Analysis Breaking News: US CPI Surges, The Inflation Monster is Really Here? Published 6 months ago on February 14, 2018 By Mate Cser The Money Makers Club now has 6 of 15 available seats. Learn more here! Last week’s crash in stocks has been preceded by several interesting events and changes in market behavior, aside from the exponentially rising trend in US equity indices, most notably in US Treasuries. The previously gradually rising bond yields started to climb in an accelerated fashion, with the promise of a new Fed Chair, the signs of wage inflation in the US, and hawkish signals from global central banks fueling the yield-rally. The better than expected hourly-earnings growth in the latest US employment report gave another boost to rise in yields (and because of the inverse relationship, the decline in bonds) and that together with Janet Yellen’s slightly hawkish exit pushed stocks over the edge, triggering the collapse of the short-volatility complex. What’s Next after Today’s CPI-Beat? That’s the reason why today’s sizeable positive surprise in the consumer price index (0.5% vs. 0.3% expected) caused a 2-3% initial drop in the major US equity futures, taking back the benchmarks to their weekly lows. The real long-term issue with inflation picking up, that if central banks will be forced to raise rates quicker and reduce their balance sheets at an accelerated pace, they could cause a massive re-pricing of assets, which in-turn could hurt growth. And with rates still at historically low levels, and after the lengthy period of quantitative easing, there won’t be too much that authorities will be able to do to stop a downturn, and as Warren Buffett says, “Only when the tide goes out do you discover who’s been swimming naked…” Price Action in Stocks While the technical setup was already bearish following the crash, this report will likely put additional pressure on stocks globally, and could contribute to a longer and deeper correction, especially given the almost perverse level of overvaluation in the US. That said, bull markets rarely with a simple top, and a “feel good” recovery will likely follow the correction, given the strong long-term uptrend, even if inflation and monetary tightening will break the back of the 9-year rally. Also, short-term the only certain thing is that volatility will remain high, as the worse than expected retail sales numbers could mute the rise in yields. The Possible Effects on Cryptocurrencies The historic run-up in cryptocurrencies also ended in the same exact period when, bond markets shifted behavior, although the cross-correlation between traditional assets and the coins hasn’t been significant before. We suspect that it was more a coincidence than a regime change, and cryptocurrencies will continue to mostly “live their own lives” even as crash events like last week’s volatility-apocalypse will likely “spill over” to the segment. Also, if the central bank bubble finally pops, strong cryptos could actually benefit from the crisis of faith just like gold. 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. (11 votes, average: 4.91 out of 5)You need to be a registered member to rate this. Loading... Mate Cser 4.6 stars on average, based on 317 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. Follow @HackedCom Feedback or Requests? Related Topics:bondscpiFederal Reserveinflation Up Next Dow Drops As Cryptos Pop Don't Miss Crypto Update: Litecoin on the Move You may like Pre-Market: Dollar Rallies on Hawkish Fed, Turkish Lira Hits Record Low Apple Earnings Beat Outweighs Trade War Fears as Fed Looms Wall Street Sees Red after GDP Miss Weekly Forecast: Crypto Markets Search for Direction After Plunge; Monetary Policy Remains in Focus Treasury Yields Up, Stocks Slightly Lower After Fed Rate Hike Pre-Market: Stocks Rebound as Italian Government Forms, US Payrolls Beat 1 Comment 1 Comment Tarik February 14, 2018 at 4:26 pm excellent content in a timely manner! Log in to Reply You must be logged in to post a comment Login Leave a Reply Cancel replyYou must be logged in to post a comment. Analysis Crypto Update: Lisk’s Bearishness Hides True Trend Published 38 mins ago on August 15, 2018 By Kiril Nikolaev The Money Makers Club now has 6 of 15 available seats. Learn more here! Many avid cryptocurrency traders have taken Lisk off of their watchlist (LSK/BTC) and for good reason. The pair has plummeted like a shooting star crashing down the surface of the planet. From the high of 0.003398 on February 10, 2018, LSK/BTC is down below 0.00043 today. The pair’s fall wiped out almost 90% of its value. Nevertheless, long-term investors shouldn’t be worried. As bearish as Lisk looks, we are convinced that it is not yet ready to go the way of the dinosaurs. On the contrary, LSK/BTC is flashing signals that it is about to come back to life soon. If it does, it will confirm our assumption that Lisk is currently range trading. Lisk is Locked in a Wide Trading Range If you’re an experienced technical analyst, then one of the things that you probably do is map out key areas of support and resistance. This helps you determine the overall trend of the market. It is then easy to come up with a strategy once you establish the trend. We performed these steps in our analysis of Lisk and the charts showed us that the pair is range trading when looking at it from a long-term perspective. Weekly chart of LSK/BTC LSK/BTC is locked in a wide trading range. The bottom of the range is support of 0.0004, the middle is 0.0016, and the top end is 0.0032. The market has been trading within this range since May 2017. The “smart money” investors buy the bottom of the range. You can see this as volume spikes whenever the pair drops to this level. This tells us that they accumulated enough positions to influence market movement. As soon as they are ready, they spark a rally and constrict supply to inflate market price. Then, they wait for the top to start distributing positions. Volume differences in the daily chart of LSK/BTC The “smart money” investors are very likely to repeat the process once LSK/BTC hits the bottom end of the range. We see that process developing right now. Breakout from a Falling Wedge Lisk is fond of falling wedges. Between June and December 2017, the pair broke out from three falling wedges as it range traded between 0.0004 and 0.0016. This appears to be the pattern used by “smart money” investors to distribute positions and keep prices from climbing further. Fast-forward to today and we see that LSK/BTC has created another falling wedge on the daily chart. Daily chart of LSK/BTC What’s interesting is that the apex of the falling wedges always formed around the bottom end of the range at 0.0004. This usually sets up the market for a bounce and a breakout that sends the pair to the midpoint of the range. We believe that the market is repeating the same process today. LSK/BTC is in extreme oversold territory on the daily RSI. On top of that, the stochastics are respecting support of 3.08. This support has never been breached. The market may linger on this level but it always bounces. This tells us LSK/BTC can only get stronger from this point. Bottom Line LSK/BTC may have lost over 90% of its value from the high of 0.003398, making the market look ultra bearish to many investors. However, technical analysis from a long-term perspective show that the pair is currently range trading. Breakout from the current falling wedge should confirm this assumption. 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. (0 votes, average: 0.00 out of 5)You need to be a registered member to rate this. Loading... Kiril Nikolaev 3.6 stars on average, based on 223 rated postsKiril is a financial professional with 4+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and ETFs, as he does his own crypto research and is the subject matter expert at ETFdb.com. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances. Follow @HackedCom Feedback or Requests? Continue Reading Analysis Crypto Update: Market Surges 10% but Downtrend Still Intact Published 2 hours ago on August 15, 2018 By Mate Cser The Money Makers Club now has 6 of 15 available seats. Learn more here! Following two days of almost constant selling, the cryptocurrency segment experienced an oversold rally, with the major coins recovering a small part of their recent losses. The technical setup is little changed so far, with the steep short-term trendlines being intact in most cases, and with the key resistance levels towering ahead of the top altcoins. That said, as the longer-term charts have become clearly oversold, and as the selloff accelerated with signs of forced liquidations across the board, such as huge volumes and very high correlations between the majors, a durable bottom could already be forming in the segment. The next few days will be crucial in deciding that, as a successful test of the lows, and the formation of a relatively strong leadership could set up a broader short-term trend change. For now, our trend model remains on a sell signal in case of the top coins, with Bitcoin being the closest to a reversal from a technical perspective. Ethereum bounced off the $260 level, Ripple found support near $0.26, while BTC recovered above $6275 but been stopped by the $6500 resistance, failing to trigger an upgrade in the trend model. ETH/USD, 4-Hour Chart Analysis Ethereum surged higher after the US close yesterday and although it failed to add to those gains in early trading today, the coin is holding up just above the $275-$280 zone, but the steep downtrend is clearly in place. ETH has been very weak for more than a month, and especially since breaking below the $400 level last week, and more signs of strength would be needed for a trend change. Key resistance is ahead at $300, while further support below $260 is found at $235. BTC/USD, 4-Hour Chart Analysis On a positive note, Bitcoin joined the oversold rally after holding up well above the $6000 level and the key long-term zone near $5850. The coin also moved above declining trendline, but for now, the pattern of lower lows and lower highs is intact and the coin remains on a short-term sell signal. BTC is clearly in the strongest technical position among the majors, and it could be the leader in a recovery, should it manage to build a bottom in the coming weeks. Resistance above $6500 is ahead at $6750, and $7000, while further support is found between $5000 and $5100. Correlations Remain High as Bearish Conditions Persist XRP/USDT, 4-Hour Chart Analysis While Ripple managed to hold up above its spike low below the strong $0.26 level and the bounce took it as high as $0.30, the steep downtrend remains intact and bulls would need further confirmation before entering new positions here. The coin is still deeply oversold from a longer-term perspective, and we expect a more durable bottom to form soon. Further resistance is ahead at $0.32, while support below $0.26 is found near $0.23. LTC/USD, 4-Hour Chart Analysis Looking at the bearish leaders, most of the coins are in very similar setups, as correlations are still very high, and Litecoin and Monero are still slightly more promising than the likes of Dash, Neo, and IOTA, which remain very weak from a technical standpoint. LTC is trading near its recent swing low at $56 and should the coin manage to hold above that durably, a short-term bottom could form, which would be a positive sign for 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. (0 votes, average: 0.00 out of 5)You need to be a registered member to rate this. Loading... Mate Cser 4.6 stars on average, based on 317 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. Follow @HackedCom Feedback or Requests? Continue Reading Analysis The Air Transportation Market is Growing. Where to Invest? Published 21 hours ago on August 14, 2018 By Dmitriy Gurkovskiy The Money Makers Club now has 6 of 15 available seats. Learn more here! By Dmitriy Gurkovskiy, Chief Analyst at RoboMarkets Today, practically every person who has internet access knows what Amazon and Alibaba are. These are the world’s largest internet-companies who, for the sale of their products, also use famous platforms like AliExpress and eBay. Their total revenue constantly has been increasing year after year. And as long as these companies are oriented toward international markets, 95% of the goods they sell are delivered by air. Here we could pay attention to the aircraft manufacturers, as the air transportation growth rate will lead to increased demand for new aircraft. Boeing has conducted research according to which the demand for pilots, aircraft technicians and flight attendants in the world is growing, and the biggest activity is expected in the Asia-Pacific Region and in North America. This week, the news feeds have been peppered with headlines on the current shortage of pilots in airline companies, and this demand will be hard to satisfy in the nearest 10 years. Last week, Ryanair pilots went on strike demanding a salary raise and improved improved working conditions. Consequently, investors have started showing interest in airline companies. Also, rumor has it that Warren Buffett is going to invest in one such company (or in several), but it has not yet been indicated which one exactly. According to some reports, it may be Southwest Airlines Co. (NYSE: LUV). Southwest Airlines Co. is an American low-cost airline founded in 1971. It is the biggest low-cost carrier in the United States and in the world by the number of transported passengers. As of December 2017, there were 706 Boeing 737 aircraft in the company. By its financial performance, the company looks attractive for long-term investments. For example, profitability has reached 16.90%. The Short Float ratio is very low – only 1.82% and the debt to equity ratio is 0.48. Based only on the rumors, Southwest Airlines stocks have left the consolidation range between the levels of $50.00 and $53.50, having broken out the 200-day moving average and indicating a possible formation of an ascending trend on D1. The closest resistance levels are at $62 and $67. On W1, a stable uptrend is visible and the broken out levels are becoming a support for underlying price. It is unclear precisely which company Warren Buffett will direct his attention to, so we can analyze the financial standing of other airline companies, which can become potentially interesting investments. Delta Air Lines (NYSE: DAL) is one of the largest airlines in the world. Its destinations network includes countries in Asia, Europe, North, South America and the Caribbean region. As of January 2018, Delta Air Lines had 853 aircraft. The financial performance of this company over the last 4 years shows a drop in income. Profitability is 7.7%, the debt to equity ratio is 0.67 and the Short Float ratio is 2.65%. According to technical analysis, the price is trading near the 200-day moving average, constantly breaking it out in both ways. Since December 2017 the resistance has formed on the chart, as the stock still won’t break out. In this situation, the breakout of $57.00 can be a signal for the further growth of the price of the stocks, but, at the same time, it has to be confirmed by good Q3 results. On W1, there is still an uptrend, but we can already see a more serious resistance area from 2015 in the range between $53 and 56. The price is now in this range. The stock already tried to break out of this resistance in January 2018, but is has never managed to secure its position above this resistance. Here there is a high chance of the price falling to the support at $40. Currently, the potential drop of the price of the stock prevails over the growth. The next airline company which we can direct our attention to is American Airlines, Inc. It is also one of the largest airline carriers in the world with headquarters in Fort Worth (Texas). The aircraft fleet of the company amounts to 958 aircraft in total. Unfortunately, recently the financial performance of this airline has not been perfect either. The debt to equity ratio (25.16) clearly demonstrates how risky this asset may be. That means that the company has 25 times more debts than the means to clear these debts. In this situation, the slightest decline of aviation operations may seriously hurt the company. It should be noted that American Airlines has the “youngest” aircraft fleet now, as the company has invested its money exactly in the aircraft, which has caused such debts. Therefore, the company decided to risk, bu investors have not appreciated it, and thus the price of the stocks in 2018 was constantly falling. Currently, the stock is in a downtrend. The price is gradually dropping within the descending channel, breaking out the support levels. However, near the level of $36 there has appeared a surge in rise, which indicates a possible forming of a strong support. This can be due to rumors about Buffett’s interest towards the airline companies: his fund has now about $100 billion of available cash and a part of it will get to the market. Overall, the stocks of American Airlines seem to be a very risky investment. There is another large airline company, which may be interesting from the point of view of investments: United Continental Holdings. United Continental Holdings (NYSE: UAL) is the fourth largest airline company in the United States. It appeared out of the merger of United Airlines and Continental Airlines in 2010. As of June 2018, the aircraft fleet of United Continental Holdings amounts to 716 aircraft. Also, as in the two previously described airline companies, the most successful financial year was 2015. According to those results, profits reached $7.34 billion. The Short Float ratio is 5.20%; the debt of the airline is 1.62 times bigger than its internal funds. On D1, the technical analysis indicates an uptrend, as the price is now above the 200-day moving average and has secured its position above $80. In this situation, the further growth of the price cannot be excluded. On W1, the stock also shows a stable uptrend trend and is currently trading near its historical maximums. Thus, the technical analysis indicates a good growth potential for this stock, but the possibility of the correction of the price to $75 cannot be excluded either. Having summarized the data on the revenue, we can see the big picture in the airline transportation market for 4 airlines. American Airlines has lost the most income, while Southwest Airlines has been constantly increasing its profit. The rest of the data indicates that the riskiest assets is American Airlines – its debt is the biggest out of all the 4 companies, its profitability is low and its Short Float is high. To sum up, for the nearest years Southwest Airlines looks the most attractive investment-wise. Amid all these data, Southwest Airlines noticeably stands out – all the rest have not been able to restore the previous revenue level after 2015. The fact of the matter is that Southwest Airlines has concentrated on low-cost transportation and this decision turned out to be the right one. If Buffett’s fund does buy Southwest stocks, this may become a very good investment for the coming years. Nevertheless, even without it, the expected growth of the passenger throughput will only be increasing the profit of this company and, consequently, the price of its stocks. You should not consider this article as a guideline to follow in any way – this is only information for analysis. Disclaimer Any forecasts contained herein are based on the authors’ particular opinion. This analysis may not be treated as trading advice. RoboMarkets bears no responsibility for trading results based on trading recommendations and reviews contained herein. 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 5)You need to be a registered member to rate this. Loading... Dmitriy Gurkovskiy 4.4 stars on average, based on 6 rated postsHaving majored in both Social Psychology and Economics, I went on to continue my education in post graduate. Later I worked as a team lead of a tech and fundamental analysis lab in the Applied System Analysis Research Institute. This helped me to acquire all necessary skills and experience to become a successful trader and analyst, as well as a portfolio manager in an investment company. I'm a pro in the financial field and the author of articles for various international media. I also hold the position of Chief Analyst at RoboMarkets. Follow @HackedCom Feedback or Requests? Continue Reading 5 of 15 Seats Available Learn more here. 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