Quantum Threat

There was however, a noticeable drop down in the Dow Jones when they discussed the Fed's balance sheet. Not that anything critical was really discussed but it seems to have become a trigger word for the markets.

The truth is that according to the explanations given last night, it doesn't seem like they have any plans at the moment and rather will act according to the situation when the time comes. It's a bit disappointing on one hand because "forward guidance" was a theme stressed by Powell's predecessors, Bernanke and Yellen. On the other hand, perhaps now we can quite Fed watching and let the markets be a bit more independent.

Still Shut

By tomorrow, this will have been the longest government shutdown in US history.

Jay Powell also gave a rare comment on this last night saying that usually, shutdowns don't have a great impact on the economy because they don't last very long. However, if we were to see a prolonged shutdown the implications could be very big indeed.

For example, one of the wings currently closed is the Consensus Bureau, who is responsible for putting out critical economic data like retail sales and GDP. If those stats aren't published, investors, economists, and even the Fed will essentially be flying blind.

Bitcoin's new Range

You've probably already noticed that Bitcoin and the other cryptos took a sharp plunge yesterday. Actually, two sharp plunges.

As we discussed in yesterday's update, there appear to be no specific reasons for this drop and it's more likely due to the lack of liquidity inherent in the crypto markets, possibly mixed with some large orders being placed on exchanges.

If yesterday's explanation of no specific explanation annoyed you in any way, you're really gonna love this next one.

The total movement of 12% from peak to trough was actually insignificant. All we're seeing is a movement from the top to the bottom of the range. Check it out. Here we can see bitcoin's price since it first fell below $6,000.

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Please note: All data, figures & graphs are valid as of January 11th. All trading carries risk. Only risk capital you can afford to lose.

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