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Dow Jones Shows Remarkable Poise as Record Streak Hits Six Days

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U.S. stocks advanced Monday, with the Dow Jones Industrial Average setting a new record high on resurgent materials and energy companies.

Dow Jones Extends Record

The Dow Has been on a tear over the past two weeks, putting up gains in eight of the past nine sessions. The index rose 63.01 points, or 0.3%, to 22,331.35. That was the sixth consecutive record close.

Fifteen of 30 index members contributed to the gains. General Electric Co (GE) was the biggest gainer, climbing 2%. Caterpillar Inc (CAT) also advanced 2% per share.

New York-based JPMorgan Chase & Co (JPM) and Goldman Sachs Group Inc. (GS) were also among the biggest contributors, rising 1.4% and 1%, respectively.

On the opposite side of the ledger, Apple Inc. (AAPL) fell 0.8%. Nike Inc. (NKE) also fell 0.7)%.

The blue-chip index has added 3% over the past month as investors shrugged off geopolitical risks and violent weather events. Markets caught a favorable tailwind after U.S. President Donald Trump backed a deal proposed by Democrats to raise the debt ceiling and keep government funded. The agreement, which was panned by several GOP lawmakers, averts an imminent shutdown of government ahead of the Sept. 30 deadline.

September is a historically difficult month for stocks as investors return from the summer lull period. Since 1950, the Dow has posted an average decline of 1.1% in September.

Dollar Rallies Ahead of FOMC

The U.S. dollar strengthened against a basket of competitor currencies Monday, but wasn’t far off last week’s multi-year low. The dollar index (DXY) rose 0.2% to 92.02.

A stronger dollar hastened the decline of precious metals, which have been in a broad retreat over the past week. Gold futures for December settlement fell 1.1% to $1,311.00 a troy ounce, a three-week low on the Comex division of the New York Mercantile Exchange. December silver futures also plunged 2.8% to $17.20 a troy ounce.

The Federal Open Market Committee (FOMC) will begin its policy meeting on Tuesday, with the official rate statement due the following afternoon. Nearly 71% of economists polled by The Wall Street Journal expect the Federal Reserve to announce plans to shrink its portfolio holdings.

Through a series of bold moves, the Fed allowed its portfolio to swell to $4.5 trillion in the years following the financial crisis. With the economy back on track – at least, on paper and while ignoring things like wages, workforce participation and productivity – the central bank has been slowly removing policy accommodation.

Central bankers will also release their quarterly economic projections on Wednesday. The projections cover GDP, unemployment and inflation. The central bank’s now infamous “dot plot” summary of interest rate expectations will also be released.

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.

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4.6 stars on average, based on 670 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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Forex Analysis And Chartbook: Tech Selloff Resumes, Dollar Dips Again, as Yields Hit 2-Month Low

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Monday Market Snapshot

Asset Current Value Daily Change
S&P 500 2,697 -1.62%
DAX 30 11,244 -0.85%
WTI Crude Oil 56.76 -0.12%
GOLD 1,224 0.21%
Bitcoin 4,989 -10.26%
EUR/USD 1.1452 0.32%

While all eyes were on the cryptocurrency segment today, as the major coins continue to fall sharply, traditional financial markets have also been very active before Thanksgiving. The last days have been dominated by the strong rally in US Treasuries (a dip in yields, in other words) which carried the yield curve to a 2-month low today, due to Jerome Powell’s dovish words, global growth worries, and European worries regarding the Brexit process and Italy.

EUR/USD, 4-Hour Chart Analysis

The Dollar has also been feeling the effects of the falling Treasury yields, and after hitting a more than one-year high against the Euro this month, the Greenback fell to its lowest level in almost two weeks.  The long-term uptrend is not in danger in the pair and in the broader Dollar index, and with no higher swing high in the EUR/USD even the short-term downtrend is intact. That said, should the pair remain above the 1.1440 level, a short-term trend change could be ahead.

Nasdaq 100 Futures, 4-Hour Chart Analysis

US stocks had an ugly day despite a quiet overnight session which was helped by the continued optimism in China, in the face of the diplomatic disaster on the APEC summit. The meeting ended without a formal communiqué for the first time ever, due to the US-Chinese spat that took another turn when US Vice President Mike Pence attacked China on several issues, dampening hopes of a quick resolution to the dispute before the looming Trump-Xi meeting.

The major indices finished sharply lower after a steep morning selloff on Wall Street and the Nasdaq got very close to its October lows due to the weakness in some of the largest tech names such as Apple (AAPL) and Facebook (FB).

While both stocks fell on bearish news, with the report on a significant iPhone production- cut being the most worrying one, the selloff in the key momentum names is a more structural problem, which is likely the sign of the broader bearish shift that we have been following in recent months.

While the year-end cold still holds a stronger bounce, thanks to seasonality and a possible positive turn in the US-Chinese relations, we will still view all rallies as selling opportunities in equities.

Gold and Copper Edge Higher Amid Dollar-Dip

Gold Futures, 4-Hour Chart Analysis

Commodities had a bullish session thanks in part to the Greenback’s weakness, but gold, copper, and oil were also helped by very different reasons too. While gold benefited from the bearish intraday shift in risk assets, crude oil continued its oversold bounce after a brief spike towards last week’s low, while copper was boosted by the stability in Chinese assets.

The precious metal is holding above the key short-term $1215 level, and although bulls are still not out of the woods following this year’s selloff, a move above the October highs would be a very positive sign for the commodity, which we still view as one of the top picks for the coming years.

Copper Futures, 4-Hour Chart Analysis

Copper is still trading in a broad consolidation pattern, despite the rally of the past days, which was sparked by trade optimism. The long-term fundamentals remain hostile for the industrial metal, given the global slowdown, and especially the state of the Chinese economy, so even in the case of a move above the formation long positions should only be considered for trading.

That said, the short-term outlook is rather neutral, as the year-end could see feel-good risk rally (with copper possibly bouncing as high as $3), even as we expect the commodity to continue its broader downtrend.

ChartBook

Major Stock Indices

S&P 500 Futures, 4-Hour Chart Analysis

Dow 30 Futures, 4-Hour Chart Analysis

VIX (US Volatility Index), 4-Hour Chart Analysis

DAX 30 Index CFD, 4-Hour Chart Analysis

FTSE 100 Index CFD, 4-Hour Chart Analysis

EuroStoxx50 Index CFD, 4-Hour Chart Analysis

Nikkei 225 Futures, 4-Hour Chart Analysis

Shanghai Composite Index CFD, 4-Hour Chart Analysis

EEM (Emerging Markets ETF), 4-Hour Chart Analysis

Forex

USD/JPY, 4-Hour Chart Analysis

GBP/USD, 4-Hour Chart Analysis

EUR/GBP, 4-Hour Chart Analysis

AUD/USD, 4-Hour Chart Analysis

Commodities

WTI Crude Oil, 4-Hour Chart Analysis

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.

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4.6 stars on average, based on 398 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.




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Market Overview

Tech Rollover Sinks U.S. Stocks; Bitcoin Falls Below $5,000 as Collapse Continues

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U.S. stocks booked huge losses on Monday, as plunging tech shares and wavering risk sentiment dragged the major indexes lower. The crypto bloodbath reached epic proportions Monday, as bitcoin slid below $5,000 for the first time since October 2017.

Stocks Lurch Lower

All of Wall Street’s major indexes headed for sharp losses, with the S&P 500 Index virtually erasing its yearly gain. The large-cap index fell 1.7% to 2,690.73, with nine of 11 primary sectors finishing in the red.

The S&P 500’s information technology component plunged 4%, with software, technology hardware and semiconductors shouldering the heavies loses. Communication services, a partial offshoot of big tech, fell 2.8%.

The tech-heavy Nasdaq Composite Index sold off 3% to close at 7,028.48.

Dow industrials were down across the board, with the Dow 30 index closing down 395.54 points, or 1.6%, to 25,017.68.

Tech Rollover Intensifies

The major tech titans that once led the bull market are buckling under the pressure of disappointing earnings forecasts and slowing global growth. Shares of Apple Inc. (AAPL) fell back into bear market territory on Monday amid reports the company was slashing production orders for its flagship iPhone products.

According to The Wall Street Journal, Apple has cut orders for the iPhone XR, XS and XS Max models by a third, signaling weak demand. The upgrades were unveiled in September around the time Apple was continuing a record-setting surge that culminated in a trillion-dollar market cap. Since reaching those peaks, the iPhone maker has lost more than $200 billion in market value.

The tech rollover on Monday extended far beyond Apple. Netflix Inc. (NFLX), Advanced Micro Devices Inc. (AMD), Facebook Inc. (F) and Amazon.com Inc. (AMZN) all posted major losses.

Plunging tech shares are usually a warning sign that investors are losing confidence in the bull market. The sector was largely responsible for the record-setting bull run that followed the election of Donald Trump in November 2016.

Crypto Carnage Intensifies

Bitcoin and the broader cryptocurrency market headed for new 13-month lows Monday, extending last week’s bearish breakdown. The bitcoin price pierced below $4,900 on Coinbase, levels not seen since October 2017. The leading digital currency is down a whopping 12% on the day and 22% compared with seven days ago. Over the course of the week, its market cap has plunged from $110 billion all the way down to $86.7 billion.

With the exception of XRP and the dollar-backed USDT stablecoin, all major cryptocurrencies in the top-ten posted double-digit losses on Monday. Losses among the majors ranged between 16% and 34% week-on-week. The combined crypto market cap, which includes bitcoin and altcoins, plunged to $164 billion. At the time of writing, the cryptocurrency market cap was worth $166 billion.

There’s no telling just how deep the correction goes, though technical traders have identified $4,800 as a major inflection point for the bitcoin price. The selloff, which appears to be technical in nature, was sparked last week in anticipation of the bitcoin cash hard fork.

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.

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4.6 stars on average, based on 670 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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Market Overview

Keeping it Warm

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Hi Everyone,

As we head into the winter months, people’s minds naturally turn to the age-old question, how are we going to stay warm?

The price of natural gas is currently skyrocketing in anticipation, but the crypto community is not standing still and is looking at more innovative solutions.

The below device, which was sent to me on social media, is a contemporary prototype that was designed in Canada to mine bitcoin while heating your house at the same time.

Of course, no sooner did I repost than someone responded with some much more advanced and nicer looking models that have recently hit the market in Ukraine.

This, especially in places where it’s cold and electricity is cheap is an excellent way to reduce heating costs and help keep bitcoin decentralized at the same time.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • APEC Disappointment
  • Commodity Underpinned
  • Crypto Buyers Market

Please note: All data, figures & graphs are valid as of November 19th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

Stocks remain in deep question mark territory today after some sour updates from the Asia-Pacific Economic Cooperation summit. Spoiler alert, the US and China, didn’t cooperate.

Despite this, the China 50 and the Nikkei are rising today but the European opening was lackluster. The following four charts should give us a good idea of just how confused the global markets have been over the last month.

As we can see, there have been wild swings in both directions but at this point it isn’t really clear if the markets are trying to find the bottom or the top.

Commodity Underpinned

It’s been a pretty hectic year so far for commodities as well. Oil is definitely looking for a floor but at this point, it’s still not clear if $55 will hold. News about OPEC and production are spinning through financial media but in my mind, this has to be related to the slide we saw in precious metals earlier this year.

Underpinning the commodities is a rising US Dollar. So more than anything it’s likely that Fed policy is driving this market. The Greenback has been forming a steady support line (yellow line below) for itself over the last few months as the Fed talks rate hikes.

Crypto Buyers Market

After the breakout we saw last week, it seems the short-term price action has continued in the downward direction this morning.

The fundamentals remain good. Just yesterday we saw a new crypto mass investment vehicle from Switzerland…

Also, over the weekend we’ve heard from one of the world’s most well-known bankers, Herman Gref that…

This is the man largely responsible for unifying the fragmented Russian banking system by implementing technological solutions, so he should know what he’s talking about.

On the other side, Gref sees the mass adoption of bitcoin and other decentralized currencies as far off as a decade as he feels that centralized countries could try to fight it.

On the technical side, the massive descending triangle that’s been forming since the beginning of the year has now clearly been broken to the downside and bitcoin is trading at prices that haven’t been seen in over a year.

The thing is, now that the major level has been broken, we really have no indication from the chart how far it can go.

The next logical level of support is at $5,000 but if that doesn’t hold, the next logical support level isn’t until $3,500. Some analysts are even calling for $1,500.

Transactions on the Bitcoin blockchain continue to rise and we’re now close to three transactions per second. Despite spiking during the breakout last week, volumes on the crypto exchanges, have remained fairly consistent through the weekend.

As far as clients in eToro are concerned, we can actually see a slight uptick (red circle) in the number of bitcoin being held by our clients since the November 14th breakout.

With all the falling prices lately, this definitely fits the definition of a buyers market.

Let’s have an excellent day ahead!

Best regards,
Mati Greenspan
Senior Market Analyst

Connect with me on….

eToro: @MatiGreenspan | Twitter: @MatiGreenspan | LinkedIn: MatiGreenspan | Facebook:MatiGreenspan

This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation.

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

The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro.

eToro is a multi-asset platform which offers both investing in stocks and cryptocurrencies, as well as trading CFD assets.

Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework.

eToro (EU) Ltd, authorized and regulated by the Cyprus Securities Exchange Commission (CySEC)

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.

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4.6 stars on average, based on 135 rated postsSenior Market Analyst at Etoro.com.




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