Weekly Market Insights: Navigating Stock Trends, Crypto Opportunities and Emerging Investment Strategies

Good evening everyone, happy weekend!

I’m very glad to meet you all at Diamond Ridge Financial Academy to exchange investment knowledge. Since it’s the weekend, tonight we will summarize this week’s market trends and trading performance together. I hope my sharing will be helpful to everyone and wish you a pleasant evening.

This week’s technical sharing focused on the practical application of support and resistance levels. Through interpreting candlestick patterns, we helped students better understand price fluctuations in the market. We explored the core logic of the battle between buyers and sellers and used real examples to show how to make effective trading decisions based on key technical points. Support levels, as areas of strong buying power are important references for identifying buying opportunities while resistance levels where selling power is concentrated, indicate selling signals. These two key areas form a framework for price movement, giving investors clear guidance for action.

In analyzing candlestick patterns, we used examples like “green candlestick engulfing red candlestick” to explain the transition between buying and selling power and early signals of trend reversals. Combining this with mid-term trend indicators like the 21-day moving average, we demonstrated the practical value of technical tools in capturing trends and optimizing strategies. This method provides students with effective and reliable tools for analysis, helping them quickly get started and improve their trading skills.

In addition, we discussed the impact of monetary policy changes on the market, especially how recent adjustments by the Federal Reserve and the Bank of England have affected stocks, forex and crypto. By analyzing these macroeconomic factors, we deepened our understanding of the importance of combining technical and fundamental analysis to provide a well-rounded approach to decision-making.

This week’s lessons not only gave students practical analysis techniques but also laid a strong foundation for understanding quantitative trading systems. Moving forward, we will continue to dive deeper into technical analysis while introducing more real-world cases to help you apply this knowledge in practice and improve your trading abilities. I encourage everyone to actively participate and integrate the theory into practice, building a solid foundation for achieving financial freedom!

Now let’s review the market performance, starting with the UK stock market. This week, the UK stock market entered a clear downtrend as expected. The FTSE 100 index dropped to 8084 points with an overall decline of 2.6%. Here’s a breakdown of the week’s performance:

Monday, fixed-line telecoms, electricity and mining sectors led the market lower.

Tuesday, construction, general industry and beverages sectors pushed the index down further.

Wednesday, industrial transportation, banking and electronic equipment sectors drove the index higher.

Thursday, industrial transportation, REITs and real estate sectors dragged the index down.

Friday, fixed-line telecoms, mobile telecoms and software services sectors led the decline.

This week, the UK stock market experienced two phases of decline. The first phase occurred in the earlier part of the week, as weaker than expected UK economic data dampened market sentiment, putting pressure on the FTSE 100 index. The second phase of the drop was triggered by the unexpectedly hawkish monetary policy stance from the Federal Reserve, which caused a global market pullback. The FTSE 100 index was not spared, extending its downward trend.

From the performance of industry sectors this week, some previously high-performing sectors saw a significant correction. For example, industrial transportation, mobile telecommunications and software sectors all experienced notable declines. This adjustment reflects investors’ risk-averse sentiment amid changes in the macroeconomic and policy environment, as well as the need to take profits from highly valued sectors.

Overall, the UK stock market’s performance this week highlights the impact of domestic economic pressures and the pronounced influence of international market linkages. Against the backdrop of global uncertainties, the FTSE 100 index is expected to maintain a weak and volatile trend next week (as shown in the chart above).

In the US stock market, the downward trend continued this week with all three major indices posting losses. The S&P 500 index dropped 1.99%, the Nasdaq Composite fell 1.78% and the Dow Jones Industrial Average recorded a 2.25% decline, showing that traditional sectors were under the most pressure. On a weekly basis, the Dow has fallen for three consecutive weeks, reflecting investors’ growing concerns about the outlook for macroeconomic conditions and policy.

This week’s market performance was mainly influenced by the Federal Reserve’s hawkish monetary policy statements. Although the market had previously anticipated a policy shift leading to more liquidity support, the latest announcement signalled only two rate cuts in 2025, significantly below market expectations. This heightened worries about slowing economic growth. In addition, geopolitical uncertainties and weak corporate earnings guidance further weighed on market sentiment.

With recent market corrections, some reasonably valued sectors or stocks might attract bottom-fishing investors, especially defensive sectors and high dividend targets, which could act as a safe haven for short-term funds. This explains why the Dow Jones rebounded more strongly than the other two indices on Friday.  

On the other hand, as Trump's inauguration approaches, the market is becoming increasingly sensitive to uncertainties about his policies. This week, several of Trump's proposed orders, including tax policy adjustments and raising the debt ceiling, faced resistance in Congress. These obstacles not only raised doubts about his ability to govern efficiently but also deepened concerns among investors about the future of fiscal policy.

In public speeches this week, Trump once again emphasized his "America First" economic strategy, including plans for tax incentives for key industries and increased trade barriers. However, implementing these policies faces significant challenges, especially given the growing partisan divide in Congress. Short-term uncertainty is likely to continue disrupting market sentiment.  

For the stock market, this policy deadlock brings both pressure and potential opportunities for rebounds. On one hand, stalled policies cast doubts on the future growth of the US economy, dampening risk appetite. On the other hand, investors hope Trump will implement market-friendly policies, such as infrastructure investments and tax cuts, once he takes office, which could boost confidence in some cyclical sectors.  

In the short term, uncertainties will keep dominating market trends, with traditional manufacturing and energy-heavy sectors in the Dow Jones index being particularly affected by policy fluctuations.

Amid global instability and unclear US policies, uncertainty has weakened many short-term strategies. The only way to find real growth opportunities in such volatility is to embrace the long-term trend of the tech revolution. As the core driver of an innovation-led economy, the tech sector not only offers high growth potential but also plays a crucial role in structural transformations. This makes tech stocks particularly worth watching during market pullbacks.  

This week’s correction has provided investors a chance to reposition in tech stocks. The tech sector's strength lies in its lower exposure to macro policies and robust market demand. Breakthroughs in areas like AI, cloud computing and 5G continue to clarify the growth prospects for these companies. Even amid low market sentiment, these fields demonstrate remarkable resilience and appeal.

Take Trump Media & Technology Group (DJT) as an example. After this week’s correction, the stock has pulled back to its 21-day moving average, forming solid technical support. As a company representing both technological innovation and policy anticipation, DJT not only has strong tech fundamentals but also gains extra attention due to Trump’s upcoming inauguration. Before Trump officially takes office, this stock is likely to remain popular with investors. The recent pullback provides a fresh buying opportunity, with an entry price range of $33.5 to $35.  

In the long run, the global trend driven by the tech revolution won’t change due to short-term policies or market fluctuations. This correction allows investors to focus more on high-quality tech targets. By prioritizing innovation as the core logic, they can gradually build future oriented portfolios. This isn’t just a strategy to cope with current uncertainties but also a key to seizing the next wave of industrial upgrades.

In the forex market, GBP/USD had a rollercoaster ride this week. Before the Fed's rate decision, GBP/USD saw a rebound as the market expected the Bank of England to hold off on rate cuts. However, after Wednesday's Fed meeting, Chair Powell said the pace of rate cuts in 2025 would slow significantly, pushing US Treasury yields higher. With the stronger dollar, GBP/USD quickly dropped.  

By Friday, the dollar briefly pulled back due to growing divisions in the US Congress, leading to a GBP/USD rebound. This week, the forex market was mainly driven by changes in US monetary and fiscal policies, causing significant GBP/USD volatility.

From a technical perspective, GBP/USD hit a 7 month low this week. As shown in the chart, the 21-day moving average remains on a downward trend, signaling a bearish market for GBP/USD. The main reason for the price movements lies in the economic performance contrast between the UK and the US. UK economic data fell short of expectations, while US data exceeded them, strengthening the dollar’s dominance.  

Additionally, with Trump’s inauguration nearing and related policies becoming clearer, market optimism about the US economic outlook has grown, further reflected in GBP/USD’s movements.  

Given the continued weak UK economic data, GBP/USD is likely to stay under pressure. Technically, the support level is around $1.241, while short-term resistance is near $1.268. For those looking to trade forex, feel free to contact the assistant for real-time trading signals.

In the crypto market, this week saw a downward trend due to the Fed’s hawkish rate cut decision. While the rate cut was expected, changes in next year’s outlook caused brief panic. Fed Chair Powell announced that the expected rate cuts for 2025 were reduced from 4 to 2, a more hawkish stance that worried investors and led to widespread sell-offs in the crypto market.  

Even so, BTC quickly bounced back after hitting the key support level of $92K, showing strong market recognition for this zone. Positive news in the crypto space also helped BTC hold up better. For example, Bitget announced it had obtained a BTC Service Provider license from the Central Reserve Bank of El Salvador and is applying for a Digital Asset Service Provider license. These developments not only expand regulatory pathways but also show growing global acceptance of crypto.

In the long term, tech assets centered around the digital economy and AI will drive global wealth growth. In a world of political uncertainty, BTC and other digital assets stand out with their decentralized and anti-inflationary properties, offering unique value for both storage and investment. Meanwhile, rapid breakthroughs in AI are fueling growth in the digital economy, creating new opportunities for investors.  

Additionally, President-elect Trump’s public support for the crypto industry is expected to encourage more countries to draft regulations and promote market development. Embracing tech assets is not just a way to deal with market volatility but a key to future wealth growth. I suggest holding BTC, Eth and other major cryptos long-term, while also adding quality tech stocks like Trump Media & Technology Group (DJT) to build a diversified and solid investment portfolio.

That’s all for tonight’s share. I hope this helps you understand the current market trends and opportunities more clearly. The future belongs to those who can catch the pulse of the tech revolution and accurately read market patterns. We look forward to working with more investors to start a new era of smart investing and achieve long-term wealth growth

For those of you who want to ride this wave of revolutionary opportunities, please get your investment accounts ready in advance, especially for stocks and major crypto accounts, so you can quickly seize the upcoming market opportunities.

Next week, we’ll be celebrating Christmas. To thank you for your support, our financial academy has prepared a special Christmas investment gift pack. If you haven’t claimed it yet, please contact the assistant to claim it as soon as possible. Merry Christmas in advance!

After tonight’s share, please think about:

1. What are the main reasons behind this week’s stock and crypto market downturn?

2. What’s the investment outlook for the crypto market? How should you act on it?