Week Ahead: Will Bitcoin's Plunge Continue? Can Gold Go Higher?

The Week That Was

This past week, all four major US indexes achieved new record closes, all posted on Monday at the start of weekly trading.

From a fundamental perspective, investors looked to be milking the last full week of trade before year-end, buoyed by the promise of the biggest tax overhaul in decades and more than 13 months of market chatter pushing the narrative that tax reform would be extremely bullish for stocks. We use the term 'milking' deliberately. Investors have been bombarded recently by endless predictions that markets in 2018 won't be able to repeat the extraordinary gains of 2017, which in itself was the best year since 2013.

Technically, all four major US indices—the S&P 500, Dow Jones, NASDAQ Composite and Russell 2000—# headeropened the trading week with rising gaps, an area indicating no price action, forming a visual gap on the chart. This occurs when buyers find no available supply at current prices and raise the stakes till they find willing sellers. While on the face of it the over-eagerness of buyers appears bullish, it also holds the potential for an “exhaustion gap,” as the previous demand is dried out, which could precede a selloff.

By Pinchas Cohen