Connect with us

Analysis

5 Things to Watch Next Week: Treasury Yields, Still Bullish Crypto Coins, Small Caps, Gold, and Jobs Friday

Published

on

1.            What’s Next for the Bond Market

The rise in yields has been arguably the most important trend of this week, as the aftermath of the “historic” Fed meeting brought about a significant rise in short-dated Treasury yields. Long-term bonds were less moved by the shift and that still shows the skepticism of the market regarding the long-term growth prospects.

What’s crucial about this that the Trump administration heavily relies on the 3% long-term growth number in the calculations regarding the new tax proposal. Let’s just say that it is an optimistic view; what’s more likely is that the expansion will be slower on average in the coming years, leaving the budget short by trillions. That said, rates could still be headed higher in the coming weeks, and that could help a durable bounce in the Dollar after the lengthy downtrend in the currency.

Two-Year Government Note Futures, Daily Chart Analysis

2.           Bullish Trend in Crypto World

Cryptocurrencies acted pretty well this week, showing resilience to bad news, while rallying on the good catalysts. Bitcoin, IOTA, and NEO have been leading the way higher, and the strength of BTC is especially impressive as the other two coins are rallying off much deeper lows, while the most valuable coin is just 15% off its all-time high. As the downturn that ended with a bang after the Chinese trade ban took the segment down by 40%, the total market capitalization of the coins is still shy of the $175 billion record, but the strength shown by the majors is encouraging. Only the leaders of the previous leg higher in altcoins are weaker, but that’s natural after the monster rallies in Dash, Monero, and Litecoin.

Bitcoin, Daily Chart Analysis

3.           Are Small Caps the New Leaders?

The above-mentioned trend in yields and the skewed positive effects of the tax proposal both favored a shift towards small cap issues towards the end of September, and sure enough the Russell 2000 run circles around the large-cap benchmarks. While the big companies were enjoying the benefits of the record low yields (through large-scale stock buybacks mostly), small caps suffered more from weaker domestic growth. How long will the current shift last? We have our doubts about the durability of the small-cap surge, and we are still sellers of equities at the current elevated valuations, despite the undoubtedly bullish short-term trend.

Russell 2000, Daily Chart

4.           Gold Bottoming?

With gold exactly matching the performance of the S&P 500 in the 3rd quarter, the recent correction in the shiny metal doesn’t seem too bad after all. The dip that came after the North Korea rally reset the overly bullish sentiment, and now the metal is at a major decision point between the crucial $1300 and $1275 levels. We still think that for diversified investors gold is essential in the current environment, and although an exact bottom is hard to catch, the current levels already seem attractive, with the daily MACD headed towards oversold territory. With volatility being near all-time lows and yields being in an uptrend, short-term headwinds are still obvious for precious metals, but the long-term valuation worries and the behavior of the major central banks more than justifies holding them

Gold, Daily Chart

5.           The Fed Meeting Minutes and Jobs Friday

With no Fed meeting in the month of October, and given the recent reveal by the central bank, we expect a less pronounced reaction to economic numbers, as the Fed’s policy looks less fluid for the time being. Janet Yellen’s speech on Tuesday was also an indication that the FOMC is determined to go on with its hiking schedule. Having said all that, a huge negative surprise in the Employment Report could change the landscape, and a meaningful drop in the ISM indices would also be a cause for concern. Apart from those releases, the week will be relatively quiet regarding economic numbers, with a focus on Australia and the RBA’s rate decision.

Key Economic Releases This Week

Day Country Release Expected Previous
Monday JAPAN Manufacturing PMI 18 17
Monday JAPAN Retail Sales 24 23
Monday UK Manufacturing PMI 56.3 56.9
Monday US ISM Manufacturing PMI 57.9 58.8
Tuesday AUSTRALIA Building Approvals 1.1% -1.7%
Tuesday AUSTRALIA RBA Rate Decision
Tuesday AUSTRALIA RBA Statement
Tuesday UK Construction PMI 51.2 51.1
Wednesday UK Services PMI 53.3 53.2
Wednesday US ADP Employment Change 151,000 237,000
Wednesday US ISM Non-Manufacturing PMI 55.5 55.3
Wednesday US Crude Oil Invesntories -1.8 mill
Wednesday EUROZONE Mario Darghi Speaks
Wednesday US Janet Yellen Speaks
Thursday AUSTRALIA Retail Sales 0.3% 0.0%
Thursday AUSTRALIA Trade Balance 0.87 bill 0.46 bill
Thursday EUROZONE ECB Meeting Accounts
Thursday CANADA Trade Balance -3.0 bill
Thursday US Unemployment Claims 270,000 272,000
Thursday US Trade Balance -43.0 bill -43.7 bill
Thursday US Factory Orders 0.9% -3.3%
Friday UK Halifax HPI 0.0% 1.1%
Friday CANADA Employment Change 22,200
Friday CANADA Unemployment Rate 6.2%
Friday US Employment Change 88,000 156,000
Friday US Unemployment Rate 4.4% 4.4%
Friday US Hourly Earnings 0.3% 0.1%
Friday CANADA Ivey PMI 57.2 56.3

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.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
0 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 5 (0 votes, average: 0.00 out of 5)
You need to be a registered member to rate this.
Loading...

4.6 stars on average, based on 280 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.




Feedback or Requests?

Analysis

Crypto Update: Bitcoin Plunges Below $6500 as Heavy Selling Resumes

Published

on

The cryptocurrency segment is having another very negative day after a calmer period, as selling pressure intensified yet again. All of the major coins turned sharply lower, with the laggards of the recent period, Litecoin, Monero, and Dash confirming their downtrend and the relatively stronger coins also taking a beating.

The total capitalization of the segment dropped below $270 billion, and from a long-term technical standpoint, several currencies are in precarious positions. With no clear news catalyst behind the move, technicals are playing a very important role, and last week’s lows will likely be in focus in the coming days.

BTC/USD, 4-Hour Chart Analysis

Bitcoin is still relatively weak both on the short- and long-term time-frames, and it dropped back to the $6275-$6500 zone that has been acting as primary support during the recent leg lower. Given the importance of the long-term zone between $5850 and $6000, a break below $6275 could set up a crucial test in the coming days. For now, traders still shouldn’t enter new positions, while investors should hold on to their coins as the bullish secular trend is still intact.

No Hiding From the Selloff as Altcoins Broadly Lower

LTC/USD, 4-Hour Chart Analysis

With the weakest coins leading the way lower again, new swing lows are likely in the majority of the coins, although there is still hope for bulls that a major long-term breakdown can be avoided. Ethereum fell below $500 after touching the declining short-term trendline, and it remains in a bearish trend, even as it’s still in a much better technical position compared to BTC, holding up well above the April lows, and being further away from last week’s swing low as well.

ETH/USD, 4-Hour Chart Analysis

 That said, we remain negative regarding the short-term outlook for the second largest coin, and traders shouldn’t enter new positions here.  Above the $500 level, strong resistance is ahead between $555 and $575, while primary support is found at $450, with further zones near $400 and $480.

BNB/USDT, 4-Hour Chart Analysis

There are no real hiding places for crypto investors from the current selloff even as Binance Coin is still holding up relatively well, within a clear uptrend and above crucial technical support.  That said, as we warned before, given the broad downtrend in the segment, traders should be cautious with new short-term positions.

Featured image from Shutterstock

Disclaimer:  The analyst owns cryptocurrencies. He holds investment positions in the coins, but doesn’t engage in short-term or day-trading, nor does he hold short positions on any of the coins.

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.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
5 votes, average: 4.60 out of 55 votes, average: 4.60 out of 55 votes, average: 4.60 out of 55 votes, average: 4.60 out of 55 votes, average: 4.60 out of 5 (5 votes, average: 4.60 out of 5)
You need to be a registered member to rate this.
Loading...

4.6 stars on average, based on 280 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.




Feedback or Requests?

Continue Reading

Analysis

Italy Spooks markets Again as Stocks Remain Under Pressure

Published

on

European stocks Led the way lower today despite a bullish start in Asia, as equities gave back their gains when Daimler published a surprising profit warning, which was deeply affected by the recent trade war developments, reigniting fears of a tariff-driven downturn in global trade.

DAX, 4-Hour Chart Analysis

The Old Continent got into more trouble later on, when two anti-EU officials were named in Italy, resurrecting fears of a clash between the systematically crucial country and the core of the Eurozone. Italian yields rose in European trading, and although they are still shy of the levels hit during the May scare, the periphery could be in trouble as the ECB pledged to exit the market by the end of the year.

Nasdaq 100 Futures, 4-Hour Chart Analysis

The main European indices were smashed lower during the session, with the DAX hitting a two month low, still being very weak relatively speaking compared to its US peers. US stocks sold off heavily following the opening bell and they failed to recover, unlike two days ago, and the major benchmarks traded well below yesterday’s levels just before the close.

The Nasdaq and the Russell 2000 lost some of their recent mojo, pulling back heavily of the all-time highs during the day. All in all, the risk off shift continues to dominate across the board, as we expected and we remain negative on risk assets here, especially regarding emerging markets, even as the Dollar’s rally could be over for a while.

Dollar Pulls back as Pound Surges

USD/CAD, 4-Hour Chart Analysis

The Dollar took a beating as the Philly Fed Index came in much worse than expected, and as the Bank of England sent hawkish signals, pushing the Pound and the Euro higher. The central bank left its benchmark rate unchanged at 0.5%, but a rate hike this year got much closer, with a key member of the bank voicing inflationary concerns.

The Greenback fell more than what the events would imply, so a larger scale consolidation could have already started in the currency following the recent gains and the marginal new high yesterday. With the EUR/USD pair nearing the 1.1450-1.15 support zone, the USD/CAD hitting 1.33 and the AUD/USD touching 0.7350, a meaningful counter-trend move would be timely in the surging reserve currency.

WTI Crude Oil, 4-Hour Chart Analysis

Gold continued to drift lower before the Dollar’s reversal and it hit $1262 for the first time since lat December before bouncing back above the $1270 level in late trading. Crude oil also fell sharply in early trading, and the WTI contract traded with a $64 handle before rallying back to $66 per barrel.

The OPEC meeting, which is expected to result in a supply increase by the cartel made the crucial commodity very volatile in recent days, but we expect the bearish trend to continue, with a likely dip to the $60 level in the coming weeks.

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.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
0 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 5 (0 votes, average: 0.00 out of 5)
You need to be a registered member to rate this.
Loading...

4.6 stars on average, based on 280 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.




Feedback or Requests?

Continue Reading

Analysis

Crypto Update: Coins Drift Sideways as Trading Activity Plunges

Published

on

Liquidity dried up in the cryptocurrency segment in recent days, as trading volumes have been declining progressively, while the major coins got stuck in tight ranges. Only a few coins show signs of activity, and the bearish short-term patterns continue to dominate the market. With a group of currencies, namely Litecoin, Monero, Dash, and Bitcoin itself clearly dragging the segment down, the short-term trend will likely continue, as the previous leaders are now showing strength either.

While all of the top digital currencies are showing some gains today, and the total value of the market edged close to $290 billion, major resistance levels are still towering above. The fact that the effect of the Bithumb hack faded away quickly is a positive here, but until signs of bullish momentum and a clear leadership forming, the short-term outlook remains bearish.

BTC/USD, 4-Hour Chart Analysis

Bitcoin continues to trade near the $6750 level, edging ever closer to the declining short-term trendline, in a bearish consolidation pattern. Bulls would need a sustained move above $7000 to negate the declining trend, but for now at least a test of last week’s lows is likely with a possible move towards the key long-term zone between $5850 and $6000.  The short-term zone around $6350 level provides support, while further resistance is ahead near $7350.

Ethereum Nears Trendline as ETC Attempts Breakout

ETH/USD, 4-Hour Chart Analysis

Ethereum has been among the strongest coins in the last few days again, and coupled with its long-term relative strength, the second largest coin is still the best candidate to lead a recovery. That said, the coin still faces strong resistance between $555 and $575, and bullish momentum is suspiciously weak. Primary support is found at $500 with further zones near $450 and $400.

ETC/USD, 4-Hour Chart Analysis

Ethereum Classic has been positively diverging compared to the rest of the market, together with Binance Coin, and to a lesser extent Tron ever since its inclusion to Coinbase, and the coin moved above the key $16 resistance yesterday in late trading.

While ETC is slightly overbought from a short-term perspective, a consolidation above $16 and a subsequent move higher could confirm a trend change. For now, the short-term trend signal is only neutral, and traders should remain cautious given the broad downtrend in the segment

Featured image from Shutterstock

Disclaimer:  The analyst owns cryptocurrencies. He holds investment positions in the coins, but doesn’t engage in short-term or day-trading, nor does he hold short positions on any of the coins.

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.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
2 votes, average: 4.00 out of 52 votes, average: 4.00 out of 52 votes, average: 4.00 out of 52 votes, average: 4.00 out of 52 votes, average: 4.00 out of 5 (2 votes, average: 4.00 out of 5)
You need to be a registered member to rate this.
Loading...

4.6 stars on average, based on 280 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.




Feedback or Requests?

Continue Reading

11 of 15 Seats Available

Learn more here.

Recent Comments

Recent Posts

A part of CCN

Hacked.com is Neutral and Unbiased

Hacked.com and its team members have pledged to reject any form of advertisement or sponsorships from 3rd parties. We will always be neutral and we strive towards a fully unbiased view on all topics. Whenever an author has a conflicting interest, that should be clearly stated in the post itself with a disclaimer. If you suspect that one of our team members are biased, please notify me immediately at jonas.borchgrevink(at)hacked.com.

Trending