Stock Market Today: Nasdaq Eyes 3% Weekly Gain; 2 Ways To Play The Hot Bitcoin ETF Trend | Stock News & Stock Market Analysis

The Nasdaq composite led another broad-based rally Friday on the back of decent buying in the semiconductor, retail internet, internet content and other technology sectors to cap a rosy start to 2018.

XThe tech-rich index, up nearly 0.7% at around 3 p.m. ET, also got an assist from fast growing firms in the game software space, such as Electronic Arts (EA) and Activision Blizzard (ATVI). The former, up 5% to 112.46, reclaimed both its 50- and 200-day moving averages in swift trading, a positive sign. Watch for a potential new base to finish.

Meanwhile, Activision, a nice winner in 2017, is also showing nice support at the 50- and 200-day moving averages lately, but there’s clear upside price resistance near the 66-67 level.

Stiff gains in heavier than usual volume are a bullish trend, for it hints at a strong appetite for equities by the institutional crowd, i.e. mutual funds, hedge funds, large investment advisers, banks, insurers and pension managers.

The S&P 500 and the Dow Jones industrial average were not far behind, up around 0.5% to 0.6%. The Nasdaq is poised to finish the week up more than 3%. Six of the 30 Dow Jones industrial average components rallied 1 point or more.

Another Dow 30 component, DowDuPont (DWDP), is having a terrific week, rising for a fourth straight session and moving further past a 73.95 entry in a sound flat base. Shares are up 1% to 75.28 in mildly below-average turnover.

Keep an eye on the chemical giant’s relative strength line, drawn in blue in all IBD and MarketSmith charts. A sharply rising line means a stock is sharply beating the S&P 500. That’s one key to market outperformance for your portfolio. Also, if DowDuPont’s RS line stretches into new high ground, that would also be bullish.

Meanwhile, Bitcoin Investment Trust (GBTX) delivered a solid rebound, rising 6% to 2,347 and snapping a “mild” three-day losing streak.

As noted in a Stock Market Today column earlier this week, the Bitcoin-tracking ETF is not at any proper buy point. Keep watching to see if it keeps the current correction to a reasonable decline.

Given that Bitcoin Investment soared more than 1,500% last year, it’s totally acceptable to see a drop in the 40% to 50% range off the 3,522 all-time peak. However, the market laws of supply and demand still apply. Over time, you want to see this and any other ETF or ETN (exchange-traded note) to rise in higher or above-average trade, and fall in lighter turnover.

Trading exchanges CME Group[ticker symb=CME] and Cboe Global Markets (CBOE) could be alternatives to playing the Bitcoin trend, but keep in mind that the their Bitcoin futures trading activity, while increasing, is still small for both of these companies relative to their gigantic business involved with equity index, option, fixed income and commodities derivatives.

CME Group, up fractionally on Friday, got a solid bounce off the 50-day moving average earlier in the week. The stock may form a new base, but for now it’s well extended after clearing a 128.06 buy point in a good flat base in active turnover on Sept. 6 last year.

Meanwhile, government bond investors did not ruffle their feathers following a smaller than expected increase in monthly U.S. payrolls. The yield on the benchmark U.S. Treasury 10-year bond, in fact, edged up to 2.47%, meaning that bond prices fell on selling pressure. The yield is still below a 2.62% peak seen in 2017, but one could reasonably expect the yield to continue rising amid broad expectations that the Federal Reserve will raise the cost of money perhaps three more times this year.

In December 2015, the Fed pushed the fed funds rate on overnight loans to big banks from a near-zero level to a target range of 0.25%-0.5%. In December last year, the U.S. central bank raised rates for a fifth time, sending the fed funds rate to a 1.25%-1.5% range.


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Originally posted 2018-01-06 01:14:16.


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