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Pre-Market: Stocks Grind Higher as Google Beats, Turkish Lira Tumbles

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Global stock markets are generally higher today, with European indices leading the way, being up by more than 1% on average. China rallied strongly overnight as the government launched a large-scale stimulus program, reacting to the recent weakness in economic numbers, while the local central bank also continued its interbank liquidity-providing operations. All of these put further pressure on the Yuan,

DAX Index, 4-Hour Chart Analysis

Thanks to that, Asian equities set a bullish tone for the day, and although the European Service and Manufacturing PMIs were mixed, the much better than expected German Manufacturing measure boosted markets, muting trade war fears.

Shanghai Composite, 4-Hour Chart Analysis

The ongoing earnings season continues to make headlines too, and with more than $2 trillion in market cap reporting this week in the US alone, day-to-day moves could be hectic, especially given the low-volume summer environment.

Alphabet (GOOG), 4-Hour Chart Analysis

The main US benchmarks followed the lead of the global market, and the overnight rally was also helped by the better than expected 2Q numbers from Google parent Alphabet (GOOG), which jumped to a new all-time high after beating analyst estimates across the board, thanks to a surge in cloud services and steady growth in its core advertising business. Earnings in Europe were also on the positive side, and also helped risk-on sentiment.

S&P 500 Futures, 4-Hour Chart Analysis

Technically speaking the US market is still miles ahead of its global peers, and the S&P 500 is trading at a more than 4-month high today, finally getting close recovering the February mini-crash, after spending more than 4-months in the 3-day range of the volatility-driven slump.

The index is still some ways of its all-time high, while the market-leading Nasdaq is once again trading at a fresh record high, and drilling down to the level of individual stocks, negative divergences are still apparent.

Turkish Lira Beaten Down on Quiet Day for Currencies

USD/TRY, 4-Hour Chart Analysis

The Turkish central bank provided a shocker today, as it didn’t raise its benchmark rate, despite the widespread consensus. The currency instantly plunged lower towards its all-time low against the US Dollar, but for now, a break-out in the pair has been avoided. The surprise decision comes after a clear legal take over of the central bank by President Erdoğan, and could send a negative message to investors.

Currencies are otherwise little changed, with the USD generally being weaker compared to its major counterparts. The Australian Dollar is among the strongest majors, with the Chinese bounce fueling its rally, while the Great British Pound is also outperforming. The USD weakness that has been sparked by Trump’s oitlash last week prevented a new high in the reserve currency, but the uptrend clearly remains intact, and the correction has been shallow so far.

Commodities are modestly higher across the board, with still crude oil being the most volatile consolidating in a relatively wide range near the $68 per barrel level. Copper is holding up above long-term support, for now, while gold is still trying to establish a bottom, being stuck near the $1225 level.

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 443 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

EOS Price Analysis: EOSIO 1.6 Update Enhances Speeds and is Cost Effective; Downside Price Risks Remain for EOS/USD

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  • EOSIO developers have released 1.6 upgrade, which sees enhanced speeds and is more cost efficient.
  • EOS/USD price action is ranging; given current behavior, a breakout may just be imminent.

The EOS price on Friday is seen trading down in minor negative territory. The price is caught in a very stubborn range. This behavior being observed could prove to be damaging in the coming sessions if the bulls do not break above resistance. EOS/USD is being dictated by a tough acting supply area, which is seen tracking from $2.60-$2.50 range. Then to the downside, a near-term demand zone is keeping the price propped up for now, $2.35-$2.25.

EOS/USD is moving within this consolidation mode, which has come into play since breaching a vital part of the bull’s recovery. An ascending trend line was seen tracking from 7th December 2018, right up until it was breached by the market bears on 10th January 2019.  This had coincided with the price running into chunky resistance at the psychological $3.00 price mark. It has not convincingly been above this region since the back-end of November 2018.

EOSIO 1.6 Release

EOSIO developers, who have been working on a system upgrade, have now announced the release of an upgraded version 1.6.0 of EOSIO. In terms of the impact of this development, they have instantly been noticeable and signaling a large improvement.  This new release does boast further features and fixes to improve upon the cumulative patches, which were implemented to enhance v1.5.

Details were provided by the company within an official Medium blog post. Updates on the EOSIO software will enhance efficiency for the peer-to-peer networking layer in addition to seeing real-time transactions improve overall transaction speed. They further stated that this release is something that had been planned as part of their progressive goals to improve their performance. They have intentions to maintain the fastest protocol across the market.

The development team tweeted, “Tests show upwards of a 35% increase in likely transaction speed. We are projecting noticeable improvements to sustainable transactions per second. In addition, reduced CPU costs, and lower latency on all EOSIO based blockchains.”

Technical Review – EOS/USD

EOS/USD daily chart.

The key for a new committed trend is to see a breakout from the confinements of the mentioned supply sitting above and demand zone below. Given the earlier detailed break below an ascending trend line, vulnerabilities remain, with the range-block formation.

Should the bears manage to force a drop below $2.25, then a new wave of selling will likely come into force. The next major area of support should be noted down towards the December 2018 low. $1.83 and then then $1.55 regions should be sought for potential comfort.

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 110 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.




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Analysis

3 Things You Need to Know About the Market Today: Trade Rally, Pound Pullback, Tesla Worries

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1, Trade Optimism Drives Rally in Stocks, Oil

Shanghai Composite, 4-Hour Chart Analysis

The US government is mulling to lift or ease some of the trade tariffs on Chinese goods, at least according to the reports that surfaced yesterday, and although the rumors were promptly denied by the Treasury, risk assets have been pushing higher ever since. Global stocks are trading at 1-month highs, with understandably, the major US indices and China leading the way higher. We expect further gestures by the two sides in the coming weeks, as the talks progress, but a final agreement could still be months away.

The most affected commodities, such as copper and oil are also up today, and but as we noted this weekend, the oversold rally in risk assets is stretched now. Also, even as the weaker global benchmarks, such as the Shanghai Composite have joined the party, the clear economic slowdown and the bearish technicals make the current environment hostile for bulls

2, Pound Retreats After Hitting 2-Month High Above 1.30

GBP/USD, 4-Hour Chart Analysis

Besides the Trade War saga, the likely delay of the Brexit deadline has been making waves all week long, and Pound bulls seem to like the idea of a possible “soft” deal with the European Union. The currency hit its highest level against the Dollar since mid-November, topping the 1.30 level, while British stocks are also trading near their 2019 highs.

Prime Minister Theresa May pledged to include the opposition parties following Wednesday’s no-confidence vote, but for now, even starting the talks is challenging, even though the government labeled the first talks “constructive”. In any case, with the chances of a no-deal Brexit being low right now, the Pound could enjoy further gains, especially as long as the global risk rally lasts.

3, Tesla Disappoints With Guidance, Cuts Workforce by 7%

Tesla (TSLA), 4-Hour Chart Analysis

While it held up very well during the recent tumroil in the stock market, Elon Musk’s crown jewel, Tesla (TSLA) has been down by as much as 8% today in pre-market trading after warning investors that the electric car maker will likely turn a smaller-than-expected profit in the coming quarter. Tesla is struggling to ramp up the production of the Model 3, while also facing difficulties to hit its cost goal with regards to its “mass” product.

With the traditional car makers slowly but surely closing in on the company, and given the looming cash flow issues, the coming quarters will crucial for the Musk. The company just avoided bankruptcy in its early days, and some bears think that the fierce competition and the production issues could lead to a crisis yet again. The company’s workforce skyrocketed in recent years, and today CEO Musk also announced that it will lay off 7%, approximately 3000 workers, to cut costs after the expansion. He stated that,

“We unfortunately have no choice but to reduce full-time employee headcount by approximately 7%, we grew by 30% last year, which is more than we can support, and retain only the most critical temps and contractors (…)”

While today, earnings reports will be few and far between, Netflix (NFLX) will also be in focus after reporting yesterday in after-hours trading, and for now, the streaming giant is also trading lower despite the broad overnight rally in stocks.

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 443 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

Stellar Price Analysis: Grayscale Announces XLM Based Trust; XLM/USD Stuck Within Bearish Structure

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  • Global digital asset management firm, Grayscale, has announced an investment vehicle based around XLM.
  • XLM/USD is moving within the confinements of a bearish pattern structure, subject to a breakout south.

XLM/USD has been subject to very narrow and choppy trading, which has been going on for the past eight sessions now. Price action is moving within a range-block formation, which is seen across the board with several of its peers. This type of behavior does indicate of some potential vulnerabilities to the downside.

The current consolidation mode taken up came into play after a prior period of range-trading, which saw a deep breakout on 10th January. XLM/USD had plummeted by a hefty 20% to its lowest levels seen since 17th December. Despite the mid-December bull run, which was seen to the end of the month, it has not escaped the bear market. Therefore, bull rallies continue to be sold with some force by the bears.

Grayscale Stellar Lumens Trust

Grayscale Investments, a global digital asset management organization, has announced the launch of an investment vehicle based on Stellar Lumens (XLM). This is aimed at giving investors exposure to the cryptocurrency XLM. It is the sixth largest by market cap, just over the $2 billion mark, at the time of writing.

The asset management company tweeted via their official account, “We are excited to announce two big developments! First, today marks the launch of Grayscale Stellar Lumens Trust! Investors can now gain exposure to the price movement of XLM through a traditional investment vehicle.”

Grayscale’s Managing Director, Michael Sonnenshein, noted that this Stellar product that they have introduced was brought in on the back of investor demand. Furthermore, he details that Grayscale’s push to offer investors exposure to “established blockchain projects with substantial traction and resources.” Sonnenshein lastly concluded by noting he is bullish on Stellar and the real use cases that it brings.

Technical Review – XLM/USD

XLM/USD daily chart. Price action is moving within triangular structure.

Price action is currently moving within a triangular pattern structure. XLM/USD has been trading within this since the start of December. The lower support was tested to the downside on 14th December at around $0.094000-$0.093500 prior to the big bounce. Life kicked back into the bulls, forcing the rally up to the tracking resistance, around $0.131500. Furthermore, the pattern has further been confirmed, with several tests to the lower and upper acting trend lines.

Lastly, in terms of the described structure, it can also be perceived as a bearish pennant formation, which again point to downside. Support is currently tracking around the $0.107000 area, and a failure to hold will see the December low retested to the downside, $0.093500. Immediate resistance can be observed at $0.120000-$0.1215000.

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 110 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.




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