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Market Overview

Something for Everybody

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Hi Everybody,

Looking at the global financial and alternative markets it’s easy to see that this is an excellent time to be trading.

We’re right in the midst of some strong trends so there should be plenty of opportunities now for short term traders and long term investors.

There are excellent setups happening regularly for both technical and fundamental analysis. Let’s take a look.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

BoE Flop

Technical Setups

NFP Today!!

Please note: All data, figures & graphs are valid as of August 4th. All trading carries risk. Only risk capital you can afford to lose.

Market Overview

The Bank of England event was certainly an exciting one. Not only did the BoE not signal towards raising the interest rate, they seem to have backed down significantly and overall showed a very pessimistic outlook for the economy.

The forecast for GDP growth this year was downgraded from 1.9% to 1.7% and the expected level of investment in the UK economy by 2022 was reduced by 20%.

Of course, with a weaker economy, it’s very difficult to start raising interest rates, even if the other central banks really want you to, and even if the current low levels of the Pound Sterling are hurting consumers.

Out of the eight voting members, only two voted to raise the rates, which is down from three at their last meeting. Furthermore, in the press conference following the decision, Governor Mark Carney’s feelings about raising the rates seemed a bit less than lukewarm.

The GBPUSD, which has been on a tear lately, pulled back significantly. Those who feel the stronger pound and/or weaker USD trend will continue now have a better entry point than they did 24 hours ago.

Some technicals…

There are a few great ranges now showing on the charts, but I wanted to just highlight one for you. We’ll take a look at more of these in the coming updates.

Here’s the USDJPY since the Trump election (white circle). Pay special attention to the green line of 112 Yens to the Dollar. Notice how it seems to be magnetizing towards that price?

Since March, the range seems to be stabilizing as well. You can see that a double top (blue) formed just below 115 and right now we’re testing the dotted yellow line, which if it holds will be a classic rising support level.

This is an excellent setup for technical traders. You have a clean target, one that the price has met and crossed over dozens of times in the past year. So there is a perfect place to put your take profit. The rising support line provides an excellent place to put your stop loss too. If for whatever reason the trade goes against you, you can get out with relatively little damage.

NFP Today

For people who like to trade the high profile news events, today is your day. As we know the U.S. Non-farm payrolls, released on the first Friday of every month, are known to produce some of the biggest moves in the shortest amount of time.

Today will be no different. The announcement will be at noon GMT and analysts are expecting to see 182,000 jobs added to the US economy in the month of July.

Also pay attention to the unemployment rate, which is expected to fall a notch, and the average hourly earnings.

The U.S. Dollar has been on the edge over the past few days. It’s been having a terrible year so far but the past few days has held on.

The Dollar index seems to have found some semblance of support just above 92 points.

The technical setup doesn’t look good. And of course, if it drops much further many would probably see it as a breakout.

Let’s hope for the Buck’s sake that a good jobs report today can at least break the fall.

Wishing you an amazing weekend!

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.

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 134 rated postsSenior Market Analyst at Etoro.com.




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Market Overview

Market Update: U.S. Stocks Rattled by the Oil Bears

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U.S. stocks traded mostly lower on Tuesday, weighed down by slumping energy shares as crude prices extended their collapse to a record 12th session. Cryptocurrencies were mostly lower as markets shifted focus to the upcoming bitcoin cash hard fork scheduled in less than two days.

Stocks Settle Mostly Higher

The large-cap S&P 500 Index fell 0.2% to 2,722.18, reversing earlier gains. Five of 11 primary sectors finished lower, with energy shares plunging more than 2% as a collective.

Shares of information technology companies also rebounded from an early-week selloff, helping the Nasdaq Composite Index recover some lost ground. However, the tech-heavy gauge gave up most of its gains in afternoon trading, closing flat at 7,200.88

The Dow Jones Industrial Average fell 100.69 points, or 0.4%, to close at 25,286.49.

A rollover in the technology sector triggered a massive selloff on Wall Street Monday. This included a 600-point drop in the Dow and a nearly 3% plunge for the Nasdaq.

Oil Rout Intensifies

The oil-price collapse entered its 12th day on Tuesday, as U.S. futures prices plunged below $58 a barrel for the first time this year.

U.S. West Texas Intermediate (WTI) for December settlement touched a session low of $54.91 a barrel on the New York Mercantile Exchange, its lowest in over a year. The U.S. oil benchmark plummeted more than 8% on the day. Brent crude, the international futures benchmark, faced a similar setback, falling 7.2% to $65.19 a barrel on London’s ICE futures exchange.

The record loss demonstrates just how quickly market narratives can shift. A little over a month ago, analysts were talking about $100 a barrel oil as a distinct possibility sometime next year. Now, crude prices are struggling to avoid a protracted bear market.

Cryptoassets Slightly Lower

Most cryptocurrencies in the top-20 traded slightly lower on Tuesday, with losses ranging between half a percent and 3.5% over 24 hours. However, the combined market value of all coins in circulation was little changed at $211 billion, reflecting underlying stability in the bitcoin price.

Bitcoin, which accounts for 52.4% of the entire market capitalization, pared losses to settle just below $6,400, according to CoinMarketCap. As Hacked reported earlier, BTC traded at a large premium on Bitfinex following a renewed slump in Tether’s USDT stablecoin.

Bitcoin cash reversed a large slump to trade slightly higher ahead of a planned network-wide upgrade on Thursday. The schism, which is expected to produce two competing coins, appears to stem from a war between Craig Steven Wright and Roger Ver, the most prominent backer of bitcoin cash. Although Ver’s Bitcoin ABC has won support from major industry players, data on bitcoin cash mining pools suggest Bitcoin SV will control the lion’s share of the network’s mining power.

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 662 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: Trade Deal Hope Boost Risk Assets as Pound Surges

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Tuesday Market Snapshot

Asset Current Value Daily Change
S&P 500 2,737 0.27%
DAX 30 11,381 0.49%
WTI Crude Oil 59.10 0.41%
GOLD 1,203 0.20%
Bitcoin 6,291 -0.42%
EUR/USD 1.1265 0.42%

After yesterday’s equity selloff and Dollar rally today we are seeing a counter-trend move in most asset classes thanks to the reports regarding some progress in the US-China trade talks. The optimism has been sparked by the planned US visit by the main Chinese negotiator which points to a renewed interest on the Chinese side that withdrew from the talks.

Stocks are slightly higher before the US open, but the short-term uptrend that carried the major indices significantly above the October lows seems to be broken, with especially the Nasdaq being set for a re-test as soon as this week. Currencies and commodities are also very active today, and as volatility is increasing across asset classes, a busy US session is likely.

GBP/USD, 4-Hour Chart Analysis

The Pound continues to be the most volatile major currency, even as the Dollar has been in the center of attention since the Fed meeting, with the looming Brexit deadlines increasing the tension in the market of the GBP. Interestingly, the Euro has been underperforming the Pound lately, due to the Italy related worries, and today the Pound is significantly higher against all of its major peers.

The Pound was also boosted by the British Employment Report, as the healthy wage growth figure outweighed the weaker than expected Unemployment Rate, at least as far as the forex markets are concerned. The GBP/USD pair jumped higher off the key 1.2850 support/resistance level that has been “in play” several times in the last few months, but the broader downtrend remains unharmed by today’s move.

S&P 500 Futures, 4-Hour Chart Analysis

The technical troubles are mounting on Wall Street, with the key benchmarks all turning sharply lower off last week’s highs. The Dow, which has been the strongest index this month also broke its rising trendline and dipped below several short-term support levels, similarly to the slightly weaker S&P 500 and the lagging Nasdaq.

The S&P 500 is now testing the key support zone near 2750, and given the broader bearish setup, we expect the large-cap index to revisit the October low in the coming weeks, with even an accelerating selloff being in the cards. The weak market internals are also pointing to further troubles for stock bulls, and we still wouldn’t buy the dip here.

Emerging Market Weakness Casts a Shadow on Risk Assets

EEM (Emerging Markets ETF), 4-Hour Chart Analysis

While the main risk on currencies is higher today, looking at the weakest links of the October risk-rout, emerging market and European stocks, the picture is not pretty. We looked at the DAX’s wounded chart yesterday, and the most important emerging market ETF also shows signs of distress, with a test of the bear market low being seemingly inevitable in the near future, especially given the broad weakness across the developed markets as well.

Copper Futures, 4-Hour Chart Analysis

Commodities are mixed today amid the Chinese optimism, with the increasing volatility in oil still being the most interesting trend in the segment. The WTI contract fell back below the $60 level after yesterday’s initial bounce, and although it only hit a marginal new low today, and we still expect a larger bounce in the coming days in oil, sellers are still in control of the market.

Gold dipped below $1200 for the first time in a month, as the precious metal failed to reverse last week’s breakdown, threatening with a test of the $1180 support level. Copper avoided a new swing low below the $2.65 level, for now, and the metal is still within its broad consolidation pattern, thanks to the renewed trade-deal optimism, with the broader downtrend clearly being intact.

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

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

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

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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4.7 stars on average, based on 393 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

The Duality of Investments & Debt

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Hi Everyone,

The battle between good and evil plays out repeatedly on various stages but, unlike the movies or a comic book, in real life it’s not always easy to tell which is which and who is who.

With investments, sometimes it can be difficult to tell which assets in your portfolio are toxic and which have tremendous potential. That’s why asset managers try to look for combinations of several different stocks that can outperform.

At eToro, we continue to develop various portfolio templates in search of fantastic combinations. The newest one we’ve released focuses on high powered stocks, which are known to pay out a large portion of their profits to investors on a regular basis.

The new CopyPortfolio™ is aptly named Yield King and can be found at this link. As you can see, these super stocks have been super resilient even during this volatile year, outperforming the benchmark S&P 500 Index.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Another Tech Sell-off
  • Japan’s Debt Mountain
  • Kryptonite

Please note: All data, figures & graphs are valid as of November 13th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

One of the strongest sectors for a number of years is now showing the weakest performance. IT stocks fell yesterday erasing the entire post-mid-term election rally. The tech-heavy Nasdaq is now firmly below its 200 day moving average.

In this interview, famous investor Ray Dalio puts us near the end of the financial cycle and says that a downturn will likely happen sometime within the next few years, but that this next downturn is going to be very different.

Ray’s new book is all about bull runs and bears and how setting the US Dollar as the global reserve currency exacerbates how the cycles function. What’s interesting though is that he doesn’t paint the buck as the villain of this story; he says it actually it helps to preserve the balance.

One person who did seem to influence the cycle yesterday is US President Donald Trump. Yesterday we discussed crude oil’s support at $60 and the Saudi attempts to defend that level.

Around lunchtime in the USA, Trump launched another offensive with this tweet….

The time of the tweet is circled in purple on the graph below and as we can see, within the hour the $60 support was obliterated.

Today we’ll watch out for earnings announcements from two of the largest players in the cannabis industry. Cronos will be reporting before the opening bell and the legendary Tilray will be after the market closes this evening.

It will be incredibly interesting to see these earnings reports as this new industry is still a bit mysterious to the average investor.

A Mountain of Debt

As Dalio wrote about debt, I feel it prudent to mention another debt milestone that happened recently. The Bank of Japan has been by far the most aggressive central bank in the world and though the USA and Europe have mostly wound down their QE printing programs, Japan continues to pump money into its economy by buying financial assets at an alarming pace.

This latest update is most surprising….

What this means is that the Bank of Japan has now created enough wealth from thin air to buy all the goods and services that the country produces in an entire year.

Here we can see it on the chart…

The long-term effects of such action are at this point impossible to predict. We are now in deep experimental monetary policy territory.

Crypto Rally Stalled

As disappointing as it may be, it seems the rally that we saw last week in the crypto markets spurred on by the Bitcoin Cash hard fork has now stalled. Most cryptos are down over the last 24 hours. Looking at November so far, we can see a rather mixed performance but still mostly positive.

Bitcoin’s transaction rate continues to push forward yet the price remains stable.

This daily market update is dedicated to the amazing memory of Stan Lee.

Have a marvelous day ahead!

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 134 rated postsSenior Market Analyst at Etoro.com.




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