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They Know Exactly What They’re Doing

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Everything is made in China these days…. even Bitcoin.

Even though ICO’s have been officially eradicated from the country in September and most bitcoin exchanges have moved offshore, bitcoin mining is still done primarily in the world’s big exporter of stuff.

A quick look at the network’s main miners confirms….

The top six biggest mining pools from Antpool (blue) to BTCC (red) are all largely based in China. Some rough estimates put China’s hashpower at more than 80% of the total network.

Of course, their main rival will have none of that. The Japanese City of Kazuno has launched a campaign to attract cryptocurrency miners.

Not only is Bitcoin legal in Japan, while its status is questionable in China, but the city of Kazuno has a lot to offer this budding industry, including an abundance of renewable energy and a picture-perfect cool climate that computer’s love.

Bitcoin transaction volumes along with the price per coin is reaching record high levels as more and more humans begin to wake up, but the energy it takes to power those transactions is not trivial. According to Motherboard, a single transaction can take as much energy as your entire house uses in a week.

So we need to be mindful of how that energy is created.

@MatiGreenspan
eToro, Senior Market Analyst

Please note: All data, figures & graphs are valid as of November 7th. All trading carries risk. Only risk capital you’re prepared to lose.

Market Overview

Two of the biggest news stories in financial media today could give us a hint about the current status of the market conditions.

21st Century Fox is trying to sell off most of it’s business to Disney, and Broadcom seeking to take over Qualcomm for $105 Billion. The latter deal would represent the largest ever transaction in the tech industry and even though Qualcomm doesn’t seem to be interested in the merger, Broadcom is preparing for a hostile takeover.

Huge merger deals have been a hallmark of a market that is flush with cash and has record low borrowing rates. It’s a great way to grow an already large company and the banks are only too happy to lend to borrowers such as these.

As far as stocks are concerned though, it’s very important that we note the cash holdings of investors in order to understand exactly how much more money is currently sitting on the sidelines and waiting to be put to work in this market.

At the moment Mutual Funds and Money Markets seem to be running low

However, this is only one indicator and just like we keep seeing with the VIX volatility index reaching shockingly record lows, it doesn’t seem like we’re in any way in a normal market.

Over to Korea

Today Donald Trump is in Seoul South Korea. I’m sure you can guess the main topic that he will be discussing with Moon Jae-in.

Though the Trump’s wild rhetoric on North Korea differs from South Korea’s more conservative approach, the US President’s visit has been carefully scripted by some of his top advisors. As long as he doesn’t deliver any surprise remarks or off-cue quips, we should be good here.

Of course, the President is known for his unpredictability and even prides himself on it. In fact, just this morning he was called out for sending a tweet that undercut his own Foreign Policy Advisers.

The Saudi Situation…

Does seem to have caught the market’s attention with the number one asset going berserk this morning is crude oil.

The breakout above $55.55 (yellow line) was significant and so far this morning it seems that market exuberance and momentum are taking hold.

This comes much to the delight of OPEC and other major oil producers who have been trying to push the market to these levels for the past 3 years. Perhaps King Salman really does know what he’s doing.

As always, I’m glad to hear your thoughts, comments, and questions. Simply reply here or tag me on your favorite social network.

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.

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 115 rated postsSenior Market Analyst at Etoro.com.




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Market Overview

Bankers & Politicians

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Hi Everyone,

Today is the day. Out of all the meetups, conferences, and hearings that we’ve seen regarding the future of money over the last year, imho none are as critical as the decision expected from India’s supreme court today.

Like several other places in the world, the Indian government is now working hard to form their policy regarding bitcoin and cryptocurrencies but the banking sector has made it clear that they will do everything in their power to halt this.

When Prime Minister Modi made the move to remove 86% of the paper money in India on November 8th, 2016 he inadvertently handed a big win to the banking system and it seems they’re willing to do everything in their power to maintain the status quo.

The crypto ban imposed by the Reserve Bank of India earlier this month is a clear example of this effort. Let’s hope that the judicial system sees through this today and strikes down this policy, doing what is right for the wider public now and for future generations.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Central Bank Independence
  • Stock Markets are Mixed
  • Divergence in Crypto

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

Traditional Markets

It was funny, but yesterday I was teaching a group of new eToro representatives about central banks and happened to use an example of what’s happening in the news.

The point I was making is that central banks are officially disconnected from politics but that politics do end up influencing their actions and vice versa.

In his testimony on Wednesday, Fed Chair Jerome Powell did his best not to take sides on the current trade dispute between the USA and China. However, when pressed, he did admit that the proposed sanctions of $200 billion on Chinese imports would have a negative impact on the economy.

This is similar to when Mark Carney, the Governor of the Bank of England, stated before the Brexit referendum that if the vote passes it would hurt the Pound. The statement doesn’t take sides, it simply states the view of someone who is in a good position to understand the economic impact.

So, it was a bit surprising that a few hours after our lesson, Donald Trump had a few remarks of his own about what he thinks the Fed should or shouldn’t be doing.

Though President Trump insists that he’s not trying to influence the Fed’s decision, the very fact that he stated his opinion will likely have an impact on policy, it certainly had an impact on the markets.

Here we can see the US Dollar falling at the time of the interview.

The price of gold also reacted to the administration’s new policy.

Well… maybe not a new policy. Trump did blast Yellen while on the campaign trail for raising interest rates but this is the first time that any US President has so publicly disputed central bank policy, at least not since Bush Senior & Greenspan.

Meanwhile, Trump is still under pressure for his performance with Putin in Helsinki and we’re watching that play out in the press and in Congress.

Stock markets remain mixed while all this sinks in.

Mixed Crypto Rally

There’s been a lot of excitement in the crypto markets over the last few days and everybody wants to know where this is going.

Here’s an article that’s rather bullish…

…and here is one that’s quite bearish…

My thoughts…

It’s still too early to say for certain. The chart of bitcoin is sending rather mixed signals. On the one hand, the downward trendline (yellow) that that has loomed over Bitcoin for the better part of this year has now been broken.

On the other hand, the current rally has stopped significantly short of breaking the strong line of resistance (dotted blue) that kept the price notably depressed in early June. A break above that could very well lead us to $10,000 (green line) but only a clean break above that would indicate a shift in the medium term trend.

One point that is giving a positive sign is the level of divergence between different digital assets. Here we can see a graph containing all the cryptos currently traded at eToro over the last few days.

We’ve noticed in the past that when the trend is down the cryptos tend to stick more closely together, whereas when things are moving up we tend to see more mixed results. The price action over the last 48 hours would certainly indicate the latter.

As always, tag me at the links below if you need anything at all. Wishing you a very pleasant 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.

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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4.7 stars on average, based on 115 rated postsSenior Market Analyst at Etoro.com.




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Analysis

Pre-Market: China Tries to Support Markets as Global Stocks Slide

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Yesterday’s risk-off shift continued today in early trading with nervous and choppy trading in Asia and Europe, as global financial markets are still haunted by trade war fears and emerging market weakness. The major US indices rolled over after another period of apparent relative strength, with the Nasdaq being the most robust market once again, while most of the key European benchmarks continue to lag behind.

S&P 500 Futures, 4-Hour Chart Analysis

Chinese assets are still in focus before the weekend, as the Yuan’s recent steep devaluation sparked fears of a credit meltdown in the country. With the largest credit bubble in human history casting its shadow on China, some analysts think that with Trump’s trade war, the bug finally found its windshield and the bubble already started to burst.

USD/Yuan, 4-Hour Chart Analysis

All eyes are on the USD/Yuan pair as Chinese authorities are reportedly intervening in the market of the currency, and most likely local equities as well, trying to prevent a serious run on the most important assets.

With the Chinese stock market already in a bear market, and the Yuan trading at fresh 12-month lows against the Dollar, it might be a bit late to stop the slide, but the intervention could cause spectacular short squeezes.

Italy also made headlines today during the European session, as Italian government bonds got slammed lower, as the future of the new finance minister is uncertain, with another round of political turmoil possibly ahead for Europe’s most vulnerable country.

Unicredit (UCG), 4-Hour Chart Analysis

Looking at the charts of Italian banks, it’s clear that the spring turmoil had a lasting effect on the financial system, as Unicredit is on the verge of hitting a new low, and the other large players also remain under pressure, in part explaining the general weakness in European equities.

Europe Still Far Behind amid Mixed Economic Numbers

USD/CAD, 4-Hour Chart Analysis

The economic calendar is almost empty today with regards to the key markets, as the Canadian Retail Sales and CPI reports are the most important releases. The Canadian Dollar rebounded when the USD entered a correction June, but now the currency edging lower again, as the weakness in commodities and the Greenback’s rally are taking their toll. New highs are likely in the USD/CAD pair in the coming weeks, although strong resistance is just ahead at 1.33.

Commodities are little changed today after yesterday’s volatile session, as the bounce in China helped to stabilize the segment. Notably copper is back above the key $2.70 level, while WTI crude oil is trading at $68 per barrel again, and gold is hovering around $1225.

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 296 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

Market Update: U.S. Stocks Rattled by Trade-War Rhetoric; Cryptocurrencies Stabilize After Brief Dip

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U.S. stocks turned lower Thursday, with the S&P 500 Index easing off five-month highs as trade tensions and mixed corporate results weighed on investors’ sentiment.

Wall Street Sees Red

The benchmark averages were down across the board, with the large-cap S&P 500 Index edging down 0.4% to 2,804.49. Financials shares were the biggest laggards, falling more 1.4% as a cluster. Materials stocks were also down sharply. In total, eight of 11 primary sectors tracked by the S&P 500 finished in negative territory.

Dow industrials finished down 134.79 points, or 0.5%, to 25,064.50. The Travelers Cos Inc. (TRV) and American Express Co (AMX) were the worst performers, falling 3.7% and 2.7%, respectively.

The technology-driven Nasdaq Composite Index fell 0.4% to close at 7,825.40.

The CBOE VIX, also known as the fear index, rebounded from six-month lows, though the underlying picture continued to show complacency in U.S. stocks. The VIX rose more than 6% on Thursday to close at 12.90. Readings below 20 are generally associated with periods of calm on Wall Street.

On the earnings front, shares of eBay Inc. (EBAY) fell after the company offered disappointing guidance in its quarterly report released late Wednesday. Dow blue-chip American Express Co (AXP) posted per-share earnings that were higher than expected, but revenues fell short.

Trade Tensions Weigh

The market downshifted one day after U.S. President Donald Trump reiterated his vow to tax European automakers. Trump threatened “tremendous distribution” against Washington’s allies unless “something fair” could be negotiated.

Earlier this month, levies on $34 billion in Chinese goods came into force as part of an original plan to tax up to $50 billion in imports. The U.S. president has also threatened to implement levies on an additional $200 billion in Chinese imports – a move that Beijing would not be able to match dollar-for-dollar.

Resistance to the president’s tariff policy is growing within Congress, with a bipartisan group of 149 House members urging Trump to abandon his protectionist stance.

Crypto Market Recovers After Dip

The cryptocurrency market remained on track for its second weekly advance in three as bitcoin recovered from an intraday slide and altcoins came off session lows.

After reaching a high of $299.8 billion Wednesday, the cryptocurrency market saw its total capitalization fall to $287.9 billion. Still, trade volumes were $17 billion, which is considered robust in comparison to the last three months.

Bitcoin, the largest crypto asset by market cap and trading volume, was little changed compared with 24 hours ago. BTC values are currently hovering north of $7,450.

Stellar XLM defied the market downtrend to report minor gains on Thursday. In doing so, Lumens overtook Litecoin for sixth spot in the crytpo market cap rankings. At the time of writing, Lumens were trading around $0.31.

EOS was among the worst performers in the top-ten, falling 4.5% to $8.31. IOTA was also down more than 4% to $1.05.

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 502 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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