Oil And Gold Up On Weaker USD
Mati Greenspan | Jan 15, 2018 05:49AM ET
Today we celebrate the birthday of a true American hero . One who fought for freedom for all in a country that promised the world and delivered nothing.
"In a sense, we have come to our nation's capital to cash a check."
King said in his famous speech , referring directly to the promise of freedom on which the United States was founded but "it is obvious today that America has defaulted on this promissory note..."
Indeed, the United States seems to enjoy writing checks that it cannot cash. Still, Martin Luther King Jr. was quite optimistic. He believed that his people need only demand payment on that check for its promises of freedom to be redeemed.
By now many of Dr. King's initial demands have been met but the fight has evolved. Victims of inequality are not necessarily defined by the color of their skin, nor do they reside solely within the borders of the United States.
We must press on in his symbolic shadow and demand freedom for everyone throughout this entire planet that we all call home.
Today's Highlights
Record Run in HK
Oil and Gold up on Weaker USD
Crypto Atmosphere
Please note: All data, figures & graphs are valid as of January 15th. All trading carries risk. Only risk capital you can afford to lose.
Traditional Markets:
The Asian markets have put on a fantastic show so far today. The China A50 index has now surpassed it's highs from April of 2015 and is now the highest it's been since 2008.
The gains in China were propelled further by what's happening in Hong Kong. The founder and CEO of Alibaba (NYSE:BABA), Jack Ma announced that he is considering listing Alibaba Group Holdings Ltd (NYSE:BABA) shares on the Hang Seng.
Alibaba's shares in the US currently hold a record for most stocks sales in an IPO and the company's daily turnover is about 30% of the entire Hong Kong Stock Exchange.
Furthermore, there are rumors that a subsidiary of the Chinese Insurance giant Ping An will be looking to raise $60 Billion from the Hong Kong market in April.
Money comes to money, and as we've seen so many times in the crypto market. More activity on an exchange means that everything listed on that exchange can see a boost.
Sinking Buck
The second strongest trend of 2017 was the declining US Dollar. The Dollar Index went from a high of about 103.50 in January to a low of 91.4 in December.
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2018 hasn't been great for the buck either and it's gotten off to a rather rotten start.
Along with the weakening Dollar comes a strength in commodities. Gold and Oil are priced in USD so they have a very strong reverse corolation.
As we can see here, since Thursday morning the USD has declined 1.8% and Gold has climbed by the same amount.
Though Oil has been a lot more volatile than gold or the buck, it's strength lately has been astounding. This strong breakout above $60 was certainly unexpected by many...
Don't get me wrong, oil rising against a weaker Dollar is understandable, but oil rising against more production in the United States is baffeling.
Friday's Baker Hughes report shows that 280 new rigs came online in the United States over the last year.
Very likely we could see those rigs really get going now that they can get $60+ a barrel for their output.
Crypto Market
It's easy to make money when everything is rising but when thing get choppy like they are now it can start to get a bit frustrating, especially for beginning traders.
Over the last few weeks, we've seen a general pumping pattern where one specific crypto will dominate the market for a few days before flatlining or even pulling back.
Over the weekend, this momentum has been on Ethereum Classic, which went from $31 to $46 in about 60 hours but now may have lost the propulsion.
Ether Classic (ETC) is the hardest crypto for me to explain simply because I don't see it as useful. It's not a great store of value and is not meant to be a medium of exchange. So I'm scratching my head trying to figure out why crypto traders latched onto this one.
Of course, if we zoom out a bit we can see the incredible gains of ETC's younger sister ETH. A platform that has hundreds of projects being built on top of it and currently processes more transactions than any other blockchain.
The present rise in ETC might just indicate that alternative investors are looking for a bit more risk at the moment, and if that's the case we may see some of the altcoins or even the exotic cryptos gaining a bit. In the chart above we can spot a nice rising trendline (yellow) but if that fails to hold we should have a nice support level just below $900 a token.
Remember: Several of the traditional markets will be closed tonight for the holiday in the USA. Crypto trades 24/7.
Let's have an amazing week ahead.
@MatiGreenspan
eToro, Senior Market Analyst
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