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Market Update: U.S. Stocks Rise Following Bank Earnings; Nasdaq Ekes Out New Record

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U.S. stocks advanced Friday, with the Nasdaq eking out a fresh record high as earnings optimism kept trade jitters at back.

Stocks Finish Mostly Higher

Equities concluded a positive week in the black with the Dow Jones and S&P 500 recording their sixth gain in seven days.

Dow industrials rose 94.52 points, or 0.4%, to 25,019.41. Wallgreens Boots Alliance Inc. (WBA) led the advance, with shares of United Technologies Corp (UTX) and Walt Disney Co (DIS) following closely.

The broader S&P 500 Index climbed 0.2% to 2,802.56, with five of 11 primary sectors reporting gains. Industrials and consumer staples led the uptrend with gains of 0.6% apiece.

The technology-driven Nasdaq Composite Index gave up virtually all of its gains by the close, but still managed to notch its second consecutive record high. The benchmark closed up 2.06 points at 7,825.98.

A measure of implied volatility known as the CBOE VIX trended in the opposite direction of stocks, reaching a session low of 11.62. The so-called “fear index” settled down 3.1% at 12.19 on a scale of 1-100 where 20 represents the historic average.

Bank Earnings

Wall Street’s earnings season began in earnest Friday after a trio of banks reported second-quarter results.

J.P. Morgan Chase & Co (JPM) earned $2.22 per share on revenue of $26.8 billion, beating both top and bottom line estimates. Citigroup Inc. (C) also reported better than expected results with per-share earnings of $1.63 on $4.5 billion in sales.

Wells Fargo & Co (WFC) was the worst performer relative to Wall Street’s forecasts. The bank earned $0.98 per sare on revenue of $21.6 billion. Analysts had called for an EPS of $1.12.

Bank earnings continue next week, with Bank of America (BAC), Goldman Sachs Group (GS) and Morgan Stanley (MS) scheduled to report between July 16-18.

Cryptocurrencies Edge Higher as Bitcoin Defends $6,000

Bitcoin’s successful defense of the $6,000 support level spurred a modest rally for cryptocurrencies on Friday. The total market cap of all coins reached a high near $251 billion, according to CoinMarketCap. That represents a gain of roughly $6 billion from the previous day.

At the time of writing, the total market was valued at roughly $247 billion.

The bitcoin price reached a session high of $6,310 before backtracking later in the session. BTC/USD is currently valued around $6,193, taking 43.1% of the total market. The largest cryptocurrency by market capitalization has held above $6,000 for the past two weeks, a sign that prices may have bottomed.

Bitcoin cash rose 1.7% to $693. Ethereum Ripple and EOS were little changed compared with 24 hours ago.

The digital currency market remains in limbo with retail traders on the sidelines and institutions waiting for greater regulatory clarity before taking the plunge. Trading volumes continue to fluctuate between $11-$12 billion on Friday.

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 673 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

The Battle Continues

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Hi Everyone,

As much as I hate to say, bitcoin and the other cryptoassets might still be overvalued at these levels. They also might be extremely undervalued though. We have no real way to know for sure.

In traditional markets, there are developed methods for understanding what an asset should be worth. As with many things in the crypto space, this is still under construction. This article from ZeroHedge does a pretty good job explaining this.

Hopefully, within the next few years, we’ll have developed a much more methodical way to understand crypto pricing. I’ve recently posted a video which introduces some of the concepts that can be used to begin. In my view, tools like the new CoinDesk Crypto Economics Explorer go a long way in helping us visualize the various factors which influence cryptoasset prices. But we still have a long way to go.

In the meantime, the only solid indicator that we have is price history, which is why technical analysis is so popular among crypto-analysts. By looking at the crypto charts right now, in contrast to what’s been said about the stocks, we can empirically notice that the crypto markets are considerably closer to the bottom at the moment than they are to the top.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • We’ve got a Bounce
  • Hash War Continues
  • New Swiss Crypto Asset

Please note: All data, figures & graphs are valid as of November 21st. All trading carries risk. Only risk capital you can afford to lose.

Bouncy Bounce

A nice bounce was affected this morning during the Asia session. Both stock markets and cryptos have come off their lows. This certainly looks like a much-needed relief rally at this point but could also turn out to be a dead cat bounce.

These four graphs serve to demonstrate that on a short enough time frame, everything is rising.

Hash War Continues

The battle for Bitcoin Cash continues and as of this writing, there is still no clear winner. As we know, this is more of a sideshow but since several analysts have pointed to this as a contributing factor to the recent volatility, we might as well explore it further.

This image from hashwar.live gives us a pretty simple visual of the neck and neck battle. On the top, we can see the number of blocks that have been mined by each camp and on the bottom, we can see the percentage of hashpower that each one is currently utilizing.

For a more in-depth view, we can check Coin Dance, which is showing a slew of data that most of us may find it difficult to understand. One thing that stands out is this…

The only real concern to the broader crypto market would be if one of the above forks started siphoning off some of the hashpower from the original Bitcoin (BTC).

As we can see from the data, it would be very costly for any miner to switch over but that doesn’t mean that some won’t try. To monitor that, we can simply check the bitcoin Hashrate, which has declined only slightly since the fork red circle.

In any case, the rising hashrate so far in 2018 was presenting some concerns before this entire thing started anyway, so even if it were to drop an additional 50% probably wouldn’t hurt bitcoin transaction times all that much and certainly wouldn’t affect the stability of the network.

In any case, if we really want to see if there’s any congestion in the Bitcoin network, we can always check the mempool, which seems pretty clear at the moment.

It’s a New Day

Putting aside the FUD of the day, the probe into tether and the slight delay in the launch of the Bakkt service, I’d rather focus on some really good news.

The new product is set to be traded on the SIX exchange, which is Switzerland’s leading stock exchange.

In this interview on Bloxlive.tv yesterday, I discussed the potential ramifications of this new financial asset, what it could mean for the industry, and the broader market conditions at the moment.

Let’s have a fantastic day!

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 | LinkedIn: MatiGreenspan | Facebook:MatiGreenspan

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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Market Overview

Stocks, Cryptos Resume Plunge; ICE Postpones Bakkt Launch Until January 2019

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U.S. stocks resumed their selloff on Tuesday, as the tech blowout extended to other segments of the market, pushing the major indexes into negative territory for the year. Cryptocurrencies crashed to fresh 13-month lows, as bitcoin’s elusive search for a bottom continued.

2018 Gains Reversed

All of Wall Street’s major indexes closed in negative territory, with the S&P 500 and Dow Jones erasing their yearly gains. The large-cap S&P 500 Index plunged 1.8% to 2,641.89. All 11 primary sectors finished in negative territory, with energy shares shouldering the biggest loss. A total of ten sectors reported losses of 1% or more.

All 30 companies tracked by the Dow Jones Industrial Average posted losses. The Dow 30 index settled down 554.24 points, or 2.2%, at 24,463.20.

The technology-focused Nasdaq Composite Index fell 1.7% to 6,908.50. That was the first time since April the index closed below 7,000.

Crypto Downturn Intensifies

The crypto downturn intensified on Tuesday, extending a weeklong selloff that wiped as much as $71 billion off the collective market cap. The combined value of all coins in circulation bottomed at $140.7 billion in the last 24 hours, levels not seen in over 13 months.

Bitcoin’s price touched new lows for the year, breaching the $4,300 threshold for the first time since October 2017. Bitcoin cash collapsed more than 32% on Tuesday to reach $225. Majors like Ethereum, XRP and Stellar Lumens all reported double-digit losses during the day.

Analysts and technical practitioners warn that further downside is likely in store for the cryptocurrency market, which continues to search for an elusive bottom. Bitcoin will continue to exert a gravitational pull on the market amid signs that some BTC miners are switching over to mine bitcoin cash.

Bakkt Launch Postponed

Intercontinental Exchange (ICE) is postponing the launch of its highly anticipated bitcoin trading platform until January to allow more time to onboard new clients, the global exchange operator announced Tuesday. Bakkt, as the platform is known, will initially facilitate the trading of physically-settled bitcoin futures contracts once it goes live on the new date of Jan. 24, 2019. Bakkt was initially scheduled to debut in mid-December.

Given the volume of interest in Bakkt and work required to get all of the pieces in place, we will now be targeting January 24, 2019 for our launch to ensure that our participants are ready to trade on Day 1,” Kelly Loeffler, Bakkt’s CEO, said in a Medium post.

As is often true with product launches, there are new processes, risks and mitigants to test and re-test, and in the case of crypto, a new asset class to which these resources are being applied. So it makes sense to adjust our timeline as we work with the industry toward launch.”

Bakkt is Corporate America’s largest venture into the cryptocurrency market, with partners like Microsoft and Starbucks joining a large consortium of dominant industry players looking to streamline adoption of digital assets.

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 673 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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Analysis

Pre-Market Analysis And Chartbook: Risk-Off Trade Still On as Stocks Plunge Globally

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Tuesday Market Snapshot

Asset Current Value Daily Change
S&P 500 2,640 -2.17%
DAX 30 11,054 -1.68%
WTI Crude Oil 54.04 -4.81%
GOLD 1,223 -0.15%
Bitcoin 4,604 -2.75%
EUR/USD 1.1392 -0.52%

The broad risk-off shift that we have been following in recent months continues to be the dominant force in global financial markets, and today, global stock markets and the majority of risk assets are deep in the red again.

With no progress in the main issues, such as the Brexit process, the US-China trade talks, and the Italian budget debate, the major benchmarks are near or at their October lows, while currencies continue to trade in corrective patterns, due mainly to the dip in US Treasury yields.

DAX 30 Index CFD, 4-Hour Chart Analysis

The German DAX index and the Nasdaq are still in the center of attention, being among the weakest major benchmarks, and the prior leaders of the US bull are all under heavy selling pressure. The DAX is testing its October lows as we speak following the release of the strong German Producer Price Index (+0.3% on a monthly basis), with the all-time low in the shares of Deutsche Bank (DB) weighing heavily on the index.

A sustained new low, with a move towards 10,000 would cement the bear market in the key benchmark, and it would be another warning sign for bulls globally, even if a year-end feel good rally materializes in equities.

XHB, 4-Hour Chart Analysis

US stock futures suffered heavy losses overnight, extending yesterday’s intraday trend and in the case of the Nasdaq and the Dow, violating key support levels in the process. The homebuilder sector was once again in the center of attention in pre-market trading, with Building Permits and Housing Starts both coming out before the opening bell, the two measures ticked higher, in line with expectations, and that’s already something to cheer about in the sector following yesterday’s dismal NAHB Index.

The sector’s main ETF fell sharply this year, but thanks to the recent dip in Treasury yields, it started to show early signs of stability, and now, a period of relative strength could be ahead, which could reset the bearish sentiment, even as the long-term outlook is still plagued by the decade-long highs in mortgage yields.

Dollar Attempts Rally of Key Levels as Pound Continues to Struggle

GBP/USD, 4-Hour Chart Analysis

The US Dollar bounced off yesterday’s lows amid the deepening risk selloff, but for now, it remains well below its recent highs against the Euro and especially compared to the safe-haven assets such as the Yen and gold. The Pound, which has seen heightened volatility in recent weeks is hovering above last week’s lows near 1.27 against the Greenback.

The pair looks ready to test that level in the coming days, with the Pound, and British assets in general showing weakness due to the uncertainty surrounding the Brexit process.

WTI Crude Oil, 4-Hour Chart Analysis

The risk-off shift has also been hurting crude oil today, and the weak bounce following last week’s crash is fading away, despite the still deeply oversold momentum readings.

We continue to expect a larger scale bounce in the commodity, even as the WTI contract is already testing the lows from last week due to today’s sharp selloff. With that in mind, opening short positions is not advised here, although until a short-term trend change bulls should also stay on the sidelines.

ChartBook

Major Stock Indices

S&P 500 Futures, 4-Hour Chart Analysis

Nasdaq 100 Futures, 4-Hour Chart Analysis

Dow 30 Futures, 4-Hour Chart Analysis

VIX (US Volatility Index), 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

EUR/USD, 4-Hour Chart Analysis

USD/JPY, 4-Hour Chart Analysis

EUR/GBP, 4-Hour Chart Analysis

AUD/USD, 4-Hour Chart Analysis

Commodities

Gold Futures, 4-Hour Chart Analysis

Copper Futures, 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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4.7 stars on average, based on 399 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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