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Market Overview

Pumping and Dumping

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  1. One of the biggest issues of the crypto market as we know it is the lack of regulation.

It’s great to see that some new companies are able to sidestep the traditional finance industry and raise large amounts of seed money in an ICO but of course, many people are taking advantage of this and using this new market to create scams for tokens that may not have any value at all.

The real problem though, is what happens after a worthless token is created. Many times these new tokens become prime targets for pump and dump schemes, which are being perpetrated shamelessly by groups like the “PumpKing Community” on the Telegram app.

I recently had the pleasure of working with Oscar Williams-Grut from Business Insider UK, who put together an excellent article explaining all about it.

@MatiGreenspan
eToro, Senior Market Analyst

 

Please note: All data, figures & graphs are valid as of November 14th. All trading carries risk. Only risk capital you can afford to lose.

Market Overview

It’s quite common these days for a country to borrow more money than they could ever conceivably payback. For example, the US Government now owes more than $20 Trillion to other countries and private investors. That doesn’t usually become a problem as long as they can pay back the service payments on these loans. When you’re a country, you generally have more freedom to borrow.

Think of it like this, the bank allows you to borrow money in order to purchase a home that costs $20 Million. When giving you that loan, they take a minimal downpayment of $250,000 and largely ignore the fact that it will take you more than 300 years to pay off the full amount. In fact, the only thing they look at is your ability to pay off the monthly mortgage bill of $2,500.

The United States is in no immediate danger of defaulting on their monthly payments but it seems that Venezuela just did.

A month ago, they ran into trouble paying off $200 Million of debt-servicing but they were granted a 30 day grace period to pay up, which has just expired. The most likely situation now is that their investors will remain patient, hoping and praying that they’ll get their money back. There is also a chance though that they will band together and demand payment, in which case things could get pretty ugly.

The main thing to watch is the price of crude oil. State owned Venezuelan oil companies are currently contributing about 6% of OPEC’s oil. So if they’re unable to keep the pumps running, there will be a significant drop off in supply from South America.

“The oil supply coming from Venezuela has been declining lately, but if the country goes into default, it will be extremely difficult for them to even meet their reduced quotas.”

Tali Salomon
eToro, Spanish Region Analyst

The price of oil is already pretty high at the moment, so it will be interesting to see how this saga plays out over the next few days.

Sudden Swings

Just as I’m writing to you, I can see a few charts that have been moving pretty quickly. The reason for the move is still not clear to me but the moves themselves are strong enough to comment on.

There are a few breakouts in some currency pairs but none of them really seem to be connected. Here’s a graph from Finviz that has a good overview.

So the Euro is surging with a clean break above 1.1700…

The Yen is falling, with the USDJPY breaking out above 113.70…

The New Zealand Dollar is the worst off from this violent swing but take a look at Gold touching $1270 an ounce before rebounding.

…but the coolest part of all this is that we might finally have a breakout in ETHEREUM. We’ve been tracking this triangle pattern for a while now. In the last few hours, the upper line of the pattern is getting a serious test…

With all the excitement in the crypto markets lately it’s nice to see ETH finally joining the party, fashionably late as usual. The move may also have something to do with some new upgrades that are being planned on the network that will move away from high electricity mining to a better system known as PoS.

What else?

All eyes and ears are on the big central bank meeting in Frankfurt. Guest speakers will include Mario Draghi, Janet Yellen, Mark Carney, and Haruhiko Kuroda. These four people have more influence over global money flows than anybody else in the world right now.

Numbers have been good lately, really good. Economic growth and employment numbers in most of the developed world have been surpassing expectations and thanks to copious amounts of money that the central banks have injected into the system, stock markets are at record highs.

At some point, possibly soon, the central banks will want to start tightening up the money by raising interest rates and reducing the amount of cash injections.

No doubt we’ll hear a lot of grandiose statements and self back patting from the quartet. Try and see past that. The markets want to know about policy going forward. Sure the “economy is doing great” but what do they intend to do about it. Will they put their money where their mouth is and start to get aggressive?

Will Japan ease off their money printing? Will Europe start signalling that they’re ready to give up on negative interest rates? Let’s see if they come up with a central theme about where things are going, then we can really see the markets start to move.

Have an awesome day ahead!

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 Post Biggest Drop in Two Weeks as Business Investment Spells Trouble for the Economy

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The U.S. stock market declined on Thursday, snapping a three-day winning streak and heading for its worst loss in two weeks after the latest report on durable goods revealed a sharp slowdown in business investment. Crypto markets corrected lower as trade volumes continued to unwind from their yearly peak.

Stocks Retreat

All of Wall Street’s benchmark indexes headed for losses, with the Dow Jones Industrial Average falling 103.81 points, or 0.4%, to close at 25,850.63. The broad S&P 500 Index fell 0.4% to 2,774.88, with seven of 11 primary industries reporting losses. The technology-focused Nasdaq Composite Index closed down 0.4% at 7,459.71.

Disappointing quarterly results weighed on the major indexes after Domino’s Pizza Inc. (DPZ) reported earnings and revenue that disappointed investors. Hormel Foods Corporation (HRL) also missed analysts’ expectations.

S&P 500 companies have mostly beaten quarterly earnings estimates, but that could soon change, according to FactSet. The research firm anticipates a sharp downturn in profitability for Q1 2019 based on January EPS estimates. More on that story can be found here.

Economic Data Mostly Positive, with One Big Caveat

U.S. economic indicators were largely positive on Thursday, with one very big caveat: a gauge of business investment fell for the fourth time in five months.

The Commerce Department reported on Thursday that durable goods orders – a proxy for manufacturing demand – rose at a seasonally adjusted 1.2% in December. When removing the volatile transportation category, orders rose at a much slower 0.1% pace. A closer look at the report revealed that new orders for nondefense capital goods, a bellwether for business investment, fell 0.7% in December. Clearly, American businesses are feeling the effects of global economic uncertainty.

Most of the other major releases Thursday were positive. Initial jobless claims fell by 23,000 to a seasonally adjusted 216,000 in the latest week, the Labor Department said.

A measure of U.S. private-sector business known as the Composite purchasing managers’ index (PMI) improved to eight-month highs in February. Markit’s PMI gauge climbed to 55.8 from 54.4 in January. All of the monthly gains were attributed to the services sector, which accounts for the vast majority of economic output.

Cryptocurrencies See Minor Pullback

The major cryptocurrencies posted modest declines on Thursday, as the total market cap fell by around $3 billion. Daily exchange trading has also fallen by roughly $10 billion from its peak on Tuesday. As far as we can tell, the daily turnover printed on Tuesday was the highest in at least ten months.

Crypto Update: Litecoin Leads Pullback in Majors

Litecoin (LTC) led the pivot lower among the majors, falling 4% to $49.12. The LTC price peaked at four-month highs earlier this week.

Bitcoin cash (BCH) posted a drop of 2.9% to $142.72. XRP`s price broke below 32 cents after falling 2.4%. Ethereum (ETH) edged down 1.2% to $145.83.

Losses for Bitcoin (BTC) were capped at 1% during the day. It was last down 0.9% at %3,948.36, according to aggregate data from CoinMarketCap.

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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4.7 stars on average, based on 773 rated postsChief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi




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Market Overview

U.S. Stocks Rise as Fed Confirms Dovish Pivot

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U.S. stocks extended their gains Wednesday after the Federal Reserve offered further reassurance that it will hold off on raising interest rates for the time being. Cryptocurrencies reported a mixture of modest gains and losses as volumes backed off from their yearly highs.

Stocks Extend Rally

The Dow Jones Industrial Average climbed 63.12 points, or 0.2%, to close at 25,954,44. The blue-chip index has risen in five of the past six sessions and looks poised to reach 26,000 this week.

The broad S&P 500 Index finished up 0.2% to 2,784.70. Materials stocks led six of 11 primary sectors higher, with most of the gains concentrated in primary industry.

Meanwhile, the Nasdaq Composite Index pared gains to finish flat at 7,489.07.

Stocks are in the midst of an eight-week rally, but the following chart spells trouble for the S&P 500 Index.

Fed Puts on the Brakes

The Federal Reserve on Wednesday provided more details as to why it decided to be patient with normalizing monetary policy. In the official transcript of last month’s meeting, Federal Open Market Committee (FOMC) members cited stock market volatility and weaker global economic growth as the main obstacles standing in the way of policy normalization.

According to the minutes, there were a “variety of considerations that supported a patient approach.” Additionally, “a patient posture would allow time for a clearer picture of the international trade policy situation and the state of the global economy to emerge and, in particular, could allow policymakers to reach a firmer judgment about the extent and persistence of the economic slowdown in Europe and China.”

The Fed’s dovish pivot last month allowed the stock market to extend a bullish revival that began just after Christmas. Central bankers will hold their next policy meeting next month. The March interest rate statement will be accompanied by a revised summary of economic projections covering GDP, unemployment and inflation.

Crypto Markets Flatline

The combined value of all cryptocurrencies hovered north of $135 billion on Wednesday, where it was little changed compared with the previous day. Markets succumbed to a fresh wave of selling overnight, as bitcoin and the major altocins reported modest declines. By the early morning, most of the losses had disappeared.

Trading volumes dipped below $30 billion but were well off the highs from Tuesday. An influx of capital into the crypto ecosystem could make for volatile trading conditions in the near term.

Bitcoin was last seen trading at $3,983.49, according to CoinMarketCap, an aggregate data provider. The bitcoin price is trading hands well north of $4,000 on Bitfinex.

Ethereum’s price was little changed at $147.83. XRP edged down 1.7% to $0.30275. EOS extended its rally, climbing 5.3% to $3.84. Read more: Litecoin, EOS, Binance Coin, Maker: Altcoins Leading the Charge.

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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4.7 stars on average, based on 773 rated postsChief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi




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Market Overview

USA is Ready to Invest in Crypto

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Hi Everyone,

In our ongoing effort to bring crypto to the general public, we’ve done yet another survey, this time focusing on online traders in the USA.

The results are clear as day, the United States is more than ready to invest in crypto.

Definitely make sure to read the full report with all the jaw-dropping stats and the methodology of the poll. This is extremely encouraging.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • US-China trade deadline: 9 days | Days to Brexit: 37
  • Unsustainable Trajectory
  • Crypto Rally Stalls

Please note: All data, figures & graphs are valid as of February 20th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

Everyone will stop what they’re doing at 2:00 PM New York time today to take in the FOMC‘s meeting minutes. During their last meeting, the Fed did a complete 180 on policy, which many have pointed to as a complete capitulation to the market’s desires. So, when they release the minutes of that meeting it will be extremely interesting to hear what they have to say.

It’s becoming increasingly clear that there will not likely be any final deal between the US and China by March 1st. It’s also becoming increasingly clear that this deadline was never very significant in the first place. Trump has indicated that he’s willing to let the deadline slide if significant progress is being made, and many feel that it is, however, until we get final confirmation of that it will remain in our countdown above. It wouldn’t be the first time Trump changed his mind at the last moment.

As well, I’ve decided to leave the Brexit countdown timer set for March 29th, the day Article 50 kicks in, rather than the new self-imposed deadline that Parliament put on their Prime Minister.

Markets are now returning to their normal levels of volatility.

Trajectory Unsustainable

After crashing in January and making a huge comeback in January, financial markets are now remarkably average.

The 200-day moving average (blue line) shows us the average price of the last 200 days and is one of the most widely watched indicators among technical analysts. Here we can see that the Nasdaq 100 is now at this level.

Many analysts were quick to point out that if we ignore 2018 and look only at the stock market performance from January 1st, we’re actually seeing stellar results.

Some pundits even take this a step further. Here’s a graph posted by @StockCats who pointed out that the current trajectory of the markets does look a bit unsustainable.

Crypto Rally Stalled – Where to Next?

Let’s face it, these last few days have been amazing. However, even within this longest crypto bear market of all time, there have been rallies before that ended up fizzling out. So, even though it’s possible we go to the moon from here, it certainly pays to be cautious.

One thing that’s interesting to me is the different spins that some of the mainstream media are putting on this. The Independent is saying that it’s because of the Galaxy S10 Crypto Wallet…

…while Bloomberg is saying that…

Forbes, on the other hand, seemed to focus on the altcoin markets.

For me, it’s pretty clear that this whole thing began due to a shortage in Ethereum creation. As I explained in an interview with BlockTV yesterday, the creation of new Ether tokens has been severely limited lately. Especially for those of you who are less inclined to look at graphs and charts, feel free to watch the recording here.

For hose of you who do like charts, check this out. This supply shortage while demand remained consistent caused Ethereum’s price to rise dramatically and the rest of the cryptos followed. By today, we’re going on sheer momentum. After months of depressed prices, it’s about time we had a real rally in this market.

As I’m writing, it does seem that we may be getting a continuation of the rally but it’s still too early to tell. Let’s see where the day brings us.

Wishing you an excellent day. As always, please continue sending in your valuable feedbacks, questions, comments, and insights. It is always useful and always appreciated.

Best regards,

Mati Greenspan
Senior Market Analyst

Connect with me on….

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

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 152 rated postsSenior Market Analyst at Etoro.com.




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