The Continuing Invasion of Ukraine by Russia took an interesting turn with the sinking of Russia’s Black Sea flagship the Moskva. This is not only the loss of the command ship for Russia’s naval presence in the area, as the sinking also diminishes Russia’s ship to shore bombardment capacity in southern and eastern Ukraine where Russia has consolidated their efforts after failing to capture Kyiv and make inroads into central and western Ukraine.
Ukrainian Resistance Scores Major Victory
The loss of the guided missile cruiser Moskva is a huge loss of face for Putin and puts more pressure for Putin to come out this conflict with tangible gains he can sell to the Russian public. It looks now the focus is on capturing Odessa and other parts of Eastern Ukraine which its questionable that Ukraine will allow without the threat or actual use of nuclear weapons (which the US CIA director said recently is plausible if Putin thinks its his only way to get the win needed for him to retain power).
Look for this conflict to continue volatility in the disrupted wheat (ZW), corn (ZC1!), crude oil (WTI) and natural gas (NG1!) markets as the output of Ukraine is blocked leaving their ports and Russian exports are blocked by sanctions. Sanctions are hitting Russia hard forcing it to face it’s first failure to cover its foreign debt since 1918. These four assets are crucial imports to not only Europeans but to Africans, India and many other developing nations and the food shortages especially could cause famine and upheaval in more than a few countries such as Egypt and the Gulf states that are net food importers.
WTI breaks through 20 day MA & Has Bullish RSI
European markets refusing Russian oil and natural gas, as well as the political instability in the region (along with the projected rising US interest rates), has helped push the EURUSD to its lowest levels in two years. Talk about Sweden and Finland joining NATO from their entrenched neutrality since WW2 (and for Sweden even longer) shows how rattled Russia’s neighbors are that Putin might strike anywhere next (especially if Ukraine continues to stimy Russia’s campaign).
The EURUSD is Testing it’s Lowest Price in Two Years
It may be hard to find a way to trade the Russian Ruble (RUBUSD) right now with so many banks refusing to accept it as payment during current sanctions but it’s interesting to observe the RUBUSD at its all-time low of this century since a Russian failure to pay its overseas debt could cause a rolling debt crisis among its creditors then those creditor’s creditors. The Bank of Russia estimates that debt to be approximately $450 billion USD which is larger than the any of the GDPs of any country but the top 30 (so for instance larger than the annual GDP of Norway, Ireland or Israel).
Elon Musk’s tweet’s about taking over Twitter (TWTR) after already buying 9% of it’s stock last week is set up to cause some major movements as the Twitter board showed resistance by saying they will take the “poison pill option” of flooding the market with more shares to dilute the value of Musk’s holding. Whatever happens we can see movement up and down on Twitter’s value as this plays out with each news announcement of what they may do and what does materialize. Depending how this plays out we could see Twitter retrace to it’s November 2021 high over $66/share or retract to its recent low in just last month at about $32/share. Excitement about Musk’s leadership could drive prices up since he has skillfully driven prices up at Tesla based on more than actual profits justify or the dilution of share value with the poison pill option could obviously put pressure for lower prices.
Will Musk Capture Twitter or Choke on a Poison Pill?
It’s the second week of quarterly earnings reports this week with heavy hitters like financial powerhouse Charles Schwab (SCHW) opening the week Monday April 18th, pharmaceutical Johnson and Johnson (JNJ) announcing Tuesday April 19th, Elon Musk’s EMV Tesla (TSLA) and Proctor Gamble (PG) announcing Wednesday April 20th. Of course, there many more announcements but less than enthusiastic reports last week from banks did not set off an optimistic tone for this earnings season. Indices seem rattled by interest rate hikes, inflationary numbers as well as recession predictions and the continuing supply chain crunch.
Charles Schwab Will Help Open this Week’s Action
The Cryptocurrency market continues to show itself under pressure as risk assets are under pressure with raising interest rates and increasing talk about a potential recession. Bitcoin is showing its highest correlation to date with the Nasdaq (US100) so that weakened market is mirrored by most cryptos.
The US 100 (NASDAQ) has been Showing a Stronger Correlation with Bitcoin
That doesn’t mean that certain cryptos or the whole market may suffer but it may mean increased volatility as investors move assets and that cryptos will need positive news for pushes to previous highs or even higher if the news warrants it. Thoughts that Russian oligarchs being sanctioned might turn to cryptos and cause a surge of demand seemed to flounder as many of their assets may have been less liquid than imagined and superyachts, private jets and penthouse apartments are easier to seize than liquidate. Since many of these oligarchs act as “wallets” for Putin it’s interesting to wait if they pressure Putin or Putin acts like a cornered animal with any or all weapons at his disposal.
CNBC was keen to talk last week about the speed of the Lightning Network for Bitcoin (BTC) transactions with a transaction from Miami to Poland in 3 minutes. These kinds of technology advances can help cryptos in general whose major drawbacks are volatility and liquidity. This raises the bar for many other cryptos to follow; but, it also shows the potential which can draw more interest from investors who saw slow transactions as an objection for holding current assets or investing in the future into Bitcoin or its cousin cryptos.
Bitcoin testing support of a two month low. Will it rebound or break support?
While many Cryptos are struggling to keep above the support of their trading range, Ethereum (ETHUSD) is showing some relative strength due to the promise of the future “Merge” later this year when it is expected to break away from the colossal carbon footprint of other energy guzzling cryptos with expected powerful performance enhancements as well.
Will the Promised “Merge” Spark Demand for Etherium?
Etherium Shows Relative Strength compared to Bitcoin
Solana, which bounces between the top 6th or 7th Crypto in Market Cap, shows a potential Bull Flag Breakout if it can continue to stay above current support levels. At less than half it’s all-time high there’s plenty more potential now for a larger movement back to its all-time high than a crash to zero.
Will Solana be this week’s Rising Crypto Star?
Some Trading Simulation Examples to Test This Week on SOLUSDT
Entrance Using the Bollinger Band
Exit Using the Bollinger Band or Relative Strength Index
There’s More than One Way to Skin the Market!
An Example of a Short Entry
And a Possible Exit Strategy
Try out one of these simulations or one of your own and let’s check the results next week!
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