Bitcoin; Let's Just Call It What It Is, A Speculative Investment

Posted on by Matt Thalman

Matt Thalman - INO.com Contributor - ETFs


An investment, as described by Webster dictionary, can be anything that an investor believes will produce income in the future or be worth more than it is today at some point in the future. Common investments include but are not limited to stocks, bonds, real estate, jewelry, artwork, or antiques.

Speculation, again as described by Webster dictionary, is the assumption of unusual business risk in hopes of obtaining commensurate gain. The dictionary has a definition of speculation specifically for students or kids which is, 'the taking of a big risk in business in hopes of making a big profit.'

The current situation with Bitcoin can best be explained by quoting the Merriam-Webster website when it is explaining speculation.

"Speculation can increase short-term volatility (and thus, risk). It can inflate prices and lead to bubbles, as was the case in the 2005-2006 real estate market in the UniteStates. Speculators who were betting that home prices would continue to increase purchased houses (often using leverage) intending to "flip" them for a profit. This increased the demand for housing, which raised prices further, eventually taking them beyond the "true value" of the real estate in many markets. The frenzied selling that ensued is typical for speculative markets."

Currently, it would be hard for anyone to argue that Bitcoin and other crypto-currencies aren't experiencing speculator behavior based on the above explanation. Continue reading "Bitcoin; Let's Just Call It What It Is, A Speculative Investment" →

Crude Oil Bounces Back

Posted on by The INO.com Team

Hello traders everywhere. Crude Oil (NYMEX:CL.Z17.E) had fallen as much as 1.4% in early morning trading heading for its first two-day decline in more than a month, but has since reversed course and is heading higher on the day. The reason for the early fall was a report on Wednesday by the U.S. Government that found swelling crude stockpiles, shrinking overseas demand and skyrocketing output from American wells.

MarketClub's Mid-day Market Report

The output from U.S. oil wells climbed by 0.7% last week to 9.62 million barrels a day, the highest seven-day figure since federal officials began tracking weekly data in 1983.

Crude stockpiles climbed to 457.1 million barrels last week, while inventories at the key Cushing, Oklahoma, pipeline hub rose by 720,000 barrels to the highest level since May, according to the Energy Information Administration (EIA). Crude exports fell by 1.26 million barrels a day. Meanwhile, gasoline stockpiles declined to the lowest level since November 2014 and distillate stocks were at the lowest since March 2015.

Earlier in the day, ConocoPhillips announced a surprise 22% increase in next year's drilling budget, the latest signal that U.S. output may not be slowing down anytime soon.

Key levels to watch this week: Continue reading "Crude Oil Bounces Back" →

Fleeing The Fed Ship

Posted on by George Yacik

George Yacik - INO.com Contributor - Fed & Interest Rates


William Dudley, the president of the Federal Reserve Bank of New York, has become the latest senior Fed official to announce his retirement. He follows Fed Vice Chair Stanley Fischer, who announced his intention to resign in September, and Daniel Tarullo, the central bank's top financial regulator, who announced his resignation back in February.

Of course, the biggest departure at the Fed was one that wasn’t voluntary, namely President Trump decision not to renominate Janet Yellen for another term as Fed chair, ignoring 40 years of precedent to reappoint a sitting Fed chief. Instead, of course, he nominated Fed governor Jerome Powell to replace her when her four-year term ends in February. Still, Yellen is entitled to finish her 14-year term as a member of the Fed’s Board of Governors, which doesn’t expire for another seven years, on January 31, 2024, although her staying on would also be unprecedented.
All told, there are now three open seats on the seven-member Board of Governors, which of course may rise to four if Yellen elects to leave.

It’s pertinent to ask, then: What are all the departures at the Fed, both voluntary and involuntarily, signaling? Is it simply senior officials graciously moving aside to let a new president get a chance to pick his own people? Or is there something more sinister afoot, namely, do they indicate that a big change in the market is about to occur and they want to get out before the chickens come home to roost? Continue reading "Fleeing The Fed Ship" →

The Modern Gold Rush: These Three Stocks Could Benefit

Posted on by Aibek Burabayev

Aibek Burabayev - INO.com Contributor - Metals


History repeats again and again as human beings don’t change; they only change on the surface. There is a good lesson learned from the Gold Rush in the 19th century – there were some lucky diggers, who made a fortune, at the same time many merchants who were selling equipment and jeans became rich. But many adventurers left broke.

These days we have the Crypto-Mining Gold Rush led by Bitcoin with a market share of more than 60% and market capitalization over $124 billion. This coin is worth as much as the Hungarian GDP and exceeded the market cap of NVIDIA Corporation (NASDAQ:NVDA) – one of those “merchants” selling “shovels” to modern “diggers” aka miners.

Today, as long ago, the competition gives an advantage to cooperated mining pools with the most advanced equipment, lowest electricity, and labor costs. That’s why there is no surprise that the top mining pools are located in China (70% of the Bitcoin hashrate).

There are two main types of suppliers to the crypto mining industry: electricity suppliers (up to 70% of all mining costs) and equipment suppliers. The massive demand for mining equipment attracts nimble middlemen, for instance, they resell the ASICs (application-specific integrated circuits, microchips) for 2x-3x of the original price tag, making relatively risk-free money on modern “diggers” that risk a lot. Continue reading "The Modern Gold Rush: These Three Stocks Could Benefit" →

Weekly Futures Recap With Mike Seery

Posted on by The INO.com Team

We've asked Michael Seery of SEERYFUTURES.COM to give our INO readers a weekly recap of the Futures market. He has been Senior Analyst for close to 15 years and has extensive knowledge of all of the commodity and option markets.

Michael frequently appears on multiple business networks including Bloomberg news, Fox Business, CNBC Worldwide, CNN Business, and Bloomberg TV. He is also a guest on First Business, which is a national and internationally syndicated business show.

Gold Futures

Gold futures in the December contract settled last Friday in New York at 1,271 an ounce while currently trading at 1,277 up about $6 for the trading week in a very non-volatile trading manner. I'm currently sitting on the sidelines as there is no trend at the current time. The U.S. dollar is trading at a three month high, and that is keeping a lid on gold prices in the short-term coupled with the fact that the U.S. stock market is hitting all-time highs. All of the interest lies in the equity market & not in gold as money flows continue to come out of this commodity. Gold prices are trading under their 20 and 100-day moving average telling you that the trend is lower. I still think we will retest major support around 1,262 and if that is broken, we could head below 1,250 in the coming weeks. I just don't see any reason to own gold when the stock market goes up on a daily basis. The chart structure is starting to improve due to low volatility in recent weeks, and we could be involved in this commodity shortly so keep this market on your radar, but in the short term look at other markets that are beginning to break out.
TREND: LOWER
CHART STRUCTURE: IMPROVING
Continue reading "Weekly Futures Recap With Mike Seery" →