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Market Overview

Pump & Dump

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The potential of the cryptocurrency markets for intraday trading has seen yet another huge leap forward last night.

I mean, every trader knows by now that these markets have the ability to move fast but moves we’ve seen on Ripple are just ridiculous. Ripple tokens, known as XRP, have gone from less than 1 cent per coin on March 29th to more than 43 cents this morning!

Ripple is seen by alternative investors as being backed by the traditional financial institutions. The service is designed to replace the current Swfit system, which is slow and expensive and will soon be obsolete.

Last night, the founders of Ripple announced that they will lock up 55 Billion XRP in an escrow account in order to create price stability. However, since this represents more than half of the 100 Billion XRP total supply of the market, traders have increased the demand.

There’s no doubt in my mind that this is an extremely speculative market. The major banks have yet to embrace ripple and why should they?

Many of the largest banks in the world are working on something else at the moment, the Hyperledger. The Hyperledger project already has 110 of the world’s biggest financial institutions on board including American Express, IBM, JP Morgan, and the Bank of England.

Of course, we can’t really predict where this high-speed train will stop. It may continue on to $1 a coin or further, but what I can tell you is that financial institutions are not known to share their wealth. When they do decide on a blockchain they’re almost certain to ensure the money stays local and the public gets left holding the bag.

 

Market Overview

As we’ve seen many times before, all the headlines this morning are about President Trump but this time somehow seems different.

The controversies surrounding his Russian connection are almost too much for the broad markets to ignore. For now, the stock markets seem fine. Many analysts are calling this a “distraction” and all we’ve really seen is a slowdown of an extremely bullish market.

The currencies and commodities, on the other hand, are showing clear signs of safe haven trading.

After bouncing off support at $1216 a week ago, gold has continued to climb. Peter Fredy Burri has called the price beyond $1300 in this post on his wall.

As far as currencies go, when we’re thinking about safe havens, we need to talk about the Yen.

Here we can see the USDJPY falling about 200 pips over the last week, indicating that Asian investors are indeed looking for a safe place to stick their money.

The situation with Oil is a bit more sticky. Here, it’s not as clear if it’s leading the sentiment or following. I tend to think of it as the former.

After again failing to break the psychological resistance of $50 a barrel, we are seeing a bit of a pullback at the moment. The crude oil inventories out today could give some indication.

What is clear is that all investors are watching oil very closely at the moment. The Oil page on eToro is one of the most active market walls right now, aside from Bitcoin & Ethereum of course.

UK Labor & Earnings

With three weeks left to the general elections, the Labour party led by Jeremy Corbyn has finally released their mission statement.

It does seem like a lost cause for Labour at the moment as they are only showing about 30% of the total vote according to recent polls. As we get closer to the voting, this charade is looking a lot more like a walk in the park for Theresa May.

So far, and ever since May’s ‘clean Brexit’ speech on January 17th (blue circle), a stronger May and a stronger conservative party have led to a stronger Pound Sterling.

On the technical side, the GBPUSD is still trying hard to break above 1.3000…

Many thanks to everyone reading these daily updates. I really appreciate all of your support. Your questions and comments are what keep me writing.

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

Past performance is not an indication of future results. All trading carries risk. Only risk capital you’re 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

Market Update: U.S. Stocks Take the Plunge as China Selloff Intensifies; Crypo Institutional Lending on the Rise

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U.S. stocks swung back sharply into negative territory on Thursday, as a fresh selloff in Chinese markets weighed on investors’ sentiment even as Beijing escaped the “manipulator” label. Cryptocurrenices continued to hover in a narrow range, as risk-off sentiment in traditional markets failed to spur new demand.

Stocks Resume Slide

All of Wall Street’s major indexes finished in the red, with the large-cap S&P 500 Index closing down 1.4% at 2,768.84. Nine of 11 primary sectors contributed to the declines, with information technology, industrials and communication services among the biggest laggards.

Sliding tech shares dragged the Nasdaq Composite Index sharply lower. The benchmark settled down 2.1% at 7,485.14.

The Dow Jones Industrial Average plunged 327.36 points, or 1.3%, to close at 25,379.32.

On Tuesday, the major bourses recorded their biggest single-day advance since March, buoyed by upbeat corporate earnings and easing tensions over Saudi Arabia.

China Roils Markets

Stocks in mainland China were at the center of the selloff on Thursday, as the benchmark Shanghai Composite Index fell to its lowest level in four years. The index closed down 2.9%, extending its October slide to a staggering 12%.

The Shanghai Shenzhen CSI 300 Index fell 2.4%. Hong Kong’s Hang Seng benchmark finished flat.

China’s national currency, the yuan renminbi, touched its lowest level in 21 months after the U.S. Treasury refrained from labelling Beijing a currency “manipulator” in its biannual report. The Trump administration has called out China for manipulating the yuan to maintain a lop-sided trade advantage against the U.S. and other nations. This has prompted calls from within the administration to implement heavy import duties as well as recognize China as a currency manipulator. So far, President Trump has pursued tariffs on more than $250 billion in Chinese imports.

Cryptocurrencies Hold Steady

For a fourth straight session, cryptocurrency prices were locked in a narrow range on Thursday, as a lack of trading catalysts kept market players on the sidelines. This comes despite a sharp rise in futures trading volume in the third quarter, according to CME Group.

The combined value of digital assets in circulation reached a high of $212 billion on Thursday. It would later fall back below $209 billion on subdued trading volumes. Bitcoin, the leading crypto based on market cap and volume, continues to trade comfortably above $6,500. It’s share of the overall market has increased to 54.1%, according to CoinMarketCap.

Institutional adoption of cryptocurrency is steadily rising, according to a new report by Genesis Capital, who in March became the first company to launch an institutional lending business. As CCN reports, the new service has originated more than $550 million in loans over the past seven months, with $130 million still outstanding.

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 647 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Analysis

Pre-Market Analysis And Chartbook: Stocks Turn Lower as Treasury Yields Eye Multi-Year Highs Again

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Thursday Market Snapshot

Asset Current Value Daily Change
S&P 500 2,791 -0.91%
DAX 30 11,664 -0.43%
WTI Crude Oil 69.16 -1.30%
GOLD 1,227 0.16%
Bitcoin 6,438 0.01%
EUR/USD 1.1486 -0.11%

Equities are broadly lower after the opening bell on Wall Street, with the selloff in China and the rise in US Treasury yields setting the tone for the day so far. The risk-off shift that dragged even the mighty US stock market lower last week continues to dominate trading globally, and while volatility is well below its recent peak, bulls are on the defensive with regards to the majority of risk assets.

Shanghai Composite Index CFD, 4-Hour Chart Analysis

The Shanghai Composite hit yet another 4-year low today, amid rumors on forced liquidations following the hawkish surprise of yesterday’s Fed meeting minutes. The Chinese index confirmed its bear market again, and as the trade war rhetoric of the Trump administration will likely heat up before the midterms in November, selling pressure could remain strong.

FTSE 100 Index CFD, 4-Hour Chart Analysis

With the likelihood of a no-deal Brexit increasing, nervous trading continues on the related assets, with especially British equities feeling pain lately. The FTSE 100 has been lagging even the relatively weak European markets, and although the benchmark is trading above its spring lows, thanks mostly to the long-term weakness in the Pound, short-term technicals are very weak, and a breakdown below to a new almost 2-year low looks imminent.

Economic numbers have been mixed today, with British Retail Sales missing the consensus estimate by a mile, while the US Philly Fed Manufacturing Index came in slightly better than expected. The negative surprise added to the pressure on British stocks, although forex markets are little changed and the Pound remained relatively stable.

US Stocks Lower Again amid Choppy Consolidation

S&P 500 Futures, 4-Hour Chart Analysis

The major US indices opened lower and extended their losses in the first hour of trading, with the S&P 500 still trading in a clear short-term downtrend following last week’s plunge. Treasury Yields, particularly on the short-end of the curve are aback near their multi-year highs after yesterday’s Fed surprise, and that weighs heavily on investors sentiment.

Philip Morris (PM) is up by more than 3% following its earnings report, as the company continued the quarter’s trend of positive surprises, but the broader market is still largely ignoring the bullish news, as US investors are focusing more on the mounting funding risks and the strengthening international headwinds.

Copper Futures, 4-Hour Chart Analysis

While currencies are relatively calm today, commodities are having an active session, and crude oil and copper are both headed lower amid the fresh risk-off shift, while old is flat thanks to safe-haven flows. WTI crude hit another one-month low today after yesterday’s breakdown, falling below $69 per barrel and copper is also in a precarious technical position.

The volatility compression pattern looks to be ending in the industrial metal, as we expected, given the weakness in China, it’s no surprise that the commodity moved below its short-term range. A drop below the strong support near $2.70 could mean that copper resumed the broad downtrend, and that would be a bearish sign concerning the global economy.

ChartBook

Major Stock Indices

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

EuroStoxx50 Index CFD, 4-Hour Chart Analysis

Nikkei 225 Futures, 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

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

Gold 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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4.6 stars on average, based on 379 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

Breakout Imminent

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Hi Everyone,

Huge congratulations to Canada for becoming the second country in the world to fully legalize marijuana!

This is a huge milestone for this fascinating industry and in my personal opinion is long overdue. I hope that in the next few years many more countries will open their respective markets to this exciting field.

Unfortunately, the @CannabisCare copy portfolio on eToro is closed for investing now but there are other options to invest for those of you who are interested.

For example, you can click this link to see the marijuana stocks that are available on the eToro platform. Or, you can check out the HMMJ ETF, which tracks the North American Marijuana market.

Of course, the usual disclaimers apply and always diversify!!

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Breakout Stocks
  • Breakout Bonds
  • Breakout Bitcoin

Please note: All data, figures & graphs are valid as of October 18th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

Volatility begets volatility. At least that’s the word on financial media lately. It’s been an entire week since the broad stock market sell-off and though we’ve seen a bright bounce from the bottom, things are far from normal.

The US indices have been the quickest to “recover” and as we can see, they’ve recouped almost half the losses from the top.

This is likely due to the monetary policy in the United States which is currently sucking up the wealth of the world. Higher interest rates are a big incentive for foreign investors to store their wealth in American assets.

As we can see, other markets aren’t nearly as far off the lows…

Bond Watch

As you’ll recall, the start of volatility this year came in February and it was largely attributed to rising bond yields. So we do need to keep a close eye on these.

In the USA, the 10-year yield is once again on the rise and threatening to break new highs. Yesterday, we saw another solid leg up…

The level to watch out for now is 3.25…

In Italy, where we are awaiting some potentially sour news from Brussels, the 10-year yield is also sitting at the highs and could very easily breakout from here.

When Bitcoin Breakout?

It’s only a matter of time now. Of course, the flatline pattern could easily remain for another few months and that wouldn’t be a bad thing, however, there are signs of excitement boiling underneath the cool price action exterior.

First off, the transaction rate has been rising steadily. Here we can see Bitcoin’s average transactions per second (TPS) rate, which has been growing steadily during the stable market conditions. This is a classic indication that we’re nearing the end of the flat cycle.

Along with the TPS rates, volumes across exchanges has reportedly remained at a steady rate of around $10 billion daily for several months now. A figure that is exponentially higher than it was just 18 months ago.

Last and foremost, and this is what I wanted to highlight today, volumes on Wall Street are growing at a rapid pace.

The CME Group has reported yesterday that the volumes on their Bitcoin futures contracted have ticked up by a massive 41% in the third quarter of 2018.

This massive surge in interest doesn’t even include the last 18 days where we’ve seen the historic update that Fidelity Investments is joining the market.

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.

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 133 rated postsSenior Market Analyst at Etoro.com.




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