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Market Overview

A Six Sentiment Backstop

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After spending several sessions deciding on a direction, global stock markets seem to have taken a decision early this week. The direction is down.

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Leading the losses are the tech stocks, which had largely outperformed the market during recent periods of volatility but are now receiving their comeuppance. The NSDQ100 is down more than 1% at the time of writing.

Investors on Wall Street are now looking to a new indicator of the durability for this market, the IPOs of two much-anticipated shares. Dropbox will be going live this Friday and Spotify will be open for public trading on April 3rd.

The scope of sentiment from investors looking to add these two tech giants to their portfolios should give us a nice indication of how confident they are in the entire market.

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@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Brexit Transition
  • Crypto G20
  • The Size of the Bitcoin Whale

Please note: All data, figures & graphs are valid as of March 19th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

Also moving this morning is the British Pound Sterling. Several updates are expected regarding a possible Brexit transition deal with the European Union.

The European Commission is expected to convene for an urgent Brexit announcement, which will be streamed live at 12:45 in Brussels at this link.

The buzz on social media and in the press is that they will be discussing a possible transition deal that will carry both sides through the Brexit process.

The GBPUSD is up sharply this morning and is now trading near the middle of its range.

Remember, no matter what happens with Brexit today, the focus is likely to shift quickly to the Bank of England’s interest rate decision, which is happening on Thursday and of course the US Fed’s rate decision on Wednesday.

The G20 Meetings

Updates from the meetings today and tomorrow will be closely watched both by traditional investors and cryptotraders.

A six-page letter sent from the FSB Chairman Mark Carney to the G20 was published last night and has since been widely circulated in the crypto community.

Carney is also the Governor of the Bank of England and is widely considered to be a thought leader on all things economic. His speech to the G20 in February 2016 provided a backstop for the global economy and very likely caused the world not to go too far with negative interest rates.

In the letter, he points out that cryptocurrencies are now less than 1% of the world’s GDP and so are not a threat to the global financial system.

Soon after the letter was published, the price of Bitcoin and other cryptos saw a massive surge. This push from the lows could not have come at a better time. As you can see, the price was just testing that long term trendline (yellow) and a turnaround here would certainly be welcome by Bitcoin bulls.

Nevertheless, the meeting is far from over, in fact it has just begun. What I’m waiting for are the updates expected from Japan regarding some proposed AML (anti money laundering) measures.

Size of the Whale

Many of you will no doubt recall the recent announcement that Nobuaki Kobayashi, the trustee charged with the assets in the case against Mt. Gox, was selling off a large amount of BTC and BCH on the open market.

The good news is that a recent analysis performed by CoinTelegraph indicates that the effect on the market may not be as big as we all thought.

As we can see, all in all there were 6 massive transactions and on five of those six days the price of bitcoin went up.

What else?

Vladimir Putin has won another six-year term in office with almost 74% of the vote in his favor. For some reason though, the Ruble doesn’t seem to be celebrating and the USDRUB has spiked up on the announcement.

Also, watch for rumors that Twitter will be joining Facebook and Google to ban cryptocurrency advertisements on the platform. I’m taking this one with a grain of salt though as the CEO of Twitter is also the CEO of Square, which has recently added bitcoin payments as part of it’s offering.

As always, please keep sending me your questions and comments. I’m really enjoying every one. Let’s have an amazing week 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.

Best regards,
Mati Greenspan
Senior Market Analyst

eToro: @MatiGreenspan | Twitter: @MatiGreenspan | LinkedIn: MatiGreenspan

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

Market Update: Consumer Staples Sink S&P 500 Index; Cryptocurrency Prices Rise $16 Billion

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U.S. stocks declined on Thursday, as consumer staples posted heavy losses amid corporate earnings season. Meanwhile, a broad recovery in altcoins led the digital currency market sharply higher.

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Stocks Decline

All of Wall Street’s major indexes headed for losses, with the S&P 500 Index falling 0.6% to 2,693.13. Nine of 11 sectors contributed to the decline, with the consumer staples component plunging 3.1%.

Within the sector, tobacco plunged 11.5% after Philip Morris International Inc. (PM) posted first-quarter revenue that trailed forecasts.

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Information technology shares also fell 1.1%, with Apple among the worst-performing companies in the sector.

The technology-driven Nasdaq Composite Index closed down 0.8% at 7,238.06. The Dow Jones Industrial Average also fell 83.18 points, or 0.3%, to finish at 24,664.89.

A measure of 30-day volatility known as the CBOE VIX reached a high of 16.92, which was still well below the historic average. The so-called “fear index” settled at 15.96 for a gain of only 2.3%.

If after-hours trading is any indication, volatility could be on the rise on Friday. Several shares plunged after the bell following disappointing corporate earnings.

Sketchers (SKX) fell 23%, Atlassian (TEAM) declined 11.3% and E*Trade (ETFC) was down more than 1%.

Cryptocurrency Rally Intensifies

Crypto assets extended their recovery on Thursday, with the most popular altcoins leading the rally.

Ethereum rose 7.8% to $563, Ripple XRP gained 9.4% to $0.77 and bitcoin cash climbed 9.4% to $963.49 (all figures according to CoinMarketCap). Bitcoin also recorded gains, rising 1.4% to $8,287.88.As a result, the total value of the cryptocurrency market reached $358.4 billion, the highest since Mar. 14.

The rally coincided with the end of U.S. tax season after the IRS extended the reporting deadline by 24 hours. U.S. cryptocurrency traders may have been on the hook for as much as $25 billion in capital gains taxes, based on recent estimates. However, that number has not been confirmed.

The market’s impressive recovery comes even as nations such as India introduce new restrictions of digital currency trading. Earlier this month, the Reserve Bank of India banned regulated banks from facilitating cryptocurrency purchases.

While India is among the world’s fastest-growing nations, it is a small player in the cryptocurrency market. News of the crackdown sent bitcoin prices to a low of $5,400 on domestic exchanges. Bitcoin is still trading at a discount on Indian exchanges, although the spread is less than $200, based on Unocoin exchange data.

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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4.5 stars on average, based on 332 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Analysis

Rally Fades in Stocks as Apple Weighs on Nasdaq

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We warned yesterday that stock markets got vulnerable as the major US indices reached short-term overbought readings, and after a choppy Wednesday session, equities turned lower today in early trading. Apple fell by more than 2% in early trading on a supplier report regarding declining orders from the smartphone giant, and the sliding stock dragged the tech segment lower.

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S&P 500 Futures, 4-Hour Chart Analysis

While the short-term technical picture deteriorated, the losses are muted so far, and the rising short-term trendlines are holding up. Volatility ticked higher, with the VIX bouncing off its two-month lows, but the index is well below the levels seen in the beginning of the month, as Syria-related fears continued to ease and the Chinese-US trade spat also took the back seat in the mainstream media.

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DAX, 4-Hour Chart Analysis

Stocks finished broadly lower in Europe, while Asian equities reversed their early gains, with trading volumes still being low across the board. The economic calendar was almost empty today, with only the much worse than expected British retail sales figure adding to the string of negative surprises coming out form the UK this week. In the US, the Philly Fed index came in higher than expected, while weekly jobless claims were in line with expectations.

Dollar Stable as Short Yields Hit New Highs

2-Year Treasury Yields, 4-Hour Chart Analysis

Treasury yields resumed their rise in the quiet environment, and as the short end of the curve continues to outperform the flattening of the yield curve continues in earnest. While forex markets are still mostly flat, the Dollar is drifting higher against most of its peers in US trading.

AUD/USD, 4-Hour Chart Analysis

Commodity-related currencies are little changed, although both the Aussie and the Canadian Dollar are off their recent highs, and should they roll over, the bullish case would receive another hit.  Despite the weakening of the risk rally, crude oil continues to hit multi-year highs, with the WTI contract getting close to the $70 per dollar level today. Gold fell back below $1350, as the choppy consolidation pattern is still intact, and the slight risk-off shift wasn’t enough to trigger meaningful safe-haven flows.

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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4.5 stars on average, based on 224 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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Market Overview

Market Update: S&P 500 Notches Third Straight Rally on Earnings; Cryptocurrencies Hit $340 Billion

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U.S. stocks finished mostly higher on Wednesday, as earnings optimism lifted the S&P 500 Index and Nasdaq to their third consecutive daily advance. Meanwhile, cryptocurrencies resumed their uptrend after a two-day pause as bitcoin returned above $8,000 and bitcoin cash surged double-digits.

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Stocks Finish Mostly Higher

Two out of the three major U.S. indexes notched gains, with the S&P 500 Index edging up 0.1% to 2,708.64.

Four of 11 sectors contributed to the rally, with energy shares jumping 1.6%. Other commodity-sensitive sectors such as materials and industrials also reported firm gains.

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The biggest laggards on Monday included consumer staples and financials, which fell 0.9% and 0.4%, respectively.

The technology-laden Nasdaq Composite Index rose 0.2% to finish at 7,295.24.

Meanwhile, the Dow Jones Industrial Average fell 38.56 points, or 0.2%, to close at 24,748.07. The blue-chip index is coming off two straight sessions of 200-point gains.

A measure of implied volatility known as the CBOE VIX rose 2.3% to 15.60, which was still well below the historic average near 20. Volatility has been creeping lower in anticipation of strong quarterly earnings from U.S. firms.

The first round of Q1 reports have not disappointed, with major banks and technology companies reporting above-trend growth. Analysts at FactSet are forecasting the strongest quarter of year-over-year growth since 2011.

Cryptos Extend Rally

After initial hesitation, the cryptocurrency market rose on Wednesday as the end of tax season offered temporary reprieve to volatility.

The total market cap for all cryptos in circulation reached a high of $342 billion, according to CoinMarketCap. That was a gain of $19 billion on the day and the highest in almost a month.

Bitcoin cash (BCH) was the biggest gainer percentage-wise, climbing nearly 16% to $880 per coin on the major exchanges. Original bitcoin (BTC) advanced 3.4% to $8,190. However, its total share of the market fell below 41%.

Other major cryptocurrencies also contributed to the rally, with Ethereum adding 3.3% to $521 and Ripple XRP gaining 7.6% to settle at $0.71.

There was no immediate catalyst for the recovery, although tax relief may have played a role. The IRS extended its deadline for U.S. tax filing by one day after servers overloaded on deadline day.

Americans cryptocurrency holders may have owed as much as $25 billion in capital gains taxes, according to Tom Lee of Fundstrat Global Advisors. However, data from Credit Karma showed that less than 100 of its 250,000 filers have reported cryptocurrency-related capital gains.

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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4.5 stars on average, based on 332 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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