Markets on Pause: Why Caution and Discipline Dominate This Week

Hello everyone. I am delighted to be back with you for an update in this Good Morning Trading. It is clear that investors are hitting the brakes this week. Basically, we have started "ranging" on most global indices. Why this hesitation? It's simple: the agenda is ultra-packed and no one wants to take reckless risks before the big announcements. I will break it all down for you and, above all, explain why, sometimes, not trading is the best decision to make.

Subscribe to the YouTube channel in 1 click

A High-Tension Macroeconomic Agenda

This week, we have two major events pushing everyone towards caution. It's a bit like the market is holding its breath.

First, we are awaiting the US employment report this Wednesday. It arrives with a bit of a delay due to administrative changes, but it is crucial. Then, on Friday, it is the turn of the Consumer Price Index (inflation) to drop.

These two figures will help operators anticipate the pace of the Federal Reserve's rate adjustments. Add to that a year marked by the future nomination of a new president at the Fed when Jerome Powell's mandate ends, and you understand why the mood is serious.

AI and the Wait for the Titan Nvidia

Beyond macroeconomics, the tech sector is feverish. We have all these fears linked to artificial intelligence that can make the Nasdaq dive for a few days before it tries to climb back up, often without much energy.

In fact, we've put another coin in the machine: everyone is waiting for February 25. That is the date of the results for the giant Nvidia. Until we have these figures and the outlook for the next three months, the market will remain tense and buffeted. So be careful, you can gain 2 or 3% one day on the Nasdaq and lose everything the next.

Update on Indices: Records and Ceilings

Despite this waiting atmosphere, the technical configurations remain interesting:

• Dow Jones: It is the strongest. It closed above 50,000 points, beating its historical record again. This is an extremely positive signal as long as we hold this symbolic level.
• S&P 500: It is progressing a little, but it is struggling with the 7,000-point mark. It is a double resistance (with its "monthly middle R1"). It will need good news, perhaps coming from employment or inflation, to turn this ceiling into support.
• Nasdaq: It bounced cleanly off 25,000 points. This is the great classic we love in scalping. But it remains stuck at the bottom of its two-month range.
• DAX 40: It is also bumping up against a monthly resistance and lacks buying momentum to pass above.

Gold and Bitcoin: Watch Out for the "No Man's Land"

Regarding other assets, caution is also required:

1. Gold: As I feared, it has started ranging between 4,750 and 5,100. Frankly, this is not the time to intervene. If you trade in the middle of the range, you are in the middle of the desert, where the risk is maximal. It is better to wait for the breakout.
2. Bitcoin: It is attempting to stabilize around $69,000 - $70,000, but it is very fragile. Over 15 days, the trend remains bearish. Bitcoin is not used to ranging for so long, so watch out for violent ruptures. It is literally a coin toss at the moment.

Conclusion: Respect Your Fatigue

To finish on a more personal note, yesterday, I did not trade. I was tired and I preferred to respect my trading rules and my discipline. Today, I feel a bit fitter to return to the fight.

Never forget: if you are not at 100%, stay a spectator. That is also what it takes to last in the markets. Take care of yourselves and see you tomorrow!

Sign up for the newsletter and receive a $100 USD gift token