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Analysis

Stocks Hit Hard Again as DAX and NASDAQ Still Wounded

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Thursday Market Recap

Asset Current Value Daily Change
S&P 500 2415 -0.51%
DAX 12371 -0.64
WTI Crude Oil 45.84 1.62%
GOLD 1223.00 0.15%
Bitcoin 2587 0.43%
EUR/USD 1.1395 0.39%

Global markets are in risk-off mode so far today, with Europe and the US tech sector leading the way lower once again. The worse than expected US ADP Employment Report is weighing on equities and the Dollar before Friday’s much-awaited official release. The Euro has rebounded from the correction of the first few days of the week, and that pushed the DAX and the EuroStoxx 50 towards last week’s lows. The weakness in the NASDAQ is dragging the broad US market down, and the rise in Treasury yields continues following yesterday’s Fed Meeting Minutes.

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TLT US Bond ETF, 4-Hour Chart Analysis

The returning strength of the European common currency dominates forex markets while the Pound and the Aussie is drifting lower compared to the Greenback amid the negative sentiment. The Yen is also among the stronger majors on safe haven buying that also lifted gold from its lows today in early trading. Oil is rallying hard after the relatively peaceful words from the Saudi-led alliance following the deadline of the Qatar ultimatum, which gave back hope about the OPEC production cut.

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WTI Crude Oil $-Hour Chart Analysis

Cryptocurrencies

The major coins are still trading without clear direction after a week of low-volatility consolidation, with only Dash being very active following yesterday’s break-out. The coin reached the $216 target zone and now it’s trading just above the prior high at $200, while Litecoin is consolidating near the $50 level. Ethereum, Bitcoin, ETC, and NEM are little changed while Monero is showing relative strength, drifting slightly higher since yesterday. Most of the smaller coins are also trading without strong momentum, with Bitshares and Waves, falling back to their consolidation pattern, and the previously weaker Zcash and Stratis showing some strength.

Dash, 4-Hour Chart Analysis

Technical Picture

The NASDAQ is right at last week’s lows after this morning’s dip, and it is at risk of forming a new lower low that would confirm the trend change after breaking the long-term trendline last week. The tech benchmark bounced off the flash-crash lows which turned into resistance this week, and that might mean that the index will soon test the key support zone near 5500.

NASDAQ 4-Hour Chart Analysis

Key Economic Releases on Thursday

Time, CET Country Release Actual Expected Previous
3:30 AUSTRALIA Trade Balance 2.47 bill 1.11 bill 0.56 bill
9:15 SWITZERLAND CPI Index -0.1% 0.0% 0.25
13:30 EUROZONE Monetary Meeting Accounts
14:15 US ADP Employment Change 158,000 181,000 253,000
14:30 CANADA Trade Balance -1.1 bill -0.5 bill -0.4 bill
14:30 US Initial Jobless Claims 248,000 245,000 244,000
16:00 US ISM Non-Manufacturing PMI 57.4 56.6 56.9

Key Economic Releases on Friday

Time, CET Country Release Expected Previous
9:30 UK Halifax HPI 0.2% 0.4%
10:30 UK Manufacturing Production 0.4% 0.2%
14:30 CANADA Employment Change 11,400 54,500
14:30 CANADA Unemployment Rate 6.6% 6.6%
14:30 US Non-Farm Payrolls 175,000 138,000
14:30 US Unemployment Rate 4.3% 4.3%
14:30 US Hourly Earnings 0.3% 0.2%
16:00 CANADA Ivey PMI 57.7 53.8
17:00 US FED Monetary Policy Report

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Analysis

Cryptocurrency Analysis: Ripple Continues Rampage as Litecoin and Ethereum Enter Correction

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Ripple remained in the center of attention in the segment after breaking out to a new all-time high yesterday, and the coin almost doubled in value, climbing above the $0.80 level. The currency concluded a 6-month long consolidation pattern with the move after being the only major on a long-term buy signal in our trend model.

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XRP gave a short-term sell signal today, while turning neutral regarding the long-term setup. Investors now shouldn’t add to their positions, although further gains are still possible, and reducing holdings somewhat is a good idea here. Major support is still found at the prior high near $0.4250 and in the $0.30-$0.32 range.

XRP/USDT, 4-Hour Chart Analysis

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While Bitcoin stagnated, and Bitcoin Cash jumped, Ethereum, Litecoin, Dash, and IOTA has been drifting slightly lower, although the recent gains are still mostly intact, and the basic setup in the segment is unchanged.

Litecoin fell below the $300 level after yesterday’s consolidation, and the coin faced strong selling pressure in the latter half of the session. The currency remains extremely stretched regarding the long-term momentum indicators, and although the short-term uptrend is still intact, a deeper correction is likely in the coming weeks, with key support levels found at $125 and $100, and weaker levels at $260 and $170.

LTC/USD, 4-Hour Chart Analysis

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Analysis

Daily Analysis: Dollar Falls, Gold Jumps after Yellen’s Final Move

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Wednesday Market Recap

Asset Current Value Daily Change
S&P 500 2668 -0.02%
DAX 13125 -0.45%
WTI Crude Oil 56.65 -0.68%
GOLD 1258.00 1.35%
Bitcoin 16,100 -6.32%
EUR/USD 1.1842 0.73%

The Federal Reserve hiked interest rates as expected today, and although the central bank’s monetary statement was slightly more hawkish than expected, the market’s reaction didn’t reflect the much-anticipated move. The worse than expected Core CPI reading that underlined the low-inflation narrative weighed on the recently strong Greenback, while stocks were unchanged after decision and bonds gained ground as yields retreated.

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EUR/USD, 4-Hour Chart Analysis

The major indices are hovering near their all-time highs with the DOW leading the way higher, hitting a new record for the second day in a row. While volatility Is expected to remain low as we approach the end of the year, market internals and valuation levels are still concerning from a long-term perspective, and stocks outside the US are also negatively diverging. The action in crude oil could be slightly more interesting as the commodity is starting to act in a slightly bearish manner after a grinding multi-month rally.

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WTI Crude Oil, 4-Hour Chart Analysis

The Brexit process is still in the center of attention in Europe, although volatility took a nosedive on the old continent as well, and it’s unlikely that the Christmas period will be much different, given the predictable drop in volumes and trading activity. The date of the next election in the financially and politically troubled Italy has been set to March 4th next year, and the early date caused some turmoil in the countries assets, which dragged the Euro Stoxx 50 lower today, together with the DAX and the other major indices.

Cryptocurrencies

As the total market cap of the crypto-market crossed the incredible $500 billion mark, Ripple, NEO, and Ethereum made headlines with lofty gains in the face of the severely overbought readings elsewhere in the segment. While XRP and NEO are still not overbought from an investment perspective, Ethereum reached our final target for its break-out and triggered a long-term sell signal.

ETH/USD, 4-Hour Chart Analysis

The previously surging IOTA continued its correction, Litecoin consolidated in a relatively narrow range, while Dash, ETC, and Monero scored marginal new highs before turning lower together with BTC. The most valuable coin that has lost some of its momentum “mojo” in recent days fell back below last week’s highs, and that could mark a failed break-out and a start of the deeper correction that seems more and more likely.

BTC/USD, 4-Hour Chart Analysis

Key Economic Releases on Wednesday

Time, CET Country Release Actual Expected Previous
11:30 UK Average Earnings 2.5% 2.5% 2.3%
11:30 UK Claimant Count Change 5,900 3,300 6,500
11:30 UK Unemployment Rate 4.3% 4.2% 4.35
15:30 US Core CPI 0.1% 0.2% 0.2%
15:30 US Crude Oil Inventories -5.1 mill -3.6 mill -5.6 mill
21:00 US Fed Rate Decision 1.5% 1.5% 1.25%
21:00 US FOMC Statement

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Analysis

Technical Analysis: Volatility on the Rise Again, as Ripple and Ethereum Hit Targets

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Ripple has been the star of today’s session in the cryptocurrency segment, as the only major coin on a long-term buy signal in our trend model continued yesterday’s break-out, and surged to a new all-time high. The currency cleared the $0.425 level that marked the top in May, and after the more than 6-month long consolidation phase, it promptly neared the $0.50 level.

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While the short-term momentum indicators are now stretched, the coin is still in an encouraging long-term setup, although the best period to buy already passed. The coin could be dragged lower in the case of the expected broad correction in the segment, but we expect XRP to outperform in the coming period, with support levels found at the prior high and below that in the range between $0.30-$0.32.

XRP/USDT, 4-Hour Chart Analysis

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Ethereum has been the other top coin on the rise, as the second largest digital currency surged past the final range projection target of the break-out two weeks ago at $685 in the aftermath of the launch of the BTC futures on Monday. The ETH token is now also on a sell signal on all time-frames, and we advise investors and investors to wait for the next major correction to establish new positions. Support levels are now found at $575, $500, $480, and $400.

ETH/USD, 4-Hour Chart Analysis

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