Connect with us

Market Overview

Asian Market Update – Friday: North Korea rattles Asian markets…again

Published

on

Intercontinental Ballistic Missile

The Big Question: What does another North Korea H-bomb test mean for markets?

Major Asian indexes were rattled on Friday morning by a threat from North Korea to conduct another hydrogen bomb test at a larger scale and IN THE PACIFIC OCEAN. In addition, other market sensitive news also weighed in and set the tone for another turn down in equity markets.

// -- Discuss and ask questions in our community on Workplace.

In Japan, the Nikkei 225 edged down 0.29 percent to 20,289 at midday on Friday. Japanese investors tend to react quickly to North Korea issues, as regional geopolitical tensions could drive the yen up, which in turn could weigh on export shares. Also, North Korea fired two missiles over Japanese territory this month.

In Greater China, stocks were also down. The Shanghai Composite Index slid 0.45 percent to 3,342 before midday. In Hong Kong, the Hang Seng Index lost 0.69 percent to 27,916. Shares in China also respond to a decision from S&P Global Ratings to downgrade China’s long-term sovereign credit rating on Thursday.

In South Korea, the KOSPI index slipped 0.65 percent to 2,390.84.

// -- Become a yearly Platinum Member and save 69 USD and get access to our secret group on Workplace. Click here to change your current membership -- //

Down under, the ASX 200 was up 0.32 percent to 5,673 at midday. The gain came as the head of the Reserve Bank of Australia signaled that Australia will not necessarily follow other countries in raising interest rates.

In responding to tough rhetoric from US President Donald Trump, who threatened to destroy North Korea if forced at the UN General Assembly, and potential new sanctions from the US, North Korea’s foreign minister said his country could conduct a nuclear test on an unprecedented scale in the Pacific Ocean.

Asian investors are also paying close attention to the US Fed’s decision to wind down its $4.5 trillion balance sheet in October. Analysts say the unprecedented move adds another layer of uncertainty for markets, especially those in emerging countries.

Main Market Movers – Mid-day Asian Trading Session

Indexes Value at Midday Daily Change
Japan-Nikkei 225 20,289.36 -0.29%
China-Shanghai Composite Index 3,342.78 -0.45%
Hong Kong –Hang Seng 27,916.30 -0.69%
South Korea-KOSPI 2,390.84 -0.65%
Australia-ASX 200 5,673.40 0.32%

Cryptocurrencies

Prices of cryptocurrencies recovered slightly overnight during the Asian trading session on Friday, following a steep fall in the previous day.

At midday in Asia, the bitcoin price was up 1.87 percent to $3,684. The bitcoin price took some heavy losses on Thursday, when it dropped to near the $3,600 level from about $3,900.

The price of ethereum edged up 2.30 percent to $264.20 around midday in Asia. Similar to bitcoin, the etherum price also saw a steep fall on Thursday, from $285 to $256.

In the news, former Commodity Futures Trading Commission head Bart Chilton took aim at the coin, saying there is “artificial inflation” in the bitcoin price and called for regulations.

A lawyer in Nebraska, US, will start to accept cryptocurrency for his practices after asking the state ethics board. That’s a positive move in the acceptance of cryptocurrencies.

Currencies

The Japanese yen gained 0.62 percent against the US dollar at midday Friday to 111.75 per dollar. The Japanese yen is perceived as safe haven, and when geopolitical tensions rise investors turn to the yen and other safe haven assets.

The Chinese yuan lost 0.03 percent against the US dollar to 6.5879.

The Australian dollar also lost 0.09 percent on the dollar, changing hands at 1.2615 per dollar at midday.

Commodities

WTI Oil was down 0.20 percent to $50.59 per barrel.

Brent Crude was down 0.11 percent to $56.37 per barrel.

Gold was up 0.53 percent to $1,297 an ounce.

Business News across Asia

In China, the People’s Bank of China (PBoC), the country’s central bank, has ordered domestic banks to stop doing business with North Korea, according to Reuters, citing unnamed sources. So far no official comment yet, but this is big step if it’s true.

Take away: If China cuts financial ties with North Korea, the North Korean economy would without a doubt plunge. China has been reluctant on such a move because it could chaos in the North and thus causes problems for China.

In India, Prime Minister Narendra Modi’s government is reportedly mulling a massive stimulus package to boost India’s economy, following slow growth in the first half of the year, per Indian media.

Take Away: The package might include measures to boost exports, investments, infrastructure, real estate and other sectors with government spending. However, Indian policymakers haven’t signed off the package yet.

Featured image from AF.mil.

 

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...

4.3 stars on average, based on 28 rated postsFredrik Vold is an entrepreneur, financial writer, and technical analysis enthusiast. He has been working and traveling in Asia for several years, and is currently based out of Beijing, China. He closely follows stocks, forex and cryptocurrencies, and is always looking for the next great alternative investment opportunity.




Feedback or Requests?

Market Overview

Curiosity Turns to Action for Amazon & Bitcoin Cash

Published

on

Those of you looking to hold stocks that invest in blockchain solutions can now officially add Amazon to the list.

// -- Discuss and ask questions in our community on Workplace.

Amazon dominates many different industries but their most profitable wing is AWS (Amazon Web Services). In 2017, the cloud computing department was responsible for ALL of Amazon’s operating profits.

At the end of last week, AWS added a few new templates that will make it easier for developers to create apps using both the Hyperledger and Ethereum blockchains.

We’ve always known that Bezos’ mega-company has been curious about blockchain, but this is the first step that clearly signals their interest in the sector.

// -- Become a yearly Platinum Member and save 69 USD and get access to our secret group on Workplace. Click here to change your current membership -- //

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Peak Earnings Season
  • Devaluation of the Japanese Yen
  • What’s Up with Bitcoin Cash?

Please note: All data, figures & graphs are valid as of April 23rd. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

The first time Donald Trump met with Emmanuel Macron the two shared a special handshake that will be analyzed by political scientists for years to come. When they met two months later it seemed they simply couldn’t let go of one another.

Though both of the above-linked videos are highly entertaining, the agenda for Macron’s three-day visit to Washington is extremely serious.

The young French philosophy major will attempt to convince the reality star billionaire that trade wars are bad ideas and that Obama’s deal with Iran is good. In short, he has his work cut out for him. In fact, he will be speaking directly with the world’s biggest proponent of a wall.

None of this may actually matter to Wall Street, which is currently at the peak of earning season’s euphoria. This week we’ll get to peek under the hood of some of the biggest corporations in the world.

It’s very rare for stocks to go down during earnings season but with the market action we’ve seen so far this year, it wouldn’t surprise me.

What is for sure is that stock traders are getting picky about what they hold. This chart shows that the famous FAANG stocks, which have been rising in unison for the last few years, have been showing some distinct syncopation since the market rout of February 2nd.

Yen Aggression

Speaking in an exclusive interview last night, the Bank of Japan’s Governor Kuroda-San stated that they “must continue very strong accommodative monetary policy for some time.”

Meaning, they are planning to maintain their aggressive stance towards weakening the Japanese Yen, possibly for years to come.

The BoJ will be holding a meeting and press conference this Friday, which is likely to reiterate their weak Yen policy and maintain their negative interest rates.

With the USDJPY so far below its yearly average (yellow), a move up to 111 may be imminent.

(Remember, an upward move on the chart shows the Dollar getting stronger against the Yen.)

Bitcoin’s Bull Chart

The expectation of a weaker Yen, especially with the BoJ Governor deliberately trying to jawbone the currency, could have direct ramifications for Bitcoin.

Japanese savers are not very happy with the fact that their holdings in Yen are being marked for devaluation and with the cryptomarket’s recent bounce off the lows, they may now be looking at some viable alternatives.

Here we can see Bitcoin’s strong push off the long-term support of $6,500 and the subsequent rise. At the moment we can see some strong resistance at $9,000, a significant psychological barrier.

The yellow line here represents a classic ascending wedge, which is often called a breakout pattern. Let’s hope it plays out.

What’s even more impressive though is the rise in Bitcoin Cash…

Bitcoin Cash is up 81% in the last 7 days!!

This one slightly more difficult to explain but it does make some sense in the crypto-crazy world we live in.

First, let’s talk about the fork. Bitcoin Cash is moving towards a hard-fork on May 15th. The planned fork that will increase the maximum block size from 8 MB to 32 MB and will also remove the SegWit protocol.

However, those looking to get a new coin or “dividend” out of this fork may be disappointed. If all goes smoothly, the new coin that is created from the fork will completely replace the old coin. Though there may be some who try to keep the old BCH alive, they will very likely be the minority. That said, there will be no free lunch, and no chain split unless things go terribly wrong.

For clients holding BCH in eToro, barring any unforeseen circumstances, your coins will move smoothly to the new 32 MB blockchain.

Still, many cryptotraders have the last few bitcoin forks permanently etched in their minds and associate hard forks with rising price and so the momentum is snowballing at the moment, especially in markets such as Japan and South Korea.

We can see a distinct spike in volumes for BCH on exchanges in both Japanese Yen…

… and Korean Won…

… whereas volumes in BTC have remained constant over the last few weeks. Japan is responsible for 60% of all Bitcoin transactions and the spikes shown above simply indicate a sudden rise in interest.

The proportional BCH volumes of both countries are still relatively small. As we can see, Japanese Yen makes up less than 1% of all BCH transactions.

Also, there seem to be some interesting updates coming out of India, which does indicate that the “crypto-ban” put in place by the RBI and finance ministry may end up being shot down by the high court. More on this in future updates.

Many thanks to everyone who is sending me great intel and excellent feedback. Keep up the great work!

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 | Facebook: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.

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: 5.00 out of 52 votes, average: 5.00 out of 52 votes, average: 5.00 out of 52 votes, average: 5.00 out of 52 votes, average: 5.00 out of 5 (2 votes, average: 5.00 out of 5)
You need to be a registered member to rate this.
Loading...

4.6 stars on average, based on 68 rated postsSenior Market Analyst at Etoro.com.




Feedback or Requests?

Continue Reading

Market Overview

Is the VIX Being Manipulated?

Published

on

A conspicuous rise in the CBOE VIX last Wednesday has reignited a long-standing debate over the soundness of the Wall Street fear index. Now, traders are asking whether the VIX is just plain broken or being gamed by holders of derivatives.

// -- Discuss and ask questions in our community on Workplace.

VIX Spikes

The CBOE Volatility Index measures how much traders are willing to pay for options that are used to hedge against future stock-market declines. The so-called “fear index” normally trades inversely with the S&P 500 Index, which means it rises when stocks fall or vice versa.

On Apr. 18, the VIX spiked 12% in the first 30 minutes of trading, marking the biggest move since 2010, according to data gathered by Macro Risk Advisors and The Wall Street Journal.

The following chart, courtesy of WSJ, illustrates the dramatic surge between 9:00 a.m. and 9:30 a.m. The only comparable move after the opening bell occurred on Feb. 14, when the index dropped nearly 14%.

// -- Become a yearly Platinum Member and save 69 USD and get access to our secret group on Workplace. Click here to change your current membership -- //

Since the VIX cannot be traded outright, investors use VIX-linked products to trade volatility, including options, futures and exchange-traded notes. VIX futures normally trade in a state known as contango, where the futures price is above the cash price and later contracts are incrementally more expensive than earlier ones.

An illustration of the structure of VIX futures contracts is presented below based on Friday’s closing prices. Contango is observed for the first six futures months.

Concerns Over Manipulation

While VIX’s sudden spike was supposedly tied to large orders for S&P 500 put options, concerns over market manipulation have been on the front burner for some time. Since February alone, at least nine lawsuits have been filed by plaintiffs arguing that the VIX is being gamed.

CBOE President Chris Concannon, who recently testified before Congress over cryptocurrency regulation, has said the allegations have impacted the monthly auctions process. He also said that CBOE is boosting its technical infrastructure to resolve these long-standing issues.

Concerns over CBOE’s options settlement process emerged last December after the exchange fined a trading firm over allegations of improper bids related to volatility auctions. The markets in question were tied to both stocks and oil. For its part, CBOE has denied that manipulation exists, with exchange officials arguing that the VIX settlement process offers a transparent auction.

Analysts warn that the VIX, while growing in popularity, is dominated by speculators betting large sums of money on how chaotic stock prices will be 30 days from now.

Volatility returned with a vengeance in early January and hasn’t left the market ever since. The fear index spiked so heavily in February that products shorting volatility were put out of commission. Credit Suisse pulled the plug on XIV,  a popular inverse volatility product, on Feb. 20 after assets under management plunged from nearly $1.9 billion to $110 million in just six days.

Prior to the decline, XIV had performed extremely well during the bull market, with gains accelerating thanks to Donald Trump’s election.

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.

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: 5.00 out of 52 votes, average: 5.00 out of 52 votes, average: 5.00 out of 52 votes, average: 5.00 out of 52 votes, average: 5.00 out of 5 (2 votes, average: 5.00 out of 5)
You need to be a registered member to rate this.
Loading...

4.5 stars on average, based on 343 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.




Feedback or Requests?

Continue Reading

Analysis

Pre Market: Dollar Up, Stocks Flat as Trump Now Targets OPEC

Published

on

It’s been a quiet and neutral session so far in traditional global financial markets, as only cryptocurrencies experienced significant moves. Stocks are slightly lower after the open, with the S&P 500 drifting back to the key support/resistance zone below 2700 that is the mid-point of the consolidation pattern that developed after the February mini-crash.

// -- Discuss and ask questions in our community on Workplace.

S&P 500, 4-Hour Chart Analysis

With the economic calendar being empty, Donald Trump is making headlines again, this time attacking the OPEC for pushing oil prices artificially higher. It’s hard to argue against the President’s claim, as the cartel is openly aiming for higher prices with its concerted production cuts, so we just have to wait and see if Trump wants to open another geopolitical front.

// -- Become a yearly Platinum Member and save 69 USD and get access to our secret group on Workplace. Click here to change your current membership -- //

Apple, 4-Hour Chart Analysis

The trade spat with China continues to make waves as well, but for now, the market is stable despite the technical weakness, with no clear bearish catalyst present. Apple is weighing on the NASDAQ for the second day in a row, as it is down another 3% today just after the opening bell.

On a positive note, the largest tech giant’s decline hasn’t been a huge drag on the other crucial stocks like Amazon and Alphabet, and the resilience of the momentum leaders points could be the basis of another leg higher in the post-crash recovery. That said, we maintain our bearish short-term bias, based on technicals and the global divergences between equity markets.

Aussie Rolls Over as Dollar Gains across the Board

AUD/USD, 4-Hour Chart Analysis

The strength thin the USD is pushing commodities (in part thanks to Trump) and related currencies lower today, and as we warned yesterday, the Australian Dollar and the Canadian Dollar have been leading risk assets ever since early February, so should the downtrend in those currencies resume, it would be a bad omen for equities as well.

EUR/USD, 4-Hour Chart Analysis

Meanwhile, the most traded currency pair is still trading in a broad consolidation pattern after failing near the upper boundary of the formation again, and as the tension in the market grows, a large momentum move could be around the corner, with the long-term trend still being bullish.

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...

4.5 stars on average, based on 228 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

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