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Market Overview

We’ve Never Been This Low

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Thousands of protesters. The government on the verge of terminating all Supreme Court Justices who do not bow to the current government. Europe and the United States issuing a warning not to proceed with such anti-democratic measures. You’d think we’re talking about a third world country. Nope.

This is happening in the heart of the free world, in Poland.

For one thing, it’s good to see the people of Poland on their feet and protesting these changes. Though the fact that there are only thousands of protesters and not more is a little worrying.

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@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

Dollar Sinking

OPEC IMF & UKUS

Bit-fork Ahead?

Please note: All data, figures & graphs are valid as of July 24th. All trading carries risk. Only risk capital you can afford to lose.

Market Overview

This week in the markets has started much like the last one has ended, eerily quiet.

The VIX volatility index closed out on Friday at a new all time record low of 9.36. This graph from Bloomberg shows the “fear index” since inception. We’ve simply never been this low before.

European and U.S. stock markets pulled back a bit on Friday, but Asia is mixed so far this week.

Meanwhile, the U.S. Dollar continues to sink into oblivion. Since the beginning of the year, it’s down almost 8.8%. Let’s take a look at the long term chart.

It’s not just Trump sinking it either. The ramp up that we see on the left side of the chart was a move made largely in hopes that the Fed would be raising their interest rates. Now that the interest rate expectations seem to be slowing, the Buck is losing momentum and starting to fall.

Busy Day Ahead

With plenty of headline events on the agenda today it’s difficult to tell just which ones will have a heavy impact on the markets. The London dispatch to Washington DC could have some effect on the Pound as they seek to establish a framework for post-brexit U.S.-U.K. relations.

The IMF will also have the spotlight for a bit when they announce their global growth forecasts. The International Monetary Fund is probably the most qualified organization to make such predictions about the global economy. An upbeat report today could definitely have an effect on investors moods.

… but the thing that I’m watching most closely is the OPEC meeting in Russia. In particular, we want to hear about Nigeria and Libya. These two countries were exempt from the current production cuts since they’re just recovering from some rough geopolitics.

So now that they’ve more or less brought their production levels back to normal many will be expecting them to join in and put a maximum limit on themselves.

Over the past year, the price of oil has been relatively stable between $40 and $55. The sharp pullback at the end of last week (white circle) was rather dangerous but if OPEC and friends pull off a stunning show today they could try and coax the sticky black stuff back towards the middle of its range.

Trouble Ahead

Judging from the price of bitcoin over the past few days it almost looks like the trouble is behind us but judging from online forums and signals coming from the various mining pools we may yet see more turbulence ahead.

At this point, it looks like a total meltdown of the network may have been avoided as the SegWit solution is almost certain to be implemented shortly. The feeling is that many who are signaling for SegWit are actually supporting SegWit2x and that we could very well be headed for a hard fork by the end of the year.

At this point, we need to consider the technical analysis as well as the fundamentals. At this point, there’s a wide range of about $1200 between the two blue lines. The price is between it’s all time high, just shy of $3000, and the low point of the pullback that ended last Sunday.

Let’s have an awesome week!

This content is provided for information and educational purposes only and should not be considered to be a 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 68 rated postsSenior Market Analyst at Etoro.com.




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5 Comments

5 Comments

  1. mvppvm_07

    July 24, 2017 at 2:48 pm

    re: crypto markets / Because most tokens/coins seem unofficially tethered to BTC, doesn’t it make sense to utilize this forum, asks a naive one, to conduct a 90 day “use case review” of TA and other less formal analyses of the price possibilities of BTC?
    The November BTC block size debate conclusion, the SegWit signaling, versioning, correlation of funds in/out….a whole host of scenarios present themselves as ways for ‘Hacked’ to offer multiple insights into the way this market morphs (or not) with the 40% variance illustrated in your $3000 – $1800 range of money making opportunities. I’d love to see more detailed risk analyses on this during the next 3 months.

  2. Mati Greenspan

    July 24, 2017 at 2:52 pm

    That actually seems like a really good idea.

  3. thesupermk

    July 25, 2017 at 1:27 am

    About Poland – it’s not that easy. Currently the judges basically appoint themselves to Supreme Court and it’s been a long term problem with Polish judicary system, that there’s absolutely no control over judges. They are practically above law.

    There have been many, many cases, both involving individuals, and big issues concerning the whole country, where judges were corrupted and no one could do anything.

    The reform was an attempt to change it. It might not have been the best one, but it’d make the judges accountable to something. But since there are groups that are benefiting from the current state of affairs, and there’s a lot of hysteria among the opposition (who said themselves their only aim in politics now is to get rid of the ruling party) – hence all the commotion.

    I’m far from saying the reform was good, but it’s not “back to communism”, it’s not “third world country”, etc. It was very clickbait slogans, very emotional, aimed to create an atmosphere of immediate danger.

    Fun fact – the previous (absolutely corrupt) establishment is doing that since Sep 2015 (when the current ruling party won), and basically according to them democracy and freedom ended at least three times already. That’s why only 50 thousand or so people (out of 38kk in Poland) were protesting – only those who would lose directly with the change, and this small group that believed in the hysteria.

    I’m just writing that to clarify that it’s not that one-sided as it’s painted.

    It has been vetoed by the president anyways now, so I guess we’re stuck with the current judicary system for longer.

  4. Lexarich

    July 25, 2017 at 9:58 am

    Just wanted to straight one thing You have wrote at the beggining. I’m from Poland and I see there is a lot of propaganda and missunderstanding. You really need to dig dipper if You want to know the truth, about 25years back… And the truth is there is shit loads of corrupted Supreme Court Justices from post communism times, they allowed previous governments to scam our country for years. And now once they finally lost elections, they cant stand it… doing everything to get their “system” back, propaganda, media, a lot of noise and manipulation going on, they even PAY PEOPLE TO PROTEST… And You want to know why there is lack of people on protests? Majority of Poland knows what is going on and we have chosen this government to do this. Like I said, ignore the noise and dig dipper if You want the truth… I’m just surprised what kind of propaganda You have wrote here…

  5. Mati Greenspan

    July 26, 2017 at 9:20 am

    Hi guys,

    Many thanks for the clarification. Indeed, I’m not as sharp on Polish politics as I probably should be and it’s great to hear from two people who know more than myself on this subject.

    Will continue to dig deeper as you suggest and will continue to call the shots as I see them. 🙂

    -Mati

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Market Overview

Market Update: S&P 500 Notches Third Straight Rally on Earnings; Cryptocurrencies Hit $340 Billion

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U.S. stocks finished mostly higher on Wednesday, as earnings optimism lifted the S&P 500 Index and Nasdaq to their third consecutive daily advance. Meanwhile, cryptocurrencies resumed their uptrend after a two-day pause as bitcoin returned above $8,000 and bitcoin cash surged double-digits.

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Stocks Finish Mostly Higher

Two out of the three major U.S. indexes notched gains, with the S&P 500 Index edging up 0.1% to 2,708.64.

Four of 11 sectors contributed to the rally, with energy shares jumping 1.6%. Other commodity-sensitive sectors such as materials and industrials also reported firm gains.

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The biggest laggards on Monday included consumer staples and financials, which fell 0.9% and 0.4%, respectively.

The technology-laden Nasdaq Composite Index rose 0.2% to finish at 7,295.24.

Meanwhile, the Dow Jones Industrial Average fell 38.56 points, or 0.2%, to close at 24,748.07. The blue-chip index is coming off two straight sessions of 200-point gains.

A measure of implied volatility known as the CBOE VIX rose 2.3% to 15.60, which was still well below the historic average near 20. Volatility has been creeping lower in anticipation of strong quarterly earnings from U.S. firms.

The first round of Q1 reports have not disappointed, with major banks and technology companies reporting above-trend growth. Analysts at FactSet are forecasting the strongest quarter of year-over-year growth since 2011.

Cryptos Extend Rally

After initial hesitation, the cryptocurrency market rose on Wednesday as the end of tax season offered temporary reprieve to volatility.

The total market cap for all cryptos in circulation reached a high of $342 billion, according to CoinMarketCap. That was a gain of $19 billion on the day and the highest in almost a month.

Bitcoin cash (BCH) was the biggest gainer percentage-wise, climbing nearly 16% to $880 per coin on the major exchanges. Original bitcoin (BTC) advanced 3.4% to $8,190. However, its total share of the market fell below 41%.

Other major cryptocurrencies also contributed to the rally, with Ethereum adding 3.3% to $521 and Ripple XRP gaining 7.6% to settle at $0.71.

There was no immediate catalyst for the recovery, although tax relief may have played a role. The IRS extended its deadline for U.S. tax filing by one day after servers overloaded on deadline day.

Americans cryptocurrency holders may have owed as much as $25 billion in capital gains taxes, according to Tom Lee of Fundstrat Global Advisors. However, data from Credit Karma showed that less than 100 of its 250,000 filers have reported cryptocurrency-related capital gains.

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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4.5 stars on average, based on 332 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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Analysis

Pre Market: Short-Covering Bounce Continues but Markets Look Vulnerable

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Stocks continued to drift higher gradually but relentlessly, as sentiment is still improving, quarterly earnings have been a tad better than expected so far, while the oversold momentum readings that developed in March are now erased.

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S&P 500 Futures, 4-Hour Chart Analysis

While we maintained a slight bullish bias amid the choppy consolidation, and the major US indices left the triangle patterns on the upside, the rally is far from being convincing, and we think that it’s time to look for entry points to trade the short side.

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Shanghai Composite, 4-Hour Chart Analysis

Trading volumes have been progressively declining as stocks rose, the momentum of the advance has also been suspicious, and Asian and European markets are still in much worse shape than their US peers, despite today’s early rally in most markets, with the Shanghai Composite actually breaching its February low just today, as we warned earlier this week.

As the easing of trade war fears was one of the main catalysts of the rally, the continued back-and-forth announcements between China and the US could rattle the weak trend, even as the escalation of the Syrian situation halted, for now. With the technicals now favoring a downswing, the market could be more vulnerable to negative news, so bulls should keep their stops tight here.

Another Calm day for Currencies as Commodities Jump

Gold Futures, 4-Hour Chart Analysis

Gold is showing surprising strength today, as although the Dollar is weak, safe-haven flows are still negative. Despite that, the precious metal is closing in on its crucial resistance zone near $1360 again, and given the lengthy consolidation phase, a breakout could setup a huge momentum move, especially if the current risk rally fades.

The oil rally also resumed after a brief correction, with the WTI contract reaching the $68 per barrel level for the first time since 2014 before today’s US inventory data. Although commodity currencies are stable, given the bullish backdrop, the performance of the Aussie and the Canadian Dollar is rather disappointing, and that also adds to our suspicions regarding the rally in equities.

The Great British Pound is the most active major fiat currency, but now the Pound is dropping following the miss in both producer and consumer prices, which cooled down rate hike expectations further together with yesterday’s lower than expected wage growth figure.

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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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4.5 stars on average, based on 224 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

HODL Chart

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For those of you who like pretty charts, here’s one that’s trending in the crypto-world right now. They call it the HODL chart.

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The more red colors indicate more active coins whereas the bluer colors indicate coins that haven’t budged in a few years. We’ll need to assume that many of the more blue coins are ones that may be lost right now and include Satoshi Nakamoto’s holdings.

What’s impressive to me is that according to this graph 7% of all coins have changed hands in the last week and a total of 58.7% have moved in the last year.

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@MatiGreenspan
eToro, Senior Market Analyst

Please note that there will be no daily market update tomorrow due to a local holiday.

Today’s Highlights

  • Realignment
  • Aggressive Oil
  • Crypto Mayor

Please note: All data, figures & graphs are valid as of April 18th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

On January 15th, 2015 the Swiss National Bank wrecked havoc on international markets by unexpectedly removing a peg that had been firmly in place for 4 years.

By maintaining a steady exchange rate of 1.20 Euros per Franc, the Swiss were able to keep investors from flooding into the safe haven currency at a time when economic turmoil was rampant and kept the Franc from increasing too much during that time.

Here’s a video that we made about it at the time: https://www.youtube.com/watch?v=Hw4AQNmkkp8

In a matter of minutes, the CHF currency surged by 19% against the Euro taking out many currency traders and even several brokers who had not adequately hedged their risk.

Today, we can see that the entire movement caused on that day has now been reversed, thanks largely to the invisible hand and of course the negative interest rate policy from the SNB.

Aggressive On Oil

Black Gold has been pushing its highs lately but is now entering dangerous territory.

The Crude Oil inventories that will be released at 3:30 GMT today are expected to show a decrease in US stockpiles of 0.5 million barrels. The forecasts are historically inaccurate but that’s not stopping people from pushing the buy button this morning.

If the price breaks above $67.60 a barrel it will be at its highest level since 2014 when prices crashed in response to a global supply glut.

The rise in prices over the last two years is thanks in large part to the coordinated reduction in production from members of OPEC and their allies who do their best to drive prices up.

At this point however, OPEC should be very careful about what they wish for. If they continue to drive prices up much higher it could have some uncomfortable consequences. For example, higher oil prices in the past have led to breakthrough innovations in alternative energy. So, not sure who I’m rooting for here.

Crypto Mayor

The capital city of Taiwan has a new contender in the upcoming mayoral elections. Yi-Ting Cheng is the founder of the OTCBTC crypto exchange and the world-class coder is running on a platform of crypto innovation for the country.

Though the odds are stacked against her, support for this candidate is growing fast on social media.

This of course, is far different than a recent bid from the current Mayor of Lafayette…

…and certainly different from Nicolas Maduro’s ICO of the Petro, which has still yet to produce anything remotely transparent about the project.

Having a Mayor of a major city who is an expert in blockchain technology could certainly be a positive thing for the entire world.

Likely unconnected to this, the price of Bitcoin jumped this morning. Let’s hope the rally continues.

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

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 68 rated postsSenior Market Analyst at Etoro.com.




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