Market sentiment analysis:
- Trader confidence has ebbed away in assets such as the Nasdaq and Bitcoin but this could yet prove to be just a correction after their recent gains.
- In that case, market sentiment could improve and prompt a resumption of the recent trend higher.
Trader confidence ebbs away
Traders have started selling the assets that have surged in recent weeks, such as the Nasdaq index of US technology stocks and cryptocurrencies such as Bitcoin. However, the economic background remains positive, with a recovery from the slump caused by the coronavirus pandemic still on track thanks to successful Covid-19 vaccination programs in the US, UK and elsewhere.
That suggests the current downturn in assets such as the Nasdaq could be simply a correction and that their prices will rise again once it is over.
Nasdaq Price Chart, Daily Timeframe (March 11, 2020 – February 23, 2021)
Chart by IG (You can click on it for a larger image)
In this webinar, I looked at the trends in the major currency, commodity and stock markets, at the forward-looking data on the economic calendar this week, at the IG Client Sentiment page on the DailyFX website, and at the IG Client Sentiment reports that accompany it. You might also like to check out the DailyFX Trading Global Markets Decoded podcasts.
--- Written by Martin Essex, Analyst and Editor
Feel free to contact me on Twitter @MartinSEssex
