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There is a perception that hamsters have dealt a heavy blow to hedge funds. But is this really the case? By the latter we mean investment banks, brokers, hedge funds and of course regulators like the Fed and SEC. Yes, the funds have lost about $5-10bn. But it’s still a drop in the ocean.

S&P 500

Why did the hamsters do so well? It was the suddenness of the attack. On the one hand, no one was expecting it. On the other hand, even when the attack started, no one of the big players took it seriously.
But now the situation has completely changed. What would happen if hamsters attacked another stock? Trying to raise its price sharply, in order to knock out the funds selling these stocks without coverage?
The best answer was given by representatives of the American stock exchange Nasdaq, who said they would stop trading on any security if manipulation appeared. Naturally, by manipulation will be understood a conspiracy of hamsters to buy particular shares.
Does the stock exchange have the right to do that? That is a question for lawyers and years of litigation. Ideally, the trading rules explicitly forbid any kind of price manipulation. That is, hamsters, most likely, will not be able to accelerate the next stock at least 5-10 times, if they mount a coordinated attack. Well, if there is no overt coordination, it will not be possible to raise the price even 2 times.
So what should hamsters do? We will talk about this in detail tomorrow, in the second part of the article.

11.00 EU retail sales for December
13.00 Bank of England interest rate decision
13.00 Planned asset purchases by the Bank of England
13.30 Address by Governor of Bank of England E.Bailey

Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.

Looking at the EUR/USD chart, a new downtrend is clearly visible. But maybe that’s just the EUR being weak? Thinking back to our Monday newsletter, it is better to pay attention to the movement of the USD against a basket of the world’s major currencies. The best way to do this is with the DXY dollar index.

DXY

What are we seeing? The dollar has been rising relentlessly since January 6. Let’s offer a new version of what’s going on, which may become more and more relevant with each month of 2021. COVID-19 is to blame! Yes, there it is again!
While all new restrictions are being introduced in Europe, almost 27 million people in the USA have already been vaccinated, which is more than the number of people who have been previously ill. In 3 or 4 months about half of the American population will have been vaccinated or will have been previously vaccinated. And these are just the official figures. But we all realise that the number of asymptomatic patients who have not been diagnosed with COVID-19 is high.
So, by early summer, most of the US population will no longer be at risk of becoming infected. There will be a sharp drop in new infections. Against this background, previous restrictions will be lifted en masse.
What will people do, after severe quarantines in many states? That’s right! They will start having a blast. Go to bars and restaurants, spend money on vacations, etc. Thank goodness people have plenty of money. The state printed it and gave it away, but there was no place to spend it.
What could this lead to? Certainly a rapid increase in inflation in the USA. And that would lead to a winding down of stimulus programmes and an earlier rise in dollar interest rates. Which would be a heavy blow to stock markets everywhere and a flight of capital into a safe asset that also pays interest. What asset is that? The US dollar of course!
Perhaps that is the reason why it is now hovering over the market, but only the smart money has recognised it so far. Let’s see what happens next.

08.00 German retail sales for December
10.00 EU Composite Manufacturing Activity Index for January
11.00 UK EU Consumer Price Index for January
14.15 USA ADP private sector employment report for January
16.00 ISM Service Business Activity Index for January in the US

Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.

02.02.2020 – Special Report. Super-Gau for small investors: Apparently under pressure from large investment houses, online brokers are making it more difficult to trade GameStop and other speculative stocks. Retail investors panicked as they were stuck in stocks that were depreciating. It smells of nasty tricks. It is quite possible that the previously short Wall Street elite is digging its own grave. Or it could be that small investors are failing to support the market. The war rages on, the outcome for the stock market is still completely unclear.

The GameStop Revolt

Historic times on Wall Street: A battle is raging in the financial industry between large hedge funds and millions of retail traders who organise themselves via Reddit, Twitter and other more specialised online platforms. The matter has now mutated into a vendetta of determined retail investors against hedge funds. GameStop, in particular, was where it really went down. Here, an investor named Keith Gill, who had gone long since 2019, stood out; he is known on YouTube as Roaring Kitty and on the Reddit group WallStreetBets as DeepF*&^%Value. He led the wild ride of online gamblers on the stock wave with his followers.
And so Gamestop shares shot up from $2.40 at the top to $418.50 within a year. Funds that had mostly acted as short-sellers against the flash mob of recreational investors had taken heavy losses. Melvin Capital Management, for example, has since had to beg for about $3 billion in support and close its short position in GameStop. Specifically, Point72 Asset Management and industry giant Citadel have come to the rescue of the distressed Melvin fund after its “mother of all short squeezes” blew up. What a triumph for the revolutionaries!

The Empire Strikes Back

But then came the counter-attack: the retail revolt led to the temporary suspension of trading in some gambler stocks last week. Presumably under pressure from the money giants on the US stock exchange. In particular, Dave Portnoy, founder of the sports and lifestyle blog Barstool with millions of followers, accused Point72 Asset Management on Twitter that the fund had obtained the restrictions on trading. On Thursday, the trading restrictions had been eased again somewhat amid public outcry. On Friday, Gamestop’s shares had closed 68 per cent higher. Those of the cinema chain AMC, which was also heavily sought after by traders, rose by 54 per cent.

Robinhood restricts number of shares

But the war is not over yet: on Saturday, Robinhood – one of the largest US trading platforms for retail gamblers – announced that 36 companies allow the ownership of only one share, including GameStop and AMC. At 14 other companies, only five shares may be held, ZeroHedge reported. The financial blog also pointed to a strange coincidence in timing: shortly before, the broker had had to take out a $1 billion emergency loan. Was that when the lenders demanded intervention against the cheeky retail rebels? At least that’s what it looks like. Then, on Sunday, a partial turnaround: GME is still allowed to trade one share, AMC ten shares, and the restrictions were lifted on 42 other shares. A perfect mess, uncertainty is poison for the stock market.
The assessment of the situation: If an army of gamblers agrees on trades on forums, then on the one hand this is a competitive advantage over professional investors, who are not allowed to collude according to the law. On the other hand, the merger into a gigantic pack of wild hunters is precisely the consequence of social media. Now, at least, it looks as if the fund elite has unfairly outwitted the GameStop rebels.

Nasty tricks from the cartel

But in doing so, the lords of money may have scored a fierce own goal. The anger of investors at Robinhood is now so great that, according to dpa, far more than 20,000 of them have joined a class action lawsuit via a special app. Texas Attorney General Ken Paxton said on Friday he had requested information from Robinhood and other online brokers to find out whether everything was above board in the restrictions on trading in shares of Game Stop and some other companies. He said there appeared to be collusion by hedge funds with trading platforms and web servers to fend off threats to their market dominance. The stench of corruption is in the air… New York Attorney General Letitia James now also wants to investigate.
The US Securities and Exchange Commission (SEC) has also confirmed that it is investigating the GameStop case. It will protect small investors if the facts indicate manipulative trading activities. Investors who have been bruised should report to the SEC. According to the financial broadcaster CNBC, 4000 complaints had already been received on Friday afternoon. We suspect that Robinhood cannot be saved from insolvency for much longer after the betrayal of its clientele.

Attack on retail investors

The episode can otherwise have nasty consequences for the entire stock market. For if retail investors are excluded from trading or stuck in falling prices, it could mean that they eventually withdraw from an unfair market altogether. We had already explained in this space that many retail investors are using the stimulus cheques in the US to gamble. If retail investors bail out, other stocks will also lack buying support, especially in a correction.

Parade of the “modern investor

Moreover, a whole important cohort of investors could stay away from the market in the long run. On the financial blog “Value Walk”, the asset management company Mintos, which specialises in alternative investments, paid homage to the “modern investor”. This is a millenial who is very tech-savvy and learns quickly. The modern investor trades via app from the internet and is also available for exotic alternatives such as art, wine or loans. According to a survey by Accenture, 90 percent of asset managers see that these Millenials know more about investment options today than they did five years ago. Blackstone also judged that the new investor is more engaged with alternatives. We think: Bitcoin is one of them. And above all, Millennials have bet on high-tech stocks. If hedge funds on Wall Street have pulled off some really nasty tricks, and if they get away with it, there are likely to be bearish consequences.

Hate and rage

And star investor Ray Dalio, one of the richest men in the world and founder of the hedge fund Bridgewater Associates, warned that GameStop was only the visible effect of a much larger problem. He told Bloomberg that the chaos was “another sign of the growing intolerance among those with opposing views”. He continued: “What concerns me more is the general anger — and almost hate — and the view of bringing people down that now is pervasive in almost all aspects of the country. (…) That general desire to hurt one another.” As already mentioned several times in this place: It is boiling. After the dozens of indications of election fraud, in the face of the ruling intolerant opinion cartel and because of the ongoing purge by the party called Democrats, because of the lockdown and the opening of the borders, it is boiling underneath the published opinion. As an investor, you should therefore always keep an eye on the “American Revolution” issue. Especially since the big investment houses donated heavily to the Democrats for the presidential election.
It should be noted that it sometimes makes sense not to trade an asset directly, but via a derivative – such as a CFD. We stay on the ball – and wish you successful trades and investments!

Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.

Every day watching EUR/USD or GBP/USD, traders blur their vision and stop seeing the global picture of what is happening in the currency market. We are launching a new column, and once a month we will give you a chance to look at the foreign exchange market with fresh eyes.

Forex chart of the day

What is this chart? It shows the major currencies traded by our traders. The reference date is GMT 00.00hrs on the 1st of January 2021. From this date, you will see how each currency has risen or fallen in relation to a basket of currencies during the month of January.
Colours:
Green is a dollar
Red – pound sterling
Yellow – EURO
White – Japanese Yen
Blue – Swiss franc
Brown – Canadian dollar
Orange – Australian dollar
Blue – New Zealand dollar

What do we see on the graph?

• Pound Sterling (red line) led the growth in January against all other currencies
• The Japanese yen (white line) has become the main outsider
• The US dollar (green line), despite the expected collapse, is also rising steadily, second only to the British pound.
• The euro (yellow line) collapsed strongly by mid-month, then began to rise

Is there a practical application for this graph?

Of course! If we are entering a medium-term trade, we should always understand what is happening to a particular currency pair globally. For example, on the pair Pound/Yen, we could only go long, but not short. It is obvious that these currencies diverge in different directions. They are moving against a basket of currencies, thus eliminating errors.
Another practical application. We are used to trading the euro/dollar pair and want to open a position betting on a rising dollar. Looking at the chart above, it makes sense to open a position on the USD/JPY pair. The Japanese currency is falling faster than the EUR, which means that the trend in this pair is stronger.

08.00 German retail sales for December
10.00 EU manufacturing activity index for January
10.30 UK Manufacturing Activity Index for January
16.00 ISM Manufacturing Activity Index for January in the USA

Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.

So, after the sharp fall in US stock markets on Wednesday, the following question was relevant. Will the correction continue and January close in negative territory, signalling a difficult year for the bulls. Or will the bulls get their act together and push the stock indices into the positive territory.

S&P500

On Thursday we got the answer to that question. The US stock market went sharply up, with the bears closing short positions in a panic. However, we did not forecast such a sharp upward move yesterday. Why so?
Indeed, in yesterday’s reasoning we expected to see a new strong red candle or a small rise, on what investors would pick up the cheaper stocks.
Apparently another force has entered the market. The name of which is the American ruling class. Indeed, who wants to see stock indices fall? A new U.S. president to be constantly rebuked for the fact that markets were rising under Donald Trump? Maybe Janet Yellen, the new head of the U.S. Treasury? If the markets fall, they will have to print huge amounts of money again to stop the fall. And then there is the situation of new lockdowns on the back of a pandemic around the world.
Apparently the powers that be have decided to bring the uptrend back to the stock markets as a matter of urgency before it is too late. The result is clear to see. On Thursday the fall of the previous day was completely recovered.
What conclusions can be drawn from this? Most likely 2021 will once again be the year of the bulls and stock investments will bring good returns to investors.

08.00 Germany’s Q4 GDP data
16.00 US University of Michigan Consumer Confidence Index for January

Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.

Wednesday was an atypical day for the US stock market. Stocks had been falling since early morning, then a reversal began during the US trading session. However, it did not last long. By the end of trading session the declines resumed. What lies ahead?

S&P500

Over the past year, we have become used to almost any strong drop being bought out. Many assumed that the situation would repeat itself on Wednesday. However, something went wrong. And the day closed with the biggest drop in months.
It is important to understand that on this day the US Federal Reserve rate decision was announced + the Open Market Committee held a press-conference. Investors did not hear anything new. It was noted that rates will remain at record lows for an extended period. The asset purchase programme will continue at the same volume. The outlook for the economy is closely linked to the outlook for the coronavirus.
The only negative signal was the US Federal Reserve’s view that the pace of economic recovery is becoming more moderate.

What do you need to keep in mind?

We recently drew your attention to the fact that it is very important for the stock market whether January closes on the plus side or the minus side. If it is on the plus side, stocks are likely to rise throughout the year (100-year statistics). And if January closes in the negative, it could be a very difficult year for investors.
Above is a daily chart of the S&P 500. What do we see? A long candle, which has almost no body. That is, the price stands just in the middle of the monthly range.
It is very important how the last 2 trading days of January will end. Such daily declines are usually followed by the 2 most frequent variants. Either the next strong red candle comes. In this case January will close in the red with no doubt. Or a correction begins, with a slight increase in the following days.

11.00 EU Consumer Confidence Index for January
14.30 German Consumer Price Index for January
14.30 US GDP data for Q4

Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.

We have recently had a discussion with our subscribers about the outlook for the English pound sterling. It was about the fact that after the “successful completion” of Brexit and the start of mass vaccination, the English currency has started to look extremely bullish, from a fundamental point of view.

GBPUSD

So far, our predictions are confirmed. Let’s take a closer look at the chart above. We see a rising channel, which is almost 45%. There is also resistance at the level of 1.375, which the pound cannot overcome for the last 4 trading days. A lot of stops accumulate behind this level. If this level is broken through, the price can go very quickly towards the round level of 1.40.
What could prevent such a development? From the technical point of view, in the short term, it is a fall to the lower boundary of the channel. And from the trading point of view, the risk is as follows. This channel and trend has already been identified by a large number of funds and speculators. What’s more, the fundamental factors contributing to the rise in price are also quite obvious. The question is, how many bulls are present in the market who have not yet joined the trend? If they are almost all already “in”, then there will be no new buyers physically in the market pushing the price up.
It is unclear whether the dollar will fall further against the pound.
However, it is almost certain that the EUR will fall against the Pound. We recommend everyone to open the daily chart and pay close attention to it. Moreover, since our last newsletter, the fundamentals for the decline of the pair have only increased. They are related to the massive introduction of lockdowns in European countries.

08.00 Gfk consumer confidence index in Germany for February
14.30 US Durable Goods Orders for December
20.00 US Federal Reserve interest rate decision

Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.

26.01.2020 – Special Report. Wait and see is often the motto of gold bulls. Because while high-tech investors or Bitcoin disciples like to breathlessly chase the short-term trend – and get shaken up accordingly – gold bugs are much more patient. And so they may soon have reason to celebrate. For right now an enormously bullish chart formation is forming, which naturally fits the entry theme of “drinking tea”: A gigantic long-term cup with a handle.

Cup formation over a decade

We don’t adorn ourselves with other people’s feathers: The investor Chris Kimble from the financial blog “See it Markets” noticed the huge cup. The left edge of the cup formation would have been formed in August 2011. The right edge was formed last summer with the all-time high at 2069 US dollars. Since then, the gold price has retreated somewhat and initiated the sideways-downward movement typical of the handle formation.

Short setback to 1,550 dollars possible

Last week Kimble wrote: „Gold has completed the ‘cup‘ pattern and is currently pulling back into what could be the ‘handle‘ part of the formation. Ideally, Gold bulls want to see a decline down to the $1550-$1600 level before another big rally begins.“ Shall mean: So gold bulls will have to suffer a little more before it might take off.
Kimble also backed up his observation with Fibonacci numbers: „As we noted back in the spring of 2020, the Fibonacci symmetry of this cup formation is very intriguing. Gold peaked at its 261% Fibonacci extension price level in 2011 at (1) and again in 2020 at (2) – this formed the ‘cup‘. And a pullback into the 38.2% Fibonacci of the ‘cup‘ formation would be an ideal spot for the ‘handle‘ to form.“

Next stop: Gold 3000

Does the cup even need a handle before it goes up? “Not necessarily… but it sure would help gold get to $3,000 a lot sooner.” So that’s the price target for the investor: $3,000 an ounce. If other chartists spot it on their trading platforms, it could all go down quite quickly. Chart analysis can be that simple – sometimes it becomes a herd instinct through a self-fulfilling prophecy.

25,000 dollars in ten years

Interestingly, Eirk Lytikainen of RealInvestmentadvice.com also recently saw almost exactly the entry level mentioned above by Kimble. The technical analysis shows 1,800 and 1,650 dollars per ounce as a good entry. And then he went into the full swing: „We will not be surprised to see $25,000 per ounce of gold by the year 2030. It will likely be a volatile ride higher, with large drawdowns along the way.“

Devaluation of paper money

But so that the friends of fundamental analysis also get their money’s worth, here is once again the background as to why gold could rise. Of course, you have long been aware of this through our well-founded Special Reports: the gutting of the dollar, euro and co. through gigantic Corona stimuli and endless quantitative easing. In other words: the digital printing press is running non-stop, the money supply is massively expanded. Let’s let Alasdair Macleod of GoldMoney.com have his say: He assumes that the year 2021 will bring the end of printed money, first and foremost the US dollar. The M1 money supply has increased extraordinarily and the process is continuing.

The chart is not just a result of monetary policy’s reaction to Covid-19, he said. Rather, the money supply has increased over the years, and now things are gradually becoming hyper-inflationary. The Federal Reserve and the US Treasury would have to work together to save the US economy from crashing – and therefore the dollar would be sacrificed.
We are curious to see if the gold bulls are right – and will keep an eye on the matter for you. Perhaps a deflationary crash is in the offing, with everyone rushing into the dollar, needing cash and selling precious metals. The Bernstein Bank wishes you successful trades and investments!

Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.

The gold metal opened the first trading day of the year with a gap up, rising above $1,900 per troy ounce again. The breach of the two-month high triggered a new wave of optimism among investors. A quick exit into the $2,000-$2,200 range was expected. But something went wrong.

Gold

On the third trading day, gold reversed and stonewalled on the Capitol assault. In hindsight, analysts suggested that investors immediately began to take profits when it became clear that Donald Trump’s scheme had failed. Democracy, like in the best films, had won and no one else was claiming a physical takeover of power.
Is this really the case? Or maybe investor expectations were simply too high? We would remind you that gold has risen by a quarter in the past year. This has only happened a few times in the last 100 years. And almost never has the gold metal rallied that much for 2 years in a row.
That is, despite the huge expectations and the injection of cash by the Central Banks, the statistics are not on the side of the gold bulls.
A reasonable question arises. What relevance do 100-year statistics have to the current situation? Indeed, if an investor were to operate with a horizon of at least 50 years, and every year sold/bought gold for a small percentage of their capital, it would be worth paying attention to statistical patterns.
But now to go short in gold just because it’s almost never risen much 2 years in a row…that’s a bit insane. Accordingly, gold sellers, and since the price is falling, supply temporarily exceeds demand, have very different rationales.

What does the chart tell us?

At first glance, things are sad. There seems to be a strong downtrend on the daily timeframe. This is indeed the case. But let’s focus on the right side of this chart. We see the following:
• In the 15 trading days so far this year, the daily has only closed below the 200-day moving average (yellow) 3 times. In other words, it acts as a very strong support.
• Equally important is the direction of this moving average. It is pointing upwards. That means that even if the price consolidates around the SMA200 for a long time, the short-term trend is still upward.
• But the most worrisome thing for both the bulls and the bears is the rapidly tapering triangle. In case of a strong decline in volatility, the exit from the triangle will happen in a month at the most anyway. With recent days’ volatility, it will happen much faster.
If the triangle is broken upwards, the technical picture will change completely. This will lead to a convergence of both fundamental and technical factors, looking in the direction of the gold metal’s rapid rise.
Therefore, it is critical for both speculators and intermediate-term investors to watch out which way the exit will occur. And then adjust their actions based on the new realities, according to the TA.

10.00 IFO Business Optimism Index for Germany for January
14.30 FBI Chicago National Activity Index for December

Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.

The price of the first cryptocurrency has already fallen by $11,000 from its previous all-time high. While analysts are trying to predict the depth of the correction, news of great fundamental importance for BTC has come out.

BTC

The world’s largest investment company, BlackRock, has requested permission from the US financial regulator for cryptocurrency transactions. For now, the company does not plan to buy Bitcoins directly, sending them to its own or a third-party storage facility. Permission is required to trade Bitcoin futures.
In theory, of course, BlackRock could not only buy these futures, but also sell them. In reality, however, there would be no selling, as the fund simply has not prescribed in its rules the opening of short positions without coverage.
This news cannot be instantly recouped by the markets. However, it is extremely important for 2 reasons.
1. BlackRock has about $8 trillion in assets under management. If the company wanted to invest 1% of the money under management, that amount would be about 25% higher than the entire bitcoin capitalisation at the moment. If anyone thinks that the BTC market will grow in this case by a factor of 2 and 25%, that is not the case. The fact is that there is at most 5 million BTC on the market (out of 18.5 million ) that can be bought. And even if no one joins the purchases (which is impossible during a trend), the price of BTC will rise 5-10 times.

2. The second conclusion is as follows. Large investment funds and pension funds are very similar. They depend on the opinion of their investors. If the largest investment fund starts buying BTC, it means that smaller funds simply can’t stay away because investors won’t understand them. They will withdraw the money, handing it over to managers who feel the hand of the market. This is exactly what we covered in detail at the end of last year.

Perhaps at these levels, bitcoin provides one of the last opportunities to buy into a correction before storming the new $50,000 milestone.

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