Bears back to real life!
Today, the technology stocks can continue the losses of the day before as Central Bank's whit tightening policies all around the globe can reduce the cash level in the market and therefore fewer buyers there. In the Futures market and before the cash market opens, we can see the NASDAQ losing more than 1%. This is while yesterday NASDAQ closed with a 2.47% loss. The biggest losers were NVDA, Apple, AMD, Amazon, Facebook, and Tesla.
Another market mover of the week was the Turkish Lira. USD/TRY surges above 17.00 earlier today to continue the effect of the Turkish Central Bank's decision to reduce the interest rate by 1% to 14%. These days we can see huge changes in Turkey's financial markets. While inflation increased sharply in the past month and it is above 21% now (According to the official reports) and it caused several public dissatisfactions, the government and Mr. President Recep Tayyip Erdogan announced on Thursday to raise the minimum wage by 50% starting next year, with abolishing income and stamp tax on the minimum wage, to reduce the negative effects of high inflation.
On the Covid front, more countries around the world starting more restrictions to stop the spreading of the Omicron variant of Covid-19. In China, regions including Guangdong, and its capital Guangzhou, introduced their first restrictions on movement. In Europe, Italy angered other EU member states with fresh testing requirements for Arrivals. And In Sweden government is re-planning the support payments for businesses that have been hit by COVID-19 effects.
Generally, market risk increasing and we can see the VIX above 23.30 once more after Wednesday fall, to send the US Dollar index above 96 Mark. This higher market risk increases Gold demand and its price above 1,800 US dollars and US stocks down more than 1% on average.
From the technical point of view, as we can see in the below figure, SP500 changed its direction to the downtrend with moving under 20DMA, RSI at under 30, and falling OBV trend line. SP500 still holds strong support at 4,550. Breaching under this level can hold the bears for a bit longer time in the charts. On the flip side, the main and strong resistance at 4,700 still is the sign to have the bulls for a much longer period.
