Intraday Market Thoughts

Yields Hit Nasdaq, Bitcoin Pre-Powell

by Adam Button
Feb 23, 2021 14:35

Indices broaden their losses as bond yields ask harder questions, with NASDAQ tech sectors feeling the pinch from rising borrowing costs (especially those that finance buybacks), especially as the index is devoid of financials. Bitcoin posted its habitual 30% decline off the highs, testing the key 21-DMA. No coincidence that BOTH Tesla & Bitcoin are 30% off their highs. Or is it? CFTC FX positioning remains in a frustrating freeze but oil positioning is a spot to watch closely. Here is Ashraf's video on indices, fx, gold and oil recorded last night.

Bitcoin hit an air-pocket on Monday in a quick fall to $46,610 from $53,000 before bouncing all the way back to $55,000. Monday's Bitcoin drop took only minutes and highlighted the fragility of the world's biggest crypto. At the same time, it highlighted the resilience of the bull market with dip buyers wasting no time at all. Ultimately, that's the signal from here with retail still at the point where they'd rather double up than cash out.

DXY stabilised at the curcial 90 support, while XAUUSD failed at the 1815/16 predicted in Ashraf's video above, whole US crude oil counts the minutes before it returns to 57--Premium subscribers can see the rationale above. 

Meanwhile, commodity markets continue to strengthen and that's providing a lasting tailwind for commodity currencies.

CFTC Commitments of Traders

Speculative net futures trader positions as of the close on Tuesday. Net short denoted by - long by +.

EUR +140K vs +140K prior GBP +22K vs +21K prior JPY +37K vs +35K prior CHF +14K vs +11K prior CAD +8K vs +10K prior AUD -3K vs -1K prior NZD +12K vs +12K prior

The speculative market continues to be locked in place. Even the latest rally in GBP is being met with skepticism while nothing seems to be able to jar euro positioning.

One spot that is notable is the oil speculative position, which is right in the middle of the 5-year range at just over 500K contracts. Could specs be what drives the next leg of the move?


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