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Market Overview

To the Moon!!

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The Cryptocurrency world is full of clashes and rivalries but none is quite as prominent as the fight between Ripple Labs and Stellar Lumens.

Both were founded in the city of San Francisco by the same man who founded the infamous Mt. Gox exchange, Mr. Jed McCaleb.

After several ideological disputes with Ripple, Jed left to start Stellar. There’s a great in-depth article on observer.com that tells the entire tale.

Steller has been praised by the crypto-community for being less corporate and more decentralized than her older sister. The economics also work a bit different. Ripple has a fixed supply of 100 Billion tokens, most of which are held by the owners of Ripple, including Jed.

Stellar has a slightly more complex system that includes a built-in inflation metric and has regular auctions and giveaways

When it comes down to it, the success of both projects will depend largely on their adoption by bigger financial firms. Stellar is gaining momentum in this regard and as of October is involved in a deal with IBM to improve the global payments system.

As an investor, we can’t really know exactly how the future will play out, which is why it pays to diversify your portfolio, not only with different cryptocurrencies but with all types of assets for long-term growth.

eToro is very proud to add Stellar Lumens as the 8th cryptocurrency on the world’s number one social trading network.

To the moon!!

@MatiGreenspan

eToro, Senior Market Analyst

Today’s Highlights

Some Stocks Perspective

Inflation Print Today

Bitcoin’s Integration

Please note: All data, figures & graphs are valid as of February 14th. All trading carries risk. Only risk capital you can afford to lose.

The Big Number

Stock markets are looking rather flat this morning as we await some big news this afternoon.

Precisely one hour before the opening bell on Wall Street the US government will announce the inflation figures for the month of January. This specific print represents an excellent opportunity for those who like to trade the news and here’s why…

Over the last two weeks, the global stock markets have been selling off big time. Many analysts claim that we should have expected this as a “technical correction” because over the entire course of 2017 the markets have been going in a single direction.

These three charts show the Dow Jones, the China 50, and the Dax 30 over the last year and a half.

Indeed, things have been a bit one-sided for a lot longer than that. Over the past decade, the central banks of the world have been overcompensating for the 2008 financial crisis by injecting more and more money into the economy and further supporting it by artificially keeping the interest rates at record low levels.

The poor stock markets have been eating this cheap money without question like veal being prepared for slaughter.

Here’s a chart of the Dow Jones showing the dip through the financial crisis. Notice the large leap up in price and volumes over the last year.

What does this have to do with inflation?

Oh right, excuse my rambling.

Many analysts believe that the pullback over the last two weeks is being caused by expectations that the Federal Reserve is about to tighten up their monetary policy.

Since low interest rates are a key driver of the upward momentum, many feel that if the rates start to go up, the markets will need to come down.

…and the key thing that the Fed is watching when deciding on those rates is the inflation data.

If inflation starts to go up faster than expected the main tool that the Fed has to slow it down is to raise the interest rates.

Analysts are forecasting January’s CPI inflation number to be 0.3% and the Core CPI to be 0.2%.

Of course, if we see any numbers bigger than that it could startle investors and might drive up the US Dollar, which would benefit from larger interest rates.

What about Crypto?

During the announcement, I will personally be watching the crypto-markets for any potential reaction.

In this chart, we can see that there has been a rather tight correlation between Bitcoin and the Dow Jones over the last month.

Of course, we know that both have been rising uncontrollably over the entire course of 2017. However, Bitcoin has already seen a very serious pullback of 71% while the Dow’s recent low was only 13% from the peak.

In my view, the crypto pullback has already shaken out a large part of the speculation money and what we have now are more of the hard core holders, most of whom probably wouldn’t sell even if we see $1000 again.

Whereas the stock market is still chalk full of speculation money, most of which has been focused on short term gains for far too long.

Any reaction to the CPI print in the crypto markets would be a clear sign that liquidity in this new market is rising and that old-school investors are starting to get onboard.

In any case, it will be interesting to see what happens. Let’s have a great day ahead!

This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation.

The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro.

Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose.

Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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Market Overview

10 Year Challenge (Market Edition)

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Hi Everyone,

Today kicks off the annual forum in Davos. This lavish gathering in the snowy mountains of Switzerland brings together the world’s most wealthy and famous, to try and tackle the problem of inequality.

Ten years ago, in the throes of the financial crisis, the theme for the Davos convention was “what must industry do to prevent broad social backlash?”

Since then, the world’s most fortunate have seen their fortunes soar even though global GDP and average working wages have remained stagnant. This interactive chart on Bloomberg tells quite a tale.

Last year I had the pleasure of attending this event and as a crypto enthusiast, I was quite pleased to see a vibrant showing of activists and blockchain builders. On the main stage of the World Economic Forum, however, the attitude towards distributed ledger technologies was more tepid.

This year there will be a panel called Building a Sustainable Crypto-Architecture, which is scheduled for tomorrow at 10:00 AM CET. This will be particularly interesting as it pits known bitcoin skeptics Gillian Tett from the Financial Times and Ken Rogoff from Harvard against the founders of Circle (the Goldman Sachs backed owners of Poloniex Exchange) and BitPesa.

You can watch all of the WEF keynotes and panels at this link. There are several that look interesting and can give some good investment insights.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Shutdown: Day 32 | Days to Brexit 66
  • 10 Years Market Challange
  • Crypto Decade

Please note: All data, figures & graphs are valid as of January 22nd. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

The clock ticks slowly on our two headline political snafus. In an apparent response to the weak Chinese GDP data, Xi Jinping has urged for calm and warned of financial risks.

Never missing an opportunity to gain the upper hand, President Trump has also responded to the Chinese figures.

Needless to say, global stocks are playing defense today. The China 50 is leading the pack with modest declines of 1.36%.

Ten Year Challenge

If you’re not familiar, the 10-year challenge is a new internet fad that has people posting a pic of themselves 10 years ago next to a current glamour shot. Though many have criticized this as just another excuse to post selfies, I thought it’d be fun to look at a few markets. 🙂

As far as the stocks are concerned the last 10 years have been stunning. Here’s a quick reminder of what the Dow Jones looked like in 2009 Vs today.

Eat your heart out Reese Witherspoon!!

As far as Emerging Markets are concerned, time was not as good to them as it was in the USA and other developed economies. There have been some good times and some bad but overall is aging nicely. Kind of like Morgan Freeman.

Gold was in the thralls of a massive bull run in 2009. Since its peak in 2011 though, it’s looking more like Soulja Boy’s Headband.

Crude oil looks exactly the same. Just like Mariah Carey.

King Dollar had just one radical change. For better or worse depends on your personal politics and point of view, kind of like the White House.

Chart credits for this segment go to tradingview.com

What about Crypto??

10 years ago, bitcoin was just two weeks old. So we can easily compare this one to Jordan Pickford who’s gone from a punk child to a full-blown superstar stud.

Kidding aside, we have an entire new emerging and thriving industry now that’s grown up around bitcoin and blockchain.

The kicker for us at eToro, is this post about our CEO and Co-founder at eToro Yoni Assia who wrote this post about income equality through the introduction of a new currency to help bridge the gap between the rich and poor.

10 years, nearly to the day, we’ve introduced the Good Dollar project as a spinoff of eToro for the betterment of economic justice.

Let’s have a remarkable day ahead!

This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation.

Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose.

The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro.

eToro is a multi-asset platform which offers both investing in stocks and cryptocurrencies, as well as trading CFD assets.

Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework.

Best regards,
Mati Greenspan
Senior Market Analyst

Connect with me on….

eToro: @MatiGreenspan Twitter: @MatiGreenspan LinkedInMatiGreenspan |Facebook:MatiGreen

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 144 rated postsSenior Market Analyst at Etoro.com.




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Market Overview

U.S. Stock Futures Fall on Brexit, China Growth Woes; Lifeless Crypto Market Drift Sideways

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U.S. stock futures declined on Monday, as concerns over Brexit and the health of China’s economy weighed on investors’ sentiment. Crypto markets were largely uneventful following a sudden correction early Sunday.

Stock Futures Falter

Futures tied to the Dow Jones, Nasdaq and S&P 500 Index finished lower in holiday trading. The Dow Jones mini futures contract fell 72.00 points to 24,615.00. The March contract for Nasdaq futures declined 31.25 points to 6,761.50. S&P 500 mini futures closed down 8.25 points at 2,663.25.

U.S. markets were closed on Monday for Martin Luther King Jr. Day. The New York Stock Exchange and Nasdaq will resume regular trading hours on Tuesday.

European equity markets were also down on Monday. The Euro Stoxx 50 Pr declined 0.3% to 3,125.07. Bourses in Frankfurt, Paris and Madrid declined by at least 0.2%. London’s FTSE 100 Index broke even in the final moments of Monday’s session.

China, Brexit in the Spotlight

Concerns about the global economy resurfaced Monday after China reported the slowest pace of annual growth in nearly three decades. Gross domestic product (GDP), the value of all goods and services produced in the economy, grew 6.6% annually, the slowest since 1990. In the fourth quarter, China’s annual growth rate slipped to 6.4%.

The International Monetary Fund (IMF) has once again revised down its estimate for global growth, warning that the synchronized global recovery was losing steam. The Washington-based lending institution now expects global GDP to grow 3.5% in 2019 and 3.6% in 2020. That’s down from the October estimate of 3.7% for both years.

Another form of instability comes from the United Kingdom, which is still grappling with how to proceed on the issue of Brexit. Prime Minister Theresa May on Monday unveiled a new Brexit plan after her initial bill was shot down by British Parliament last week. A vote on the so-called Brexit Plan B is scheduled for Jan. 29.

Crypto Markets Drift Aimlessly

The cryptocurrency market saw little movement on Monday, as a lack of conviction from the bulls and the bears kept price action subdued. Tron was the notably exception among the major cryptocurrencies, gaining 5.1% to $0.0250.

Bitcoin’s price was little changed over the 24-hour cycle and was last seen trading at $3,583.44. The largest cryptocurrency by market cap dropped 4% on Sunday after gaining nearly 3% during the previous session.

Altcoins and tokens traded in a similar fashion at the start of the week. XRP edged up 0.3% to $0.3196. Ethereum fell 1% to $117.79. Bitcoin cash, EOS and Stellar XLM were little changed during the session.

The combined crypto market cap held below $120 billion on Monday.

In terms of news, Ethereum’s developer communication has announced that the highly-anticipated Constantinople hard fork will take place Feb. 27. The rollout, which was originally scheduled last week, was delayed after developers identified a major security flaw in one of the Ethereum Improvement Proposals (EIP).

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.7 stars on average, based on 743 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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Analysis

3 Things You Need to Know About the Market Today

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1, Chinese GDP Growth Slows to Multi-Decade Low

Shanghai Composite, 4-Hour Chart Analysis

When even the strongly PR-optimized Chinese economic releases are showing severe weakness, it’s not at all surprising that the local stock market is in a deep bear market, and even the explosive oversold rally on Wall Street combined with the trade optimism of last week is not enough to meaningfully change the technical setup.

While economic growth slowed to an almost 30-year low on a yearly basis, retail sales and industrial production beat the consensus estimates by a hair, but that wasn’t enough to cause a material rally in equities, with the global sentiment leaning slightly bearish. This week’s most important question will be how risk assets will hold on to their recent gains, with a special attention on China and Europe, which continue to lag behind the US from a technical perspective.

The Shanghai Composite is more than 30% below its bull market highs, while the main European benchmarks are also around 20% below their respective highs, and that’s following one of the strongest short squeezes in history on Wall Street, mind you. The next few days could be crucial for markets, and we now advise caution even for short-term bulls.

2, Stocks Retreat after Friday Ramp with Wall Street Closed

German DAX 30 Index, 4-Hour Chart Analysis

Looking at Europe, the major indices failed to extend their gains from Friday, while US stock futures are also modestly lower after the European close. With the US markets being closed in observance of the Martin Luther King Jr. Day, trading volumes and activity has been predictably low, and things will likely get heated tomorrow, as the earnings season will also continue.

Johnson & Johnson (JNJ) and IBM (IBM0 will report earnings tomorrow, and all eyes will be on their overseas numbers and guidance amid the global economic slowdown. We had some negative reports regarding the US-Chinese trade talks, concerning the sensitive issue of Intellectual Property, and we still think that even though an agreement is likely in the coming months, implementation and enforcement will be borderline impossible.

3, Oil Tests December High

WTI Crude Oil, 4-Hour Chart Analysis

While risk assets, in general, had a slightly bearish half-session crude oil kept on pushing higher following Friday’s move to new correction highs, with the WTI contract entering the resistance zone that capped the December consolidation. The crucial commodity, which has been slightly lagging US stocks from a technical perspective is still squeezing late shorts, but we expect a short-term top very soon, possibly after a stop hunting rally above the $55 per barrel level.

What’s sure, is that we wouldn’t be buyers at these levels, even in light of the OPEC production cut, since over-supply remains a major issue, and the increase in US output continues. That said, the short-term uptrend is intact and the topping process could take a while, but we will keep a close eye on the day-to-day price action following the 25% rally off the December lows.

Featured image from Shutterstock

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.7 stars on average, based on 445 rated postsTrader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.




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