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Global Money

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Once again the crypto markets are surging!

Markets go up. Markets go down. The point of the game is to close as many as you can in green. Crypto markets are like any other and they have their ups and downs it’s just that the swings are much sharper than other markets.

If a stock goes up 20% in a year it’s considered fantastic. Lately, we’ve been seeing cryptos that move more than 50% in a single day.

The Crypto Copyfund, that was implemented on eToro in June got off to a shaky start but is now firmly in the green with 30% profits. We’ve run some back testing data on it recently and as you can see from the stats page, the performance had it been around since January would have been 470%.

@MatiGreenspan
eToro, Senior Market Analyst

 

Please note: All data, figures & graphs are valid as of August 24th. All trading carries risk. Only risk capital you can afford to lose.

Market Overview

Perhaps the most controversial of Donald Trump’s policies is the wall that he’s trying to build on the border with Mexico.

His fans love him for it and his enemies can’t stand it. Yet, he insists that it will be built and has threatened the government that he will not approve any budget that doesn’t include money for the wall.

Still, this is not a new statement. Trump gave the same exact threat to Congress last time the budget was up for debate. Yet, the market is reacting as if it’s the end of the world.

US Stocks fell yesterday and Asian markets are currently continuing with the downward pressure.

Pressure the Peso

Seems somebody is taking Trump seriously though. The Mexican Peso, which has been a somewhat accurate Trump barometer since before the election has been kicked into gear again.

This graph shows the US Dollar strengthening against the Peso following the Afghanistan Speech then crash against the wall.

Meanwhile in Europe

The new President of France was off to a great start but after celebrating his first 100 days in office, it seems that his support is now falling fast.

Not that he’s doing anything particularly wrong. It’s more like, doing the right thing is not usually very popular. In fact, in this graph from The Economist, we can see that Macron’s approval ratings getting started are worse than his 3 predecessors.

It doesn’t seem to be affecting the Euro too much though. The single currency has been rising steadily ever since he was elected on May 7th.

The Euro is certainly expensive at the moment but the fact that it hasn’t fallen back much gives us a greater possibility that it may still have more room to grow.

Bye bye Janet

This could very well be the last big appearance of Janet Yellen as the chairwomen of the Federal Reserve.

Though the President has mentioned that Yellen is on his short list of candidates to be the next Fed boss, her chances of being re-nominated are quite slim.

However, this will likely not be a tearful event. The President of the European Central Bank along with other big bankers have some decisions to make.

Both traders and long term investors should pay close attention to headlines and speeches coming out of Kansas from today through Saturday.

What we really want to know is will the ECB be winding down their stimulus package? Will the USA start to sell off some of their assets that they’ve been accumulating over the past decade? What about other countries?

Having a unified global monetary policy can be a good thing but not all countries are on the same page as far as their policies. It will be interesting to hear what they have to say.

Let’s have an awesome day!

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 (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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Market Overview

U.S. Stocks Round Out Miserable Week in the Red as Trade Fears Linger; Crypto Crash Intensifies

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U.S. stocks extended their losing skid to three days on Friday, as the S&P 500 and Dow turned negative for the year amid trade-related tensions and concerns over global growth. Cryptocurrencies also booked heavy losses, with the total market losing half its value in less than a month.

Crippling Losses

All of Wall Street’s major indexes booked heavy losses in the final session of the week. The Dow Jones Industrial Average fell 558.72 points, or 2.2%, to 23,388.95. Twenty-nine of 30 index members contributed to the decline, with tech juggernauts Microsoft Corp (MSFT), Intel Corp (INTC) and Cisco Systems Inc. (CSCO) leading the market lower. The Dow has shed nearly 1,500 points over the past three sessions.

The much broader S&P 500 Index fell 2.3% to close at 2,633.08. Ten of 11 primary sectors finished lower, with information technology shedding 3.3%. Industrials, healthcare and consumer discretionary shares all fell between 2.4% and 3% on average. Utilities, a sector known for its defensive posture, managed to rise modestly.

The technology-focused Nasdaq Composite Index declined 3.1% to close at 6,969.25.

A measure of implied volatility known as the CBOE VIX rose sharply on Friday, signaling tumultuous trading conditions over the next 30 days. VIX reached a session high of 24.71 on a scale of 1-100 where 20 represents the historic mean. It would later settle at 23.19, having gained 9.4%.

Hiring Slows

The U.S. labor market remained on solid footing last month, though signs of a cooldown emerged as employment growth lagged considerably below expectations. American employers added 155,000 workers to payrolls in November, following a downwardly revised gain of 237,000 the month before, the Department of Labor reported Friday. Analysts in a median estimate called for a November hiring pace of 200,000.

Average hourly earnings, a proxy for wage inflation, rose 0.2% month-on-month and 3.1% annually. The latter figure is encouraging for an economy that was bogged down by sluggish wage growth for the bulk of the post-crisis recovery. The 3.1% growth clip, now the second month running, is also the highest since 2009.

The national unemployment rate held steady at.3.7%, a nearly five-decade low.

Crypto Chaos

Bitcoin and altcoins resumed their rapid selloff on Friday, leaving little doubt that the bottoming process was still in force. The combined value of all cryptocurrencies reached a low of $104 billion, levels that would have seemed unfathomable earlier this year.

With few exceptions, most major cryptos were on track for heavy losses for the week. EOS has lost a staggering 45% over the past seven days, with prices approaching $1.50. Bitcoin cash has lost 43% over the same stretch, reaching its lowest level on record. Ehereum plunged 24% week-over-week, while XRP and Stellar lost 19% and 32%, respectively.

Bitcoin’s price fell 18% during the week to reach $3,277.60, the lowest in 15 months. The leading digital currency now retains 55% of the total market cap.

The latest selloff has produced favorable conditions for Tether, which has regained its dollar-pegged status. The stablecoin is trading flat for the week at $1.00. Bitcoin SV also avoided weekly losses and currently trades at $95.34.

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 691 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

Escaped Goat

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Hi Everyone,

As bitcoin reaches a new low point for 2018, cryptotraders everywhere are looking for somebody or something to blame. Well, a recent report that was sent to me by the folks at Cryptocompare may have stumbled upon something.

The CCCAGG Exchange Review takes a good hard look at global volumes on crypto exchanges and where they’re coming from. One of the findings of the report is the incredible impact of a series of promotions from the Korean exchange Bithumb.

This chart plots out these promotions against bitcoin’s price and as you can see, bitcoin’s break below $6,000 came shortly after the promotion ended.

If these findings are indeed accurate, I would say that blaming South Korea for the drop wouldn’t exactly be correct. More likely, it appears that the volume promotion by Bithumb caused several months of stabilization in prices, to begin with.

Of course, it’s just a theory at this point. True or not, we maintain that all of the recent volatility in the crypto markets has been driven by technical factors. After the breakout of $5,000, we mentioned light support at $3,500, which has now been broken. The next key area of support that is being tested now is $3,000.

Let’s hope it holds.
@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Here Come the Cavalry
  • Jobs Numbers Today
  • Entering Support Zone

Please note: All data, figures & graphs are valid as of December 7th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

As we’ve been discussing in these daily market updates pretty much since I started writing them in 2015, is the enormous effect that central banks have over financial markets.

This year’s volatility can almost solely be attributed to the fact that the Fed and the ECB are on a path to tighten monetary policy. The obvious sideshow of the global trade war has had a slight impact as well.

Well, recent updates from the Fed seem to indicate that they’re willing to reconsider this tightening. Last night Chairman Powell delivered a speech that has been largely interpreted as dovish.

It seems that weeks of market declines and possibly tweets from the president have finally caused the Fed to blink.

Today has been pretty green for the stock markets, presumably in response to Powell’s updates. However, other markets are giving signals too.

Gold for example, reached a fresh high yesterday seeing $1,244 an ounce for the first time since July. The move was quickly retraced but as you can see it has been building a solid support line since.

Crude Oil also remains a hot topic as the OPEC meeting in Vienna continues. The feeling there is that a concrete deal is unlikely, but it won’t be for lack of trying.

Oil has been testing its psychological support level of $50 a barrel for the better part of two weeks now.

Jobs Day

Very soon we’ll receive data from the US Bureau of Labor Statistics known as the Non-farm payrolls. Those who’ve been in the markets for a bit know that this is the most important figure that comes out on a daily basis.

Usually, if the numbers come out significantly higher or lower than analysts are estimating, there can be a large reaction from the market. What does seem odd is that said analysts seem to be getting lazy.

For an entire year now, the analyst forecast (gold dot) has always been just under 200,000 jobs added. With that, the actual results either surprise or they don’t.

The market reaction to the numbers today will be tricky. A strong job market might actually cause investors to sell because it might mean that the Fed will become hawkish again.

High Shorts

The crypto markets have now passed several dismal milestones. Ethereum, for example, is now firmly trading below $100 per coin and even experienced a flash crash today on one exchange.

Another milestone is a new high for short positions on the Bitfinex platform. In this chart, we can see BTC short positions in blue against the bitcoin price in orange.

This might not be as concerning as you would think though. A high level of shorts in a specific market can often be an indication that the trend is about to reverse.

If all the equity available to short is currently doing so, then it’s not possible to add more short positions, which could possibly be a good setup for a short squeeze as we approach the critical level of $3,000.

As always, let me know if you have any questions, comments, or further insight. I’m always happy to hear it. Wishing you a very pleasant weekend.

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.

Best regards,
Mati Greenspan
Senior Market Analyst

Connect with me on….

eToro: @MatiGreenspan Twitter: @MatiGreenspan LinkedInMatiGreenspan |Facebook:MatiGreenspa

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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Market Overview

Stocks Fall as Arrest of Huawei Executive Stokes Fresh U.S.-China Confrontation

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U.S. stocks fell anew Thursday after it came to light that a senior Chinese business executive was apprehended in Canada over possible U.S. sanctions violation, intensifying the trade impasse between Washington and Beijing. The United States last week became a net oil exporter for the first time in 75 years, highlighting the significance of the decade-long shale boom.

Stocks Pare Losses

After languishing heavily for much of the day, U.S. stocks managed to pare most of their losses in the final hour of trading. The Dow Jones Industrial Average fell 78.05 points, or 0.3%, to 24,947.67. The blue-chip index was down more than 500 points earlier in the day. By the close, it had extended its two-day slide to nearly 900 points.

The much broader S&P 500 Index also pared its losses, falling 0.2% to close at 2,695.95. Seven of 11 primary sectors finished in the red, with energy, materials and financials leading the market lower.

Meanwhile, the technology-heavy Nasdaq Composite index reversed course to finish slightly higher, adding 0.4% to 7,188.26.

The CBOE VIX, also known as the fear index, rose to its highest level in over a month, offering a bleak picture of the holiday-shortened season. VIX touched a session high of 25.94 on a scale of 1-100 where 20 represents the historic average. It would eventually settle 2% higher at 21.15.

Huawei Arrest Raises Risk of U.S.-China Standoff

A senior executive of Chinese telecommunications giant Huawei has been arrested in Canada and faces extradition to the United States on suspicion of sanctions violation. The arrest comes less than a week after the U.S. and China agreed to suspend their trade war for 90 days in pursuit of a more comprehensive deal.

Meng Wanzhou, Huawei’s chief financial officer, was apprehended on Dec.1 following a lengthy investigation by the U.S. Justice Department. Although the company has been given very little information on the detention, Huawei has been under federal probe for its business dealings with Iran. This puts it in direct violation of U.S. sanctions against the Islamic Republic.

“The company has been provided very little information regarding the charges and is not aware of any wrongdoing by Ms. Meng,” a Huawei spokesperson said, according to CNN. “The company believes the Canadian and US legal systems will ultimately reach a just conclusion. Huawei complies with all applicable laws and regulations where it operates, including applicable export control and sanction laws and regulations of the UN, US and EU.”

China’s Foreign Ministry has called on Meng to be released and has asked the U.S. and Canada to explain why she was arrested.

U.S. Becomes a Net Oil Exporter

For the first time in 75 years, the United States has become a net exporter of oil, signaling the start of a profound shift in the global energy balance. According to Bloomberg, the shift from net importer to net exporter occurred last week and followed years of unprecedented growth in domestic shale production. U.S. crude shipments rose to 3.2 million barrels last week, the highest on record.

The news came just as the Organization of the Petroleum Exporting Countries (OPEC) was planning to announce a new round of production cuts. The 15-member cartel will likely lower output by at least 1 million barrels per day beginning in January, though the exact amount is still pending confirmation from Russia, OPEC’s major ally.

As we’ve seen before, tapering crude output provides only temporary reprieve against America’s oil resurgence, where low-cost shale producers have managed to maintain profitability in the face of falling prices. A supply cut that brings U.S. oil prices back above $60 a barrel will invite shale producers to ramp up production in the short run. This plays into the hands of President Trump’s stated goal of attaining “energy independence.”

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 691 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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