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Analysis

50 Billion Baby! – Buffett Blew It

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Some call it the Woodstock of stocks. The Berkshire Hathaway annual meeting draws a huge crowd where everyone listens closely to what the oracle has to say.

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He really spilled the beans this year, reassuring investors of his plans to continue the business after he dies as well as reflecting on some of his biggest mistakes.

The one that seems to stick out most in today’s headlines is that he blew it big time when it comes to tech. He bought way too much IBM and not nearly enough Amazon and Google.

You see, what comes naturally to some people simply doesn’t compute with others and vice versa, that’s why everybody invests in their own way. Investors like Warren Buffet represent the old world. We can already see the tech-tonic shift happening.

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At this moment, half of the world’s top ten richest people made their money in the technology sector.

Market Overview

Congratulations to the people of France who have resoundingly voted to block fascism. It may sound like the obvious thing to do but given the world’s collective choices lately, even this choice seemed too close to a reality for comfort. The world thanks you for your level headed decision.

The results were no surprise to the financial markets of course. We’ve been seeing extreme risk on sentiment for the past two weeks straight, ever since the first round of these elections.

Stock indices and the Euro have been rallying, while gold and the Yen have been dropping.

The Japanese Nikkei 225 rose 2.4% this morning, and European markets are expected to open strong.

The EURUSD opened the week with a sharp gap up but the gap has been completely covered already…

The current market attitude is most clearly reflected in the price of gold. After being beaten for half a month, it’s as if the pressure has now been lifted and it has begun to rise.

Oil has been doing its own thing lately. On Friday morning there was a bit of a flash crash that saw the price as low as $43 a barrel before recovering. As OPEC and Shale continue their long drawn out game of tug of war, the markets watch nervously. Still fresh in our minds was the market selloff of January 2016, which was largely attributed to low oil prices.

The SL Killer

Many cryptotraders woke up to a bit of a shock this morning. It seems that a large exchange site called Kraken was hit hard by a hacker attack.

For some reason, the attack didn’t affect very many cryptocurrencies, only Ethereum and just for about 2 minutes. On the longer term chart, it just looks like a big ol nasty spike that managed to take out a bunch of stop losses.

Party Time!!

Despite Kraken’s downtime and the above flash crash, digital currencies are rising steadily. This morning, the total market cap of all cryptocurrencies blew past the $50 Billion milestone and now stands at $51.3 Billion.

This graph shows just the past 24 hours, where we can observe another $5 Billion day.

On Thursday, May 4th we noted a rise of $1 Billion per day over the previous 10 days. In fact, since Thursday the rate of growth has accelerated to approximately $3 Billion per day.

The reasons for this amount of growth is quite clear. Mankind is looking at an economy that increasingly relies on technology for our day to day lives. As we mentioned above, most of the BIG money made in the last few decades was all from technological advancements.

The current banking system is outdated. Why should a bank to bank transfer take 5 business days when we can zing money across the globe in a matter of minutes?

Why do we need to lug around a wallet and credit card every time we leave the house when our smartphone is able to do just about everything else?

The total amount of money in the world is far more than $1 Quadrillion. If the blockchain is the future of the internet and the future of the economy, then $50 Billion is not nearly enough to support it and will need to rise sharply over the next decade.

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

Past performance is not an indication of future results. All trading carries risk. Only risk capital you’re prepared to lose.

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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Analysis

Long-Term Cryptocurrency Analysis: Bitcoin Flirts with $8000 as Altcoin Bull Persists

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Bitcoin’s swift recovery was the main topic of the week, as the most valuable coin not just regained its steep losses, but hit a marginal new high towards the end of the period. The entire segment is experiencing capital inflows as the total value of the coins climbed above $230 billion for the first time ever after finally leaving the vicinity of the $200 billion mark.

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BTC breached the $8000 level before turning slightly lower on Friday, but despite the severely overbought daily chart, it is still trading near its all-time highs. As the long-term picture still suggests a deeper correction, investors should wait with opening new positions and traders should also control position sizes here. Key support levels are found at $7700, $7000, and $6700, while the recent key break-out level at $5000 still hasn’t been re-tested.

BTC/USD, Daily Chart Analysis

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Dash is still the most bullish altcoin from a technical standpoint, despite this week’s short-term correction, as the coin is trading above its prior all-time high, and this weekend, it looks ready to test the break-out high near $500. Support levels are still found at $400, $360, and $330, and as the long-term picture is approaching overbought territory, investors should only hold on to their positions here.

DASH/USD, Daily Chart Analysis

The other major altcoins are also mostly in bullish setups, with some of them already in the latter stages of this cycle, like Monero and IOTA, but elsewhere in the segment, there are still opportunities for both traders and investors. Let’s see the detailed long-term view.

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Analysis

Technical Analysis: Litecoin and NEO Jump as Bitcoin Trades near $8000

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The cryptocurrency segment continued its bullish run, as the total value of the coins climbed above $230 billion for the first time ever, while Bitcoin also posted marginal new highs. The most valuable currency is still overbought regarding the long-term picture, and we continue to expect a deeper correction in the coming period, despite the recent strong rally. Support levels are still found $7700, $7000, and $6700 while the $8000 level is ahead as a major obstacle.

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BTC/USD, 4-Hour Chart Analysis

Litecoin has been the most active major besides Bitcoin, as it rallied strongly after breaking out above the key $64 resistance and it breached the next target at $75 before heading below $70 again. The coin remains in bullish long- and short-term patterns, and we expect a move above the major resistance zone ahead with the next target found at $82.50.

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Litecoin/USD, 4-Hour Chart Analysis

NEO is showing strength in the second half of the session, while Monero is recovering well from a short-term dip, similarly to IOTA and Ethereum Classic. Ethereum continues to represent stability in the segment, while Ripple failed to build up momentum so far after yesterdays spike higher. With still most of the altcoins being in bullish setups, let’s see the short-term charts.

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Analysis

XRP Looking to Make a Significant Rally

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The XRP/USD pair went into a deep correction after hitting 0.29490 a month ago. It nosedived to the major support level of 0.19052. The pair consolidated for a few weeks which gave the market the legs to test resistance at 0.22924.

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Technical indicators show that the pair was ready to breach its immediate resistance, which it did this morning. Now that resistance has broke at 0.22924, it’s time to buy. This successful breakout will take the pair to 0.23997 first and 0.26563 next before hitting the target of 0.26796 which is coincidentally a major resistance level.

Technical indicators hint that the market would most likely be overbought by the time it hits 0.26796. Should it respect the major resistance level, the likelihood of the market turning extremely bearish increases. Therefore, it is recommended to closely watch your trail stops to preserve your gains.  

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Summary of Strategy

Buy: As close to 0.22924

Support: 0.22224 and 0.20081

Target: 0.26796

Stop: If the market breaches 0.20081 as next reliable support is 0.19052

 

Disclaimer: The writer 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 money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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