Where Is The Dax Headed Next??? – Part 2

I talked about the DAX most recently, three weeks ago,

Where Is The Dax Headed Next???

The DAX is a blue chip stock market index consisting of the 30 major German companies trading on the Frankfurt Stock Exchange.  And Germany, the biggest economy in Europe is stalling.   Germany is an export country and so they have been hit hard by the trade tariff between China and the US and the all the uncertainty surrounding Brexit.

You put all these issues in a pot and the finish product is an inevitable recession.  An inevitable recession was further supported by the recent ZEW Survey.  ZEW Indicator of Economic Sentiment is a leading indicator for the German economy. The recent ZEW Survey showed sentiment among investors fell to -44.1 from -24.5 in July, its lowest since Dec. 2011.

Germany Is Flirting With Recession After Investor Confidence Falls

Source

Since price broke the 12200 level and formed a “M” pattern, also known as a reversal pattern,

I’m not sure if price will get back to the 12220 level for a short,

so lets see if price to push to the downside and pull back for a short.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

Ag Analysis Report – 8/14/19…Yep, Corn Prices Went A Lot Lower

This past weekend I talked about how the latest AccuWeather 2019 crop production analysis predicts a significant decline from last year’s corn and soybean yield.  And how this past Monday, the fate of many farmers would be decided by the World Agricultural Supply and Demand Estimates (WASDE) is a monthly report that forecast supply and demand for major crops (global and United States) and livestock (U.S. only).  But this was another example of why I don’t really care about reports, news or Trump twits because price action trumps everything and the chart suggested corn prices were going to decline. 

Ag Analysis Report – 8/9/19…Is Corn Prices Going Lower???

The Agriculture Department on Monday said farmers planted a bigger corn area than analysts estimated and pegged crop yields that also exceeded expectations, sparking the biggest rout in futures since 2013. That was a blow to growers who were holding back supplies, hoping a rally that started in May due to delayed sowing would extend through the fall.

“This is a huge disappointment for farmers that have already been struggling with a lot of uncertainty with this corn crop, trade wars and what have you,” said Tanner Ehmke, manager of the research team at CoBank, a $138 billion lender to the agriculture industry. “A lot of people were banking on the opportunity to sell at much higher prices. This report now really brings that into question.”

Source

DDRUUUMM RROOLLLLLLL

I do feel story for all the farmers in the Midwest as they have just been reduced to pawns, as Trump continues to play chess with China.  And like the big Ag companies, I would love to teach those farmers how to hedge their crops with futures so they can protect themselves win, lose or draw.

If there was one message I could send the farmers, it would be the chart suggests price will retest the weekly demand at $356.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

Bond Analysis Report 8/14/19 – More Upside To Come On The 30 Yr Bond

The yield for the longest-dated Treasury bond is now a hair’s breadth away from plumbing its lowest level in history.

Investors said the $22 trillion U.S. government debt market was now approaching this key milestone on a combination of factors including the growing world of negative-yielding government bonds, expectations for Fed easing spurred by rising recession concerns, and the absence of inflation pressures.

The 30-year Treasury bond yield TMUBMUSD30Y, +1.26% ended at 2.13% on Monday, following a relentless rally in long-term government bonds in the past few weeks. The 30-year yield is only a few basis points away from its all-time low set in July 2016, when it touched 2.09% after the U.K. voted to leave the European Union.

Source

So what’s the significance of the 30 year bond yield reaching all-time lows? 

Well Interest rates and bond prices are inversely correlated, meaning when one goes up, the other goes down. 

Because a bond’s payout is fixed, as interest rates go up, the existing bond becomes less attractive because people want to buy the new bond that pays more interest.  So to make the existing bond more attractive, the value of that existing bond decreases.

And as the global and US economy continue to slow down, Fed Powell won’t have any choice, but to lower rates again…possible two more times this year.  So I personally expect the 30 year bond to continue to go up in value.

The chart suggests price will move higher to the monthly supply at 174’00.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

Lyft Thinks They Are Slick, Short The Stock Now

Back in late March Lyft made their debut on the stock exchanged and opened at $72 per share. Lyft is now down 18% since its IPO.  Despite the positive earnings last week, which included raising their full-year outlook, Lyft has further downside.  There have been countless questions and discussions surrounding Lyft’s business model.

 In fiscal 2019, Lyft expects to generate revenue of at least $3.47 billion with an adjusted EBITDA loss of $850 million to $875 million. In 2018, Lyft’s EBITDA’s loss was around $850 million.  Thus, Lyft may never make a profit, nor do they have a clear path to profitability.

But here is why I think Lyft is a short now.  During their earnings announcement last week, where they reported raised their full-year outlook, Lyft said they are cutting down their lock-out period from late Sept. to Aug 19th.

“The lock-up period is scheduled to end on September 24, 2019, which falls within the Company’s quarterly blackout period that commences at the end of the day on August 31, 2019,” the company said in the filing. “Therefore, in accordance with the lock-up agreements with the underwriters, the lock-up period will end at the open of trading on August 19, 2019, which is ten trading days prior to the commencement of the Company’s quarterly blackout period. The Company will also release the market standoff agreements when the lock-up period expires.”

Lyft expects that about 257.6 million shares of Class A common stock may become eligible for sale in the public market beginning August 19. This includes about 12.8 million of Class B shares of common stock converted into Class A stock.

Newly public companies are typically subject to a lock-up period preventing insiders including founders, directors and other employees from selling their shares for a designated period of time. The restriction is intended in large part to prevent these investors from injecting large numbers of shares into the market, which could send stock prices lower by quickly increasing supply.

Source

So there are about 274 million shares outstanding.  The founders, institutions that bought a stake in the company before going public want to cash out.  We are talking about potentially diluting the float (float is the number of shares actually available for trading) by almost 100%.

August 19th simply becomes a supply and demand issues, very similar to the supply and demand issues on Steem.  It’s way too expensive to short the stock by borrowing shares due to the borrowing rates, which was once 100%.  Thus, the best way to short Lyft is through options.  But give yourself so time for the trade to work.  The leap options, January 2012 options are too illiquid.  But the January 2020 put options gives one plenty of time for the trade to work, which also includes time for an additional two earnings report (which may not meet expectations).

So if you think Lyft will at least test the lows within the next five months,

Consider buying some January 2020 put options with a strike price at $50, but first ensure its liquid enough.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

Gold Smart Money Sentiment 8/12/19 – This Is Why I’m Became A Gold Bug

The Commitments of Traders (COT) is a weekly market report issued by the Commodity Futures Trading Commission (CFTC) listing the positions held by commercial traders and the “Smart Money”, the hedge funds and bank institutions in various futures markets in the United States. Since the COT measures the net long and short positions held by speculative traders and commercial traders, it is a great resource to gauge sentiment in the Markets.

In recent weeks gold has hit a six year high and is on the verge of closing above a key psychological level at $1500. Since December, gold is up 15%.  Because of the ongoing trade war between the US and China and now a pending currency war between US and China, Goldman Sachs said last week the risk of a recession is rising. And what is the Smart Money doing, they are rushing into safe havens.

The Smart Money is buying Gold as evidence of open interests increasing, along with the price of gold.

Which has translated into Gold long positions rising for the 9th time in the past 10 weeks.

We haven’t seen this much bullishness in Gold by the Smart Money since 2016.

But this is the chart that does it for me, as it indicates the Smart Money really became bullish on Gold at the beginning of June.

Thus, the chart suggest to go long on Gold during pull backs.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

Cryptocurrency Relative Strength Analysis Report For Week Starting 8/12/19

When you think about Cryptocurrencies, one name immediately comes to mind, Bitcoin.  Since the creation of Bitcoin, there has only ever been one cryptocurrency at the top of the market cap rankings…Bitcoin. 

When the price of Bitcoin rises, generally you can expect altcoin prices to rise with it. Likewise, when the Bitcoin price drops, altcoins also follow. And sometimes when Bitcoin is rising, the altcoins are declining due to cash moving from the altcoins to Bitcoin and vice versa.

Source Image

Bitcoin dominance is used to measure the percentage of the cryptocurrency market that can be attributed to Bitcoin. Thus, it’s very easy to determine the relative strength of Bitcoin at any point. Not the case for the altcoins…until now. I have taken the more popular altcoins and determined their relative strength, relative to Bitcoin using just moving average.

Binance

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EOS

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Ethereum

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Litecoin

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Neo

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Steem

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Tron

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Zcash

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Based on the moving averages and the last daily closing price, relative to the moving averages,

the altcoins relative strength, relative to Bitcoin are the following:

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Two Weeks Ago

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This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

Box Got Crushed – Part 3

This is my third and
might be my last post on Box, not sure if they are worth discussing any
more.  So let me catch you up on things.

I first spoke about Box five months ago,

Box Got Crushed

In 2005, Box was founded
and ten short years later, the company went public and now serves 70% of the
Fortune 500 companies.   Box began as an enterprise-focused cloud
storage company, but it’s been increasingly building out a platform on top of
its cloud-storage product.  I was never
high on the company because one of their biggest competitors is Microsoft
Corp’s OneDrive and SharePoint, who based on their size, sold the same
commodity type storage for cheaper.

Needless to say, earlier this year when they announced fourth quarter earnings, the results were below expectation.

I personally saw further declines and the chart suggested price would head down to the monthly demand at $14.

Lets fast forward to June,

Box Got Crushed – Part 2

Box announced their first quarter earnings report. Box’s revenue in the quarter increased 16% from a year earlier, but the lowered their forecast for the rest of the year leading to a sell off in the stock. Needless to say price hit and bounced off the the monthly demand zone at $14. As the zone indicated, there were unfilled buy orders which cause the bounce in price.

So the question at the time became there more unfilled orders at the demand zone or did they get all used up after the bounce in price?

Box isn’t scheduled to announce earnings until late Aug, but their direct competitor Dropbox Inc announce their second quarter earnings this past Thursday.  Dropbox reported a slight increase in the number of users who are paying for its file sharing services but they also reported a wider second-quarter net loss.  Again, since Box is in the same line of business as Dropbox, Box sold off as well.

So now we can answer the question of were there more unfilled buy orders at the demand zone or did they get all used up after the bounce in price in June? I’m sure there were more unfilled buy orders below the pivot highlight by the purple circle, but the sellers absorbed them all and pushed prices higher.

I expect price to bounce from current levels, but then head lower, eventually to the weekly demand at $10.50.

This post is my personal opinion. I’m not a financial advisor. Do your own research before making investment decisions. By reading this post, you acknowledge and accept full responsibility of any gains or losses.

The Are Slowly Coming, In Groups Of Herds

The new report from digital asset management company Coinshares points to the increasing dominance of institutional investors in Bitcoin. At the same time, retail investment in the sector is dwindling. This could have lasting effects on the way Bitcoin’s price behaves in the future.

According to Coinshares, there is a fundamental difference between the price rise of 2017 and the bull market of 2019. They noted that four factors were responsible for the 2017 Bitcoin price frenzy- a spike in Google searches for ‘Bitcoin’, media attention, rise in a number of tweets related to Bitcoin and the corresponding rally in altcoins. This time, none of these factors are visible in the market.

Source

I’m still remember my 2nd post ever on Steemit,

Wall Street Secrets Revealed #1 – The Hedge Funds Are Coming To Crypto

I talked about the launch of Bitcoin Futures on the Chicago Mercantile Exchange in December 2017 and how Retail Investors chase price and buy high and sell low, while the Professionals buy low and sell high. The Hedge Funds have purposely sold Bitcoin futures to get in a better price.

I also talked about the Retail Investors are throwing in the towel after seeing a more than 50% correction in the Bitcoin price to the buyers, the Hedge Funds, who are loading up and buying from the Retail Investors. But to fill all their buy orders, as the sell orders dry up, price must go down to the next stack of sell orders. We are approaching what I believe will be the bottom of bitcoin at $6000.

bitcoin.PNG

I also still remember my 11th post ever on Steemit, as it was confirmation that supply and demand works in the Crypto space as well,

Crypto Analysis Report 2-16-18 Bitcoin…Sellers Were Waiting At $10000

Two trillion dollars are on Wall Street, waiting for the pipelines from Wall Street to the Crypto Space to be fully developed. When we talk about Bitcoin hitting $100k even $200k, will it’s going to be the Smart Money’s push into Cryptos that gets price there. Buckle your seat belts, it’s going to be one hell of a ride over the next 5-10 years.

This post is my personal opinion. I’m not a financial advisor. Do your own research before making investment decisions. By reading this post, you acknowledge and accept full responsibility of any gains or losses.

Intermarket Relative Strength Analysis Report For The Week Starting 8/11/19

Instead of looking at financial markets or asset classes on an individual basis, intermarket analysis looks at several strongly correlated markets or asset classes, such as stocks, bonds and commodities. This type of analysis expands on simply looking at each individual market or asset in isolation by also looking at other markets or assets that have a strong relationship to the market or asset being considered.

The US economy is still the largest in the world and the US dollar is still the most powerful currency in the world.  Over half of all foreign currency reserves in the world are in US dollars.  Thus, the asset classes relative strength will be compared to the US Dollar.

Bitcoin

30 Yr Bond

Copper

Euro Dollar

Gold

Oil

Soybeans

S&P 500

Based on the moving averages and the last daily closing price, relative to the moving averages,

the asset classes’ relative strength, relative to the US Dollar are the following:

Two Weeks Ago

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

Sly

The Hyena keeping tabs.



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