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Hi Everyone,

Here’s a graph for you. It certainly impressed me when I saw it yesterday.

It shows how even though the price has declined since the beginning of the year, eToro clients have not only maintained their positions, but are actually increasing their bitcoin holdings.

The graph was inspired by a recent article in which our CEO and founder Yoni Assia stated that…

After I posted the graph on Twitter, one user was quick to point out that there are many more buyers now and so the increased amount of holdings actually shows that each individual investor is holding less.

While that may be true, it actually serves to strengthen the case that demand is holding strong. If more people want to hold bitcoin, that grows the network, even if they’re holding it with less allocation in their portfolio.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Market Manipulation
  • Dollar Pullback Relief

Please note: All data, figures & graphs are valid as of August 21st. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

Whatever you feel about him, President Donald Trump’s garish rhetoric has been great for traders who like volatility. This latest headline is particularly punchy…

Just as China and the United States have started preparing for some fresh rounds of trade talks, President Trump, true to his style, has spiced things up by placing things off kilter in a way that now seems quite normal.

This comes after a report from Trump’s own administration published in April stopped short of making any such labels. In fact, the USA hasn’t officially labelled any country as a currency manipulator since 1994.

Looking back since the start of 2017, if either China or the EU have been trying to deliberately weaken their respective currencies, they haven’t been doing a very good job of it.

Dollar Pullback

Zooming in a bit to the movements of the day…

The US Dollar is finally showing some signs of weakness, which is providing some much-needed relief for the rest of the markets. In fact, it seems like investors are even ready to take on a bit more risk today as the stocks climb and the precious metals have bounced off the lows.

On the left, we can see the US Dollar Index, which seems to have peaked last Wednesday. On the top right is the NASDAQ, which is toying with it’s all-time high and on the bottom right is gold’s retracement off the long-term lows.

Crypto Section

Let’s leave this section deliberately blank for today. We’ve shown the chart about Bitcoin’s stable range too many times to count.

As mentioned, a steady price range is healthy for Bitcoin as it increases it’s use as a stable store of value and gives developers of the network more time to build the infrastructure that will be needed going forward.

Have an amazing day 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

Connect with me on….

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.

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4.6 stars on average, based on 134 rated postsSenior Market Analyst at Etoro.com.




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Analysis

5 Things To Watch Next Week + ChartBook

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Third Time is the Charm for the Dollar?

Dollar Index, 4-Hour Chart Analysis

The Greenback had a nervous week, as the midterms and the Fed meeting were both high-risk events for the reserve currency. The outcome of the elections was in line with expectations, and although the political gridlock is slightly negative for the Dollar, given the recent economic trends and the widening rate differential with its most important peers, the USD’s long-term rising trend still seems safe.

From a technical perspective, the Dollar index looks ready to test its recent highs just above 97, and while a break-out is not guaranteed, Dollar shorts are being squeezed and another leg higher would cause a lot of pain in the investment community.

A move above 97 could set up a rally up to 100, with a possible test of the 2016 highs. A trade deal with China followed by a strong risk rally is the biggest risk here for Dollar bulls, but barring an agreement, the rising trend could continue in the coming months.

Oil Ready to Bounce?

 WTI Crude Oil, 4-Hour Chart Analysis

Oil completed the drop below the $60 per barrel level in the WTI contract that we have been expecting, despite the two-week rally in equities. The Dollar strength towards the end of the week gave another boost to the selloff, and the crucial commodity reached a deeply oversold stance with regards to momentum.

Oil entered a bear market recently, but given the stretched technicals, a short-covering rally will likely start soon, burning the late shorts and resetting investor sentiment. Obvious targets for the likely move are the $63 and $65 resistance levels, while the next major support zone is found around the $54 per barrel price level.

The Perfect Short or a Post-Election Santa Claus Rally?

Nasdaq 100 Futures, 4-Hour Chart Analysis

Should the US market follow China and most of the emerging markets into a bear market the current setup is what technical analysts call the perfect short, or in other words the first complex correction in the developing downtrend. There are still contradicting technical signs on Wall Street, but most of the trends point to at least a lengthy healing process even if the longest bear market in history will resurrect once more.

Besides the bearish worldwide trends, peaking earnings, the persistent weakness in small-caps, the horrible market internals, and the Nasdaq’s lackluster performance are the most important negatives here, while the still robust economic growth, the baseline election outcome, and the possibility of a Chinese trade deal could be considered bullish.

Also, the Dow and the S&P 500 got relatively close to their all-time highs during the recent rally, but Friday’s decline could already morph into something bigger next week.

A Chinese Deal Could Define the Coming Months

Shanghai Composite Index CFD, 4-Hour Chart Analysis

Despite a brief period of relative strength and the trade deal hope the Chinese stock market is still nothing short of disastrous from a technical standpoint, and the Shanghai Composite is in a clear long-term downtrend. The bounce that started almost a month ago failed to carry the index back above the key resistance levels, and there is no technical evidence of a looming trend change.

The Chinese Yuan also gave back its initial gains, and now, the weak macro trends and the bearish technicals are back in charge. That said, an agreement between the two countries could cause a major short-covering rally, even if it will likely not be enough to stop the bear market which is likely primarily caused by the end of the historic credit cycle in the country.

Employment Reports, Retail Sales, and CPIs Highlight Economic Calendar

We will have a busy week with regards to economic releases, with especially the Great British Pound, the Dollar, and the Australian Dollar being in focus. The US CPI (Wednesday) and Retail Sales (Thursday) reports will be closely watched globally, and after the slightly hawkish Fed statement, risk assets could be in pressure should the CPI beat the estimates similarly to the PPI.

Analysts expect a price increase of 0.3%, with the core measure of 0.2% while Retails Sales are forecast to surge by 0.6% and 0.5% respectively. In Europe, the British Employment Report and the German ZEW index will come out on Tuesday, while the British CPI and the flash Eurozone GDP are scheduled for Wednesday, with the British Retail Sales coming out on Thursday.

ChartBook

Major Stock Indices

S&P 500 Futures, 4-Hour Chart Analysis

Dow 30 Futures, 4-Hour Chart Analysis

VIX (US Volatility Index), 4-Hour Chart Analysis

DAX 30 Index CFD, 4-Hour Chart Analysis

FTSE 100 Index CFD, 4-Hour Chart Analysis

EuroStoxx50 Index CFD, 4-Hour Chart Analysis

Nikkei 225 Futures, 4-Hour Chart Analysis

EEM (Emerging Markets ETF), 4-Hour Chart Analysis

Forex

EUR/USD, 4-Hour Chart Analysis

USD/JPY, 4-Hour Chart Analysis

GBP/USD, 4-Hour Chart Analysis

EUR/GBP, 4-Hour Chart Analysis

AUD/USD, 4-Hour Chart Analysis

Commodities

Gold Futures, 4-Hour Chart Analysis

Copper Futures, 4-Hour Chart Analysis

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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4.7 stars on average, based on 392 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: U.S. Stocks Plunge as Oil Selloff Intensifies; Bitcoin Cash Community Looks to Oust ‘Fake Satoshi’

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U.S. stocks declined sharply on Friday, with most major sectors reporting big losses as oil prices headed for their tenth consecutive down session, sparking renewed fears of a slowdown in global growth. Cryptocurrency prices continued lower heading into the quieter weekend session, as attention shifted to the upcoming hard fork of bitcoin cash.

Stocks End Strong Week on a Soft Note

After a week filled with gains, all three major U.S. stock indexes finished lower on Friday. The Dow Jones Industrial Average fell 201.92 points, or 0.8%, to 25,989.30. Blue-chips Cisco Systems Inc. (CSC), Goldman Sachs Group Inc. (GS) and Caterpillar Inc. (CAT) were the biggest decliners, falling at least 2.2% each.

The broader S&P 500 Index declined 0.9% to close at 2,781.01, with eight of 11 primary sectors seeing red. Information technology and the newly created communication services category were the biggest losers.

Sliding technology shares contributed to a steep drop in the Nasdaq Composite Index. The tech-laden average plunged 1.7% to finish at 7,406.90.

Oil’s Bear Market Continues

Oil’s protracted selloff intensified on Friday, fueling concerns of a synchronized downshift in global growth.

U.S. West Texas Intermediate (WTI) futures for December settlement crossed below $60 a barrel for the first time since March, capping off a staggering 22% decline over the past five weeks. The U.S. futures benchmark was last down 73 cents, or 1.2%, to trade at $59.94 a barrel on the New York Mercantile Exchange. Brent crude, the international futures benchmark, retreated 76 cents, or 1.1%, to $69.89 a barrel.

Members of the Organization of the Petroleum Exporting Countries (OPEC) will meet in Abu Dhabi over the weekend to discuss possible output strategies for 2019. If OPEC backs renewed output cuts, it would mark the second time this year that the producer group has shifted course on its output strategy.

Bitcoin Cash Community Outs ‘Fake Satoshi’

The development community behind bitcoin cash is working together to oust Craig Steven Wright from its ranks, according to Bitmain founder Jihan Wu. Wright, the so-called ‘fake Satoshi’, is part of a triad of influential actors pushing for the system-wide upgrade on Nov. 15.

“The whole BCH community are working together to kick Fake Satoshi out,” Wu said, as quoted by CCN. “The resistance against cult leader proves the inner strength and sophistication of the BCH ecosystem.”

Wright seems to have crossed a red line after threatening to attack the community for backing Bitcoin ABC, the main implementation of the blockchain. According to CCN, Wright allegedly issued the following statement in writing:

“Side with ABC, you hate bitcoin, you are my enemy. You have f–king no idea what that means. You Will. I AM Satoshi. Have a nice life. You will now discover me when pissed off. And, no. You Could have had proof. Your choice. F–k you.”

Following an epic run-up in price, bitcoin cash has come back down to earth over the last 48 hours. The BCH price is down 5.1% on Friday to $560. Over the past seven days, the fourth largest cryptocurrency has gained 22.5%.

The overall cryptocurrency market was worth $212.9 billion on Friday, down from a high of $221 billion earlier in the week.

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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4.6 stars on average, based on 660 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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Analysis

Pre-Market Analysis And Chartbook: Commodities and Stocks Plunge After Fed Meeting

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Friday Market Snapshot

Asset Current Value Daily Change
S&P 500 2,779 -0.93%
DAX 30 11,518 -0.08%
WTI Crude Oil 60.20 -0.91%
GOLD 1,211 -1.06%
Bitcoin 6,345 -0.94%
EUR/USD 1.1345 -0.16%

The aftermath of the Fed’s monetary meeting has been bearish for risk assets so far, even though Treasury yields haven’t risen too much following the central bank’s slightly hawkish statement. The Fed didn’t mention the recent turmoil in financial markets yesterday, and that could mean that the “Fed put” under the stock market is much deeper than bulls hoped, and until the economy remains on track, Jerome Powell will keep on tightening.

 WTI Crude Oil, 4-Hour Chart Analysis

Stocks markets are lower today globally, although the losses are muted, and the recent lows are not in any kind of danger for now. Commodities are in more trouble, with oil continuing its decline, gold hitting a new one month low, and copper also falling below key support.

WTI crude oil plunged below the $60 level, as we expected, and now the crucial commodity is testing the long-term support zone just below that price level. Traders playing the short side now face a heightened correction risk, and a stronger short-covering rally could be ahead next week, with the $65 level being the obvious target for that.

EUR/USD, 4-Hour Chart Analysis

The Dollar is once again in the center of attention in forex markets, and the Greenback is drifting towards its recent high as measured by the Dollar index and the EUR/USD pair. The latter is now only slightly above its August lows, and the common currency is looking ready to hit new 16-month lows after the recent failed rally attempt.

While the USD pulled back just after the midterms, the broader uptrend in the reserve currency is intact and the Fed’s adamant stance interrupted the correction. Some of the risk-on currencies are in much better shape compared to the Dollar, but especially if the stock decline resumes, we expect new highs in the USD across the board.

Stock Rally Pauses in the US but Risk-Off Flows Remain Muted

S&P 500 Futures, 4-Hour Chart Analysis

As far as the technicals are concerned, Wall Street is still in a risk-on mode, with the Volatility Index (VIX) being just above yesterday’s lows, and the major indices holding on to most of their gains. The S&P 500 ran into resistance yesterday after the strong bounce, but for now, the post-Fed dip is controlled, and until a dip below the key support/resistance zone near 2750, bulls remain in control, at least short-term.

On a negative note, small caps are once again lagging the broader market, and that could point to the end of the bounce in the coming week. The Nasdaq is also underperforming the other benchmarks, while the defensive utilities and healthcare stocks are among the best performing issues yet again.

Gold Futures, 4-Hour Chart Analysis

As we mentioned above, gold hit a one-month low today amid the broad commodity selloff, with the front futures contract clearly plunging below the $1220 support. While a recovery back to the recent consolidation range is still possible, a durable break would warn of a test of the $1180 support. Bulls would need a quick recovery above $1215 to maintain the early-October break-out.

ChartBook

Major Stock Indices

Nasdaq 100 Futures, 4-Hour Chart Analysis

Dow 30 Futures, 4-Hour Chart Analysis

VIX (US Volatility Index), 4-Hour Chart Analysis

DAX 30 Index CFD, 4-Hour Chart Analysis

FTSE 100 Index CFD, 4-Hour Chart Analysis

EuroStoxx50 Index CFD, 4-Hour Chart Analysis

Shanghai Composite Index CFD, 4-Hour Chart Analysis

EEM (Emerging Markets ETF), 4-Hour Chart Analysis

Forex

USD/JPY, 4-Hour Chart Analysis

GBP/USD, 4-Hour Chart Analysis

EUR/GBP, 4-Hour Chart Analysis

AUD/USD, 4-Hour Chart Analysis

Commodities

Copper Futures, 4-Hour Chart Analysis

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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4.7 stars on average, based on 392 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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