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Analysis

Nasdaq Leads Stocks Lower as Dollar Retreats Before Central Bank Bonanza

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Friday’s sudden negative shift continued to define trading so far today, with the weakness in the Nasdaq and especially the market-leading tech giants is driving returns. The major US indices opened with losses, with the Dow and the S&P 500 clearly outperforming the tech benchmark, reversing the relationship that dominated the market for months.

Nasdaq 100 Futures, 4-Hour Chart Analysis

Facebook (FB), which quickly turned into huge drag following its disappointing guidance, is down by 4% today, Netflix (NFLX) is also under pressure, and the other FANG stocks, Google parent Alphabet (GOOG) and Amazon (AMZN), and Apple (AAPL) are also in the red, even as Apple is yet to publish its quarterly numbers, while Amazon and Google released decent reports. Should the momentum leaders of the recent US rally lose their mojo, the already fragile foundation of the rally will receive another hit.

FB, 4-Hour Chart Analysis

The largest public company, Apple is scheduled to release its earnings report tomorrow after the closing bell, and all eyes will be on the firm’s margins and its services segment. Apple is trying to deal with the fact that its main product, the iPhone is facing a maturing market with fierce competition, and its push to monetize its unparalleled ecosystem will be crucial to keep growing.

With the company’s record share in the largest indices, the earnings report will be huge for the whole market, and a positive guidance could stop the Nasdaq’s correction, while a disappointing report could trigger a deeper correction across the board.

Apple, Daily Chart Analysis

European and Asian stocks, which also lagged the market-leading US tech segment are also performing slightly better today, but from a longer-term perspective, they are still clearly on the weak side. The deep divergences that made us cautious in recent weeks are still present, and given the hostile valuation levels in the US and the Dollar-funding woes in emerging markets, we remain defensive regarding stocks here.

DAX Index, 4-Hour Chart Analysis

Central Banks in Focus as BOJ Intervenes

The Bank of Japan stepped in to prop up government bonds yet again overnight as the recent rumors of a possible policy change triggered a rise in yields that spooked the central bank. Monetary policy will be in the center of attention throughout the week and across the globe, with the Federal Reserve and Bank of England holding meeting s beside the BOJ scheduled gathering.

Dollar Index, 4-Hour Chart Analysis

The Dollar and the Yen were both sold compared to the other major today, with especially the Euro being pushed higher, despite the risk-off day in stocks. With the Dollar index still trading in a choppy range, hard-to-trade conditions will likely persist in forex markets in the coming eventful days, until a clear momentum move out of the pattern.

While the general picture in the most traded commodities is unchanged today, the weakness in the Dollar sparked a rebound-rally in crude oil and gold after Friday’s slump, while copper reversed its early losses too. The WTI crude contract is just above the key $70 per barrel level, gold is slightly over the $1230 level, while copper is holding on above the $2.75 level, for now.

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 445 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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Altcoins

Lisk (LSK) Pushing for Momentum as Marketing Chief Responds to Over-Hyped Claims

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Lisk (LSK) trailed on the edges of Tuesday’s altcoin surge which saw more than a dozen alts increase by between 7% and 40% in value.

One day previously, the project’s head of marketing, Thomas Schouten, took to Reddit to respond to the recent assessment by William Mougayar that Lisk was among multiple blockchain projects which he regarded as ‘over-marketed’.

Mougayar is a venture investor and advisor, and author of The Business Blockchain, which boasts a foreword by Vitalik Buterin. Shouten’s regard for Mougayar’s opinion was such that he felt compelled to respond to the criticism.

Is Lisk Over-Marketed?

As you can see from Mougayar’s graphic, Lisk joins the likes of EOS, Tron and XRP (here referred to as Ripple) in the over-marketed category. Mougayar stated:

“I’ve classified some projects in 3 buckets: Right, Under & Over Marketed. It is based on their own or community-driven activity. I understand some will push back, but this is how I view the market today.”

The tweet followed the author’s post from the previous day titled ‘Marketing Strategies and Practices for Blockchain Projects and Startups’. The post makes a nifty read for those interested in the marketing side of blockchain; why more money doesn’t always breed more success (he’s looking at you, EOS); and the difference between branding and visual identity.

“Over-marketed means the claims are ahead of delivery or being hyped. Under-marketed means the potential of the product is not well messaged into the market.”

Many of the tweet’s 130 comments came from disgruntled coin holders intent on defending their respective projects – in response to which Mougayar added:

“…the classification has nothing to do with the products/services of these companies… I didn’t include all blockchain projects, but selected ones that I was familiar with and that were significant enough to use as a representative sample.”

Lisk Head of Marketing Responds

The response by Lisk’s Thomas Schouten was less hostile than you might expect. He conceded that Lisk had indeed been over-marketed to an extent:

“William’s definition of over-marketed is “claims are ahead of delivery or being hyped”. To a certain degree, I agree with his judgement… I feel that too often our team has predicted progress that could not be delivered in the end. We have learned from this the hard way.”

However, Schouten also pointed out that many of the so-called ‘right-marketed’ projects happened to be exchanges, while most ‘over-marketed’ projects happened to be platforms.

“Coincidence? No. To me, comparing an exchange (for-profit) with a working product and profitable business model, to open-source blockchain platforms in development (non-profit) is comparing apples with pears.”

Lisk Price

While LSK did record 3.3% gains against the dollar, and over 4.4% against BTC on Tuesday, momentum was hard to come by. LSK/BTC on Binance moved from $0.0003368 up to $0.0003518, while the dollar valuation rose from $1.19 to $1.23.

The daily trade volume of $3.6 million was a $400,000 increase from the previous day – not insignificant, but nowhere near the trade influx seen by some of the day’s major movers.

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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4.5 stars on average, based on 125 rated postsGreg Thomson is a full-time crypto writer and digital nomad. He eats ICOs for breakfast and bleeds altcoins. Wherever he lays his public key is his home.




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Analysis

3 Things You Need to Know About the Market Today

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1, Pound Resumes Rally on Strong Employment Report

GBP/USD, 4-Hour Chart Analysis

The Great British Pound reacted well to the likely delay of the Brexit process in recent weeks, and today the currency defied the risk-off shift and rallied back towards the 1.30 level against the USD. The better than expected British Employment Report, which showed the strongest wage growth in a decade, outpacing inflation despite the long-term weakness of the Pound.

While the currency gained ground, British equities followed the global trends and finished lower, threatening with a resumption of the broader declining trend. All eyes are still on the Brexit saga, but should the extended deadline scenario prevail, the short-term bullish trend could continue in the pair, even as traders should keep the considerable event risk in mind when trading the Pound-related pairs.

2, Oil and Stocks Slide as Risk Assets Suffer amid Renewed Trade Worries

Johnson & Johnson, 4-Hour Chart Analysis

While the losses in risk assets have been limited yesterday, due, in part at least, to the US bank holiday, today, we saw heavy selling across the board. Oil ran into a wall near the resistance zone that we pointed out yesterday, and the crucial commodity fell back to a $52 per barrel handle with regards to the WTI contract.

Stocks got hit hard on reports that this week’s round of meetings between the senior US and Chinese officials has been canceled, with the issues of Intellectual Property and deeper Chinese economic reforms being behind the setback. We argued several times that these ‘soft’, hard to control issues are unlikely to be resolved anytime soon, even in the case of a formal agreement, so while we expect wild swings on trade-related headlines, the structural, credit-related issues will drive Chinese assets.

3, Johnson & Johnson Misses on Guidance Despite Earnings Beat

WTI Crude Oil, 4-Hour Chart Analysis

The pressure on stocks intensified following Johnson & Johnson’s (JNJ) earnings report, with the 2019 guidance disappointing investors. While the previous quarter was a positive surprise from the healthcare giant, as far as the bottom line is concerned, the outlook for the consumer segment cast a shadow on the broader market even as the company’s core Pharmaceutical business continues to shine.

Shares of the company are down by around 2%, and after the closing bell, IBM’s (IBM) report will be in focus, as the struggling tech giant will also report earnings. IBM has seen its share price cut in half as its growth stalled in recent years, and even a small positive surprise could propel the stock higher following the market-wide decline of the recent months, but it’s unlikely that the broader downtrend will be broken anytime soon.

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

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

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 445 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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Analysis

Goldman Sachs: Even a $7.50B Fine Can’t Take Them Down

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By Dmitriy Gurkovskiy, Chief Analyst at RoboMarkets

Last week, Goldman Sachs Group Inc. (NYSE: GS) published its Q4 earnings report, in which the main financial indicators exceeded all analysts’ expectations.

The net profit amounted to $2.54B, well above expectations of $1.78B; the revenue reached $8.12B compared with a forecast of $7.5B; finally, the net interest income rose to $898M versus an expected $758M.

The chart shows that Goldman Sachs’ revenues always exceeded the forecast figures. In 2017, the forecasts were quite conservative, with the actual results not much different. In 2018 this bias was already smaller. Based on the data from the chart, one can conclude that 2018 was not the best year for the bank, with revenues falling as predicted, which led to a share price fall, too. Over 2018, the stock lost almost 45% of its value.

Early in the year, the stock was still near the historical highs; then, after the Q1 report release, the price went down, as the report showed worse figures than expected.

Now, the price is increasing sharply, bouncing off its lows. Investors tend to first pay attention to the expected figures, especially if the company has been operating in the market for a long time. In such situations, news has a short-term impact on the price, as this has may times stood the test of time. Goldman Sachs was no exception.

The news on the Malaysian scandal, which broke out in 2015, is still here to stay. The Malaysian authorities accuse bank representatives of bribing officials to get an order for bond placement in 2012-2013. The revenues from those bonds, i.e. $6.5B, were just taken away, without any hint on using them for the local investment. In response, Goldman Sachs pointed out that the bonds were placed for the purpose of raising money for Malaysia, but instead part of the funds was stolen by members of the Malaysian government. As it turned out, the then Prime Minister of Malaysia, Najib Razak, was indeed found to have $681M in his accounts. This was a dead end, however, and indeed officials were very unlikely to punish themselves. Now, when Razak lost the election, the new government launched an anti-corruption investigation and Najib Razak was accused of money laundering, while Goldman Sachs was also charged.

In mid 2015, the stock actually declined, which lasted about a year. Overall, the fall was 37%, but then Goldman was out of the Malaysian scandal and media spoke about corruption in the Asian country. Meanwhile, in Malaysia, people knew very few things, as the media was tightly controlled by the government, and those who dared to report it were immediately closed. As such, The Insider, a Malaysian media, was closed after the very first publication of the article hinting on government corruption.

Therefore, linking the stock decline to the scandal does not work. However, if you follow the chart of the company’s revenues, you’ll understand what really happened.

The chart shows that the revenue forecast for the second quarter of 2015 was already declining, and when the Q2 real income was less than the previous one, both the stock and the prediction went down. Thus, the price directly responded to the decline in forecast indicators for revenues, and the news factor here had virtually no effect on the stock.

In 2016, the stock started recovering with the expectations also going higher. Therefore, the current growth in the value of the stock is directly related to the expectations of the growth of Goldman Sachs earnings in Q1 2019.

As for the possible fine, David Solomon, the Goldman Sachs CEO, decided to play it safe: the bank has already started accumulating money for it.

Technically, on W1 the stock is quite weak, being under 200-day moving average, but in spite of this, there’s still an uptrend, as the MA is going up.

When the stock fell down to its lows at $160, the volume increased drastically, which is one of the most evident signs of a reversal. This will be further confirmed once the 200-day MA gets broken out and the price stays above. But since the price went up sharply from its lows and increased for 4 weeks in a row, a small correction may happen as well.

The price may bounce off the 200-day MA and fall back to $190, after which the rise may resume.

Disclaimer

Any predictions contained herein are based on the authors’ particular opinion. This analysis shall not be treated as trading advice. RoboMarkets shall not be held liable for the results of the trades arising from relying upon trading recommendations and reviews contained herein.

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 26 rated postsHaving majored in both Social Psychology and Economics, I went on to continue my education in post graduate. Later I worked as a team lead of a tech and fundamental analysis lab in the Applied System Analysis Research Institute. This helped me to acquire all necessary skills and experience to become a successful trader and analyst, as well as a portfolio manager in an investment company. I'm a pro in the financial field and the author of articles for various international media. I also hold the position of Chief Analyst at RoboMarkets.




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