Connect with us

Analysis

Daily Analysis: An Epic Finish for an Epic Week

Published

on

Friday Market Recap

Asset Current Value Daily Change
S&P 500 2621 1.09%
DAX 12,107 -1.25%
WTI Crude Oil 59.06 -3.42%
GOLD 1318.00 -0.61%
Bitcoin 8580 3.48%
EUR/USD 1.2250 -0.04%

A heaven for traders, but a headache for the average investor. That is probably true for the this week’s market that had everything that “action-junkies” could ask for. Today’s session was yet again nothing short of spectacular in stocks and all the major asset classes, with the only unlikely exception of cryptocurrencies.

Volatility remained very high, especially after the months of record low level of risk perception among investors, as the major US indices full percentages in both directions in a matter of minutes. Compare that to the “no 1% daily moves in the indices for full months” era of the previous period, and you will understand how false the illusion of safety was amid the bull run.

VIX, 4-Hour Chart Analysis

US stocks re-tested the Monday crash-lows today in late trading, while European and Asian equities still lagged, but that was not the end of the week’s story, as the last hours brought about a classic short-squeeze into the close form oversold readings. While some traders will call it the Plunge Protection Team’s doing, these furious rallies are part of bearish trends, even if some stock investors forgot how those look like.

S&P 500 Futures, 4-Hour Chart Analysis

Forex markets were also very active today, although yet again, the end-of-the-day moves were muted compared to the hectic intraday action. The Dollar index edged higher, but it was well off the daily highs at the closing bell, with the EUR/USD pair finishing virtually unchanged near 1.2250 after touching 1.22 earlier on. The safe haven Yen was among the winners of the day even after the late-day dip, while the Pound suffered again after yesterday’s brief BOE induced rally attempt.

DXY (Dollar index), 4-Hour Chart Analysis

Commodities were lagging the other asset classes, and that is usually a sign of systemic selling pressure, with crude oil receiving another huge blow. The WTI contract is now back below the $60 level following the bearish US production data, as the shale-cap on the price of the crucial commodity seems to be working. Gold had a relatively quiet session, despite the turmoil in risk assets, as the precious metal is likely concluding its overbought correction.

WTI Crude Oil, 4-Hour Chart Analysis

Cryptocurrencies

The crypto segment continued to impress amid the broad chaos in traditional assets, as the bullish consolidation that started mid-week continued, and the major coins were trading near or at the post-Monday selloff highs. A lot of coins made technical progress, scoring new bounce highs in the quiet environment, and as the rotation continued in the sector, new leaders emerged yet again, with ETC, Cardano, Stellar, EOS, Ripple, and IOTA all outperforming the average.

Stellar, 4-Hour Chart Analysis

Bitcoin itself continues to hover around the $8650 level, with an eye on the $9000-$9200 resistance zone before the weekend, and as Ethereum, Litecoin, and Ripple are all pulling their weight, the majority of the market capitalization on the segment is in the relatively strong group.

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.
9 votes, average: 4.78 out of 59 votes, average: 4.78 out of 59 votes, average: 4.78 out of 59 votes, average: 4.78 out of 59 votes, average: 4.78 out of 5 (9 votes, average: 4.78 out of 5)
You need to be a registered member to rate this.
Loading...

4.6 stars on average, based on 378 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?

Analysis

Hawkish Fed Lifts Yields, Dollar as Stock-Correction Continues

Published

on

US stock markets had a choppy and mixed session, and the major indices closed the day virtually unchanged, despite the early losses and the negative news flow. The US housing market disappointed again, the EU-Italy debate over the country’s budget continued, the US-Chinese relations further deteriorated, and the Fed also provided a negative catalyst towards the end of the day.

Dow 30 Index Futures, 4-Hour Chart Analysis

Investors were eagerly waiting for the meeting minute form the Fed’s latest meeting, but those expecting a dovish surprise were let down. The transcript contained more hints to tighter-than-expected monetary policies in the coming months and years, but still after an initial dip stocks rebounded to pre-announcement levels.

US 2-Year Treasury Yield, 4-Hour Chart Analysis

While especially shorter-dated yields rallied after the release, we would add that although there were voices that the Fed should exceed the “neutral” interest rate to cool the economy in the future, those voices will likely be muted by any major correction in financial markets or even a moderate slowdown in the economy.

Russell 2000, 4-Hour Chart Analysis

Stocks weathered the rise in yields so far, but after-hours, futures markets are drifting lower, and should yields resume their recent swift advance, another wave of selling could hit risk assets. With a lot of stocks and benchmarks still clearly in oversold territory concerning the short-term momentum indicators, the choppy correction could also continue, but we remain defensive towards global stocks, and we expect the risk-off period to continue in the coming weeks.

Dollar Extends Early Gains as WTI Crude Dips Below $70

Dollar Index (DXY), 4-Hour Chart Analysis

While the Dollar was already up in early trading against most of its major peers, it got a strong boost from the meeting minutes, with the Dollar Index climbing above the key support/resistance level near 95.50, establishing a swing low.

Barring a quick reversal, the Greenback headed for another important leg higher, and all eyes will be on the 1.15 level in the EUR/USD pair, as an extended move below that could open up the way for a strong momentum move in the USD. On a positive note, the most vulnerable emerging market currencies continue to perform well, in contrast with equities in the segment, and that could give some stability to risk-on currencies in the face of the broadly negative technicals

WTI Crude Oil, 4-Hour Chart Analysis

Commodities mostly finished the day with losses amid the rally in the Dollar, but while gold still only gave back a small part of its recent gains, oil plunged to a new almost one-month low, at least as measured by the WTI contract.

The Brent contract continues to outperform despite the easing of the US-Saudi tensions, but overall the risk-off shift in global markets is clearly hurting oil.  Copper is still stuck in a volatility compression pattern, but given the lengthy consolidation, a significant move is expected in the coming days by the industrial metal.

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...

4.6 stars on average, based on 378 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

Altcoins

Why Would Anyone Have Faith In Tether?

Published

on

I don’t want to get sued for slander so let me explain the reasoning beyond today’s title. After all of the turmoil surrounding Tether on Monday, how can the price be anywhere near the $1 parity level with the US dollar?  After more than a year, how can anyone have confidence in Tether and their common law partners Bitfinex when, for example, Circle, backed be the highly respected Wall Street giant Goldman Sachs offers an alternative?  We should also mention that Circle is just one of many so called stable coins.

It isn’t hard to find a list. Exchanges are feverishly adding stable coins. Singapore based Houbi is adding Paxos Standard Token (PAX), True USD (TUSD), Circle (USDC) and Gemini (GUSD).  

When Stable Coins Cause Instability

Well, the evidence is mounting as the months move along that so called stable coins can have the power of creating anything but stability.  This week’s experience with Tether, Bitfinex and the price explosion of Bitcoin demonstrates that there are still dangers lurking. This is why trust is important.

Monday’s gyrations were not the first questionable moment for Tether.  The coin, which gains its intended stability by being tied on a one for one basis with the US dollar, has been the subject of questionable behavior all year.  

As far back as January trade sources were expressing concern the Tether was responsible for last December’s major price bubble in Bitcoin.  The frenzy over Bitcoin set off speculation across the entire crypto spectrum. But that was just the beginning.

In June Bloomberg reported on a paper by John Griffin, a finance professor at the University of Texas, that among other things claimed 60% of last year’s price move in Bitcoin was the result of manipulation surrounding Bitfinex. That directly implicates Tether.

Using algorithms to analyze the blockchain data, Griffin’s team found that purchases with Tether were timed following market downturns and result in sizable increases in Bitcoin prices. Less than 1% of hours with such heavy Tether transactions are associated with 50% of the meteoric rise in Bitcoin and 64% of other top cryptocurrencies.

These findings prompted the US Commodity Futures Trading Commission to step in with a series of subpoenas.

Tether’s coins had become a popular substitute for dollars on cryptocurrency exchanges worldwide, and for good reason. They are anonymous, closely tied to the value of the US dollar and can be used in exchange for Bitcoin, Ether or about 10 other cryptocurrencies.  Tether is closely associated with Bitfinex, with whom they share common shareholders and management.

Bitfinex has offices in Hong Kong but it is legally headquartered in the British Virgin Islands. In May they announced plans to move to Zug, Switzerland. Bitfinex has a sorted history of poor security, having lost nearly $100 million worth of Bitcoin from customer accounts. Moreover, while claiming to have total one for one US dollar backing for each Tether, real proof is absent.  

Further Evidence of Manipulation

Over the course of this year, as we have gathered digitally to witness the loss of nearly $600 billion in crypto value, everyone has been looking for the culprit. When I first read of some of the academic studies that blamed the advent of futures trading on the CBOE, I laughed. Honestly, I believed the real cause of the rise and fall of crypto were a well connected group of billionaires that together had the power to move markets.  

Well the folks at Chainalysis have just produced some surprising research results. Their Blockchain Intelligence Platform powers investigation software for some of  the world’s top institutions. These guys don’t do surveys, the have their hands on big data that is able to detect some interesting stuff.

Chainalysis released a new report last week showing that the so called Bitcoin whales are not responsible for price volatility. The study examined the 32 largest BTC wallets, which reportedly represent 1 million BTC, or around $6.3 billion. That is a pretty solid sample size.

The data revealed that the BTC whales are do not act in concert with one another. In fact not only are they a diverse group but about two thirds behave like longer term investors. Instead of being FOMO (Fear Of Missing Out) types, on net they have traded against the heard buying on price weakness.

Putting The Pieces Together

The crypto world is bombarded with globally generated news on an hourly basis. But what does all of it mean anyway? Hopefully this article adds some perspective on what and who has been responsible for the direction of crypto prices over the past year.  As more of these weak players are identified and depleted of their business, real investors will have the confidence to return to the market.

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.
1 vote, average: 5.00 out of 51 vote, average: 5.00 out of 51 vote, average: 5.00 out of 51 vote, average: 5.00 out of 51 vote, average: 5.00 out of 5 (1 votes, average: 5.00 out of 5)
You need to be a registered member to rate this.
Loading...

4.4 stars on average, based on 113 rated postsJames Waggoner is a veteran Wall Street analyst and hedge fund manager who has spent the past few years researching the fintech possibilities of cryptocurrencies. He has a special passion for writing about the future of crypto.




Feedback or Requests?

Continue Reading

Altcoins

EOS Price Forecast: EOS/USD Heading for Another 300% Move?

Published

on

  • EOS/USD price action via the 4-hour chart view has formed a bullish flag pattern.
  • The price is moving around levels seen back end of March to early April, before a bull run of over 300%.

The past six sessions for EOS/USD have been erratic to say the least. It has been subject to a high amount of volatility, swinging aggressively in both directions. There has been a lack of commitment from either the bear or bull camps of late. As the market continues to trade with such behavior, it appears to be trying to find its feet, ahead of a potential chunky firm trend.

EOS DApp Hacked Again

An EOS based gambling DApp, EOSBet has been hacked, with $338,000 being reported as stolen. This isn’t the first time; just back in September, hackers managed to get away with a reported 40,000 worth of EOS, which at the time had a value of $200,000. It has been said that they were able to exploit their smart contracts, having found security vulnerabilities.

Technical Review – 4-hour Chart View

EOS/USD 4-hour chart

EOS/USD price action has formed a bullish flag pattern, which began taking shape on 15th October, after the aggressive price behavior stabilized. The bulls at the time ran the price well up into $6 territory. Consequently, it then met the breached ascending trend line, failing to move back above this area. This followed the sharp breakthrough to the downside, which occurred on 11th October. As a result, a drop of over 15% was seen, forcing EOS/USD to retreat in a demand area, within the $5.0000 level proximity.

Looking to the upside, small near-term resistance is seen at around $5.6100, which is the upper trend line of the mentioned bull flag pattern. A breakout will likely open the doors to a retest of the broken ascending trend line, tracking around $6.1100. Support can be eyed at $5.4600, which marks the lower trend line of the flag. Furthermore, should this fail to hold, EOS/USD could likely fall back down to the serving demand area, within the lower $5.0000 territory.

April 2018 Bull Run

EOS/USD April bull run

In April of this year EOS/USD entered a chunky bull run, gaining over 300%. From the back end of March until 11th April, the price had been stuck within consolidation mode. Resulting in the price trading within a tight range, at levels of where the price is currently seen today.

Something quite astonishing started to unfold. Between the period of 11th April to the 29th April, a bull run of around 290% was seen. Over this time frame EOS/USD went from $5.9500 up to a high of around $23.0811. The price is currently demonstrating a similar behavior to that of what was seen during the mentioned period. It is interesting to note that the price did have historical levels to break through, as it had already run higher during the period of December 2017 and came back down. Finally, this is not to say EOS/USD will observe the same bull run. However, it is an interesting observation to be aware of.

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.

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.
1 vote, average: 5.00 out of 51 vote, average: 5.00 out of 51 vote, average: 5.00 out of 51 vote, average: 5.00 out of 51 vote, average: 5.00 out of 5 (1 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 31 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.




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