(New York)

Despite a very poor three months, there have been increasing amounts of articles arguing that Bitcoin may be a tipping point where it moves higher. However, Bloomberg has published a piece saying it is at a so-called death cross. The cryptocurrency’s 50-day moving average has dropped to its nearest point to its 200-day moving average in nine months, a move which spells doom for technical analysts. If it crosses below the 200-day threshold, it would signal the “death cross”.

FINSUM: While this does seem significant, we would argue that technical analysis is not as relevant in Bitcoin. The reason why being that the fundamentals of the market (e.g. a sound regulatory environment) are unstable, and there is little trading history from which to weigh technical indicators.

(New York)

Gun stocks may be in for a deep fall. For many years gunmakers have been protected by a legal precedent which keeps them from being held liable in cases of gun violence. However, a novel new argument in a court case may bring that crashing down. Families of the victims in the Sandy Hook shooting in 2012 have brought a case against Remington which argues that the gunmaker should be held liable because it made the choice to distribute its rifles to a dealer who illegally sold weapons. Essentially, the case holds Remington liable for its distribution channels.

FINSUM: If this argument holds it would defeat the 2005 precedent that has protected gunmakers and open the door to unknown levels of legal action.

(New York)

Investors beware of yields. That is the message from one of Wall Street’s most respected names in fixed income. In particular, Jeffrey Gundlach is warning that if ten-year Treasury yields get to over 3% then it will spell doom for stocks. Yields are currently at 2.84%, down from a peak on February 21st of 2.95%. “My idea that the S&P would go down on the year would become an extraordinarily strong conviction as the 10-year starts to make an accelerated move above 3 percent”, says Gundlach.

FINSUM: So the argument here seems to be based on the idea that stocks would become less attractive as investors could earn more from bonds given rising yields. That makes some sense given the increasing size of the retirement population.

(New York)

In a refreshing article given the relative doom and gloom over the last month, Barron’s has published a piece arguing that it is the bears, not the bulls, that need to be afraid of the equity market right now. The view is based on technical analysis. Many might be interested to learn that rather than the technical indicators showing a bull market at or near its peak, signs are suggesting a move upward may be in store. The piece is also quick to point out that despite the shallow correction a month ago, the bull trend for the market has continued unabated.

FINSUM: We don’t put a great deal of stock in technical analysis and only view it as useful as a companion to fundamental analysis. Nonetheless, it is good to stay abreast of this information.

(Washington)

In what seems a status quo that has been in place for eons, the way credit is measured in the mortgage market appears poised to change. For many years, Fair Isaac Corp’s FICO score has been by far the dominant credit score used when determining mortgage issuance. Now Congress is trying to shake things up with a bank deregulation bill that would require Fannie Mae and Freddie Mac to consider credit scores beyond FICO. If the move happens, it is expected that more mortgages would be approved.

FINSUM: This would be a huge shakeup with big implications for the market. If more mortgages get approved, it seems like credit-worthiness would fall in aggregate, with a commensurate rise in rates.