After a year-end crash that rang several alarms (there were losses of up to 30% in the fourth quarter of 2018), Amazon shares are given a good reprieve in the stock market. In fact, the largest e-commerce company in the world has marked a bullish path so far in 2019. Now, after accumulating profits of up to 24%, AMZN is approaching resistance levels that could be crucial to revisit its historical maximums.
Market Analysis
Gold Markets Trend For 2019
2018 was full of disappointment for commodities, contrary to expectations. Markets started the year with very high hopes, after upwardly revised growth projections in late 2017. As January and February are traditionally strong months for Gold, the strong demand noticed in the first quarter of 2017 helped the asset start 2018 in bullish mode.
In contrast to the forecasts, however, Gold markets bottomed out by the end of August at $1160 as it faced Dollar strength, mainly due to the Fed interest rate hikes. By the close of 2018 things changed as commodities perked higher, with Gold reversing more than 61.8% of the year’s losses.
Projections for 2019 point towards a bullish outlook for Gold on the perspective of a weaker year for the US Dollar. The slowdown in the global economy and the fact that policymakers are trying to focus on maintaining robust domestic growth momentum, as well as trade tensions and political jitters, leave the balance of risks to the downside.
ABC Correction Waves – Elliott Wave theory
Following with the Elliott Wave theory that we have seen in the previous article, in this article we will see how the 5 impulse waves (in favor of the trend) proposed by Elliot are corrected and reversed by 3 waves against the trend called ABC Correction Waves.
Observe the following image:
The price swings marked by colored lines and the letters a, b, c form a corrective movement of the bullish wave formed by swings 1, 2, 3, 4 and 5.
Because we have used a bull market in the previous example does not mean that this theory does not apply to bear markets. The same pattern 5-3 may appear like this:
EUR Markets Trend for 2019
The Euro dropped from its top of 1.25 to 1.12 lows against the Dollar over 2018, and has been
trading at 1.14 in the early days of 2019. The drop in the Euro is directly associated with the
interest rate hikes by the Fed as the Euro Area interest rate has remained stable. Furthermore,
the exchange rate also reacted strongly on news regarding Brexit, with March 2019 fast
approaching and no deal reached yet.
On the macro side, the Euro Area has been quietly registering decent growth rates, estimated at around 2%, on a y/y basis. Inflation has been fluctuatingiii around the ECB target level of 2%. In 2019, growth is forecastediv to stand at 1.7%, down from the previous forecast of 1.8%, with a similar path for inflation. An increase in bond yields is expected, attributed to both the end of QE in December 2018 and the discounting of the effect of a possible ECB rate hike in late 2019. The hike, as communicatedv by the ECB in the last few meetings, is expected to take place in the third quarter of 2019.
USD Markets Trend for 2019
At the beginning of 2018 it looked like the combination of proposed infrastructure spending, tax cuts and expected interest rate rises could have supported the USD. Despite a poor first quarter, the USD rallied as the four interest rate hikes materialised and the benefits of the tax cuts, especially for corporations, meant record earnings growth during 2018. The USD Index gained more than 4.3% over the course of the year. The rally in both the USD and US Equity markets turned down in the final weeks of the year.
Expectations are that there will only be one or two rate hikes this year as signalled by the Federal Reserve, as the economic outlook for the US cools. Many are even suggesting no rate hikes at all for 2019 as corporate earnings slow and the trade war impact ripples out. Recession has been mentioned as a possibility for late 2019 as the much anticipated “yield curve inversion” (where short-term yields are higher than long-term yields) is expected to occur.
JPY Markets Trend for 2019
On account of the stronger Dollar fundamentals, the Yen lost ground against it over the course of 2018, although it registered significant gains in December, reducing the overall blow. Currently trading at 108.8, compared to 111.01 in the first week of 2018, the pair has an immediate Support level at 108.50, and a subsequent one at 104.87. The closest Resistance level stands at 111.43.
The Japanese economy appears to have left the perils of the past behind and is now growing at a moderate yet stable rhythm. Overall leading economic indicators are in the black, with both manufacturing and non-manufacturing outlooks being positive. The country keeps importing more, signifying that consumption is growing, while inflation, the utmost worry for the Japanese economy, appears to remain above zero, despite fluctuating on a m/m basis.
Furthermore, the unemployment rate continues to remain low, while retail trade keeps growing. BoJ policy is still accommodative, with no change in interest rates expected, at least until inflation manages to remain close to the target for a significant amount of time. No major political events are expected to take place in the country over 2019, thus Prime Minister Shinzo Abe will still maintain the majority in the House of Representatives, and Abenomics will continue boosting the Japanese economy.
Binance Coin (BNB) surprises with its 22% profit
Binance Coin, the native token of the crypto exchange Binance, registered on Tuesday up to 22% of gains when entering to the index of the first 10 cryptocurrencies.
The Binance to Dollar (BNB/USD) exchange rate set its intraday high at 8,788 in the open of the European session. Previously, the pair opened at 7.158 as part of its rally previously underway. On January 31, the BNB/USD traded as low as 6,079, raising the pair’s weekly earnings to 44.5%.
From a technical perspective, the BNB/USD previously had a downward trend within a falling wedge formation. Ideally, as the contracts and the volume of the wedge begin to fall, the underlying asset attempts a break-up action.
Technical correction in the market
A technical correction is a change in the direction of the price of an asset after a constant movement (bullish or bearish). According to the definition of Technical Correction, this phenomenon occurs only when there is no evidence to support the change of direction in prices. These corrections often appear when investors temporarily reduce their buying trades in a bullish trend movement or their selling trades in a bearish trend movement.
The 2019 Equity Outlook: What are the experts saying?
As another year comes to an end we are not only left scratching our heads as to where the last twelve months have gone, but also what can we expect from the markets in 2019? Last year seemed to start with a lot of positivity on the back of a strong 2017, the Dow Jones continued to ride the Trump wave through January and would later go on to reach all-time highs despite a number of tough months.
Cable finished January at 1.419 and reached a high of 1.437 in April, a month that would go on to prove very difficult for the value of the sterling and set the tone of decline for the rest of the year. Holiday makers can only dream about what those price levels must have felt like given cables current value.
Look at the NASDAQ, we saw Apple become the first ever company to reach a valuation of $1 trillion and the index seemed to be on an unstoppable charge before a harsh reality check in October.
Theresa May could lose the Brexit vote and the market expects Europe to move
Political instability in the UK is assured and will affect the British economy and the rest of the EU, experts say
The market assumes that Theresa May tomorrow will lose the vote on the plan for the departure of the United Kingdom from the European Union that the premier agreed with Brussels. May had agreed to expose a plan B in three days, if the Brexit vote fails tomorrow. Experts and analysts consulted trust that the European Commission can now offer a little hand to prevent uncertainty from going further. This issue, added to the bad macro economic data from China, has caused a fall in European markets.
If the pact does not receive the approval of the Parliament, the Prime Minister will have three days to modify it, something that the experts do not see probable either, and from then on it will be the Parliament that takes control of the Brexit. This can lead to several very different scenarios: that the departure of the UK from the EU is delayed for the parties to continue negotiating (in principle the planned disconnection date is March 29); that new elections be called if the Labor Party manages to take forward a motion of no confidence against the Executive of May or the convocation of a new Brexit referendum.