Moderna has reported their coronavirus vaccine is almost 95% effective. Their vaccination is also a much promising product compared to Pfizer’s vaccine that has to be stored in ultracold temperatures. Moderna vaccine can be stored in refrigerator temperatures for 30 days. This means that conventional more readily available cold chain equipment can be utilized in the distribution of the vaccine.  The news gave a lift to DJIA and to certain S&P 500 stocks while the price of gold suffered another blow and dropped to $1864 before recovering and rallying to $1889 where it’s currently trading. By reading further you agree with our disclaimer at the bottom of this page and acknowledge that we do not provide investment advice.

It’s interesting to see positive coronavirus news lifting DJIA and S&P500 but sending Nasdaq stocks lower. This can be explained by strong gains and high valuations in those tech stocks that benefitted from lockdowns and people staying at home. While market participants were earlier buying these stay-home stocks they were getting rid of more traditional companies that suffered during the pandemic. Now that there are two promising vaccinations being tested these trades are being unwound and money has been flowing DJIA stocks and away from these stay-at-home tech stocks. At the time of writing this, DJIA is trading near resistance and Nasdaq bouncing from support created by a channel low and 38.2% Fibonacci retracement level. The nearest key intraday support and resistances in Nasdaq are at 11780 and 12070.

The price of gold is now trading below the rising trendline support it before the news. This could obviously slow the bulls down and in order for the price of gold to hit our T1 zone there are some technical obstacles to overcome. While the market can still move to our target zones, the price hitting our T1 isn’t as high probability event as it was before the news. The nearest key intraday support and resistances in gold are at 1864.00 and 1898.90. For more analysis on this and many other markets, you may want to subscribe to TIOmarkets YouTube channel

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Janne Muta
Chief Market Analyst

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