments, intertwined with concerns about global economic growth trajectories and central banks’ stances on interest rates, play a substantial role.
Today's calendar, unusually muted for a Wednesday, has already served us Australia's inflation figures, which matched the 5.2% forecast. Awaiting us later in the session are the U.S. durable goods orders, and it remains to be seen how they’ll sway the market.