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Don’t Jinx the Market

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Being the second Friday this year that happens to fall on the 13th of the month may not bear much significance. The fact that the doomsday theorists who believe that today is the day Planet X will make a move on Earth may bear even less.

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However, according to a study by the University of Chicago Booth School of Business, even if you don’t believe in superstitions they can still have an impact.

Today we’ll keep a close eye on Donald Trump’s speech regarding the future of the Iran Nuclear program. Though Trump has expressed his disdain for the deal that was struck by his predecessor he is largely expected to uphold the agreement.

As wildfires rage throughout California and much of Mexico and the Carribean islands are still in shambles following multiple horrific hurricanes and earthquakes the world and the markets could certainly use a bit of calm.

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@MatiGreenspan
eToro, Senior Market Analyst

 

Please note: All data, figures & graphs are valid as of October 13th. All trading carries risk. Only risk capital you’re prepared to lose.

Market Overview

Wall Street’s focus is quickly shifting from the Fed to earnings.

The FOMC minutes released on Wednesday failed to provide investors with any sort of certainty regarding the fate of a rate hike in December. In fact, it showed that the Fed is quite confused about the lack of inflation and torn over how to proceed.

Yesterday some of the big banks released their earnings. Although the profits were largely better than forecasted financial stocks did end up declining and taking the rest of the market with them.

For example, JP Morgan shares fell 0.9% even though earnings and revenue growth came out good and shares in Citigroup tumbled 3.4% because even though they did better than analysts expected their return on equity was much worse than other banks.

On the long term though this loss is barely even noticeable. Looking at the chart of the S&P 500 the technical setup does seem prepared to break into new record territory above 2,555 points.

Though I usually prefer not to apply technical analysis to a stock index, in this case, the rising support line (yellow) meeting a horizontal “psychological” resistance (blue) cannot be ignored.

Central Banks Still Underpin

Though the focus of investors may shift from time to time we need to always keep in mind who is running the show.

Those of you who have been reading my updates for a while know very well who I’m talking about.

Over the past 9 years, Central Banks have been the main buyer of financial assets and are the main driver of market activity. However, this trend is quickly changing behind the scenes.

The European Central Bank is currently printing €60 Billion per month to support the market but according to a report out this morning, they’re now considering to cut that amount in half as of January.

This move, if it happens, will be largely in line with other central banks who are all trying to “normalize” their monetary policy to keep from flooding the world with cash.

(Some) Cryptos Fly

A spectacular display is now happening in the crypto-market.

Yesterday morning Bitcoin popped above the previous highest level of $5000 a coin and didn’t slow down until surpassing a breathtaking height of $5,800.

Unlike the moves that we saw previously where all cryptos moved in sync, alternative investors are now differentiating between different coins and there is a distinct flight to quality.

Over the past 24 hours, Bitcoin is up 13% and Litecoin has risen 11%. Ethereum yet again has shown up to the party fashionably late and just within the last two hours has risen more than 10%.

Of course, I wouldn’t want to say anything to jinx it at this point but the value of all cryptos now stands just $3.8 Billion short of it’s all time high, which was marked on September 2nd.

As always, let me know if you have any questions, comments, or feedback, or if you need any assistance in your portfolio. Wishing you an amazing weekend.

This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation.
The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro.

Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose.

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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Cryptocurrencies

Trade Recommendation: Ethereum

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The market is overbought and we have to expect for a correction. The price can bounce from the resistance zone formed by the downtrend line and 700.00 resistance level and continue downward movement. But we also know that sometimes crypto markets move out of logic. We must be ready to catch a new strong upward movement to new highs. Is it possible? I think yes and Bitcoin confirms it. We can use a breakout above the resistance zone for opening long trades. Entry level is 708.00 with stop orders at 670.00 level. Profit targets should be 750.00 and 800.00 levels. This is high risk trade and the best entry levels are much lower. Don’t invest too much in this market now. It’s better to wait for a good correction and buy based on solid reversal signals. If you don’t use leverage, trading volume for this trade is up to 5% from your deposit.

Market: ETHUSDT
Buy: 708.00
Stop: 670.00
Profit Targets: 750.00 and 800.00

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The trading signal is based on Poloniex chart.
Disclaimer: The analyst are some invested in Ethereum.

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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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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Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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Cryptocurrencies

Trade Recommendation: NEM

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The trading idea is based on a trend reversal signal. The price is at SMA100 which is strong resistance line. If the market can break this zone and move above the local swing highs, we’ll get the trend reversal signal. DMI and MACD support upward movement. We have good buy opportunity for long run. Buy orders should be placed at 0.00004100 level with stop orders at 0.00001900 level. Profit targets are 0.00009000 and 0.00012000 resistance levels. If you don’t use leverage, trading volume for this trade is up to 10% from your deposit.

Market: XEMBTC
Buy: 0.00004100
Stop: 0.00001900
Profit Targets: 0.00009000 and 0.00012000

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The trading signal is based on Poloniex chart.
Disclaimer: The analyst does not have investments in NEM.

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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