There is not much life left in the Dow Jones futures as volume has dropped significantly due to traders being away for the holiday period. Today’s price action is more likely to be even more lacklustre due to the year’s final trading, and many traders will be busy in the early celebrations of the New Year. 2020 has been an incredibly intriguing year for the stock market as we have seen one of the sharpest declines in the US stock market as the major indices plunged over 30% in mid-March earlier this year. And following that, we experienced one of the fastest recoveries for the US equity markets. We saw the US and European stock indices scoring several record highs. There is no doubt that it is the Nasdaq index that deserves the crown as the index is up over 40% this year, and most of the gains are chiefly due to the mammoth rise in Amazon, Apple, Facebook, Netflix, Tesla, Zoom, and other work from home related stocks.
The Pharma sector also had one of the finest years as companies like BioNTech and Moderna scored one of the best year-to-date performances, and their stocks have climbed over 100%. Airlines, tourism, hospitality, and retail sectors have been hit hard, and stocks such as American Airlines, Delta, and United Airlines still have massive upside left. Traders are hoping that they will be able to reap their reward from their investments in these companies in 2021 as economic recovery shifts into a higher gear. There is no doubt that the worst may be behind us, and with Biden’s presidency and coronavirus vaccine, good days may be ahead for the US and global economy.
Investors are more confident today as the members of the UK Parliament approved the Brexit deal yesterday. There was always an element of risk and uncertainty that The House of Commons may not agree with the Brexit deal. But now, investors know that everyone is behind this trade deal, and there is no more uncertainty when it comes to Brexit as everyone knows what to do and how to minimise the damage. There is no distrust that lawmakers have secured one of the greatest deals, as they still have a free trade agreement with the EU, yet they secured their borders, which really triggered Brexit.
The final pump of the year is taking place for Bitcoin as the digital asset made another record high earlier today, pushing the price further away from its average mean, which is the 50-day SMA on the daily time frame. Everyone is interested in seeing Bitcoin kissing the 30K price level goodbye and moving further away from that price level. The reality is that the Bitcoin price has gone too far and too fast, and any upward move in the digital assets is pushing the Relative Strength index further into overbought territory on the daily time, which should be taken as a caution.
On the fundamental front, the Bitcoin price is still moving higher despite unfavourable regulatory headlines. It is an assurance for Bitcoin lovers that the price is likely to continue its uptrend in 2021. The worst that could happen to the Bitcoin price is just a healthy correction, which we mentioned yesterday.