Crypto Market Daily Highlights – May 17

Key Insights:

  • The global crypto market cap is back above the $1.3trillion mark. 
  • BTC’s price has tested the $30,300 resistance. 
  • Both bullish and bearish news is driving market volatility higher.

 The larger cryptocurrency market has been rangebound for most of this month, as the global crypto market cap oscillated between the $1.2 trillion low and $1.34 trillion. 

Data from Coin Market Cap top 100 suggested that Kadena (KDA) jumped by 14.70%, and Algorand (ALGO) saw 11% daily gains leading market the crypto majors. 

It has been an eventful 24 hours for the crypto market, with BTC jumping back above the $30,000 mark and several altcoins in the top 100 making gains. Sustained gains, however, still remain in question as the market continues to be volatile. 

BTC risks falling to $20,000

According to some market experts, BTC’s chances of revisiting the lower levels are still high. The Luna Foundation Guard (LFG) recently revealed that it had sold almost all of its BTC reserves during last week’s Terra (LUNA) and TerraUSD meltdown. The higher amount of circulation BTC in the market added to price volatility. 

Famous trader Phoenix said in a recent Twitter post that if bitcoin’s price falls below the $29,494 mark, the next price range to watch would be $21,800-23,800. 

As highlighted in an FXEmpire article earlier this morning, the Bitcoin Fear & Greed Index fell from 10/100 to 8/100, its lowest level since March 14, 2020. 

The early-week BTC losses witnessed this week could be blamed on global investors in the equity markets and the crypto market responding to dire economic data from China.

Despite short-term price gains, weak technical signals and low buying pressure left bitcoin’s price in a rangebound movement. That said, in the traditional market, weak stats coupled with the threat of a recession left the NASDAQ 100 down 1.20%.

Even though Federal Reserve chair Jerome Powell’s assurances on the rate hike front have delivered support, the same has failed to change the larger economic outlook. Furthermore, the correlation between bitcoin and the NASDAQ strengthened marginally on Monday.

On a one-day chart, BTC’s price made some positive progress; however, high gains didn’t seem to be on bitcoin’s cards as RSI highlighted high selling pressure in the market. 

FXempire, BTC, Crypto, Bitcoin
BTC 1-day price | Source: FXEmpire

Analyst Rekt Capital pointed out that the $20,000 zone is an area of interest should current levels fail to hold and buyers not materialize.

LUNA and UST Debacle Continues

The South Korean Conservative Party has requested a parliamentary hearing on the dramatic fall of Terra’s LUNA and its algorithmic stablecoin UST. 

On Tuesday, the South Korean National Assembly’s Political Affairs Committee summoned Terraform Labs co-founder Do Kwon for a parliamentary hearing regarding the issue. The committee’s representative, People’s Power’s Yoon Chang-Hyeon, said,

“There is a part that raises questions about the behavior of exchanges during the crash. Coinone, Korbit, and Gopax stopped trading on May 10, Bithumb on May 11 stopped trading daily, but Upbit did not stop trading until May 13.”

However, amid the negative commentary, TerraUSD’s price managed to register 11.83% gains trading at $0.1216 at the time of writing. 

High Volatility Sends Altcoin Prices Up

A recent Santiment report highlighted that for those ‘expecting less volatility for crypto markets in the first weeks of May after the rocky first four months of 2022, a continued pattern of downswings shook even crypto’s optimistic traders to their cores.’

After the second FOMC meeting that resulted in the US Fed increasing interest rates by another 0.5%, crypto markets showed some life for 24 hours. At press time, some of the top gainers were altcoins like Elrond (EGLD), Kava (KAVA), Aave (AAVE), and Kadena (KDA)

Algorand (ALGO) also gained close to 7.82% as the token traded at $0.49 at the time of writing. On the other hand, BAYC’s ApeCoin (APE) also noted 7% gains, trading at $8.73. 

Interestingly, Litecoin’s price saw a bounce of over 6% in the last 24-hours as it traded at $70.83. 

One of the most interesting news came from China, as bitcoin mining was back in the news this week, with new data showing China as the second-largest bitcoin mining nation, despite an outright ban.

A recent, FXEmpire article also highlighted that the world’s largest digital currency asset manager, Grayscale, confirmed that it would be bringing its first European ETF called the Grayscale Future of Finance UCITS ETF (GFOF).

Thus, with both bullish and bearish developments taking place in the crypto market, volatility could continue to push BTC and the global crypto market’s boat in the near term. 

USD/JPY Price Forecast – US Dollar Continues to Reach Higher Against the Japanese Yen

US Dollar vs Japanese Yen Technical Analysis

The US dollar has rallied just a bit after initially dipping on Tuesday, to show a continued uptrend in this market. The ¥130 level seems to be attracting a certain amount of attention, so that is something that you need to be aware of. If we can break above there, then we will probably test the highs, but it is not until we break above there that the market really takes off. I anticipate that more likely than not, we are going to see a market that is more sideways than anything else. With that in mind, it is more likely than not going to be more or less a short-term type of situation.

If we were to break down below the ¥127.50 level, then it is possible that we could drop to the 50 Day EMA, which is currently breaking above the ¥125 level. That is an area that will continue to attract a certain amount of attention due to the psychology and of course the previous resistance that we had seen there. As long as the Bank of Japan continues to fight bond yields, that means they are essentially “printing yen” and therefore it drives down the value of the currency.

At the same time, the US dollar gets a continual lift due to the hawkish behavior of the Federal Reserve. As long as that is going to be the case, it does make quite a bit of sense that we would see this market attract buyers as the Japanese yen will be shunned by most traders.

USD/JPY Price Forecast Video 18.05.22

For a look at all of today’s economic events, check out our economic calendar.

GBP/USD Price Forecast – British Pound Slams Into a Large Round Number

British Pound vs US Dollar Technical Analysis

The British pound has rallied significantly during the course of the trading session on Tuesday to reach the 1.25 level, an area that obviously would cause a certain amount of interest, as it is a large, round, psychologically significant figure. Furthermore, it is worth noting that the market has a lot of noise all the way to the 1.26 handle, and therefore I think it is only a matter of time before the sellers come back in and push this market lower. After all, we are in a massive downtrend, and that should continue to be the case going forward.

When you look at the chart, you can see that the 50 Day EMA is near the 1.2750 level and dropping. The 1.30 level is the top of the overall downtrend from what I can see, so it is really not until we break above there that I would consider buying. Nonetheless, I would anticipate a certain amount of volatility as during the trading session on Tuesday there are five Federal Reserve members speaking. With so many people paying close attention to the Federal Reserve, it is difficult to imagine a scenario where we would not see a lot of noise.

Nonetheless, the market continues to look very shaky, so that typically does not end up being induced above a market that is going to be more “risk on.” In general, this is a market that continues to see more of a “fade the rally” type of attitude, and I think that will continue to be the case.

GBP/USD Price Forecast Video 18.05.22

For a look at all of today’s economic events, check out our economic calendar.

GBP/JPY Price Forecast – The British Pound Explodes to the Upside Against the Japanese Yen

British Pound vs Japanese Yen Technical Analysis

The British pound has rallied a bit during the trading session against the Japanese yen on Tuesday as we continue to see plenty of strength against the Japanese yen in various currencies. With this being the case, the market is likely to continue seeing a lot of noisy behavior, and therefore it is probably only a matter of time before we get a little bit of a pullback.

However, if we can stay above the ¥160 level, then I would be convinced that this market is trying to rally. Keep in mind that this pair is highly sensitive to risk appetite and of course, risk appetite is all over the place right now, so it is going to continue to be a very difficult situation. The size of the candlestick is rather impressive, and that does tell you that there is a little bit of momentum here. If we can break above the ¥162.50 level, that would be very bullish as well. Nonetheless, it is interesting to see how this has played out, but if we get a turnaround and break down below the ¥160 level, then it is likely that we could go much lower.

It is worth noting that the market bounced from the 200 Day EMA, which of course is an indicator that a lot of people pay attention to. If we break it down below that level, then it is likely that the ¥155 level could be the next support level, and breaking down below there would kick this market into a major downtrend just waiting to happen.

GBP/JPY Price Forecast Video 18.05.22

For a look at all of today’s economic events, check out our economic calendar.

EUR/USD Price Forecast – Euro Slams Into Resistance

Euro vs US Dollar Technical Analysis

The Euro rallied significantly during the trading session on Tuesday to break above the 1.05 level. By doing so, we have challenged a major resistance barrier, but it looks like we are already starting to see sellers come back in. The 1.06 level is an area above that is also resistive, so we are essentially in a major “zone” that has a lot of pressure. That being said, if we were to break above the 1.06 level, then it allows the market to go chasing the 50 Day EMA. The 50 Day EMA has broken down below the 1.08 level, an area that had previously been supported. I think we need to get above all of that to even consider buying the Euro.

The Federal Reserve continues to tighten and sound hawkish, especially with the inflationary numbers in the United States causing major problems. Beyond that, we have just seen retail sales come in much weaker than anticipated, showing signs that the American consumer is starting to pull back. If that is going to be the case, the Federal Reserve will certainly have to pay attention to this, because inflation has become a major political issue in the United States.

Unless the Federal Reserve suddenly changes its attitude, and there is essentially zero chance that it will, I do not anticipate this market turning around anytime soon. Because of this, I am looking to fade all rallies that show signs of exhaustion. The market is more likely than not going to continue to go lower as we are basically just retesting a bearish flag at this point.

EUR/USD Price Forecast Video 18.05.22

For a look at all of today’s economic events, check out our economic calendar.

Gold Price Futures (GC) Technical Analysis – Yields Rise on Strong Retail Sales Data, Pressuring Gold Prices

Gold futures are edging higher on Tuesday, helped by a weaker U.S. Dollar, but capped by rising Treasury yields. Well, how can that be? The best explanation is safe-haven buyers drove the dollar beyond its fair value area, meaning it’s overbought and has to come down.

Essentially, the dollar is currently being driven lower by safe-haven liquidation. But Treasury yields are being driven higher by the strong U.S. retail sales report.

At 13:18 GMT, June Comex gold futures are trading $1825.30, up $11.30 or +0.62%. The SPDR Gold Shares ETF (GLD) is at $170.34, up $1.55 or +0.92%.

Just last week, investors were seeking protection in the safe-haven Treasury bonds and the U.S. Dollar in anticipation of a slowdown in the economy caused by the Fed’s aggressive interest rates. Today’s retail sales report shows that the U.S. consumer is still buying despite inflation hovering near a 40-year high.

This supports the Fed’s plans to hike rates by 50 basis points in June and July. That’s bearish for gold. The rate hikes have already been priced into the dollar so now safe-haven longs are bailing on the dollar because the retail sales report is a sign of strength for the economy. That’s helping to underpin gold.

Daily June Comex Gold

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum is trending higher following the confirmation of Monday’s closing price reversal bottom.

A trade through $1910.70 will change the main trend to up. A move through $1785.00 will negate the closing price reversal bottom and signal a resumption of the downtrend.

The minor range is $1910.70 to $1785.00. Its 50% level at $1847.90 is the next upside target and potential resistance.

Daily Swing Chart Technical Forecast

The direction of the June Comex gold futures contract into the close on Tuesday will be determined by trader reaction to $1822.90.

Bullish Scenario

A sustained move over $1822.90 will indicate the presence of buyers. If this move is able to generate enough upside momentum then look for a surge into the pivot at $1847.90.

Bearish Scenario

A sustained move under $1822.90 will signal the presence of sellers. The first downside target is a minor pivot at $1809.90.

Aggressive counter-trend buyers could come in on the first test of $1809.90. They will be trying to form a potentially bullish secondary higher bottom. Taking out this level, however, could trigger an acceleration into the support cluster at $1785.00 – $1783.80.

For a look at all of today’s economic events, check out our economic calendar.

AUD/USD Price Forecast – Australian Dollar Breaks Through Round Figure

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar has rallied during the trading session on Tuesday to break above the 0.70 level, showing signs of life yet again. That being said, the market is going to continue to be a bit noisy, but quite frankly it is difficult to imagine a scenario where the Aussie dollar simply takes off to the upside because quite frankly the US dollar is like a wrecking ball to almost everything at this point. Because of this, I believe that we have a situation where traders are going to come in and jump all over this market as it is most certainly negative. That being said, you also have to keep in mind on risk appetite in general.

If we break down below the 0.70 level, then it is likely that the market goes looking to the 0.6850 level, possibly even lower than that. A breakdown below the 0.68 level would be catastrophic for the Aussie, perhaps sending the market much lower. Rallies at this point in time continue to be looked at with suspicion, and therefore I think it is probably only a matter of time before they get faded. In fact, it is not until we break above the 0.72 level that I would take any rally seriously.

The market continues to be very noisy but still favors the greenback as there are so many concerns around the world currently. I think that continues to be the case, and therefore I still think that the US dollar is king, and will remain so for the foreseeable future. Commodity markets of course are heavily influenced by the Aussie as well, but I look at this as a bit of a relief rally more than anything else.

AUD/USD Price Forecast Video 18.05.22

For a look at all of today’s economic events, check out our economic calendar.

Crude Oil Price Update – Bullish WTI Traders Targeting $116.43 – $121.17

U.S. West Texas Intermediate crude oil futures are trading at a seven week high on Tuesday. The catalysts behind the rally are the European Union’s ongoing push for a ban on Russian oil imports that would tighten supply and the possible easing of China’s COVID lockdowns that would drive demand higher.

So essentially, it’s the best of both worlds for crude oil bulls with both supply and demand positioned to drive prices higher. The market is likely to continue to rally until it reaches the highly elusive supply and demand balance point.

At 12:29 GMT, July WTI crude oil futures are trading $111.68, down $0.14 or -0.13%. On Monday, the United States Oil Fund ETF (USO) settled at $83.11, up $1.83 or +2.25%.

Also in focus late Tuesday and early Wednesday are potential further declines in U.S. fuel inventories. Weekly inventory reports are expected to show a rise in crude stocks and declines in inventories of distillates and gasoline.

U.S. gasoline prices are currently trading at all-time highs due to low stockpiles. Furthermore, gasoline inventories are expected to drop further as the nation prepares for the start of the summer driving season.

Daily July WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through the intraday high at $113.20 will signal a resumption of the uptrend. A move through the March 7 main top at $116.43 will reaffirm the uptrend. The main trend will change to down on a move through $96.93.

The short-term range is $116.43 to $88.53. The market is currently trading on the strong side of its retracement zone at $105.77 to $102.48, making it support.

Daily Swing Chart Technical Forecast

The direction of the July WTI crude oil futures contract on Tuesday is likely to be determined by trader reaction to $111.57.

Bullish Scenario

A sustained move over $111.57 will indicate the presence of buyers. Taking out $113.20 will indicate the buying is getting stronger. This could trigger a late session surge into $116.43.

Bearish Scenario

A sustained move under $111.57 will signal the presence of sellers. If this creates enough downside momentum then look for the selling to possibly extend into the short-term Fibonacci level at $105.77.

Side Notes

A close under $111.68 will form a closing price reversal top. If confirmed, this could lead to the start of a 2 to 3 day correction.

For a look at all of today’s economic events, check out our economic calendar.

Tesla Is Up By 3%, Here Is Why

Key Insights

  • Elon Musk tweets that “20% fake/spam accounts, while 4 times what Twitter claims, could be *much* higher”.
  • Traders wonder whether he tries to negotiate a better price or walk away from the deal. 
  • If the deal falls apart, Tesla stock could gain upside momentum.

Tesla Stock Rebounds After Musk Says He Needs Proof That Fake/Spam Accounts Are Less Than 5% Of Twitter Users

Shares of Tesla gained upside momentum in premarket trading after Elon Musk tweeted that his offer to buy Twitter was based on the assumption that Twitter‘s SEC filings on the number of fake/spam accounts were accurate.

He also noted that Twitter’s CEO refused to show proof that fake/spam accounts were less than 5% of the total account number. Musk added that the deal could not move forward until he sees proof of Twitter’s statements.

Traders are trying to guess whether Musk is trying to walk away from the deal without paying the breakup fee or trying to negotiate a better price.

Both scenarios are bearish for Twitter stock, so it’s not surprising to see that Twitter is losing ground in premarket trading.

For Tesla stock, the recent news is bullish. Traders are worried that Musk will have to sell more Tesla stock to finance the deal, so a lower priced deal or a full collapse of the deal would serve as bullish catalysts.

What’s Next For Tesla Stock?

There are two main catalysts for Tesla in the near term. The first catalyst is the fate of the Twitter deal. If the deal is scrapped, traders will have no worries about potential stock sales from Musk, which will provide more support to Tesla shares.

The second catalyst is the situation with coronavirus in China, which has already put pressure on both production and demand for Tesla cars. At this point, it looks that developments in China could serve as a bigger catalyst for the stock, so traders will need to keep a close eye on the country in the upcoming weeks.

It should be noted that Tesla’s valuation has recently declined to more attractive levels, so the stock may be sensitive to positive catalysts. In this light, Tesla will have a good chance to gain additional upside momentum in case Twitter deal continues to fall apart.

To keep up with the latest earnings updates, visit our earnings calendar.

S&P 500 Reverses With a Handsome Inverse Head and Shoulders Pattern

That should help Americans but their decisions should also be affected by the retail sales print that will hit the screens soon. All we can say for now is that we’re anticipating this data to be on the green side of the market.

S&P 500 Technical Analysis

On SP500, it looks really optimistic from the technical side as well. On the chart, we have a very handsome inverse head and shoulders pattern (blue). The surge from today’s European session, allowed the price to break the neckline (blue) of this pattern, which in consequence gives us a mid-term buy signal.

S&P 500 Price Forecast

The closest target is currently on the mid-term down trendline (black) and the horizontal resistance on the 4155 (orange). As long as we stay below those two, there is no real long-term buy signal. So far, it’s just a correction. A promising one but still just a correction. The positive sentiment will be cancelled should the price drops below the neckline, but chances for that are now limited.

Daily Gold News: Tuesday, May 17 – Gold Bounces From the $1,800 Level

Gold Price Recap

The gold futures contract gained 0.32% on Monday, May 16, as it fluctuated following its recent declines. The market reached the new local low of $1,785.00, but it closed above the $1,800 level again. Gold retraced almost all of the February-March rally on strengthening U.S. dollar, Fed’s monetary policy tightening fears. It went back to the $1,800 level where it’s been fluctuating for months in 2021. This morning yellow metal is trading higher following U.S. dollar weakness, as we can see on the daily chart (the chart includes today’s intraday data):

Precious Metals Price Action

Gold is 0.2% higher this morning after bouncing from the $1,800 price level. It is trading along its recent daily highs. What about the other precious metals? Silver is 0.5% higher, platinum is 1.1% higher and palladium is 0.1% lower. So the main precious metals’ prices are higher this morning.

Fundamentals and Economic News Schedule

Yesterday’s Empire State Manufacturing Index release has been worse than expected at -11.6 (exp. 15.3). Today we will get the important Retail Sales release at 8:30 a.m., Industrial Production release at 8:15 a.m. and the Fed Chair Powell’s speech at 2:00 p.m., among others.

The markets will still continue to react to the ongoing Russia-Ukraine war news.

Below you will find our Gold, Silver, and Mining Stocks economic news schedule for the next two trading days.

Tuesday, May 17

  • 8:00 a.m. U.S. – FOMC Member Bullard Speech
  • 8:30 a.m. U.S. – Retail Sales m/m, Core Retail Sales m/m
  • 9:15 a.m. U.S. – Industrial Production m/m, Capacity Utilization Rate
  • 10:00 a.m. U.S. – Business Inventories m/m, NAHB Housing Market Index
  • 1:00 p.m. Eurozone – ECB President Lagarde Speech
  • 2:30 p.m. U.S. – Fed Chair Powell Speech
  • 2:30 p.m. U.S. – FOMC Member Mester Speech

Wednesday, May 18

  • 8:30 a.m. U.S. – Housing Starts, Building Permits
  • 8:30 a.m. Canada – CPI m/m
  • 9:30 p.m. Australia – Employment Change, Unemployment Rate
  • Tentative, Eurozone – ECB Financial Stability Review

For a look at all of today’s economic events, check out our economic calendar.

Paul Rejczak
Stock Trading Strategist
Sunshine Profits: Analysis. Care. Profits.

* * * * *

Disclaimer

All essays, research and information found above represent analyses and opinions of Paul Rejczak and Sunshine Profits’ associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Paul Rejczak and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Rejczak is not a Registered Securities Advisor. By reading Paul Rejczak’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits’ employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

 

EUR/USD Mid-Session Technical Analysis for May 17, 2022

The Euro is climbing against the U.S. Dollar on Tuesday amid expectations of higher interest rates from the European Central Bank (ECB). On Monday, ECB policymaker Francois Villeroy de Galhau said a weak Euro threatened price stability in the currency bloc.

An ECB rate hike is not guaranteed, however, due to deteriorating economic conditions. The central bank is not in the same position as the Federal Reserve, for example, to raise rates, despite rising inflation.

At 11:30 GMT, the EUR/USD is trading 1.0533, up 0.0098 or +0.94%. On Monday, the Invesco CurrencyShares Euro Trust ETF (FXE) settled at $96.63, up $0.28 or +0.29%.

The common currency is also being underpinned by a weaker greenback. Nonetheless, worries that escalating tensions with Russia could lead to a gas embargo, a recession in the Euro Zone and prevent the ECB from lifting interest rates are capping the Euro’s prospects.

“There is undoubtedly a risk that the ECB might have to delay its lift-off in the end or that it will not hike interest rates as much as it currently seems willing to do,” Commerzbank analyst You-Na Park-Heger wrote in a morning note.

US Retail Sales Could Fuel Volatility

Today U.S. retail sales report, due to be release at 12:30 GMT, is expected to show that retail sales increased by 1.0% during April and core retail sales rose by 0.4%. The report will reveal information on how consumers are spending in the wake of inflation hovering near a 40-year high.

A strong report will justify the aggressive tone from the Fed. Treasury yields are likely to rise on the news, which would likely cap the EUR/USD.

A weak report could be an early sign of economic weakness. Although it probably won’t derail the Fed’s plans for 50-basis point hikes in June and July, it could put a cap on future rate hike expectations. This may strenghen the EUR/USD, at least temporarily.

Daily EUR/USD

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through the main bottom at 1.0354 will signal a resumption of the downtrend. Taking out the January 3, 2017 main bottom at 1.0339 will reaffirm the downtrend. The main trend will change to up on a trade through 1.0642.

The minor range is 1.0642 to 1.0354. The EUR/USD is currently trading on the strong side of its pivot at 1.0498, making it support.

The short-term range is 1.0936 to 1.0354. Its retracement zone at 1.0645 to 1.0714 is the nearest resistance.

The main range is 1.1185 to 1.0354. Its retracement zone at 1.0770 to 1.0868 is controlling the near-term direction of the EUR/USD.

Daily Swing Chart Technical Forecast

Trader reaction to the pivot at 1.0498 is likely to determine the direction of the EUR/USD into the close on Tuesday.

Bullish Scenario

A sustained move over 1.0498 will indicate the presence of buyers. If this creates enough upside momentum then look for a surge into the resistance cluster at 1.0642 – 1.0645.

Overtaking 1.0645 will indicate the buying is getting stronger with 1.0714 – 1.0770 the next potential target zone.

Bearish Scenario

A sustained move under 1.0498 will signal the presence of sellers. This could trigger a quick break into the minor pivot at 1.0455. If this fails to hold then look for a test of the support cluster at 1.0354 – 1.0339. The latter is a potential trigger point for an acceleration to the downside with the next major target the January 8, 2003 main bottom at .9860.

For a look at all of today’s economic events, check out our economic calendar.

Hormel Attracts Big Money

And the food giant could rise even more due to ever-present demand and a current dividend of nearly 2.0%. But another likely reason is Big Money lifting the stock.

Big Money Eats Up Hormel

So, what’s Big Money? Said simply, that’s when a stock goes up in price alongside chunky volumes. It’s indicative of institutions betting on the shares.

Smart money managers are always looking for the next hot stock. And Hormel has many fundamental qualities that are attractive.

This sets up well for the stock going forward. But how the shares have been trading points to more upside. As I’ll show you, the Big Money has been consistent in the shares.

You see, fund managers are always looking to bet on the next outlier stocks…the best in class. They spend countless hours sizing up companies, reading reports, speaking to analysts…you name it. When they find a company firing on all cylinders, they pounce in a big way.

That’s why I’ve learned how critical it is to gauge Big Money demand for shares. To show you what I mean, have a look at all the Big Money signals HRL has made the last year.

The last few weeks have seen Big Money activity too. Each green bar signals big trading volumes as the stock ramped in price:

Source: www.mapsignals.com

In the last year, the stock attracted 15 Big Money buy signals. Generally speaking, recent green bars could mean more upside is ahead.

Now, let’s check out technical action grabbing my attention:

Outperformance is important for leading stocks.

Hormel Fundamental Analysis

Next, it’s a good idea to check under the hood. Meaning, I want to make sure the fundamental story is strong too. As you can see, Hormel is a huge, profitable company with growing sales. Take a look:

  • Market capitalization ($29.1 billion)
  • Profit margin (+8.0%)
  • 1-year sales growth rate (+18.5%)

Source: FactSet

Marrying great fundamentals with technically superior stocks is a winning recipe over the long-term.

In fact, HRL has been a top-rated stock at my research firm, MAPsignals, for years. That means the stock has buy pressure, strong technicals, and growing fundamentals. We have a ranking process that showcases stocks like this on a weekly basis.

HRL has a lot of qualities that are attracting Big Money. It’s made the Top 20 report 18 times since 2010, with its first appearance on 05/23/2011…and gaining 337.5% since. The blue bars below show when Hormel was a top pick:

Source: www.mapsignals.com

It’s been a top stock in the consumer staples sector according to the MAPsignals process. I wouldn’t be surprised if HRL makes additional appearances in the years to come. Let’s tie this all together.

Hormel Price Prediction

The Hormel rally could have further to go. Big Money buying in the shares is signaling to take notice. Shares could be positioned for further upside, plus it pays a current dividend of nearly 2.0%. Given the historical gains in share price and strong fundamentals, this stock could be worth a spot in a diversified portfolio.

Disclosure: the author holds no positions in HRL at the time of publication.

Learn more about the MAPsignals process here.

Contact

https://mapsignals.com/contact/

 

McKesson Brings in the Big Money

And the healthcare services firm could rise even more due to strong demand and growth prospects. But another likely reason is Big Money lifting the stock.

Big Money Drawn to McKesson

So, what’s Big Money? Said simply, that’s when a stock goes up in price alongside chunky volumes. It’s indicative of institutions betting on the shares.

Smart money managers are always looking for the next hot stock. And McKesson has many fundamental qualities that are attractive.

This sets up well for the stock going forward. But how the shares have been trading points to more upside. As I’ll show you, the Big Money has been consistent in the shares.

You see, fund managers are always looking to bet on the next outlier stocks…the best in class. They spend countless hours sizing up companies, reading reports, speaking to analysts…you name it. When they find a company firing on all cylinders, they pounce in a big way.

That’s why I’ve learned how critical it is to gauge Big Money demand for shares. To show you what I mean, have a look at all the Big Money signals MCK has made the last year.

The last few weeks have seen Big Money activity too. Each green bar signals big trading volumes as the stock ramped in price:

Source: www.mapsignals.com

In the last year, the stock attracted 27 Big Money buy signals. Generally speaking, recent green bars could mean more upside is ahead.

Now, let’s check out technical action grabbing my attention:

Outperformance is important for leading stocks.

McKesson Fundamental Analysis

Next, it’s a good idea to check under the hood. Meaning, I want to make sure the fundamental story is strong too. As you can see, McKesson has been growing sales and earnings at big clips. Take a look:

  • 1-year sales growth rate (+10.8%)
  • 3-year EPS growth rate (+1,048.8%)

Source: FactSet

Marrying great fundamentals with technically superior stocks is a winning recipe over the long-term.

In fact, MCK has been a top-rated stock at my research firm, MAPsignals, for years. That means the stock has buy pressure, strong technicals, and growing fundamentals. We have a ranking process that showcases stocks like this on a weekly basis.

MCK has a lot of qualities that are attracting Big Money. It’s made the Top 20 report 18 times since 2000, with its first appearance on 09/18/2000…and gaining 1,036.4% since. The blue bars below show when McKesson was a top pick:

Source: www.mapsignals.com

It’s been a top stock in the health care sector according to the MAPsignals process. I wouldn’t be surprised if MCK makes additional appearances in the years to come. Let’s tie this all together.

McKesson Price Prediction

The McKesson rally could have further to go. Big Money buying in the shares is signaling to take notice. Shares could be positioned for further upside, plus it pays a current dividend of nearly 0.6%. Given the historical gains in share price and strong fundamentals, this stock could be worth a spot in a diversified portfolio.

Disclosure: the author holds no positions in MCK at the time of publication.

Learn more about the MAPsignals process here.

Contact

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NZD/USD Forex Technical Analysis – Trade Through .6380 Shifts Momentum to Upside

The New Zealand Dollar is edging higher on Tuesday, basically tracking its Australian counterpart which is climbing on the back of somewhat hawkish Reserve Bank of Australia (RBA) meeting minutes. Technical traders are also responding to oversold conditions that are encouraging weak shorts to trim some of their positions.

At 09:45 GMT, the NZD/USD is trading .6360, up 0.0049 or +0.78%.

While still early in the process, the NZD/USD could be building a support base after testing a major long-term retracement zone at .6231 – .5921 last week. Besides central bank activity, traders are also responding to expectations that China may be ending its lockdowns soon.

US Retail Sales Could Fuel Volatility

Today U.S. retail sales report, due to be release at 12:30 GMT, is expected to show that retail sales increased by 1.0% during April and core retail sales rose by 0.4%. The report will reveal information on how consumers are spending in the wake of inflation hovering near a 40-year high.

A strong report will justify the aggressive tone from the Fed. Treasury yields are likely to rise on the news, which would likely pressure the NZD/USD.

A weak report could be an early sign of economic weakness. Although it probably won’t derail the Fed’s plans for 50-basis point hikes in June and July, it could put a cap on future rate hike expectations. This may weaken the NZD/USD, but more than likely put a lid on any major price advances from current levels.

Daily NZD/USD

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through .6217 will signal a resumption of the downtrend. A move through .6569 will change the main trend to up.

The minor trend is also down. A trade through .6380 will change the minor trend to up. This will shift momentum to the upside.

The minor range is .6380 to .6217. Its 50% level at .6298 is support.

On the upside, the short-term resistance is a pivot at .6393. This is followed by a long-term 50% level at .6467.

Daily Swing Chart Technical Forecast

Trader reaction to .6298 is likely to determine the direction of the NZD/USD on Monday.

Bullish Scenario

A sustained move over .6298 will indicate the presence of buyers. Taking out .6380 will change the minor trend to up and could create the momentum needed to overcome .6393. This could trigger a surge into .6467.

Bearish Scenario

A sustained move under .6298 will signal the presence of sellers. This could trigger a break into the long-term Fibonacci level at .6231, followed by the main bottom at .6217. This is a potential trigger point for an acceleration to the downside with the May 15, 2020 main bottom at .5921 the next major target price.

For a look at all of today’s economic events, check out our economic calendar.

Can the UK Data Splurge Save Sterling?

Written on 17/05/2022 by Lukman Otunuga, Senior Research Analyst at FXTM

Sterling should come with some sort of health warning. This morning, it is the turn of the bears to take a bruising after sellers were looking to push GBP/USD down to another round number and 1.20. This morning’s strong set of UK employment data has helped propel the pound higher and we get the all-important inflation figures out early tomorrow.

Red-hot labour market

It’s the middle of the month so that means a UK data deluge. First up were today’s jobs numbers which saw unemployment fall to its lowest level in nearly half a century in the first quarter of 2022. The jobless rate stood at 3.7% with fewer people out of work than there were job openings for the first time on record. Hiring demand remains solid and a lack of workers means wage growth is running a little faster than it was before the pandemic.

Amid all the headlines, the scorching labour market may start to cool as the squeeze on household incomes deepens. It is also important to note that the Bank of England recently forecast that the unemployment rate could rise above 5% in the next two years. So, upcoming employment reports will be important as they inform on increasing recession risks to the economy.

CPI on a tear to 9%+

We may get even bigger headlines tomorrow with the release of inflation data for April. Consensus sees a huge jump in the headline figure to 9.1% y/y from 7% in March. It is going some when a miss on the data could still print at 9% for headline CPI. The main culprit for the surge is the massive 54% energy price hike by the UK energy regulator (Ofgem). This is really a symptom of the energy crisis in Europe due to surging wholesale market prices surpassing the caps and driving several suppliers to the wall.

Key for markets will be the size of the relative price shock to household’s energy bills. The BoE has already warned of 10% inflation into autumn later this year. This is expected to dampen discretionary household spending and crowd out some pricing power in other part so the economy. Indeed, this could show up in the retail sales numbers that are released on Friday.

Sterling bounces hard

Governor Bailey added to the more positive sentiment around the pound by sounding more combative yesterday on fighting inflation. This was in contrast to the recent BoE meeting and the focus on the grim growth outlook. His emphasis was clearly more on runaway inflation and the tight labour market at his testimony. This has helped solidify rate hike hopes for a 2% policy rate by the end of the year. Cable needs to close above 1.25 to fend off more selling. Any consolidation would then need to advance beyond the month-to-date top at 1.2638.

For a look at all of today’s economic events, check out our economic calendar.

For more information, please visit: FXTM

Disclaimer: This written/visual material is comprised of personal opinions and ideas. The content should not be construed as containing any type of investment advice and/or a solicitation for any transactions. It does not imply an obligation to purchase investment services, nor does it guarantee or predict future performance. FXTM, its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness of any information or data made available and assume no liability for any loss arising from any investment based on the same.

Bitcoin (BTC) Rallies Despite the Fear & Greed Index at a 2022 Low

Key Insights:

  • On Monday, Bitcoin (BTC) fell by 4.66% to end a 3-day winning streak and reverse a 4.15% gain from Sunday.
  • Monday’s pullback left the Bitcoin Fear & Greed Index at 8/100, the lowest level since a March 14, 2020 low of 8/100.
  • Bitcoin (BTC) technical indicators flash red, with bitcoin sitting below the 50-day EMA.

Bitcoin (BTC) slid by 4.66% on Monday. Reversing a 4.15% gain from Sunday, bitcoin ended the day at $29,839.

A choppy session saw bitcoin rise to an early high of $31,296 before sliding to a day low of $29,104.

While resistance at $29,000 proved key to preventing heavier losses, the Fear & Greed Index sends a bearish signal.

The Bitcoin Fear & Greed Index Falls to a 2022 Low of 8/100

This morning, the Bitcoin Fear & Greed Index fell from 10/100 to 8/100, its lowest level since March 14, 2020, when the Index also stood at 8/100.

The Index falls to lowest level since March 2020.
Fear & Greed 170522

Monday’s BTC loss came as investors across the global equity markets and the crypto market responded to dire economic data from China.

The weak stats coupled with the threat of a recession left the NASDAQ 100 down 1.20%. Fed Chair Powell’s assurances on the rate hike front have delivered support. There has been little chatter on the economic outlook, however.

While the correlation between bitcoin and the NASDAQ strengthened marginally on Monday, the knock-on effects from last week’s TerraUSD (UST) de-pegging remain an area of focus.

In the aftermath of the TerraUSD collapse, the market will need to consider a shift in the regulatory landscape and investor sensitivity to any adverse news that could send another crypto into a tailspin.

TerraUSD breaks BTC correlation with the NASDAQ.
BTCNASDAQ 1705 Daily Chart

At the time of writing, the NASDAQ Mini was up 147 points to deliver BTC support.

Bitcoin (BTC) Price Action

At the time of writing, BTC was up 2.10% to $30,465.

A mixed start to the day saw bitcoin fall to an early morning low of $29,757 before striking a high of $30,508.

Bitcoin finds early support despite Fear & Greed Index slide.
BTCUSD 170522 Daily Chart

Technical Indicators

BTC will need to avoid the $30,083 pivot to target the First Major Resistance Level at $31,058.

BTC would need the broader crypto market to support a breakout from this morning’s high of $30,508.

An extended rally would test the Second Major Resistance Level at $32,272 and resistance at $32,500. The Third Major Resistance Level sits at $34,464.

A fall through the pivot would test the First Major Support Level at $28,860. Barring another extended sell-off, BTC should steer clear of sub-$28,000 levels. The Second Major Support Level sits at $27,889.

A BTC move through $30,500 would support a breakout.
BTCUSD 170522 Hourly Chart.

Looking at the EMAs and the 4-hourly candlestick chart (below), it is a bearish signal. BTC sits below the 50-day EMA, currently at $30,980. This morning, the 50-day pulled back from the 100-day EMA. The 100-day EMA fell back from the 200-day EMA; BTC negative.

A move through the 50-day EMA would support a run at $35,000.

A move through the 50-day EMA would support a run at $35,000.
BTCUSD 170522 4 Hourly Chart.

USD/JPY Forex Technical Analysis – US Retail Sales Report Sets the Tone

The Dollar/Yen is slightly higher early Tuesday as investors await the release of a slew of U.S. economic reports including retail sales and industrial production.

The futures markets are priced for consecutive 50 basis point hikes from the Federal Reserve in June and July and for the benchmark U.S. interest rate to reach 2.75% by year’s end. Today’s reports could confirm those expectations or cast doubts over whether the economy is strong enough to withstand the Fed’s aggressiveness.

At 06:50 GMT, the USD/JPY is trading 129.340, up 0.230 or +0.18%. On Monday, the Invesco CurrencyShares Japanese Yen Trust ETF (FXY) settled at $72.54, up $0.13 or +0.18%.

Today U.S. retail sales report, due to be release at 12:30 GMT, is expected to show that retail sales increased by 1.0% during April and core retail sales rose by 0.4%. The report will reveal information on how consumers are spending in the wake of inflation hovering near a 40-year high.

A strong report will justify the aggressive tone from the Fed. Treasury yields are likely to rise on the news, which would give the USD/JPY an added boost.

A weak report could be an early sign of economic weakness. Although it probably won’t derail the Fed’s plans for 50-basis point hikes in June and July, it could put a cap on future rate hike expectations. This may weaken the USD/JPY, but more than likely put a lid on any major price advances from current levels.

Daily USD/JPY

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum is trending lower. A trade through 126.945 will change the main trend to down. A move through 131.348 will signal a resumption of the uptrend.

The minor range is 126.945 to 131.348. The market is currently straddling its pivot at 129.147.

Support is a pair of 50% levels at 127.410 and 126.316.

Daily Swing Chart Technical Forecast

Trader reaction to 129.147 is likely to determine the direction of the USD/JPY on Tuesday.

Bullish Scenario

A sustained move over 129.147 will indicate the presence of buyers. If this move creates enough upside momentum, we could see a surge into the minor top at 139.813, followed by the main top at 131.348.

Bearish Scenario

A sustained move under 129.147 will signal the presence of sellers. If this move gains any traction then look for the selling to possibly extend into the nearest support cluster at 127.520 – 127.410.

Side Notes

The reaction by U.S. Treasury yields to the retail sales and industrial production reports on Tuesday will ultimately determine the direction of the USD/JPY.  Basically, higher yields, higher USD/JPY and lower yields, lower USD/JPY.

For a look at all of today’s economic events, check out our economic calendar.

Bitcoin’s Short-term Upward Channel

Bitcoin and Major Cryptos Last Price Changes

On Monday, Bitcoin was down 3.6%, ending the day around $29.9, but is trading back above $30K on Tuesday morning. Ethereum has little changed over the past 24 hours (-0.4%), remaining near $2000. Other altcoins from the top 10 changed in price from -2.7% (Polkadot) to 1.2% (Solana). Total crypto market capitalisation, according to CoinMarketCap, rose 0.1% overnight to $1.30 trillion. Bitcoin’s dominance index fell 0.1 points to 44.3%.

Indicators and BTC Technical Analysis

The Cryptocurrency Fear and Greed Index was down 6 points to 8 by Tuesday, hitting its lowest level since August 2019. Technically, the crypto market on Monday followed the cautious sentiment of the stock market. We note that after hitting lows on May 12th, a short-term upward channel is forming in BTCUSD with increasingly higher local lows and local highs. Such dynamics of the flagship crypto resemble the work of traders of institutional managers, who moderately “buy the fear” or fix the profit from the short positions.

Chart Description automatically generated

Fundamentals and BTC Price Forecast

So far, there is little reason to argue that a prolonged rise will follow the current buying, as the fundamentals (tightening markets, slowing economy) remain in place. According to CryptoQuant, institutional investors continue to buy BTC through market makers despite the decline in the crypto market.

Sam Bankman-Fried, CEO of cryptocurrency exchange FTX, believes bitcoin has no future as a payment network because of its low scalability and negative impact on the environment. There is a need for an alternative blockchain-based Proof-of-Stake (PoS) protocol for payments. IMF managing director Kristalina Georgieva called for a new public infrastructure for payment systems, including digital currencies.

Do Kwon, founder of the Terra ecosystem, presented a new plan to rehabilitate the project. On May 18th, the developer intends to present Terraform Labs team with a new management system for the Terra fork, decoupling it from the TerraUSD (UST) stable coin.

by FxPro’s Senior Market Analyst Alex Kuptsikevich

Markets Remain in Fight or Flight Mode While Rolling the Dice on Recession Odds

Global Macro and Stock Markets Analysis

US equities fell .4 % in a choppy session to start the week with little change to the broader macro or recessionary narrative.

Markets remain in fight or flight mode while rolling the dice on recession odds.

Still, traders seem to be in the mood to stay bearish until proven otherwise. However, there is still a lingering risk- on tone despite horrific Chinese data.

Investors’ hopes remain elevated that yesterday’s worse than expected Chinese outruns could prove to be a ‘whatever it takes” moment, and local policymakers will step hard on the stimulus pedal.

Oil Fundamental Analysis

Oil prices are up near 2.5 % on a confluence of anticipated Chinese demand returning amid Russian supply concerns. But China’s covid slowdown is music to oil bull’s ears as the breadth of the shift is where the surprise lies.

In addition, Shanghai has announced a gradual reopening starting immediately. It aims to return to everyday life by June 1, so we should expect mobility to return to its usual post haste.

But importantly, this could mean more stimulus down the pipe as even a gradual reopening increases the prospects for policy easing.

China’s official institutions have been reluctant to enact an adequate stimulus program as the locked-down economy is not giving policymakers bang for their buck via the multiplier effect.

Oil investors will continue watching the China covid curve while playing the China rebound story through Oil futures and XLE.

FOREX Fundamental Analysis

Chinese Yuan CNH

Traders have moved off, at least this one has, the CNH/JPY competitive advantage trade as a motive to sell the Yuan. And are now looking at the typical RMB correlation associated with local equity markets.

While a depreciating RMB is theoretically positive for export-oriented firms, it is generally associated with lacklustre overall share market performances.

With a good chance, policymakers could use yesterday’s economic data low point as a watershed moment to release a flood-like stimulus once the economy opens. There should be a positive bounce in Chinese equities and possibly change the tide for USDCNH. But mainland stocks will need to do the heavy lifting, not the PBoC

Japanese Yen

For the yen, the tide may be starting to turn. The Japanese currency broke nine successive weeks of losses against the US dollar last week.

There has been a notable change in how the pair operates in the last week.

US rates had been behind the currency moves – pushing the US dollar higher against the yen, euro, franc, and Aussie.

Now the drivers are more technical. When rates go up and equities go down – the S&P 500 had fallen 6.4% since May 4 when the Federal Reserve lifted rates by 0.5 percentage points – dollar-yen is not rallying as much. Instead, it is now trending down.

Traders want to buy the yen – and the classic ‘risk-off’ hedge of holding yen calls. Again, this is rolling the dice on US recession odds which could cause a significant spill across the global markets.

For a look at all of today’s economic events, check out our economic calendar.