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Daily Analysis: Tax Cut Delay Rumors Send Small Caps Lower

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Tuesday Market Recap

Asset Current Value Daily Change
S&P 500 2582 -0.15%
DAX 13,379 -0.66%
WTI Crude Oil 57.05 -0.26%
GOLD 1277.00 -0.23%
Bitcoin 7115 0.55%
EUR/USD 1.1599 0.10%

The divide between the majority of the US stock market and the leading mega-cap companies just got even wider, as the Senate Republicans continue to debate crucial details and the timing of the plan. Small caps, which benefited greatly of the initial draft, turned sharply lower, while the Dollar also got under pressure towards the end of the session. The NASDAQ 10o and the Dow held up well amid the broad sell-off, but the Russell 2000 lost as much as 1.5%, as the rally is getting narrower and narrower.

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European equities also tumbled from their highs, as the political turmoil in Saudi Arabia and the Middle East got even trickier, as the Lebanese-Hezbollah connection of the events got into the spotlight. That said, oil’s surge got halted by a surprisingly small inventory draw in the US, and the long-term outlook of the commodity remains questionable.

Long-dated Treasuries remained very strong thanks to safe-haven flows, which pushed the Yen higher again too, and the yield-curve continued to flatten, as troubles are looming on the horizon, despite the rosy surface.

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Russell 2000, 4-Hour Chart Analysis

Despite the slight weakness in the Dollar, the underlying trend in the Greenback remains positive, with the Dollar Index still hovering around its 5-month highs, and the EUR/USD pair trading near the 1.16 level. Commodity currencies retreated from their Monday highs, as oil and gold both fell moderately while the Great British Pound remained stable after its recent bounce, trading near 1.3170 against the Greenback, while hovering around the 0.88 level in the EUR/GBP pair.

Dollar Index (DXY) 4-Hour Chart Analysis

Cryptocurrencies

Altcoins continued to broadly outperform Bitcoin in the segment, as the total value of the coins remained stable just below the $200 billion mark. Ethereum suffered a slight hit, and caused some volatility among altcoins, while Litecoin, Dash, IOTA, and Monero showed strength. LTC was especially bullish, breaking out from a lengthy consolidation pattern and surging past the $60 level. The recently strong Ethereum Classic fell as much as 10% top-to-bottom in a short-term correction, while Bitcoin traded around the $7000 level in a choppy fashion, also getting close to a double-digit dip, as the session was consistent with the long-term setup in the segment.                                            

LTC/USD, 4-Hour Chart Analysis

Key Economic Releases on Tuesday

Time, CET Country Release Actual Expected Previous
05:30 AUSTRALIA RBA Rate Decision 1.5% 1.5% 1.5%
05:30 AUSTRALIA RBA Statement
10:30 UK Halifax HPI 0.3% 0.2% 0.0%
11:00 EUROZONE ECB President Draghi Speaks
21:30 US Fed Chair Yellen Speaks

Key Economic Releases on Wednesday

Time, CET Country Release Expected Previous
Tent. CHINA Trade Balance 275 bill 193 bill
05:30 CANADA Buiding Permits 0.7% -5.5%
10:30 US Crude Oil Inventories -2.5 mill -2.4 mill

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Analysis

Long-Term Cryptocurrency Analysis: All Majors Stretched as Ripple Finally Breaks-Out

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Although the previous leaders of the rally started to correct or at least consolidate in the wake of the overbought long-term setups, another batch of coins turned exponential, with Litecoin, Ripple, and Ethereum all registering lofty gains this week. Bitcoin, Monero, and Dash have been holding up well, and even drifted to new marginal highs during the period, while Ethereum Classic had a more volatile week, before moving to new highs today.

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XRP left the broad trading range that has dominated its market since May, and surged to new all-time highs while almost quadrupling in the process. As the coin was the only major on a long-term buy signal according to our trend model, and the move triggered a sell signal on Thursday, now all of our tracked coins are on sell signals.

Ripple could be in for further short-term gains but long-term investors should reduce their positions after this week’s spike. Support levels are found Major at the prior high near $0.4250 and in the $0.30-$0.32 range.

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XRP/USDT, Daily Chart Analysis

IOTA, which has been leading the market higher before is down by more than 30% off its all-time high, but given the exponential move before, an even deeper correction is likely in the coming weeks, and investors should wait until a more favorable setup to add to their positions. 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 majors look this weekend.

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Analysis

Technical Analysis: Bitcoin Up Again as Altcoins Mixed in Volatile Trading

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Bitcoin is at a new all-time high today, although the momentum of today’s move is far below from what we saw recently, and the coin only managed to reach a marginal record high yet again. BTC is now worth $300 billion, and it is still trading right at the short-term trendline, inside a rising wedge pattern that shows a clear momentum divergence.

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With the short-term trend still being intact further gains are still possible, but as all the majors are overbought from a long-term perspective, we still advise investors to wait for a better buying opportunity before adding to their holdings. Primary support is still found near $13,000, with further levels at $11,300, $10,000, $9000, and stronger levels at $8200 and $7700.

BTC/USD, 4-Hour Chart Analysis

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 XRP entered a volatile short-term correction after its two-day surge after giving a short-term sell signal yesterday, and the coin spiked back towards $0.60 before settling down just below yesterday’s highs. The long-term setup also turned overbought thanks to the almost 300% rally, and now investors should reduce their holdings, even as further gains are still possible. 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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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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