Thursday Market Recap
|Asset||Current Value||Daily Change|
|WTI Crude Oil||51.37||-1.39%|
A sudden decline in the Hang Sei index in Hong-Kong sparked a wave of selling in global stocks, but the major US indices recovered well during the session, which marked the 30th anniversary of Black Monday, the largest one-day decline in history. Today, there was no follow through after the early losses, and with IBM still leading the way, the Dow and mega caps pulled the market higher.
With the dovish candidates gaining momentum in prediction markets regarding the next Fed Chair, the Dollar slid lower for the second day in a row, losing ground to the Euro, the Yen, and the Loonie, but the struggling Great British Pound turned south again thanks to the lingering Brexit fears.
NASDAQ 100 Futures, 4-Hour Chart Analysis
The New Zealand Dollar and the local coalition talks made headlines, as the Kiwi lost more than 2% against the major currencies following the announcement of the new Labour-led government. The currency hit a new 5-month low against the Greenback amid the rout and got close to key 0.70 level as well. Gold continued its rebound thanks to the stock weakness and the Dollar sell-off, but the precious metal is still well-off the $1300 level after the weakness earlier on this weak. Crude oil remains very choppy, as it fell below the $52 barrel yet again, extending the trendless, hard-to-trade period in the crucial commodity.
NZD/USD, 4-Hour Chart Analysis
The sharp drop of yesterday is just a faint memory for Bitcoin traders, as the most valuable cryptocurrency is back near its all-time high, leading the swift recovery in the segment. Most of the majors are up today, with Ripple and Ethereum still being in the center of attention, following the Byzantium update of the second largest blockchain and the extremely volatile days of XRP. The rest of the majors are less volatile, with notable weakness in the market of NEO and IOTA, and a generally calmer environment following yesterday’s turmoil.
XRP/USDT, 4-Hour Chart Analysis
Gold might have formed a crucial higher low this week that could propel the next leg higher in the long-term uptrend, providing a good buying opportunity for both investors and traders. The precious metal is after a bullish cross in the MACD indicator with a favorable stop loss level found below yesterday’s low. Gold faces resistance near the key $1300 level, and above that around $1315.
Gold, 4-Hour Chart Analysis
Key Economic Releases on Thursday
|14:30||US||Philly Fed Index||27.9||22.2||23.8|
Key Economic Releases on Friday
|14:30||CANADA||Core Retail Sales||0.3%||0.2%|
|16:00||US||Existing Home Sales||5.32 mill||5.35 mill|
Featured image from Shutterstock
Technical Analysis: Litecoin Continues Surge as Bitcoin Tests Highs
With the crypto world being focused on the historical futures launch, the major coins all enjoyed buying following a hectic weekend, and a volatile week as a whole. BTC itself got another boost from the widespread publicity and the volatile correction of the recent days ended, with the most valuable coin bouncing back towards its all-time high.
While the long-term picture remains severely overbought, the short-term picture is not stretched and further gains are possible even amid the elevated correction risk. That said, investors should wait for a more favorable entry point to ad dot their holdings, while traders should control position sizes in the light of the long-term setup. Major support levels are now near $13,000, $11,300, and $10,000, with stronger levels still at $8200 and $7700.
BTC/USD, 4-Hour Chart Analysis
The major altcoins are all up today, but only Monero and Litecoin are still within short-term uptrends, and the segment as a whole is still dangerously overextended, and a deeper correction is very likely in the coming weeks. LTC continued its recent break-out, getting close to the $200 level, and joining the extremely overbought group regarding the long-term momentum, and triggering a long-term sell signal in our trend model. Key support levels are found $100 at $75 and $64, with a weaker primary level at $125.
LTC/USD, 4-Hour Chart Analysis
Long-Term Analysis of the Silver Market
The silver market has once again caught investors’ interest as the price is nearing areas not seen since late 2008.
2017 started at a low point for silver, and it seems it will end the year that way as well, meaning investors who bought at the beginning of the year haven’t suffered nor gained much.
This doesn’t mean, however, that the price hasn’t moved during the year. After the low start of the year, silver quickly tacked on about 18% to a top of $17.50 per ounce.
In terms of fundamentals in the silver market, things look a bit complicated for 2018. There are multiple forces pulling in different directions for the price of silver going forward:
- A sharp stock market correction can be expected to occur some time in 2018. Most likely, this will happen sooner rather than later. Stock market crashes always trigger a flight to safety, meaning gold, silver, and quite possibly bitcoin, can benefit.
- We are seeing signs that inflation may be starting to rise again, although this is not confirmed yet. Rising inflation is always good for precious metals.
- If the US federal budget deficit widens as a result of the new tax reform, the US dollar may suffer as a consequence. Goldman Sachs put out a note to investors in November 2017 saying that the US debt is “on track” to reach an “unsustainable” level in coming years. Fed Chair Janet Yellen has also said about the US debt that it is “the type of thing that should keep people awake at night.” Rising debt levels creates uncertainty about the economy, which is generally good for gold and silver.
- Central banks around the world seem committed to raise interest rates in 2018. Rising interest rates are bad for precious metals because it would make it more attractive to put money in the bank.
- The cryptocurrency bull market is on track to continue, diverting attention and capital away from precious metals as a traditional store of value. However, this one is uncertain, as it may also be considered a positive in the way that the rise of cryptocurrencies brings the inflationary and unsustainable nature of fiat currencies into focus.
- The US dollar may have hit a bottom in 2017 and trade higher compared to other major fiat currencies going into 2018. A stronger dollar is always bad for precious metals, which are priced in dollars.
When looking at the chart, we can see that silver is back down to were it started the year, which coincides with a major support area where it has turned several times in the past few years.
From a technical perspective, silver has been trading in a triangle pattern on the longer-term weekly chart, with the price now trading very near the lower end of the triangle, adding confluence to our bias that silver will trade up from here.
Silver failed to live up to our prediction from early 2017, and is now even trading well below the level from that time.
A low price by any measure combined with two major technical support levels adds confidence to our trade and makes silver a low risk and potentially high reward trade for 2018.
Depending on your own strategy and investment style, you may want to wait for the price to break out from the current triangle pattern it has been trading in for the past year and a half. You would then give up some of the potential return for an even safer trade. After that, major resistance is found around $17.50 and $18, with lots of upside potential if we can finally break through those levels.
Featured image from Pixabay.
Long-Term Cryptocurrency Analysis: Look Out Below?
After last week’s observation that a major top is in or near in the segment, the Bitcoin surge continued for almost a week, with Thursday’s wild session taking the coin as high as $19,000 (the article uses Bitstamp prices) on some exchanges. While the currency already pulled back by more than 20% the long-term picture is still extremely overbought and a much deeper correction is likely in the coming weeks.
BTC spiked below $13,000 today, violating the primary weak support at $13,300, with further levels now at $11,300, $10,000 and $9000, but stronger support only found at $8200 and $7700. Next week’s futures launch could cause another jump in trading activity, and volatility is expected to remain very high amid the likely correction.
BTC/USD, Daily Chart Analysis
While not all altcoins participated in the, supposedly, last part of the rally, IOTA, Monero, and towards the end of the week Litecoin, also stretched above all conventional targets with IOTA also turning exponential after a deal with Microsoft. The coin exploded by more than 350% before entering an initial sharp correction, breaking the steepest short-term uptrend. Strong support is only found at $3 and $1.5, but potential Fibonacci support is at $2.35.
IOT/USD, Daily Chart Analysis
Let’s see how the long-term charts of the other altcoins look after the crazy week.
- Companies are Lining Up to Launch Bitcoin ETF, According to SEC December 12, 2017
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