Tech • IA • Crypto
Crypto Massacred, ATH Ahead for the Stock Market!
5/10TL;DR
Major equity indices show conditions supportive of a potential push toward new all-time highs despite tighter monetary expectations.
KEY POINTS
Bullish structure on U.S. indices
The NASDAQ and S&P 500 have recently reclaimed key liquidity zones after a short-term pullback, with price action suggesting a continuation of the broader uptrend. Technical signals indicate that recent dips absorbed selling pressure, reinforcing a bullish structure across daily and higher timeframes. Momentum remains intact as long as key imbalance zones hold.
Liquidity grabs reinforce upward bias
Both indices have swept recent lows, a move often interpreted as clearing liquidity before continuation. This behavior, combined with the filling of weekly gaps, strengthens the case for further upside. Analysts point to these patterns as precursors to expansion phases that could drive prices toward new all-time highs (ATHs).
Rate hike expectations fail to derail optimism
Markets are pricing in an 84% probability of at least one rate hike this year, with September seen as the most likely timing. Despite this hawkish outlook, equities remain resilient. The anticipated increase of 0.25 percentage points is not viewed as sufficient to derail risk appetite, especially amid strong thematic drivers like artificial intelligence and semiconductors.
Volatility remains subdued
The VIX index continues its downward trajectory, signaling low market fear and supporting risk-on conditions. Persistent weakness in volatility suggests investors are comfortable maintaining exposure to equities, further reinforcing bullish momentum.
Dollar strength shows signs of consolidation
The U.S. dollar index (DXY) has reached recent highs but may enter a consolidation phase. Positioning data indicates a sharp rise in short exposure among asset managers, hinting at potential exhaustion in upward momentum. However, no clear bearish reversal has been confirmed.
Oil decline supports equities
Crude oil has moved toward key support near $74, completing a downside target. Lower energy prices are generally seen as positive for equities by easing inflationary pressures. However, geopolitical risks remain, and any escalation could quickly reverse the trend.
Gold lacks clear direction
Gold has shown signs of rejection following recent macro events but remains within a broader consolidation range. Without a decisive break of key support zones, the metal does not currently present a strong directional signal compared to equities.
European indices mirror bullish setup
The DAX and CAC 40 are also approaching potential breakout zones. Both indices maintain bullish structures, having held key weekly imbalance levels and reclaimed liquidity. Market positioning suggests a high probability of new record highs in European equities if current momentum persists.
CONCLUSION
Global equity markets remain structurally bullish, with technical and macro conditions aligning to support further upside and potential new all-time highs despite tightening monetary policy.