I cannot make any claims about the virus itself and this post is the reaction of major stock markets. A good explanation I’ve found on epidemics and exponential growth is this one on YouTube which I recommend watching if you are not already up to speed.
Looking at the current situation it appears that the market has room to fall further as the economic fallout continues and the virus spreads.
If the virus starts to slow down, it won’t be long before stocks find a bottom given the huge amount of stimulus that central banks are providing.
The most important thing is that we need to see the number of new daily cases start to flatten out.
Currently the virus is spreading at an exponential rate and that is causing businesses and services around the world to enter lock-down.
That has dire consequences for company profits.
To summarize some of the information in the mentioned video above, exponential growth means that as you go from one day to the next you have to multiply by some constant.
In the case of coronavirus, daily cases have been increasing by about 1.15 to 1.25 times the previous day’s cases. This results in an exponential curve with the number of new cases increasing on a daily basis. In fact, a virus provides a textbook example of exponential growth since what causes new cases are existing cases. However, there comes a time when exponential growth has to slow down.
For example, as millions of people become sick there are fewer people that can be infected so the rate of new cases must decrease. Likewise, measures such as hand washing and limiting gatherings also have the effect of reducing the spread.
So an exponential curve will eventually level out at an inflection point and turn into what’s called a logistics curve. At this point the number of new cases each day levels out and then starts decreasing. We have already seen this happen in China and now it is happening in South Korea too.
New cases in China leveling out. Source: John Hopkins University.
Growth Factor = No. New Cases Today / No. New Cases Yesterday
A value over 1 indicates that we are still on the exponential part of the curve and there may be higher magnitudes of new cases ahead of us. In other words the growth is not slowing down.
This is the case right now in the USA and Europe. Whereas a value of 1 means that growth is leveling out and a value under 1 means new cases are decreasing.
Taking China as an example, the coronavirus spread began at an exponential rate which has gradually leveled off thanks to drastic shutdown measures.
With new cases appearing to have peaked the country has been able to get back to work and reboot its economy. Meanwhile, the United States and Europe have only just started to see new cases increase, indicating that they are likely to be near the beginning of the exponential curve.
What does all this mean for the stock market now?
I think we need to see the growth rate of new cases in the US and Europe start to level off before we can put in a major stock market bottom. So we need to see the daily growth rate drop to one or below and then stay there, perhaps for a week or so.
Once that happens I think we will see a bottom in stocks and a significant relief rally thanks to the huge amount of stimulus that is being provided by central banks.
It is because of this stimulus that we will see the slingshot. Importantly, though, I don’t think we need to see growth rates level off for the whole world.
It would be enough to see growth rates in the US and Europe start to slow for a bottom to be put in. That’s because these areas (plus China) account for the vast majority of global GDP.
To keep on track of this I am using the coronavirus dashboard developed by John Hopkins University which seems to provide the most up to date and reliable figures that I’ve found. The dashboard provides the latest statistics on new cases which can then be used to calculate growth rates.
Analyzing these numbers it doesn’t seem all that surprising that 10% drop in US stocks that day coincided with a huge daily growth rate of 2.8 times (this is for locations outside Mainland China).
Ultimately, virus growth rates and the stock market are linked and so long as the curve is exponential the markets are going to struggle.
Stock markets are likely to rally every time the virus looks to have been defeated, even when it’s not.
The data isn’t entirely accurate so there is likely to be some false starts. It’s also possible that the market will be able to lead a flattening in the virus whether it is caused by luck, government intervention or some other reason.
But eventually the market will get it right, it always does.
That being said, when stocks are up and the exponential curve has leveled off, review your Daily, then your Weekly charts with signals for Green Light Trade Signals because that will mean we are close to a bottom, or the bottom may be in!
Bitcoin Holds Support For Wealth Maximizer Traders
Volatility in bitcoin (BTC/USD) has fallen noticeably in the past six weeks as the pair has been range bound around a key price support zone. Low volatility usually leads to higher volatility, and given the price pattern, bitcoin is poised to move soon.
For the past six weeks or so, bitcoin has been consolidating around the bottom line support of a descending trend channel. This follows the completion of a 61.8% Fibonacci retracement of the 2019 rally, as the pair fell through $7,231.40 seven weeks ago before reaching $6,430 and holding. That low completed a 53.6% decline off the 2019 top and remains the most recent trend low.
The top of the range or resistance of the six-week consolidation is at $7,870.10, which is right around the bottom of the 55-week exponential moving average (EMA) orange line, now at $7,805.60. In addition, the long-term uptrend line has so far provided some support around the recent lows as well. Although it may not be done forming, so far this pattern can be looked at as a possible double bottom trend reversal pattern, as of now.
Although it’s not clear what happens next, bitcoin does seem to be getting closer to making a move in one direction or the other.
The first sign of an upside breakout is on an advance above the most recent short-term daily swing high of $7,689 from two weeks ago, with confirmation of strength seen on a decisive move above $7,870.10. Note that the 55-day EMA, seen in the chart below, is also marking resistance of the current consolidation bottom along with a trendline. Also, there is a bullish divergence in the 14-day relative strength index (RSI).
Even with the 53.1% retracement, bitcoin ended 2019 up 94.1%. In an upside breakout scenario, not only is a move up to the top channel line possible, but bitcoin also has a chance to break out of the declining trend channel. The falling channel is part of a potential trend continuation pattern that has formed subsequent to the 2019 top of $13.868.44. That top ended an aggressive 28-week 343.2% advance off the December 2018 bear market low of $3,128.89 and can be considered as the first leg up off a bottom.
On the downside, a decisive drop below $6,430 triggers a continuation of the bearish channel, and given that a break below the long-term uptrend line would therefore occur, selling pressure could accelerate. The next lower key support zone is identified as $5,900 to $5,427, given prior price support levels around $5,900 and the 78.6% Fibonacci retracement at $5,427.15.
The October issue of InsidersPower Newsletter covered the warning of a correction and what is coming for the balance of the year and into 2019. Now let’s take a look at our daily signals issued and when they were issued to help protect our members and their families from quick collapses.
S&P 500 Index
Warning Signal Issued: October 6
Warning Signal Issued: October 6
Russell 2000 Index
Warning Signal Issued: September 24
The Russell 2000 is by far the most common benchmark for funds that identify themselves as “small-cap“.
We all know momentum was pulled out of the Cryptocurrency market starting in November of 2017. But, there are plenty of opportunities to continue to profit within the industry. So, let’s take a close look at Ethereum at the weekly and a recent daily chart.
Traders Weekly Chart
As we notice when reviewing Ethereum chart below it remains in a weekly decline with strong downward momentum.
Traders Daily Chart
As we can see in the recent daily chart below, any trades countering the larger longterm weekly momentum should be reconsidered.
At a minimum, they should be assumed with an understanding that momentum may eventually turn a green light back to red and raise the risk level of a bullish countertrend trade. Although the bullish green lights up to July were successful, all were counter-trend rallies. Importantly, they eventually gave way to profitable long-term momentum red light shorts.
“Wall Street is working on a new platform which will ease the trading, storing and spending digital assets.”
Did you read that? Go ahead, read it again.
That’s tremendously bullish for bitcoin and other cryptocurrencies. It will help them gain acceptance among investors, merchants and consumers.
Last week, Intercontinental Exchange (ICE) announced plans to form a new company, Bakkt, with the purpose to create an open and regulated global ecosystem for digital assets. The new company is expected to work with a marquee group of organizations that includes BCG, Microsoft, Starbucks and others to come up with an integrated platform that will ease the trading, storing and spending of digital assets.
That could give a boost to digital assets like bitcoin, as it will ease market volatility. “Traditionally volatility scares most investors no matter the asset class,” says Christopher Bates, a former Member of the NYSE. “Bakkt will draw resources from reputable companies with knowledge in fields of risk management and technology to create a federally regulated platform. Once investors feel at ease trading in a regulated environment volatility should ease.”
All InterAnalyst subscribers understand what emotional distress volatility can cause, especially when it goes from 18,000 down to 6,000! So, understand that volatility is part of the life of an immature asset. That volatility is nothing new and although it will subside over time, you must learn to live with it by controlling your own emotions and decisions.
Remember, this isn’t the first time Wall Street has cozied up to digital assets. In the last two years, Wall Street has been introducing bitcoin futures to help investors hedge their positions. It has also added new products like the Investment Trust, which allow for broader investor participation in the Bitcoin market — and could help the digital currency move from the “innovator” and “early adopter” stage in the Rogers Curve to the “early majority.” That’s when demand for a product turns into a cascade, and the product becomes an “epidemic.”
That’s good news for long-term bitcoin bulls, as an “epidemic” means higher bitcoin prices, especially since bitcoin is in limited supply, provided that big governments, big banks, and hackers do not spoil the party.
It is always fun to join the party early, but please be aware that the costs early on are tremendous volatility. So use all the resources available to pick your entry points wisely and do not expect miracles.
I have to apologize to my wife for buying her a ring for our engagement 24 years ago . . .
That ring may have just dropped in value by 98% according to this amazing find:
Don’t tell the Hatton Garden gang: scientists just unearthed an eye-watering hoard of diamonds, so valuable it would completely destroy the world’s economy.
The scientists reckon there’s a quadrillion tonnes of diamond buried in the ‘cratonic roots’ in continents.
There’s plenty more where these came from (Getty) Cratonic roots are the most ancient sections of rock under tectonic states, shaped like upside-down mountains. The researchers estimate that the roots may have 1-2% diamond, meaning that about a quadrillion tons of diamond are buried there.
Given that a ton of diamond is 50,000,000 carats, worth at least £3,000 each, that comes out at a tasty £150,000,000,000,000,000,000,000,000 by our relatively unscientific calculations.
‘This shows that diamond is not perhaps this exotic mineral, but on the [geological] scale of things, it’s relatively common,’ says Ulrich Faul, a research scientist in MIT’s Department of Earth, Atmospheric, and Planetary Sciences.
‘We can’t get at them, but still, there is much more diamond there than we have ever thought before.’
The researchers concluded that there were diamonds down there due to an anomaly in seismic data – where sound waves seemed to speed up. Faul and his colleagues calculated that the anomaly could be caused by 1%-2% of diamonds in the ‘cratonic roots.’ Faul said, ‘Diamond in many ways is special. One of its special properties is, the sound velocity in diamond is more than twice as fast as in the dominant mineral in upper mantle rocks, olivine.’
“We are Reshuffling the World Order” Asheesh Birla- VP, Ripple
The influence of regulators is good especially in a sector that is still new and developing. Besides, with regulation, investors’ interests are secured. However, is too much regulation negative? Well, Asheesh of Ripple thinks it is. He even said regulators are unknowingly imposing laws “killing” cryptocurrencies. Anyhow, let’s see what time has now that Ripple and XRP are splitting to please the SEC.
From the News
There is a “necessary’ decoupling going on right now. That of Ripple, the company that was incorporated six years ago and XRP, a product of Ripple Labs and it makes sense for Ripple especially. These two have been synonymous since XRP trading took root a couple of years ago. But as it appears, SEC’s position and selection criteria of what’s qualifies to be a security is driving a wedge between these two. The relation position was even emphasized by The Hatch Company, a PR firm which Ripple hired to drive their point home and complement Brad’s assertion.
Talking of regulators, Asheesh Birla the product VP at Ripple said it’s likely that they will regulate cryptocurrencies to “death”. So, to take measures now that they are a software company offering their client financial solutions, Ripple, the company, is prepping a large regulatory team to take on unfavorable country regulations. This is in line with their vision of on-boarding more than 1,000 new banks/companies to their fold in the next two years. As such, they want to make RXTP integration as smooth as possible and to remove all these bottlenecks that can impede adoption.
Legitimacy Through Global Regulation
Ripple does not want to hear people saying to its coin ‘Ripple,’ and it is working very hard in order to change that in the community. Ripple has been trying to change the notion that is installed in the cryptocurrency market that it is responsible for the XRP currency.
The main intention is to turn its virtual currency into a symbol. And there are some projects and logos around that the community is analyzing as the possible solution for that problem.
The official Github site of the project for the new symbol explains that so as to consider XRP a currency, it will need its own symbol. This is very similar to what other fiat currencies have: $ for dollars, for example. At the moment, the final version of the logo has not been decided, but apparently, it will be different from the current logo of the company and coin.
One of the main reasons for this change is due to the fact that the company wants to ‘desecuritize’ itself. Regulators in the United States may consider some virtual currencies, including Ripple and Ethereum, securities. And the likelihood of XRP being considered one is high.
If this turns out to be in that way (Ripple being considered a security) it would have a strong impact in the price of the virtual currency. With a new logo, it would resemble more as a currency rather than a security – but the effect is not proven yet.
At the same time, the company says and claims that the XRP ledger is an open source and any company would be able to use it for their own purposes. But third-party development in the platform has not been as much as desired and most of the commits made by Ripple have been performed by its staff.
If Ripple wants to solve that problem and disassociate itself from the XRP token, it will have to burn or sell the supply of XRP that the company holds.
Overly, XRP is down 80 percent from their all-time high at the time of this writing. That’s by all accounts a crash and burn and who knows if it will recover or how long it will take. But Ripple, the company does have a future as a company if they can make the split legal.
Over the past couple of months, Bitcoin and other cryptocurrencies have experienced a tremendous surge in popularity. Personally, I was completely floored the other day when my nephew wanted to ask me questions about investing in Bitcoin. It seems like the whole world is getting caught up in the cryptocurrency revolution, and needless to say, the powers that be cannot be thrilled about this. Independently-controlled cryptocurrencies represent an existential threat to the global debt-based central banking system that we have today, and so the elite have a very strong incentive to bring about the demise of Bitcoin and other emerging cryptocurrencies.
So it is no surprise that one of the key mouthpieces for the elite, the Washington Post, has begun to demonize Bitcoin. And if you are going to demonize something, one of the fastest ways to do that is to link it with racists. The following is an excerpt from an article that the Post just published entitled “Bitcoin’s Boom Is A Boon For Extremist Groups”…
Even before Charlottesville, Richard Spencer, a prominent member of the alt-right, a group that espouses racist, anti-Semitic and sexist views and seeks a whites-only state, had gone as far as declaring bitcoin “the currency of the alt right.” But far-right political leaders and experts on extremist movements alike say the adoption of bitcoin gained new urgency after Charlottesville as extremists looked for ways to operate beyond the reach of government control and the shifting policies of U.S. tech companies.
For those of us that are accustomed to thinking critically, we see right through what the Washington Post is trying to do. The Bitcoin phenomenon has absolutely nothing to do with Richard Spencer and his ilk, but every time the liberal elite want to demonize someone or something they trot out their favorite boogeyman once again. Just like every other currency, Bitcoin can be used for good purposes or for bad purposes. But the Washington Post article would have us believe that Bitcoin is at the core of some great “racist conspiracy” that is about to take America by storm…
Extremist figures who invested in bitcoin as a bulwark against efforts to block their political activity now find themselves holding what amount to winning lottery tickets. The proceeds could be used to communicate political messages, organize events and keep websites online even as most mainstream hosting services shun them, experts say.
The truth, of course, is that these sorts of racists are a very, very small fraction of one percent of the U.S. population. They are so small in numbers that they are not even worth mentioning, but the Washington Post and other liberal outlets love to give them attention because they make the perfect enemies for the narratives that they are trying to promote.
Later on in the article, there was an effort to link Bitcoin to drug traffickers, money launderers and those who use the Internet for other dark purposes…
Extremists are hardly alone in benefiting from surging bitcoin values. Early buyers include cryptography enthusiasts, libertarians and professional investors – as well as drug traffickers, money launderers and others who regularly conduct transactions on the “dark Web,” a part of the Internet only accessible using specialized software that helps shield online activity.
The “logical conclusion” that many on the left are going to come to after reading such an article is that Bitcoin must be banned.
In the months and years ahead, I would expect to see a major push to crack down on cryptocurrencies. And once independent cryptocurrencies have been dealt with, the elite will promote their own versions as the long-term solution.
According to the Post article, the Southern Poverty Law Center is currently tracking 200 Bitcoin wallets that they believe are owned by extremists. Apparently, every single transaction that involves these accounts is being monitored…
Public blockchain records make such monitoring possible. Researchers can study the times, dates and amounts of any transaction, along with what accounts are involved. That does not include the actual names of account holders, but such records can illuminate identities. The SPLC, for example, looks on the donation pages of extremist websites for bitcoin accounts that are seeking contributions.
If the elite are ultimately able to convince the general public that Bitcoin and other cryptocurrencies are for racists, criminals, tax evaders and drug dealers, that will make it much easier to crack down on them.
But of course blockchain technology is here to stay. Once the elite are able to move the public away from “unregulated cryptocurrencies”, they will simply introduce “Fedcoin”, “Utility Settlement Coin” or whichever other digital currency that they want to promote at the time.
For the moment, however, the cryptocurrency revolution is still raging. Even as I write this article, the price of Bitcoin is flying all over the place. At the moment it is sitting at $14,730, but that will change in a few moments.
I would anticipate even more volatility as we head into 2018, and other experts seem to be of the same opinion. For example, just consider what Nick Colas is saying…
Nick Colas, co-founder of DataTrek Research, has been following the bitcoin phenomenon for at least four years. Looking ahead to 2018, he sees more volatility for an asset that has soared nearly 1,600 percent over the past year.
In fact, he figures bitcoin could slosh in a range between $6,500 and $22,000; it was around $15,750 in Wednesday morning trade.
“Bottom line: bitcoin can rally to $22,000 and still be reasonably priced, or plummet to $6,500 and also be correctly valued,” Colas said in his daily note. “We expect to see bitcoin trade for both prices in 2018.”
But as I have said before, the key to this phenomenon is not how high the price of Bitcoin can climb.
Rather, the key is if Bitcoin or other cryptocurrencies can truly become methods of exchange that are widely used outside of the control of national governments and global central banks.
If we can create a truly autonomous financial system that is independent of the current debt-based system, that would be a wonderful thing for humanity.
Unfortunately, the elite are going to fight very hard to keep that from happening, because control over currencies is one of the main factors that allows them to have so much control over the entire planet.
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