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Daily Analysis: Stocks Turn Lower as Trump Gets in Real Trouble

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Wednesday Market Recap

Asset Current Value Daily Change
S&P 500 2374 -0.98%
DAX 12685 -0.93%
WTI Crude Oil 48.88 -0.13%
GOLD 1257.00 1.69%
Bitcoin 1833 5.21%
EUR/USD 1.1138 0.51%

 

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US stocks are sharply lower today after a swift overnight decline that was triggered by the words of fired FBI director Comey regarding Donald Trump. This latest scandal is probably the most serious so far for the POTUS, as several high-ranking Republicans have voiced their concerns already. Risk assets are under pressure globally in the wake of the events, as the odds of an impeachment has risen significantly. Asian and European equities are also lower, while safe haven assets are on the rise. Economic releases took the backseat amid the slump, with only British assets getting a slight boost from the better than expected Employment Report.

The Yen surged higher together with gold today, while the Dollar lost ground against most of its major peers. Commodity-currencies are even weaker than the USD, as the Chinese stock market fell once again, and the general risk-off sentiment is also hurting them. The Euro and the Pound are also just slightly higher after the strong rise of the previous days, with the Swiss Franc being the most bullish of the European currencies. The strongest decline in risk assets since mid-March might continue in the coming days, especially if US economic numbers continue to disappoint.

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USD/JPY, 4-Hour Chart Analysis

Cryptocurrencies

Bitcoin turned sharply higher this morning getting close to its recent all-time highs once again. BTC is back above $1800, amid the continued Ripple-rally that propelled the currency near the $15 billion market capitalization level. Today’s advance means that the cryptocurrency market is now worth more than $60 billion, despite the ongoing deep correction in the other majors.  NEM is still diverging from Ripple, why Stellar is down by double digits today. LTC us showing signs of life after falling well below $25, while Ethereum, Ethereum Classic, Dash, and Monero are all drifting lower again.

Ripple, 4-Hour Chart Analysis

Technical Picture

The S&P 500 failed to sustainable break-out to new highs yesterday. And today’s decline confirms the recent period of relative weakness in the broad index. That said, the short-term support near 2377 still holds the benchmark, although the rising short-term trend-line has been broken. The 2350-2355 support zone could be in focus in the coming days if the risk-off sentiment remains dominant. The other major indices are following the S&P lower so far, but renewed strength in Europe and in the NASDAQ could point to another push to all-time highs.

S&P 500, 4-Hour Chart Analysis

Key Economic Releases on Wednesday

Time, CET Country Release Actual Expected Previous
10:30 UK Average Earnings 2.4% 2.4% 2.3%
10:30 UK Unemployment Rate 4.6% 4.7% 4.7%
11:00 EUROZONE Final CPI 1.90% 1.90% 1.90%
14:30 CANADA Manufacturing Sales 1.00% 1.10% -0.20%
16:30 US Crude Oil Inventories -1.8 mill -2.5 mill -5.2 mill

 

Key Economic Releases on Thursday

Time, CET Country Release Expected Previous
1:50 JAPAN Prelim GDP 0.4% 0.3%
3:30 AUSTRALIA Employment Change
3:30 AUSTRALIA Unemployment Rate 5.9% 5.9%
10:30 UK Retail Sales 1.2% -1.8%
14:30 US Initial Jobless Claims 240,000 236,000
14:30 US Philly Fed Manufacturing 18.9 22.0
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Analysis

Cryptocurrency Analysis: Ripple Continues Rampage as Litecoin and Ethereum Enter Correction

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Ripple remained in the center of attention in the segment after breaking out to a new all-time high yesterday, and the coin almost doubled in value, climbing above the $0.80 level. The currency concluded a 6-month long consolidation pattern with the move after being the only major on a long-term buy signal in our trend model.

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XRP gave a short-term sell signal today, while turning neutral regarding the long-term setup. Investors now shouldn’t add to their positions, although further gains are still possible, and reducing holdings somewhat is a good idea here. Major support is still found at the prior high near $0.4250 and in the $0.30-$0.32 range.

XRP/USDT, 4-Hour Chart Analysis

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While Bitcoin stagnated, and Bitcoin Cash jumped, Ethereum, Litecoin, Dash, and IOTA has been drifting slightly lower, although the recent gains are still mostly intact, and the basic setup in the segment is unchanged.

Litecoin fell below the $300 level after yesterday’s consolidation, and the coin faced strong selling pressure in the latter half of the session. The currency remains extremely stretched regarding the long-term momentum indicators, and although the short-term uptrend is still intact, a deeper correction is likely in the coming weeks, with key support levels found at $125 and $100, and weaker levels at $260 and $170.

LTC/USD, 4-Hour Chart Analysis

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Analysis

Daily Analysis: Dollar Falls, Gold Jumps after Yellen’s Final Move

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Wednesday Market Recap

Asset Current Value Daily Change
S&P 500 2668 -0.02%
DAX 13125 -0.45%
WTI Crude Oil 56.65 -0.68%
GOLD 1258.00 1.35%
Bitcoin 16,100 -6.32%
EUR/USD 1.1842 0.73%

The Federal Reserve hiked interest rates as expected today, and although the central bank’s monetary statement was slightly more hawkish than expected, the market’s reaction didn’t reflect the much-anticipated move. The worse than expected Core CPI reading that underlined the low-inflation narrative weighed on the recently strong Greenback, while stocks were unchanged after decision and bonds gained ground as yields retreated.

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EUR/USD, 4-Hour Chart Analysis

The major indices are hovering near their all-time highs with the DOW leading the way higher, hitting a new record for the second day in a row. While volatility Is expected to remain low as we approach the end of the year, market internals and valuation levels are still concerning from a long-term perspective, and stocks outside the US are also negatively diverging. The action in crude oil could be slightly more interesting as the commodity is starting to act in a slightly bearish manner after a grinding multi-month rally.

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WTI Crude Oil, 4-Hour Chart Analysis

The Brexit process is still in the center of attention in Europe, although volatility took a nosedive on the old continent as well, and it’s unlikely that the Christmas period will be much different, given the predictable drop in volumes and trading activity. The date of the next election in the financially and politically troubled Italy has been set to March 4th next year, and the early date caused some turmoil in the countries assets, which dragged the Euro Stoxx 50 lower today, together with the DAX and the other major indices.

Cryptocurrencies

As the total market cap of the crypto-market crossed the incredible $500 billion mark, Ripple, NEO, and Ethereum made headlines with lofty gains in the face of the severely overbought readings elsewhere in the segment. While XRP and NEO are still not overbought from an investment perspective, Ethereum reached our final target for its break-out and triggered a long-term sell signal.

ETH/USD, 4-Hour Chart Analysis

The previously surging IOTA continued its correction, Litecoin consolidated in a relatively narrow range, while Dash, ETC, and Monero scored marginal new highs before turning lower together with BTC. The most valuable coin that has lost some of its momentum “mojo” in recent days fell back below last week’s highs, and that could mark a failed break-out and a start of the deeper correction that seems more and more likely.

BTC/USD, 4-Hour Chart Analysis

Key Economic Releases on Wednesday

Time, CET Country Release Actual Expected Previous
11:30 UK Average Earnings 2.5% 2.5% 2.3%
11:30 UK Claimant Count Change 5,900 3,300 6,500
11:30 UK Unemployment Rate 4.3% 4.2% 4.35
15:30 US Core CPI 0.1% 0.2% 0.2%
15:30 US Crude Oil Inventories -5.1 mill -3.6 mill -5.6 mill
21:00 US Fed Rate Decision 1.5% 1.5% 1.25%
21:00 US FOMC Statement

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Analysis

Technical Analysis: Volatility on the Rise Again, as Ripple and Ethereum Hit Targets

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Ripple has been the star of today’s session in the cryptocurrency segment, as the only major coin on a long-term buy signal in our trend model continued yesterday’s break-out, and surged to a new all-time high. The currency cleared the $0.425 level that marked the top in May, and after the more than 6-month long consolidation phase, it promptly neared the $0.50 level.

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While the short-term momentum indicators are now stretched, the coin is still in an encouraging long-term setup, although the best period to buy already passed. The coin could be dragged lower in the case of the expected broad correction in the segment, but we expect XRP to outperform in the coming period, with support levels found at the prior high and below that in the range between $0.30-$0.32.

XRP/USDT, 4-Hour Chart Analysis

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Ethereum has been the other top coin on the rise, as the second largest digital currency surged past the final range projection target of the break-out two weeks ago at $685 in the aftermath of the launch of the BTC futures on Monday. The ETH token is now also on a sell signal on all time-frames, and we advise investors and investors to wait for the next major correction to establish new positions. Support levels are now found at $575, $500, $480, and $400.

ETH/USD, 4-Hour Chart Analysis

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