Friday, 16 February 2018

Experts: The decline in US indices is not over

US indices may have registered their 5th consecutive day of increase, but not all experts believe that the downtrend is over.
Trader Kenny Polkari is not so convinced that the downturn is behind us, although the Dow Jones blue chip index has returned above the psychological level of 25,000 points.
According to Michael Yoshikami, founder and CEO of Destination Wealth Management, index growth has been predetermined by purchases of investors who are afraid of failing to return to the market.
His point was that there was this tension that is happening when investors believe that a 10% drop is a blatant opportunity for purchases. This attracted people who had cash on hand. And that's when the upside pressure begins.
Growing interest rates and fears of inflation triggering an eruption of the volatility index led to a record fall in US indices.
According to Nicholas Collas, founder of Datatrek Research, fears of inflation and rising interest rates will be the major issue this year. This, he says, will trigger more volatility in the markets.
Collas recalls that the VIX volatility index has reached peak in February only once since it was created in 1990.
According to trader Peter Costa, the market should see a rise in markets of between 5 and 6%.

Thursday, 15 February 2018

The bitcoin tested $10,000

In the last two days, the bitcoin and the other cryptocurrencies have risen. The largest in terms of market capitalization cryptocurrency went back over the psychological limit of $9,000 and was on the brink of testing the key level of $10,000.
From the outcome of this test will depend the future direction and movement of the bitcoin, according to market observers. On the one hand, an unsuccessful breakthrough and retention above $10,000 can restore the drop in full force.
On the other hand, if we see the psychological limit of $10,000, the increase in cryptocurrency may continue and even we could see $12,000 in the mid-term, according to technical analysts.
Otherwise, the bitcoin reached yesterday a 11-day peak, at a level of $9,725. After reaching the lowest value of just over $6,000 at the beginning of February, the cryptocurrency is in a sustained phase of increase.
Investors' concerns about potential interference and regulation of cryptocurrencies have lowered, which in practice has contributed to the rise of the bitcoin.
On Tuesday, Peter Boockvar of the Bleakley Financial Group was another investor who described the bitcoin as an "absolute bubble" in an interview with CNBC's financial magazine.
For other cryptocurrencies, the ethereum increased by 4.7% to 891 dollars, and the bitcoin cash was up 3.8% to $1,296. Lighthcoin was the biggest winner among the cryptocurrencies, after rising from 23 percent to 196.95 dollars, while the ripple added 3 percent to its value to 1.07 dollars.
Statistics, however, suggest that investors may have missed the rise of the bitcoin by nearly 50 percent of its bottom, given the record low trading volumes that are the lowest since July 2017.

Wednesday, 14 February 2018

50 Cent earned $200 million from his stake on VIX

Do you remember the trader "50 Cent"? No, it's not the rapper, it's the trader with this nickname and known for his constant call-options on the VIX volatility index. In the past year, these stakes had a constant loss, due to the record low volatility.
However, it turns out that patience is rewarding, and after the recent outburst of volatility, the trader is already ahead with $200 million!
In fact, among the biggest winners of last week's fall in US indices was the trader named on the famous rapper. He has earned about $200 million in total from his stake on the volatility index, thanks to his $400 million instilling of his investment, and it's only for a month.
At one point, 50 Cent turned into 30 Cent because of the depreciation of his traditionally traded options. In early February, however, the time for retribution for the trader came when he was rewarded for his patience, commented market observers.
It is unclear, however, whether the price of this profit was "not quite salty." Because, according to many market observers, it is possible that the stake in call-options on the volatility index was a pure sample of hedge or high volatility insurance. But such may have done much more damage than the $200 million profit, the same experts said.

Tuesday, 13 February 2018

Inflation expectations in the US have fallen

Inflation expectations in the US declined over the past month, according to a report by the New York Fed, published yesterday. Financial markets traditionally look at these reports as evidence of what inflation will be.
The survey of consumer expectations indicates a further gradual rise in interest rates. However, inflation is expected to be 2.71% next year compared to 2.82 the previous month.
The three-year value of expectations was 2.79% in January, which was also down from 2.89% previously. Both values ​​last month were the highest in a long time.
Data largely contradicts the government's January wage increase report, which raised inflationary expectations of the market as well as expectations for interest rate hikes from the Fed.
The Fed raised interest rates three times in the past year, despite the fall in inflation. At the same time, the reserve is expected to do so three more times this year.
In addition, the Fed is expected to begin gradually reducing its record balance, which will also exert an upward pressure on interest rates.

Monday, 12 February 2018

Citigroup: Oil could rise to $ 80 a barrel

Oil prices, rising on Wednesday after US oil drops, may continue to grow to $ 80 a barrel. This is predicted by Citigroup Inc.
The reason for these expectations is the geopolitical risks largely unrelated to the Middle East, as well as the uncertainty of President Trump's policy.
Oil prices have risen heavily as OPEC countries have taken a policy extension to curb their production by the end of this year. Subsequently, the price was further supported by the riots in Iran.
Last week, however, oil has suffered heavy losses as a result of massive sell-offs on world stock markets, which has led many investors to close their long oil positions to reduce risk or lock their profits.
And yet, as the most systematic risk to the raw material remains President Trump, according to analysts of the State Bank.
If the US imposes sanctions again on Iran, the third largest oil producer in OPEC, the price of oil could rise by $ 5 only as a result of this action, the Bank's analysts said.

Thursday, 8 February 2018

D. Gartman: The decline in US indices is not over

The collapse of US indices since the beginning of the week mobilizes an army of analysts and experts who are struggling to give an advices to investors.
Their opinions are quite opposite, some of them recommend investors to sell because we can see a further decline in the market, while the other part advises investors not to panic and not to close their positions.
The Dow blue chip index lost 1 841 points in two sessions, or nearly 7% of its value.
Some investors sell because they fear higher interest rates will affect the profits of US companies.
Others are dropping stocks because they expect further weakness in stock markets, or because they just have algorithms that sell when the majority sells, and so the decline is on the rise.
What are the predictions?
"The last few days are just the beginning of what may be a more serious bearish market," according to investor-veteran Dennis Gartman.
"We are now in the nine years of the bullish market, so will we see an adjustment of 12, 15, or 17% over the next few months?" - the expert continued.
Of course, investors should keep in mind that Gartman is traditionally a counter-investor. He has been warning of a correction for months, in an environment of growth and an increase in indexes to new and new records.
Of course there are experts who are in the opposite opinion. For example, according to Jeremy Siegel, one of the most prominent bulls in the market in recent years, which is also a warning of a potential correction, a 500-point drop in Dow could provide a good starting point for investors to buy stocks.

Carl Icahn: The bitcoin and the other cryptocurrencies are ridiculous

The last expert to comment on the bitcoin and the other cryptocurrencies is investor activist Carl Icahn. He said, that the bitcoin and the other cryptocurrencies are ridiculous and he would not approach them.
"Maybe I'm too old for them," Icahn said. "But I would not have touched these things."
The negative comments of the billionaire investor became a reality in front of the CNBC financial magazine.
"I'm not playing the cryptocurrencies, maybe just because I do not understand them," added Icahn in the special TV interview. "How are these currencies regulated?"
"Maybe I'm too old for them," Icahn explained, "but I just would not touch those things."
The bitcoin recovered from its three-month minimum on Tuesday, reaching levels of about $7,000. Earlier in the day, cryptocurrency dropped momentarily below the psychological limit of $6,000.
Despite the great popularity of the bitcoin, more and more well-known investors and analysts are critics of the bitcoin and other cryptocurrencies.
During the Davos Economic Forum in Switzerland last month, the bitcoin was severely criticized by many business leaders.
Jamie Dimon said the bitcoin would never be a major competitor to the dollar. According to him, however, blockchain technology can serve for greater efficiency in financial transactions.
Last month, billionaire investor Warren Buffett said he believed that the recent madness of the bitcoin and the other cryptocurrencies would not end well.
At the end of last year, Icahn said that the bitcoin "looks like a balloon."