Lukman’s Week Ahead: Market Themes to Watch Out For – Webinar Oct 21

An authority on the markets, Lukman is frequently quoted by leading media across the globe, including the BBC, CNBC, CNN Money and Reuters. Join Lukman for expert insights on the latest market movements, potential trading opportunities and what the week ahead has in store for traders.

Enjoy an expert look at:

  • The key themes driving the financial markets
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  • What to monitor over the coming week

 

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Lukman Otunuga has been a Research Analyst at FXTM since 2015. A keen follower of macroeconomic events, with a strong professional and academic background in finance, Lukman is well versed in fundamental and technical analysis. His in-depth analysis on global currency and commodity markets is often cited by leading international media, including the Associated Press (AP), BBC, CNBC, CNN, Marketwatch, NASDAQ, and The Telegraph. He has also appeared on Africa’s biggest television network, NTA 2. Lukman holds a BSc (hons) degree in Economics from the University of Essex, UK and an MSc in Finance from London School of Business and Finance.

Gold, The Ultimate Safe Haven Asset. A Looming Nobel Prize?

2019 Nobel in Economics and Gold

Yesterday was a big day! At least for all those boring economists and similar bean-counters. The Nobel Prize in economics was awarded. Abhijit Banerjee, Esther Duflo, and Michael Kremer became 2019 laureates for their experimental approach to alleviating global poverty.

Nice! But, dear Nobel Committee, we also have great ideas how to reduce poverty in the world. Just give everyone some gold! We know, that’s not the quick road to wealth, but whatever the current outlook, gold portfolios should appreciate substantially in the long run.

Jokes aside, and let’s get serious. How about central banks stop printing money? You see, inflation is a silent wealth killer. Even a small rate of inflation, like the popular 2-percent target, means that prices double each generation (around 35 years). But in many developing countries, inflation rates are much higher, closer to 5 percent, which means that prices double each 14-15 years. Inflation is a great hit to real wealth. So, even if gold does not generate any yield, it can provide people a hedge against inflation (under the condition that inflation is not small or diminishing).

Or how about central banks stop keeping interest rates at ultralow levels? Yes, zero or even subzero interest rates are great for borrowers, but we doubt whether anyone attained wealth through indebtedness. If you are a company, you can leverage to finance your investments. But if one is a consumer and takes a loan to buy another luxury car, he is moving away from making a fortune. You cannot reach wealth except through hard work, savings and investments. Due to diminished compound interest, the ultralow interest rates reward saving much less, putting all savers in troubles.

For example, if a person saves $100 each month at 4 percent, then she will have $120,000 in forty years, but only $59,000 at 1 percent. Our saver would be about half poorer in forty years. Say goodbye to your happy retirement under the palm trees! Gold will not substitute your pension fund, but when added to portfolio, it can make it more resilient and profitable. The fact that gold usually shines during very low real interest rates, is a nice bonus!

Last but not least, how about stopping maintaining the flawed monetary system which generates business cycle and economic crises with all their disastrous consequences (think about high unemployment)? Luckily, the yellow metal can help in this regard as well. Even central banks begin to notice the exceptional features of gold… or, goud!

Dutch Central Bank Acknowledges the Unique Role of Gold

The De Nederlandsche Bank (DNB), which is the central bank of the Netherlands, has published a rather unusual note. The DNB pointed out that gold is the ultimate safe-haven asset, which always retains its value, crisis or no crisis:

Shares, bonds and other securities are not without risk, and prices can go down. But a bar of gold retains its value, even in times of crisis. That is why central banks, including DNB, have traditionally held considerable amounts of gold. Gold is the perfect piggy bank – it’s the anchor of trust for the financial system. If the system collapses, the gold stock can serve as a basis to build it up again. Gold bolsters confidence in the stability of the central bank’s balance sheet and creates a sense of security.

Isn’t it a shocking note? The respected central bank of a developed economy has finally acknowledged the possibility of the monetary system collapse. We hope that the timing of the publication does not reflect any insider knowledge about the state of the global monetary system… Or, gold bulls could actually keep their fingers crossed for it. And what is more: the DNB admitted that gold would be superior than financial assets during the hard reset! Finally, we can praise the central banks!

If you enjoyed the above analysis, we invite you to check out our other services. We provide detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. If you’re not ready to subscribe yet and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today!

Disclaimer: Please note that the aim of the above analysis is to discuss the likely long-term impact of the featured phenomenon on the price of gold and this analysis does not indicate (nor does it aim to do so) whether gold is likely to move higher or lower in the short- or medium term. In order to determine the latter, many additional factors need to be considered (i.e. sentiment, chart patterns, cycles, indicators, ratios, self-similar patterns and more) and we are taking them into account (and discussing the short- and medium-term outlook) in our trading alerts.

Thank you.

Arkadiusz Sieron
Sunshine Profits‘ Gold News and Gold Market Overview Editor


Disclaimer 

All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA 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, Przemyslaw Radomski, CFA 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. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski’s, CFA 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. Przemyslaw Radomski, CFA, 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.

The Moving Average Spring Strategy Applied – Short Time Frames – Webinar Oct 23

Designed for both new and intermediate traders alike, this presentation will teach attendees how to use this popular strategy on MetaTrader 4 using a variety of time frames on both live and historical live charts. Theunis will also demonstrate how to define good entries and exits, and talk guests through the dangers of over-analysing. Don’t miss out on the chance to learn from one of our FX experts from the comfort of your own home! All the material presented in webinars from South Africa have been approved by the Company’s Key Individual, in accordance to FSCA guidelines.

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FXTM Forex Educator Theunis Kruger has always been fascinated by economics, with a particular interest in ‘wave’ formations and how they can be used to forecast and analyse trends in the financial markets. He began to trade personally as a hobby, but his keen insights and aptitude soon paved the path towards a successful career. With a decade of solid trading experience to his name, Theunis now enjoys sharing his forex knowledge with others. He also has experience in real estate and holds a degree in Town and Regional planning, complimenting his passion for securing a healthy financial future.

Gold Cycle Forecast Signals Bottom is Near

Now that the $1550 level has been reached, we are expecting a rotation to levels that may reach just below the $1450 level before attempting to set up another momentum base/bottom formation.  And just like clockwork, Gold has followed our predictions and price is falling as we expected. Just look at our October 2018 chart where we forecasted the price of gold rallies and corrections along the way.

GOLD CYCLE FORECAST – DAILY CHART

Take a look at the most active cycles for gold and where our gold forecast is pointing to next. The downside rotation currently in Gold is likely not quite over yet and the gold mines will selloff the most.  This new momentum base should setup and complete once the gold cycles bottom.  The next upside price leg should push Gold well above the $1760~1780 level – so get ready for another big rally of 20%+.

GOLD MINERS SELL OFF – DAILY CHART

Unfortunately, so many traders are highly emotional and fall in love with positions in shiny metals or gold miner stock positions. Yet we all know if you trade on emotions or fall in love with a position, you are most likely to lose a ton of money. Two weeks ago I got so much flack from traders when I said gold miners were on the verge of a violent drop in price, then the bottom fell out and the dropped huge. Then last Thursday morning when gold, silver, and miners are trading up huge in pre-market and at the opening bell I warned it looked like a big fakeout and price could collapse for yet a second leg down and the same response from those emotional traders who love their positions and won’t sell them when they should as active traders.

HAVE YOU OUTPERFORMED GDXJ THIS YEAR?

If you like to trade in the precious metals sector then you most likely love to trade the gold miners ETF GDXJ. As you can see above GDXJ is only up 19.55% year to date. Sure, it’s a nice gain, but are you still holding your metals position knowing you just gave back most or all of your profits?

Being a technical analyst my focus is to only enter a position when the charts/analysis point to an immediate price advance or decline. I site in cash waiting for the next cycle top or bottom to form in an asset class like gold miners, gold, silver, or silver miners, and once the cycle starts I jump on the wave and ride it for the move until it shows signs that its weakening and will break. almost 50% of the year my portfolio is sitting in cash. And my average position only lasts around 12 days.

Take a look at all my precious metals related trades this year (2019) below. They are all winners, and total gain for subscribers of my Wealth Building Newsletter is 41.74% profit. More than double the return than if you were riding the GDXJ roller coaster for 9 months straight and all your money at risk.

My point here is that no matter how much you love metals (and I LOVE METALS), but you do not need to always be in a position in them. There are times to own, and times to watch with your money safely in cash.

CONCLUDING THOUGHTS:

The end result is that the fear and greed that is starting to show up in the precious metals markets may become an “unruly beast” if it continues to grow in strength and velocity.

Keep reading our research because our proprietary tools have been nailing all of these price targets and moves many months in advance.  The next bottom in metals should set up when our cycle bottoms – then the next upside leg will begin.  This time Gold should target $1800 and Silver should target $21 to $24.  This will be an incredible move higher if it plays out as we suspect.

I urge you visit my Wealth Building Newsletter and if you like what I offer, join me with the 1-year subscription to lock in the lowest rate possible and ride my coattails as I navigate these financial market and build wealth while others lose nearly everything they own during the next financial crisis. Join Now and Get a Free 1oz Silver Bar!

I can tell you that huge moves are about to start unfolding not only in metals, or stocks but globally and some of these supercycles are going to last years. A gentleman by the name of Brad Matheny goes into great detail with his simple to understand charts and guide about this. His financial market research is one of a kind and a real eye-opener. PDF guide: 2020 Cycles – The Greatest Opportunity Of Your Lifetime

Chris Vermeulen
www.TheTechnicalTraders.com

Global Equity Markets Roar

Third-quarter results for UnitedHealth group were better than expected and led it to raise profit guidance for the year, with similarly upbeat reports also from Johnson and Johnson and JPMorgan. European equities were mostly up, too. Gold struggle in the face of surging US bond yields and the general risk-on fervour 

Brexit

The Pound galloped higher overnight, leaving the currency around 4% stronger over the past week. RTE News’ Tom Connelly, who broke the original Brexit ‘deal’ story, writes that the EU and UK sides are the closest they have been and that there is some optimism now. He has Irish sources typically, so this is another positive sign.

European stocks rallied to levels not seen in more than a year as speculation that a Brexit deal is imminent prompted traders to scoop up shares across the board.
Of course, any ‘breakthrough’ between the EU and the UK must still face the British house parliament.

But traders remain favourably positioned for the ‘white smoke’ moment hoping for domestic ratification on Brexit.
Framing out the “feel good” risk-on vibe, the US-China trade discussions seem to be making some progress, and the prospect of a genuine truce has risen.
Asia open

While Asian cash market looks set to gain however entering the morning session, traders have hit the pause button possibly awaiting the outline of a Brexit agreement to judge the likelihood of parliamentary approval, which suggest there still much wood to be chopped before pen gets put to paper.

As well, investors are looking for more clarity around the various phases of the US-China trade talks. Individually, Chinas firm commitment to buy $50 billion in US farm goods, details around December tariff detente, possible first-level tariff rollbacks and any signs progress on lifting the US export ban on Huawei, yup lots of wood to chop there also.

Oil market

Crude fell for a second day amid a weakening global growth outlook and as US oil producers defensively hedge against copious crude supplies in the world’s largest economy.

Oil markets continued to struggle overnight under the weight of a dreary macro scrim as back to back miserable China data prints (bad trade data and factory gate inflation) were compounded by a Germany’s sickly ZEW survey which pressured prices.

However, a lower base is being tentatively held in check after OPEC Secretary-General Mohammad Barkindo reiterated his “whatever it takes” to sustain oil market stability mantra.

While corporate earnings reports and phase one of the US-China trade talks is buttressing general risk sentiment, without an implicit rollback of existing tariffs, a tariff detente will have minimal effects on shifting the global growth dial to a more pleasant setting and therefore limited impact on oil prices. In other words, a detente means things may not necessarily get worse, but it doesn’t suggest that global economic conditions will improve any time soon.

But the fact that the losses are very sticky at these downcast levels it could be another worrying sign for oil bulls.

Gold market

The robust US corporate earnings reports coupled with positive developments on the Brexit front has triggered a market rotation out of bonds into equities resulting in US 10-year bond yields significantly rising which is weighing on the opportunity cost of holding gold.

Roaring US equity markets and an upsurge in US bond yields are possibly two of the worst flatmates for gold; as a result, gold toppled nearly $20 top to bottom overnight.

Also, The NY Fed manufacturing survey lifted a better-than-expected 2pts in October, giving the hawks on the FOMC “something to talk about” and perhaps hawkishly influencing their October policy decision process.

Currency markets

Japanese Yen

The “Risk on” environment has propelled the USDJPY higher within reach of the psychological 109 level as the S&P 500 had a peak above the equally cerebral 3000 markers.

Australian Dollar

The market is still debating the RBA’s monetary policy gymnastics. But given the RBA Board is expressing some doubts about the efficacy of dropping rates further operating in what for the RBA is uncharted territory, it could mean slowing the pace of rate cuts but doesn’t necessarily alter their dovish bias. Despite a frothy global “risk-on” environment, the Aussie dollar is trading 20 pips off yesterday’s session tops.

The Yuan

The Yuan may remain stable within the current 7.05-7.10 level while the phase one trade deal gets chiselled out.

Back to back weaker economic data out of China (Trade and factory inflation gate) provided a stark reminder if not a reality check that a weaker Yuan from a pure fundamental landscape may still be in the cards. As such the USDCNH has traded with a better bid overnight.

But given there remains a strong possibility of a Phase 1 deal getting inked, at minimum USDRMB topside should remain capped and we could see the CNH outperform in the weeks ahead assuming phase 2 and 3 of the propose US-China trade deal comes to fruition.

This article was written by Stephen Innes, Asia Pacific Market Strategist at AxiTrader

Two-Weeks Before Fed Meeting, Policymakers Remain Divided Over Rate Cut

It’s not too early to start thinking about the U.S. Federal Reserve’s next move on interest rates. With two weeks to go until their next monetary policy meeting on October 29-30, U.S. central bank policymakers appear unconvinced phase one of a partial U.S.-China trade deal is enough to dismiss the policy uncertainty that has weighed on U.S. economic growth for months.

At the same time, Federal Reserve decision-makers remain far from united behind additional rate cuts beyond the two cuts they made in July and September with unemployment at a 50-year low and consumer spending strong.

On Tuesday, it was San Francisco Fed President Mary Daly and St. Louis Federal Reserve President James Bullard’s turn to voice their opinions about the direction of interest rates.

Off-Setting Views

On Tuesday, Daly told reporters after a speech at the Lost Angeles World Affairs Council & Town Hall, “Right now, I see the economy in a good place, and policy accommodation in a good place.”

However, businesses retain an overarching sense of uncertainty, Daly said, even though “the gusting (of headwinds) seems to have gone down a little bit on the news of some progress on Brexit, some progress on trade negotiations between the U.S. and China.”

Current weak inflation levels, and a three-year inflation outlook among U.S. consumers falling to its lowest level on record, has caught her eye.

On Tuesday, a report showed the inflation outlook among U.S. consumers remained muted in September, rising slightly over the near-term but falling to the lowest level on record over a three-year time frame since the New York Federal Reserve began its monthly survey of consumer expectations in 2013.

Although Daly expressed some concerns over low inflation, she still expects it to rise back to the Fed’s 2% target, and believes the Fed’s two rate cuts so far this year, in July and September, will help sustain the longest U.S. expansion in history.

“In terms of what to do going forward, I would like to see additional data, because the economy is in a really good place right now,” Daly said.

Speaking in London, Bullard painted a gloomier picture. Like Daly, he sees what he called continued “trade regime uncertainty” as a key risk to the U.S. economy. However, he also put more emphasis on continued weak inflation and slowing global growth.

Unlike Daly, who sees Fed policy as currently “slightly accommodative”, Bullard said on Tuesday in his view policy may be “too restrictive”.

As a result, the Fed “may choose to provide additional accommodation going forward, but decisions will be made on a meeting-by-meeting basis,” Bullard said.

Fed Still Divided

Two weeks before the Fed’s interest rate decision, and policymakers still haven’t budged from their September meeting positions.

One group like Fed Chair Jerome Powell believes the outlook is generally positive. Another believes the U.S. economy needs even easier policy to avoid sinking into a recession. Still a third group believes the Fed has gone far enough or even a little too far in trying to revitalize the economy. Their biggest fear is a too-easy policy could lead to financial instability if investors take on too much risk and asset values get stretched.

As of Tuesday’s close, investors expect Fed policymakers to reduce rates when they meet October 29-30. According to the CME FedWatch Tool, the latest probability of a 25-basis point Federal Open Market Committee (FOMC) rate cut is 75.4%.

The focus ahead of the next Fed meeting will be on U.S. economic data. This week, the key report is Retail Sales. Next week, it’s Durable Goods. On October 29, the Conference Board releases its Consumer Confidence report. On October 30 while the Fed is meeting, a report on Advance GDP will be released.

Unfortunately, Fed members won’t have the chance at this meeting to react to data on Personal Spending and the Core PCE Price Index.

Additionally, ISM Manufacturing, which last month posted its second consecutive contraction, will be released on November 1 along with the October Non-Farm Payrolls report.

This could be a problem for Fed members because some may favor another rate cut in anticipation of a weak ISM Manufacturing report, and some may pass on a rate cut due to expectations of a solid jobs report.

Impressive Earnings Reports Provide Clarity for Investors

What a relief! Finally a day when we didn’t have to watch the box all day scanning for meaningless U.S.-China trade talk headlines Yes, earnings season began with a flurry of activity on Tuesday, allowing us to focus on the reports and only the reports. It certainly made trading easier because the numbers were cut and dry. There was very little to read into, very little was left to interpretation. The reports were either bullish or bearish.

In the cash market on Tuesday, the benchmark S&P 500 Index settled at 2995.68, up 29.53 or +1.01. The blue chip Dow Jones Industrial Average finished at 27024.80, up 237.44 or +0.91% and the technology-driven NASDAQ Composite Index closed at 8148.71, up 100.06 or +1.27%.

The big takeaway this week for traders is the impact of clarity. We learned on Monday that a lack of clarity usually has a negative impact on investor decisions, encouraging them to shed risky assets. Tuesday taught us that clarity over earnings brings them right back then.

Since it’s “the market”, I don’t expect bullish earnings reports to line up like they did on Tuesday. We’re likely to see days featuring mixed reports. Furthermore, we’re likely to see both bearish and bullish headlines on the progress of the trade talks. For that matter, you can throw in headlines about Brexit. Since we’re coming down to the deadline set for October 30, this phenomena has been capturing its share of headlines lately. It was reported on Tuesday that upbeat news over Brexit contributed to the rally.

Investors Bullied by Headlines

As I wrote earlier, this week’s price action in the stock market has been all about the impact of clarity on an investor’s decision process. I’m sure you heard the old adage, “when in doubt, stay out” for investors looking to enter a new position, and “when in doubt, get out” when holding a position.

In my opinion, trying to keep up with the headlines is primarily behind trader indecision. Furthermore, traders have even built algorithms to generate buy and sell signals on key words. This could be the source of stock market volatility also. Additionally, even the headline writers at Bloomberg, Reuters and CNBC aren’t telling you anything useful. Most of the time the headline is late and the story is stale by the time traders act upon it.

I think you’ll have more success if you react to numbers in a report and the price action than a headline unless the headline is stating a fact. Any headline implying hope, fear or greed is dangerous.

Last week, CNBC’s Jim Cramer warned against trading stocks on the roller coaster of U.S.-China headlines. Markets are “hostage to events that are not only totally out of our hands, but totally out of the president’s hands,” Cramer said on “Squawk on the Street.”

“I am describing an unfathomable market,” declared, “where if you have conviction, you are out of your mind,” meaning fundamental cases for buying or selling are useless.

Just the Fact Ma’am

If you’re going to trade the headlines then look for something that states a fact. On Tuesday, Reuters said, “JPMorgan Hits Record High, Lifts Bank Stocks, UnitedHealth Eyes Best Day in Eight Years, and JNJ (Johnson & Johnson) Set for Biggest One-Day Percentage Gain Since January. Those are facts.

“Brexit Deal Hopes Brighten Sentiment” – “Hope and Sentiment” – the kiss of death for traders. Clarity breathes life into a market.

Ethereum and Stellar’s Lumen Daily Tech Analysis – 16/10/19

Ethereum

Ethereum fell by 3.36% on Tuesday. Reversing a 3.16% gain from Monday, Ethereum ended the day at $180.58.

A bullish start to the day saw Ethereum strike an early morning intraday high $188.58 before hitting reverse.

Falling short of the first major resistance level at $189.67, Ethereum fell to a late intraday low $176.48.

The reversal saw Ethereum fall through the first major support level at $182.28 and second major support level at $177.70.

Finding support late in the day, Ethereum broke back through the second major support level to limit the downside on the day.

The extended bearish trend, formed at late April 2018’s swing hi $828.97, remained firmly intact. A reversal from June’s current year high $364.49 back through the 23.6% FIB of $257 reaffirmed the extended bearish trend.

At the time of writing, Ethereum was down by 0.3% to $180.03. A bearish start to the day saw Ethereum fall from an early morning high $181.2 to a low $179.78.

Ethereum left the major support and resistance levels untested early on.

ETH/USD 16/10/19 Daily Chart

For the day ahead

Ethereum would need a move back through the morning high to $182 levels to support the recovery of Tuesday’s loss.

Support from the broader market would be needed, however, for Ethereum to target Tuesday’s high $188.58.

Barring a broad-based crypto rally, the first major resistance level at $187.28 would likely limit any upside on the day.

Failure to move through to $182 levels could see Ethereum spend another day in the red.

A fall back through to sub-$180 levels would bring $176 levels back into play before any recovery.

Barring an extended sell-off through the day, however, Ethereum should steer clear of the first major support level at $175.18.

Looking at the Technical Indicators

Major Support Level: $175.18

Major Resistance Level: $187.28

23.6% FIB Retracement Level: $257

38.2% FIB Retracement Level: $367

62% FIB Retracement Level: $543

Stellar’s Lumen

Stellar’s Lumen slid by 3.88% on Tuesday. Partially reversing an 8.4% rally from Monday, Stellar’s Lumen ended the day at $0.06395.

A mixed start to the day saw Stellar’s Lumen rise to an early morning intraday high $0.06688 before hitting reverse.

Coming up against the first major resistance level at $0.0685, Stellar’s Lumen slid to a late intraday low 0.062696.

Finding support at the first major support level at $0.0630, Stellar’s Lumen recovered to $0.0639 levels to limit the loss on the day.

The extended bearish trend remained firmly intact, reaffirmed by 24th September’s new swing lo $0.051614. Stellar’s Lumen continued to fall short of the 23.6% FIB of $0.1310 following a pullback from $0.13 levels in late June.

At the time of writing, Stellar’s Lumen was up by 0.97% to $0.06457. A bullish start to the day saw Stellar’s Lumen rise from an early morning low $0.06395 to a high $0.06457.

Stellar’s Lumen left the major support and resistance levels untested early on.

XLM/USD 16/10/19 Daily Chart

For the day ahead

Stellar’s Lumen would need to hold onto $0.0645 levels to support a run at the first major resistance level at $0.06630.

Support from the broader market would be needed, however, for Stellar’s Lumen to break through to $0.0650 levels.

Barring a broad-based crypto rally through the day, the first major resistance level at $0.0663 would likely limit any upside.

Failure to hold onto $0.06450 levels could see Stellar’s Lumen hit reverse. A fall back through the morning low $0.063950 would bring sub-$0.0630 levels into play before any recovery.

Barring another crypto sell-off, however, Stellar’s Lumen should steer clear of the first major support level at $0.06210.

Looking at the Technical Indicators

Major Support Level: $0.06210

Major Resistance Level: $0.0663

23.6% FIB Retracement Level: $0.1114

38% FIB Retracement Level: $0.1484

62% FIB Retracement Level: $0.2082

Please let us know what you think in the comments below.

Thanks, Bob

Bitcoin Cash – ABC, Litecoin and Ripple Daily Analysis – 16/10/19

Bitcoin Cash – ABC – Finds Support

Bitcoin Cash ABC fell by 3.21% on Tuesday. Reversing a 1.90% rise from Monday, Bitcoin Cash ABC ended the day at $220.88.

A relatively bullish start to the day saw Bitcoin Cash ABC strike an early morning intraday high $228.93.

Falling short of the first major resistance level at $230.63, Bitcoin Cash ABC slid to a late morning low $222.68.

Bitcoin Cash ABC fell through the first major support level at $223.84 before recovering to $226 levels.

A late afternoon sell-off did the damage, however, with Bitcoin Cash ABC sliding to an intraday low $217.71.

Bitcoin Cash ABC fell back through the first major support level and through the second major support level at $220.16.

Finding support from the broader market late on, Bitcoin Cash ABC recovered to $220 levels to limit the day’s losses.

At the time of writing, Bitcoin Cash ABC was up by 1.41% to $224.00. A bullish start to the day saw Bitcoin Cash ABC rise from an early morning low $222.13 to a high $225.33.

Bitcoin Cash ABC left the major support and resistance levels untested early on.

For the day ahead, Bitcoin Cash ABC would need to steer clear of sub-$223 levels to support a move back through to $225 levels.

Support from the broader market would be needed, however, for Bitcoin Cash ABC to take a run at the first major resistance level at $227.3.

Barring a broad-based crypto rally, the first major resistance level would likely cap any upside on the day.

Failure to steer clear of sub-$223 levels could see Bitcoin Cash ABC test the first major support level at $216.08.

Barring a broad-based crypto sell-off, however, Bitcoin Cash ABC should steer clear of sub-$216 levels.

BCHABC/USD 16/10/19 Daily Chart

Litecoin Back at $54 Levels

Litecoin slid by 4.08% on Tuesday. Reversing a 0.71% gain from Monday with interest, Litecoin ended the day at $54.56.

Tracking the broader market, Litecoin struck an early morning intraday high $57.42 before hitting reverse.

Coming up against the first major resistance level at $57.46, Litecoin slid to a late morning intraday low $53.45.

Litecoin fell through the major support levels before recovering to $55 levels. Litecoin broke back through the third major support level at $54.15 and second major support level at $55.45.

A broad-based crypto sell-off in the late afternoon, however, saw Litecoin slide back to $53 levels before finding support.

Litecoin fell back through the second and third major support levels before recovery to $54 levels late in the day.

At the time of writing, Litecoin was up by 0.71% to $54.95. A relatively bullish start to the day saw Litecoin rise from an early morning low $54.55 to a high $55.13.

Litecoin left the major support and resistance levels untested early on.

For the day ahead, a move through to $55.20 levels would support a run at the first major resistance level at $56.84.

Litecoin would need the support of the broader market, however, to break through to $57 levels.

Barring a broad-based crypto rebound, Litecoin would likely come up short of Tuesday’s high $57.42.

Failure to move through to $55.20 levels could see Litecoin spend another day in the red.

A fall through to Tuesday’s low $53.45 would bring the first major support level at $52.87 into play before any recovery.

LTC/USD 16/10/19 Daily Chart

Ripple’s XRP Recovers to $0.29 Levels

Ripple’s XRP fell by 3.14% on Tuesday. Partially reversing a 7.3% rally from Monday, Ripple’s XRP ended the day at $0.28882.

A relatively bullish start to the day saw Ripple’s XRP strike an early morning intraday high $0.30 before hitting reverse.

Falling short of the first major resistance level at $0.3058, Ripple’s XRP slid to a late afternoon intraday low $0.28316.

Ripple’s XRP fell through the first major support level at $0.2837 before finding support from the broader market.

Off the back of the late support, Ripple’s XRP broke back through the first major support level limit the loss on the day.

At the time of writing, Ripple’s XRP was up by 1.1% to $0.2920. Tracking the broader market, Ripple’s XRP rose from an early morning low $0.28872 to a high $0.29261.

Ripple’s XRP left the major support and resistance levels untested early on.

For the day ahead, Ripple’s XRP would need to hold onto $0.29 levels to support a day in the green.

Support from the broader market would be needed, however, for Ripple’s XRP to break through the first major resistance level at $0.2982.

Barring a broad-based crypto rally, the first major resistance level and Tuesday’s high $0.30 would likely limit any upside.

Failure to hold onto $0.29 levels could see Ripple’s XRP hit reverse. A fall through the morning low $0.28872 would bring the first major support level at $0.2813 into play.

Barring a crypto meltdown, however, Ripple’s XRP should steer clear of sub-$0.28 levels on the day.

XRP/USD 16/10/19 Daily Chart

Please let us know what you think in the comments below

Thanks, Bob

Brexit and Economic Data Put the GBP and USD in Focus

Earlier in the Day:

It was a relatively busy day on the economic calendar through the Asian session this morning.

New Zealand 3rd quarter inflation figures provided the Kiwi Dollar with direction early in the session.

Outside of the stats, positive updates on Brexit and U.S corporate earnings failed to support risk sentiment early on.

For the Kiwi Dollar

The annual rate of inflation eased from 1.7% to 1.5% in the 3rd quarter, while coming in ahead of a forecast of 1.4%. Quarter-on-quarter, consumer prices rose by 0.7%, following a 0.6% rise in the 2nd quarter. Economists had forecast a 0.6% increase.

According to NZ Stats,

  • Higher prices for rents and cigarettes and tobacco supported the 1.5% increase in the CPI, year-on-year.
  • The increase was partially offset by falling prices for vegetables, petrol, and telecommunications equipment.
  • Quarter-on-quarter, the 0.7% rise in consumer prices came off the back of price rises for local authority rates and payments, vegetables, and meat and poultry.
  • Falling prices for fruit, petrol, and new cars were negatives for the quarter.

The Kiwi Dollar moved from $0.62858 to $0.063125 upon release of the figures. At the time of writing, the Kiwi Dollar was down by 0.21% to $0.6281.

Elsewhere

At the time of writing, The Japanese Yen was up by 0.14% to ¥108.71 against the U.S Dollar, while the Aussie Dollar was down by 0.21% to $0.6739.

The Day Ahead:

For the EUR

It’s a relatively busy day ahead on the economic calendar. Finalized Italian and Eurozone inflation figures for September are due out later this morning, along with the Eurozone’s August trade figures.

Barring material deviation from prelims, the Eurozone’s trade data will likely have the greatest influence on the EUR.

Outside of the numbers, Brexit will continue to have an impact throughout the day.

At the time of writing, the EUR was down by 0.02% to $1.1031.

For the Pound

It’s a relatively busy day ahead on the data front. September inflation figures are due out later this morning.

We can expect the Pound to show greatest sensitivity to the annual rate of inflation and the Input Producer Price Index figures.

Direction for the Pound will ultimately come from Brexit updates, however. With the EU Summit now just 4-days away, time is rapidly running out.

Positive updates from the EU and the Brexiteers delivered more upside for the Pound at the start of the week. Expect plenty of volatility and a reversal should negative updates begin to filter through, however.

At the time of writing, the Pound was down by 0.28% to $1.2751.

Across the Pond

It’s a relatively busy day ahead on the economic calendar. September retail sales figures are due out later today, along with August business inventory numbers.

Retail sales will have the greatest influence on the day. Consumer spending remains a key contributor and barometer to the U.S economy. Any unexpected slide in spending and expect the markets to balk as recession chatter continues to do the rounds.

On the geopolitical front, demand for the Dollar could rise should progress on Brexit negotiations hit a wall. Chatter from the Oval Office also needs monitoring throughout the day.

The Dollar Spot Index was up by 0.02% to 98.312 at the time of writing.

For the Loonie

It’s a busier day on the economic calendar, with September inflation figures due out later today. Expect the Loonie to react to today’s figures, with support likely to kick in should inflationary pressures build. The monthly movement in consumer prices will likely have the greatest impact.

With the BoC holding steady on the monetary policy front, inflation will need to hold steady at best.

The Loonie was down by 0.04% at C$1.3204, against the U.S Dollar, at the time of writing.

European Equities: Brexit, Earnings and Economic Data in Focus

Economic Calendar:

Wednesday, 16th October

  • Italian CPI (MoM) (Sep) Final
  • Eurozone Core CPI (YoY) (Sep) Final
  • Eurozone CPI (MoM) (Sep)
  • Eurozone CPI (YoY) (Sep) Final
  • Eurozone Trade Balance (Aug)

The Majors

It was a bullish day for the European majors on Tuesday. The DAX30 led the way, rallying by 1.15%, with the EuroStoxx600 and CAC30 up by 1.11% and 1.04% respectively.

Following a bearish start to the week, the majors were able to brush aside continued uncertainty over the ongoing U.S – China trade war.

Positive updates on Brexit from the EU on the possibility of a Brexit deal this week provided strong support for the majors.

Michael Barnier, the EU’s chief negotiator, spoke on Tuesday of a deal still being possible this week.

From the U.S, corporate earnings were a boost for the global equity markets, with JPMorgan earnings impressing.

The Stats

It a relatively busy day on the Eurozone economic calendar on Tuesday. Economic data included Germany and the Eurozone’s ZEW economic sentiment figures for October.

Of less influence on the day were Germany’s ZEW current conditions and French finalized September inflation figures.

According to the latest ZEW report,

  • The German ZEW Current Conditions Index fell from -19.9 to -25.3 in October. Economists had forecast a decline to -26.0.
  • Germany’s ZEW Economic Sentiment Index fell from -22.5 to -22.8 in October, which was better than a forecast of -27.0
  • The Eurozone’s ZEW Economic Sentiment Index fell from -22.4 to -23.5 in October. Economists had forecast a decline to -33.0.

Concerns over a possible recession weighed on consumer sentiment at the start of the 4th quarter, with progress in the U.S – China trade talks having provided little comfort.

From the U.S, a modest pickup in manufacturing sector activity in New York State was enough to avoid stressing the majors. The NY Empire State Manufacturing Index rose from 2 to 4 in October.

The Market Movers

For the DAX: Autos found strong support, with BMW leading the way, rallying by 2.45%. Daimler was also amongst the best performers on the DAX, rallying by 2.26%. Continental and Volkswagen weren’t far behind, with gains of 1.8% and 2.20% respectively.

Bank stocks also found further support. Deutsche Bank rallied by 2.88% to lead the way on the DAX30, while Commerzbank rose by 0.97%

From the CAC, it was also a bullish day for the banks. BNP Paribas and Soc Gen led the way with gains of 3.64% and 2.12% respectively. Credit Agricole saw a more modest rise of 1.51%. For the autos, it was also positive with Renault rising by 1.36%, while Peugeot rallied by 2.85%.

On the VIX Index

The VIX Index saw red for a 5th consecutive day on Tuesday, declining by 7.07%. Following on from a 6.48% fall on Monday, the VIX ended the day at 13.5.

Progress on Brexit and U.S corporate earnings, with JPMorgan Chase earnings, in particular, supported risk appetite on the day.

VIX 16/10/19 Daily Chart

The Day Ahead

It’s a relatively busy day ahead on the Eurozone economic calendar. Economic data includes finalized September inflation figures for Italy and the Eurozone. Alongside the inflation figures, the Eurozone’s August trade data is also due out.

We would expect the inflation figures to have a relatively muted impact on the majors, however, with Brexit and corporate earnings in focus.

A material narrowing in the Eurozone’s trade surplus could test the majors in the early part of the session.

From the U.S, September retail sales figures will provide direction later in the day. With recession talk continuing to do the rounds, any unexpected slide in sales will impact.

On the earnings front, corporate earnings from the U.S will also have influence. Bank of America and Morgan Stanley’s 3rd quarter results are in focus.

While U.S stats and corporate earnings will be key, expect Brexit chatter to have the ultimate say on the day. With just days remaining until the EU Summit, it’s crunch time for Boris and the Brexiteers.

In the futures market, at the time of writing, the DAX30 was down by 11 points, with the Dow down by 50 points.

The Crypto Daily – Movers and Shakers -16/10/19

Bitcoin slid by 2.14% on Tuesday. Reversing a 0.78% gain from Monday, Bitcoin ended the day at $8,191.1.

A bullish start to the day saw Bitcoin rally to an early morning intraday high $8,439.7 before hitting reverse.

Falling short of the first major resistance level at $8,456.37, Bitcoin fell to a late afternoon intraday low $8,100.

The sell-off saw Bitcoin fall through the first major support level at $8,255.47 and second major support level at $8,140.93.

Finding support late in the day, Bitcoin broke back through the second major support level to $8,200 levels.

Negative sentiment across the broader market ultimately weighed, however, with Bitcoin easing back to sub-$8,200 levels.

It was Bitcoin’s lowest closeout since 6th October’s $7,883.

For the bulls, the extended bullish trend remained intact in spite of hovering at sub-$9,000 levels. While falling back through the 38.2% FIB, Bitcoin continued to hold above the 62% FIB of 7,245.

The Rest of the Pack

Across the rest of the top 10 cryptos, it was a mixed bag across the crypto board on Tuesday.

Binance Coin and Bitcoin Cash SV bucked the trend on the day, rising by 0.49% and by 2.30% respectively.

It was deep red for the rest of the majors, however.

EOS led the way down, with a 6.34% loss

Litecoin, Bitcoin Cash ABC, and Ethereum also saw heavy losses on the day. Litecoin slid by 4.08%, with Ethereum and Bitcoin Cash ABC falling by 3.36% and 3.21% respectively.

Ripple’s XRP (-3.14%) and Stellar’s Lumen (-2.04%) saw more modest losses on the day.

Through the early part of the week, the total crypto market cap rose from a Monday low $223.92bn to a high $228.17bn before hitting reverse. The Tuesday sell-off saw the total market cap fall to a current week low $221.83bn before support kicked in. At the time of writing, the total market cap stood at $222.65bn.

Bitcoin’s dominance continued to sit at sub-67% levels in spite of Tuesday’s sell-off.

This Morning

At the time of writing, Bitcoin was down by 0.11% to $8,181.7. A bearish start to the day saw Bitcoin fall from an early morning high $8,191.1 to a low $8,156.8.

Bitcoin left the major support and resistance levels untested early on.

Elsewhere, Bitcoin Cash SV and Bitcoin Cash ABC found early support, rallying by 2.87% and 1.72% respectively.

EOS (+0.33%), Litecoin (+0.62%), and Ripple’s XRP (+0.65%) were also in the green at the time of writing.

Ethereum and Binance Coin struggled at the start of the day, however, with losses of 0.43% and 0.42% respectively.

BTC/USD 16/10/19 Daily Chart

For the Bitcoin Day Ahead

For the day ahead, Bitcoin would need to move through to $8,240 levels to support a run at the first major resistance level at $8,387.2.

Support from the broader market would be needed, however, for Bitcoin to break out from $8,200 levels.

Barring a broad-based crypto rebound, the first major resistance level would likely pin Bitcoin back from $8,400 levels.

Failure to move through to $8,240 levels could see Bitcoin spend another day in the red.

A fall back through Tuesday’s low $8,100 would bring the first major support level at $8,047.5 into play.

Barring a crypto meltdown, Bitcoin should steer clear of sub-$8,000 support levels on the day.

US Stock Market Overview – Stock Rally Driven by Healthcare and Robust Bank Earnings

Stock prices moved higher on Tuesday as riskier assets gained traction. As stock prices move higher, US yields move in tandem. The higher yields reflect the market’s belief that a trade agreement could occur. Better than expected earnings were released on Tuesday in the banking sector which buoys the US stock market, raising yields and pushing gold lower. Most sectors were higher, driven by healthcare, and technology shares, consumer staples, and utilities bucked the trend. Financials were also a robust performer following stronger than expected earnings.

Banks Beat the Street

In the banking sector, shares of JPMorgan Chase, rose 3.25% after the bank reported better than expected financial results. The company continued to see strength in both its consumer and investment-bank businesses. JPMorgan reported a profit of $9.08 billion, or $2.68 a share. Expectations had been for earnings of $2.45 a share. A year earlier, the bank reported a profit of $8.38 billion, or $2.34 per share. Revenue from non-lending operations at the bank jumped 13% to $15.11 billion. In the bank’s consumer unit, revenue rose 7% to $14.26 billion and in the corporate and investment bank it rose 6% to $9.34 billion.

Citi also beat on the top and bottom line. Citi reported earnings of $1.97 per share versus expectations that the company would earn $1.95 per share. Revenue came in at $18.6 billion versus expectations that the firm would post revenue of $18.545 billion. Fixed-income trading posted revenue of  $3.211 billion versus expectations of $3.09 billion. Net interest margin came in at 2.56% versus 2.66% forecast.

Not all the banks beat. Goldman Sachs disappointed. The company said that profit slumped 26% to $1.88 billion, or $4.79 a share, below the $4.81 expected. Revenue fell 6% to $8.32 billion, slightly above the $8.31 billion expected, on lower results in the firm’s investing and lending and investment banking divisions.

Healthcare Rallies on J&J Earnings

Healthcare was the best performing sector in the S&P 500 index following robust financial results from Johnson & Johnson. The company reported earnings per share $2.12 versus $2.01 expected. Revenue came in at $20.73 versus $20.07 billion expected. J&J also raised its full-year guidance and now sees earnings of $8.62 to $8.67 per share, with revenue in the range of $81.8 billion to $82.3 billion. Prior to the report, analysts were expecting full-year earnings guidance of $8.53 to $8.63 a share on revenue of $82.4 billion to $83.2 billion.

Natural Gas Price Prediction – Prices Rise on Cool Weather Forecast

Natural gas prices surged another 2.5% on Tuesday. Tropical depression 15, forming in the Atlantic and there is one other storm that has less than a 10% chance of becoming a tropical cyclone. There is also one storm in the Gulf of Mexico with a 10% chance of becoming a tropical cyclone. The weather is expected to be colder than normal throughout most of the mid-west which could buoy natural gas heating demand.

Technical Analysis

Natural gas prices rallied sharply and is poised to test resistance near the October highs at 2.40. Support on natural gas is seen near the 10-day moving average at 2.28 and then the October lows at 2.18. Short term momentum has flipped and turned positive in oversold territory as the fast stochastic generated a crossover buy signal. Additionally, the current reading on the fast stochastic is 43, above the oversold trigger level of 20 and in the middle of the neutral range. The fast rebound in the fast stochastic reflects accelerating positive momentum. Medium-term momentum as turning and the MACD (moving average convergence divergence) is poised to generate a crossover buy signal.

Export Demand is Flat Week over Week

The Energy Information Administration reports that liquid natural gas exports are flat week over week. Eleven LNG vessels, according to the EIA, with a combined LNG-carrying capacity of 41 Bcf departed the United States between October 3 and October 9. One vessel was loading at the Sabine Pass LNG terminal on Wednesday. Net injections into storage totaled 98 Bcf for the week ending October 4, compared with the five-year average net injections of 89 Bcf and last year’s net injections of 91 Bcf during the same week.

Gold Price Prediction – Prices Slide as Positive Earnings Sentiment Buoys the Dollar and Weighs on Gold

Gold prices moved lower on Tuesday as the Chinese now seem to agree with phase one of the US-Chinese trade agreement. Trump and Xi are scheduled to meet on the sidelines of the APEC meeting in the middle of November. On the geopolitical front, Turkey and Syria remain in the headlines. After the US withdrew from northern Syria and Turkish forces moved in, the Kurds had no choice but to look to Syrian forces loyal to President Assad.  The US has now lost any voice in this conflict which is what President Trump likely wanted.

 

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Technical Analysis

Gold prices moved lower pushing down after Monday’s inside day. Prices are poised to test support which is seen near an upward sloping trend line that comes in near 1,473. Resistance is seen near the 10-day moving average at 1,496, and then a downward sloping trend line that comes in near 1,513. Short term momentum has turned negative as the fast stochastic generated a crossover sell signal. The fast stochastic is printing in the middle of the neutral range. Medium-term momentum has also turned negative. The MACD histogram is printing in the red with a declining trajectory which points to accelerating negative momentum and lower prices.

Positive Sentiment Weighs on Gold Prices

Gold prices lost ground as riskier assets gained traction. As stock prices move higher, US yields move in tandem. The higher yields reflect the market’s belief that the dark clouds that have covered any trade agreement could be getting lifted. Higher US yields and a weak European economy point to a stronger dollar which weighs on the price of the yellow metal. Better than expected earnings were released on Tuesday in the banking sector which buoys the US stock market, raising yields and pushing gold lower.

Pound Steady as Brexit Negotiators Race to Meet Midnight Deadline

GBPUSD climbed back above the psychological 1.26 level, as investors’ optimism surrounding the likelihood of a Brexit deal remains intact for now. Sterling is one of just three G10 currencies that are gaining against the Greenback at the time of writing, with the other two being the Japanese Yen and the Canadian Dollar.

With the clock counting down until the EU leaders’ summit, which is scheduled to commence on Thursday, it remains to be seen whether a suitable Brexit deal could be brought before the EU establishment for their approval. The spotlight then turns to Westminster on October 19, which will be the first Saturday parliament in 37 years, to decide on Brexit’s next steps.

Should Brexit negotiators fall short in meeting those deadlines, Sterling could then tumble towards the 1.22 mark. UK Prime Minister Boris Johnson may then be forced to ask for a Brexit extension, and in so doing, merely kick the Brexit can down the road once more.

Gold breaks below $1490 despite IMF cutting 2019 growth forecast

Bullion is testing the psychologically-important $1490 handle, even as the International Monetary Fund lowered its global economic forecast for 2019 to three percent. That would be the slowest growth rate for the world’s economy in a decade, with the IMF now having made its fifth consecutive cut to its projections for the year. With global trade tensions taking its toll on the worldwide economy, safe haven assets are expected to remain broadly supported going into 2020.

Brent tests $59/bbl level as demand-side uncertainties abound

The IMF’s lowered 2019 global growth forecast is also expected to fuel concerns over waning global demand for Oil, with Brent now threatening to break below $59/bbl again. The risk-on mode from Friday’s announced US-China trade truce failed to garner enough momentum to keep Brent elevated. Even though investors have to contend with the risk of an escalation in geopolitical tensions that could constrict global Oil supplies, markets are still primarily concerned by demand-side uncertainties, which are fueling the downward bias for Brent.


Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (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 as to any loss arising from any investment based on the same.

U.S. Dollar Index Futures (DX) Technical Analysis – Brexit Optimism, Strong Sterling Weighing on Dollar Index

The U.S. Dollar is trading slightly lower against a basket of major currencies after posting a wicked two-sided trade early Tuesday. The early session rally was fueled by increasing demand for risky assets as U.S. Treasury yields rose and equity markets soared on the back of upbeat comments over Brexit and better-than-expected U.S. earnings reports.

At 16:11 GMT, December U.S. Dollar Index futures are trading 98.015, down 0.155 or -0.16%.

The upbeat comments over Brexit, however, were a double-sided sword, however, with a surge in the British Pound helping to drive the index lower. The Euro also inched higher against the dollar. However, losses may have been limited by a drop in demand for the safe-haven Japanese Yen and Swiss Franc. The dollar also lost ground to the commodity-linked Canadian Dollar.

Dollar index traders are primarily focused on the British Pound after optimistic comments on Brexit from European negotiator Michel Barnier were backed up by reports that a draft legal text over the United Kingdom’s divorce from the European Union was being drawn up.

U.S. Dollar Index
Daily December U.S. Dollar Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has been trending lower since the formation of the closing price reversal top at 99.305 on October 1.

The main trend will change to down on a trade through 97.560. A move through 99.305 will negate the closing price reversal top and signal a resumption of the uptrend.

The minor trend is down. This move confirms the shift in momentum to the downside. A trade through 98.955 will change the minor trend to up.

The short-term range is 96.960 to 99.305. Its retracement zone at 98.135 to 97.855 is currently being tested. This zone provided support on Friday when the selling stopped at 97.885. Trader reaction to this retracement zone will likely determine the near-term direction of the index.

On the upside, 50% resistance levels come in at 98.435 to 58.595. On the downside, the major 50% support level is 97.140.

Daily Swing Chart Technical Forecast

Based on the early price action and the current price at 98.015, the direction of the December U.S. Dollar Index the rest of the session on Tuesday is likely to be determined by trader reaction to the 50% level at 98.135.

Bearish Scenario

A sustained move under 98.135 will indicate the presence of sellers. This could trigger a further break into Friday’s low at 97.885, followed by the Fibonacci level at 97.855. This is a potential trigger point for an acceleration to the downside with 97.560 the next likely downside target.

Bullish Scenario

Overcoming the 50% level at 98.135 and sustaining the move will signal the presence of buyers. If this creates enough upside momentum then look for an extension of the rally into the 50% level at 98.435.

S&P 500 Price Forecast – Stock Markets Rally After Bank Earnings

The S&P 500 has rallied relatively significantly during the trading session on Tuesday, reaching towards the 3000 level by noon local time. Ultimately, there is a lot of noise above here and extending towards the 3025 level, so we aren’t out of the woods yet, but clearly it looks as if the market is trying to knock on the high levels. Short-term pullbacks intraday will probably continue to be looked at as buying opportunities as one of the mantras on Wall Street is “the Fed has your back”, and that of course drives stocks higher longer term.

S&P 500 Video 16.10.19

To the downside, I believe that the 50 day EMA which is currently trading at the 2950 level should offer enough support that people continue to look towards this market for gains. At this point, I believe that there will more than likely be a nice “zone of support” between the 2950 level and the 2940 level. Ultimately, this is a market that we need to pay attention to above, because if we do break out to the upside and above the recent highs, it can take off towards the 3100 level. This is certainly the time of year it could, because fall earnings season tends to be a rather impulsive move just waiting to happen.

To the downside, if we break down below the 2940 level then it’s likely that we go looking towards the 200 day EMA which is currently trading at the 2880 I am bullish, but I recognize that looking for value on pullbacks probably continues to work best.

Please let us know what you think in the comments below

Silver Price Forecast – Silver Markets Continue To Consolidate

Silver markets are likely to continue to be very noisy, as the global economic situation is the same. If that’s going to be the case, then it makes quite a bit of sense that the market is essentially waiting to figure out how certain things play out, including not the least of which will be the US/China trade relations, Brexit, and of course central banks around the world cutting interest rates and liquefy the markets. As long as that’s going to be the reality, gold and silver both should get some type of bid.

SILVER Video 16.10.19

To the downside, the $17.00 level should offer a significant amount of support, as the market has certainly seen a strong reaction every time he gets close to that level. If we were to break down below there, then the 200 day EMA comes into play. The 200 day EMA is currently found at the $16.28 level, and obviously a longer-term signal could be formed if we were to break down below there.

To the upside, the $18 level is obvious resistance, opening up the door to the $18.75 level, and then possibly even the $19.75 level. I still believe in the value of silver though, and I do like buying short-term pullbacks as they give us an opportunity to take advantage of the longer-term trend. Central banks, geopolitical issues, and of course recessionary fear should continue to power this market higher. August was 15% in gains, and since then we have been pulling back slightly to perhaps bring sanity back to the market. That pullback is just about over.

Please let us know what you think in the comments below

Crude Oil Price Forecast – Crude Oil Markets Bounce Back

WTI Crude Oil

The WTI Crude Oil market initially fell during Tuesday but found enough support near the $52.50 level to turn around and form a supportive looking candle. Ultimately, what I find interesting about this is that we have seen quite a bit of buying pressure at $52.50 over the last week or so anyway, and of course the uptrend line underneath will have its influence as well. All things being equal, the $51 level kicks off significant support down to the $50 level, and therefore it makes sense that value hunters have come back into the market.

Oil Forecast Video 16.10.19

Brent

Brent markets also fell rather hard during the Tuesday session initially but has found support just as the WTI market has. Ultimately, this is a market that is probably getting a bit of a boost due to the fact that there are still tensions with the Iranians, and of course there’s also the possibility that the Brexit gets done and that could drive up demand in theory as well. Either way, there is significant support underneath, and that’s probably the most important thing to pay attention to. The 50 day EMA is close to the $60.75 level and breaking above there could open up the door to the $62.50 level, possibly even the $64 level after that. To the downside, I see the $56 level as the beginning of a massive amount of support that extends down to the $55 level. Ultimately, I believe that we are rallying from here to form a larger range.

Please let us know what you think in the comments below