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We Don’t Have a Clue

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By far the favorite social network for journalists and second favorite for financial buffs is Twitter. At least for now.

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The hallmark of this unique platform has been the amount of information that you can gather in the least amount of time and screen space. Each tweet is limited to 140 characters, so you can literally scan hundreds of headlines in the span of a few minutes.

Yesterday night, Twitter started a war with their own community by announcing that some users will now be allowed to create 280 character tweets. The backlash was instant with many calling out the CEO Jack Dorsey. One even decided to fix his tweet in a very appropriate way showing that if you’re creative enough, anything worth saying can be said in 140 letters or less.

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@MatiGreenspan
eToro, Senior Market Analyst

 

Please note: All data, figures & graphs are valid as of September 27th. All trading carries risk. Only risk capital you’re prepared to lose.

Market Overview

Janet Yellen’s speech last night was groundbreaking, to say the least. Not only did she elaborate on her previous statement that the Fed doesn’t understand inflation but she also explained how they plan to proceed despite this apparent lack of knowledge.

This is not Yellen’s first rodeo and she did handle the markets with extreme caution, like a five year old holding an egg on a spoon. She alternated between telling Wall Street what it wanted to hear and delivering hard truths in a very digestible way. This display proves that though they may not have a clue when it comes to the current factors driving the economy they certainly know how to manipulate the markets.

Rather than taking this as a big red warning sign, many traders remained hyperfocused on what this will mean in the short term. More specifically, will the Fed raise the US interest rate in December?

The answer that many analysts arrived at is yes. The odds of a rate hike by the end of the year moved from 63% yesterday to 70% this morning. The immediate impact on the markets was a much needed boost to the US Dollar.

With Donald Trump’s new weak USD policy the Dollar has been having an extremely bad year so far losing 12.5% of it’s value from the highs in January (green circle) to the lows at the beginning of September (purple circle).

Now, every technical analyst draws their lines slightly differently. So on this chart, I’ve drawn two paths of resistance. The yellow line is the most conservative possibility and the blue line is the most aggressive possible.

Thanks to Yellen’s clever manipulation the blue resistance is now broken and due to the quick nature of the Trump induced decline, there isn’t much in the way of technical levels to point to until the yellow line.

The strength of the Buck has large ramifications for other markets as well. The most noticeable in this case is Gold which is now struggling to maintain its gains. As of this writing, the shiny metal is below $1300 per ounce and fighting to hold what little support it has left.

Well Deserved

Big Kudos to our top cryptotrader @Jaynemesis who appeared in an extensive article on Bloomberg about cryptos, copytrading, and the recent market moves.

The full article can be found at: https://www.bloomberg.com/news/articles/2017-09-27/cryptocurrency-derivatives-you-bet-this-trader-has-295-return

As we showed yesterday, the cryptomarket has been able to break the downwards trend already. However, it has yet to decide on the next direction. To reiterate, here’s a chart of the breakout in Bitcoin. A strong tear through $4000 could be quite significant.

Also, though many on Wall Street are calling cryptocurrencies a bubble. One trader has stated that the bubble is just getting started and that he thinks this will turn out to be the biggest bubble we’ve ever seen. In true Wall Street fashion, Mike Novogratz wants to ride it all the way.

Here’s the link to that story: New $500 Million Crypto Hedge Fund

Let’s have an amazing 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 money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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Analysis

Cryptocurrency Analysis: Altcoins Slide as Bitcoin Rally Pauses

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All of the major coins are trading lower today after a bearish weekend, as altcoins are still underperforming Bitcoin, with the market leader holding up well near its all-time high. BTC is back below the $6000 level after surpassing our long-term target last week, but it’s still well within the rising trend, despite the overbought long-term picture.

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The coin found support near the $5800 level, although it spiked as low as $5600 in the bearish environment. While we advise investors to wait until the next correction with new positions, traders could still bet on a rally to new highs as long as BTC remains in an uptrend. Support levels below $5800 are found near $5400 and $5000.

BTC/USD, 4-Hour Chart Analysis

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Altcoins are trading well below their respective all-time highs, as capital has been flowing towards Bitcoin in recent weeks, but most of the major coins are still in long-term uptrends, with only ETC looking suspiciously week. Dash is the best performing currency of the day, as it surged off the $265 support, while Monero, Litecoin, and NEO are also among the relatively strong coins. Ethereum hit a one-month low below the $285 support, while Ethereum Classic, Ripple, and IOTA are all performing weaker than the broad market. Let’s see the short-term charts of the altcoins.

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Cryptocurrencies

Trade Recommendation: Stellar

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The price bounces from SMA50 which is a support line for the market. MACD lines support upward movement. Also we can draw a pennant chart pattern which also confirms further upward movement. If the price breaks the resistance line of the pennant, this pattern will be realized as a continuation pattern. It will give us an additional confirmation of the upward movement. Pending orders for buy should be placed at 0.035000 level with stop orders at 0.028000 level. The main profit target should be at 0.048000 level. The part of trade volume can be left for the higher target at 0.070000 level. If you don’t use leverage, recommended trading volume for this trade is up to 5% from your deposit.

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Market: STRUSD
Buy: 0.035000
Stop: 0.028000
Profit Targets: 0.048000

The trading signal is based on Poloniex chart.

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Cryptocurrencies

Trade Recommendation: Lisk

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A new attempt to catch a trend reversal. The price diverges with MACD and it gives us a buy signal on the falling market. DMI allows to open long trades. We should place pending orders for buy above the previous high at 0.000840 level. Stop orders must be placed below the support at 0.000680 level. Profit targets are 0.001200 and 0.001400 levels. The part of trade volume can be left for long run. If you don’t use leverage, recommended trading volume for this trade is up to 5% from your deposit.

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Market: LSKBTC
Buy: 0.000840
Stop: 0.000680
Profit Targets: 0.001200 and 0.001400

The trading signal is based on Bittrex chart.  

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