1. The NASDAQ
US stocks are facing another challenging time, as summer seasonality is here, meaning a negative expected return for the next few months. What’s more, the recent price action has been suspicious, especially the NASDQ’s sharp correction that left traders wondering about how stable the market actually is. The tech index tumbled once again on Friday, on a news that wasn’t by any means disastrous (the Amazon – Whole Foods deal), so we might be approaching a major correction after the very strong Trump-rally since November.
2. Bitcoin at a major crossroad
Bitcoin’s latest correction carried the number one cryptocurrency 30% lower, and although BTC recovered well for the weekend, the currency is not out of the woods yet. The long-term charts are still overbought, and trades might be in for more corrective action, be it another dip or a frustrating sideways period (like the one Litecoin experienced before its recent break-out). In any case, the next few days once again look crucial.
BTC 4-Hour Chart Analysis
3. The Flippening is here?
Ethereum had a much more convincing rebound in the past two days than Bitcoin, and there seems to be no pause in the narrowing of the difference between the market cap of the two giants of the crypto field. As we speculated earlier, the “Flippening” might be closer than most people think, and it would now only take one major move from ETH (like the one on the previous weekend) to complete its quest for the number one spot. Of course, trends might change quickly, but for now, we wouldn’t bet against Ethereum, considering its relentless uptrend.
ETH/BTC 4-Hour Chart Analysis
4. Trump and the Russians: The next Chapter
While the market has been mostly ignoring Trump’s troubles, with the exception of the one-day correction in May, the recent developments in the Comey-case suggest that the POTUS might have a hard time in shrugging off this latest scandal. And as the stock market seems to be more fragile than in recent months, a possible correction could be exaggerated by another negative news cycle for the billionaire President.
5. All Eyes Still on the Dollar
The US Dollar got a boost from the FED last week, but the continued weakness in the US economy, numbers coupled with the crumbling position of Trump could set up a perfect storm for the currency. The bond market already suggests troubled times ahead, with lower interest rate expectations across the board. Apart from the Dollar itself, Gold should be a good tell about the changing long-term trends; should the precious metal emerge strongly from its current short-term correction, another leg lower for the world reserve currency is all but settled.
Key Economic Releases of Next Week
|Monday||JAPAN||Trade Balance||–||0.1 trill|
|Tuesday||AUSTRALIA||Monetary Meeting Minutes||–||–|
|Tuesday||UK||BOE Gov Carney Speaks||–||–|
|Tuesday||US||Current Account||-124 bill||-112 bill|
|Wednesday||UK||Public Sector Credit||7.3 bill||9.6 bill|
|Wednesday||US||Existing Home Sales||5.54 mill||5.57 mill|
|Wednesday||US||Crude Oil Inventories||–||-1.7 mill|
|Thursday||CANADA||Core Retail Sales||–||-0.2%|
|Thursday||US||Initial Jobless Claims||241,000||237,000|
|Friday||US||New Home Sales||599,000||569,000|