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Cme!

Decoding Bitcoin's Latest CME Gap: An Insightful AnalysisOver the past weekend, Bitcoin experienced a significant sell-off, causing a price discrepancy to form, commonly referred to as a 'gap'. This gap is discernible between the present Bitcoin market price and the closing price from last Friday (as per New York time). Notably, these gaps, often identified in futures markets such as the Chicago Mercantile Exchange (CME), can serve as potential signals for traders. It's currently anticipated that this gap could be filled in the near future. The phenomenon of 'filling the gap' refers to the price retracing its steps back to the level before the gap was formed, thus restoring market equilibrium. The market's response to this development will be closely watched by traders and investors alike.
Long
by p3nchan
1
Debt ceiling aside, watch the dollar and central bank meetings!As the debt ceiling discussions draw to a close, the dollar's rally indicates that markets have largely priced in this event. The focus now returns to the Federal Reserve (Fed) and its notably hawkish stance. Fed officials' recent statements and fed fund futures, which are pricing in another rate hike in the upcoming meeting, suggest it might be the right time to reassess the dollar pairs. Two weeks ago, we discussed the USDCNH pair, which made a swift upward move. Interestingly, the correlation between USDCNH and USDAUD has been increasing, and USDCNH has been a leading indicator for the last few moves, with USDAUD following its trend shortly after. To understand why, let's look at the AUDCNH as well as the USD. The moves in these pairs seem to be largely driven by the USD, as the AUDCNH has remained range-bound since 2022. The Reserve Bank of Australia (RBA) is scheduled to meet on June 6th and is expected to maintain its policy, while the Fed will meet on June 13th and is expected to hike rates. This divergence in monetary policies could further strengthen the case for a USDAUD rally. Current yield differentials continue to favour the USD carry trade and this trend appears set to continue as the Fed is expected to raise rates while the RBA remains on hold, widening the yield differentials. With the Fed poised for another rate hike and the RBA expected to maintain its policy stance, along with the dollar's strengthening and the USDCNH leading the AUDUSD pair, we could express our market views via a risk-managed trade long on the USD and short on the AUD. To set up this position, we can take a short position on the Micro AUD/USD futures, with stop-loss orders placed at 0.673 and take-profit orders at 0.627. A Micro AUD/USD futures contract represents 10,000 AUD, with each point move in AUD equalling USD 10,000. The charts above were generated using CME’s Real-Time data available on TradingView. Inspirante Trading Solutions is subscribed to both TradingView Premium and CME Real-time Market Data which allows us to identify trading set-ups in real-time and express our market opinions. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com Disclaimer: The contents in this Idea are intended for information purpose only and do not constitute investment recommendation or advice. Nor are they used to promote any specific products or services. They serve as an integral part of a case study to demonstrate fundamental concepts in risk management under given market scenarios. A full version of the disclaimer is available in our profile description. Reference: www.cmegroup.com www.cmegroup.com
Short
by inspirante
3
The case for a Weaker Yuan The most recent Caixin Manufacturing PMI dipped below 50, landing back in contraction territory after two prints above the 50-mark. As the world's top exporter, China is acutely sensitive to fluctuations in both exports and manufacturing numbers. Historically, we've seen periods of Yuan devaluation during times of contracting Manufacturing PMI and exports as China works to invigorate export demand. With the latest PMI number trending lower, it's worth pondering whether this signals a movement toward a weaker Yuan. A more detailed examination of Chinese economic data presents some reasons for concern. Chinese export-related economic data has collectively taken a downward turn. This could stimulate further Yuan weakening as the government strives to reinvigorate exports. Moreover, as the world's second-largest oil importer, lower oil prices gives China additional leeway in weakening its currency, as the ripple effects of higher oil prices are tempered. From a technical perspective, the CNH is teetering on the edge of the 200-day moving average, and prices have once more nudged above the 0.382 Fibonacci retracement level. Meanwhile, in a shorter timeframe, we notice price action breaking out of the ascending triangle and nearing the top of the wedge pattern. With the USD breaking to the upside coupled with the potential for a weakening Yuan, we think this makes the case for a higher USDCNH. Taking a risk-managed long at the current level of 6.9520, a prudent stop 6.8930 and take profit level at 7.0900. A Standard Size USD/Offshore RMB (CNH) Futures represents 100,000 USD. Prices are quoted in RMB per USD, each 0.0001 per USD increment equal to 10 CNH. The charts above were generated using CME’s Real-Time data available on TradingView. Inspirante Trading Solutions is subscribed to both TradingView Premium and CME Real-time Market Data which allows us to identify trading set-ups in real-time and express our market opinions. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com Disclaimer: The contents in this Idea are intended for information purpose only and do not constitute investment recommendation or advice. Nor are they used to promote any specific products or services. They serve as an integral part of a case study to demonstrate fundamental concepts in risk management under given market scenarios. A full version of the disclaimer is available in our profile description. Reference: www.cmegroup.com
Editors' picks
CME:CNH1!Long
by inspirante
8
Natural Gas: Has it Found a Bottom?Natural gas made a stunning rally to an all-time high, only to come crashing back down again. It's been a while since we last covered natural gas, so let's take a look at what's happened since then. The previous technical & seasonality setup played out perfectly with the RSI bouncing off the low and the rally into the winter season, hitting our profit target and extending further. This time, we're seeing a similar setup on a different timescale. Zooming out, natural gas has retraced the entire move it made in the past three years and is now back to pre-COVID levels. The question is, has natural gas found a bottom here? Looking at the weekly chart for natural gas over the past 20 years, we see an interesting picture. The weekly RSI has only broken past the 30 level five times over this two-decade period, and each time marked the rough bottom for natural gas. Fortunately, we're seeing this exact setup now, with prices seeming to find resistance at the $2 handle, which has also proven to be a reliable resistance level. Comparing the Henry Hub natural gas against the Dutch TTF natural gas, we can see the spread back to the lows when adjusting for the same unit measurement of MMBtu and in USD. On the fundamental side, this excerpt from the US Energy Information Administration (EIA) sums up the outlook for Natural Gas vs Coal: “Natural gas-fired generation capacity in the United States has grown in recent years, although coal-fired generation has continued to decline. Lower coal-fired generation is due to a long-term trend of coal power plant retirements and increased competition with natural gas-fired combined-cycle plants when natural gas prices are low. A total of 11.5 gigawatts (GW) of U.S. coal-fired electricity generating capacity retired in 2022. No new coal-fired capacity has come online since 2013, and developers have not reported any plans to build new U.S. coal-fired capacity in the future. In contrast, nearly 6.1 GW of natural gas-fired capacity was added in 2022, according to our Preliminary Monthly Electric Generator Inventory.” Natural Gas saw a record high for the winter heating season. Additionally, close to 23% of US coal plants have plans to retire by 2029, and the last new coal plant that came online in the US was in 2013, 10 years ago. With coal plants being the second-largest source of electricity in the US and supply being cut, energy has to come from somewhere else. While the push for renewable energy continues, natural gas remains the main source of energy production. The dissipation of supply from retiring coal plants will likely be filled by natural gas. The reason being? Natural Gas currently remains most reliable form of energy source, while nuclear faces political pushbacks and Wind, Hydro & Solar have unpredictable/intermittent generation capacity. Lastly, the Dollar sits on a key level now. If broken, the weakening dollar could drive commodities prices higher en masse. All in all, the case to long natural gas from here seems reasonable, with the fundamental outlook for Natural gas still positive and the technical set-up pointing to a low. Taking a long position at the current levels of 2.186 and setting our stops at 1.85 and our first take profit level at 3.1 gives us a reasonable halfway point while setting our next take profit level at 3.8 gives us a higher profit potential if prices continue to rise. CME’s Henry Hub Natural gas is quoted in U.S. dollars and cents per MMBtu. Each 0.001 increment equal to 10$. The charts above were generated using CME’s Real-Time data available on TradingView. Inspirante Trading Solutions is subscribed to both TradingView Premium and CME Real-time Market Data which allows us to identify trading set-ups in real-time and express our market opinions. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com Disclaimer: The contents in this Idea are intended for information purpose only and do not constitute investment recommendation or advice. Nor are they used to promote any specific products or services. They serve as an integral part of a case study to demonstrate fundamental concepts in risk management under given market scenarios. A full version of the disclaimer is available in our profile description. Reference: www.cmegroup.com www.eia.gov www.eia.gov blogs.worldbank.org
NYMEX:NG1!Long
by inspirante
4
BTCUSD PLAN Hello to all small and big traders, today I was checking all the empty spaces of CME when I noticed 3 gaps that have not been filled yet, one is in the area of 34000 to 34800, one is in the area of 21000 to 20000 and the other is in the area of 9500 to 10600. It doesn't matter if it is filled, but it must be filled. This plan is for a long-term view. Now or first, we will pay 34,000 dollars, and then the drop and the new floor, and then we will move right at the time of halving for the new ATH, or it will be filled later, whatever the case may be. be careful .
CME:BTC1!
by hamidhsh
4
A Beefy Premium.Live cattle recently hit an all-time high, leaving us wondering if the rally has gone too far. The front month contract reached 177 on April 13, surpassing the previous record set in November 2014. Meanwhile, lean hogs have been trading lower since last year. One way to assess this trend is to look at the spread between the two livestock markets. Both the absolute price difference and the Live Cattle/Lean Hog ratio are currently at highs. The absolute price difference is at its second-highest level ever, with only March 2015 having a higher reading. The ratio spread, meanwhile, is trading at the higher end of the range since 2015. So, what's driving this trend? Well, we could start by looking at what caused the surge in 2015. A mix of live cattle rising and lean hog prices falling contributed to the surge in the spread as cattle inventories bottomed in 2014. Looking at the current supply dynamics, we see the smallest cattle herd in eight years, with the previous low marked by the 2014 episode and hog supplies on a downtrend but still above the previous decade’s average. As consumers become more environmentally conscious, they may prefer pork over beef due to the former’s lower environmental impact per calorie. Additionally, with the price gap between beef and pork increasing, price-sensitive consumers may switch to other protein sources as inflation continues to weigh on their mind. In the longer term, consumer preferences could flip to favour hogs over cattle. Seasonality effects are also pointing towards an unusual year. Historically, May marks the low point for the spread as hog prices run up towards the middle of the year. However, with May already underway, the spread is not close to any lows and lean hogs are still trading down. This suggests that the current year’s spread is trading abnormally high compared to past trends. Given that both Lean Hog & Live Cattle Futures have the same contract unit of 40,000 pounds and price quotation of US cents per pound, we can trade the spread of the two contracts using a 1:1 ratio. To express our bearish bias on the spread we can sell one contract of the Live Cattle Futures and buy one contract of the Lean Hog Futures. Keeping in mind the 2015 run took close to 1.5 years to bottom, we will place our stops further out at 110 and take profit at 45, giving the spread a longer horizon and more room to play out. Each 0.00025 increment equal to 10$. So, will you be switching from steaks to pork chops anytime soon? The charts above were generated using CME’s Real-Time data available on TradingView. Inspirante Trading Solutions is subscribed to both TradingView Premium and CME Real-time Market Data which allows us to identify trading set-ups in real-time and express our market opinions. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com Disclaimer: The contents in this Idea are intended for information purpose only and do not constitute investment recommendation or advice. Nor are they used to promote any specific products or services. They serve as an integral part of a case study to demonstrate fundamental concepts in risk management under given market scenarios. A full version of the disclaimer is available in our profile description. Reference: usda.library.cornell.edu usda.library.cornell.edu www.cmegroup.com www.cmegroup.com ourworldindata.org
CME:LE1!Short
by inspirante
EUR/USD's hidden clues & key levels? Here’s an interesting chart: the inflation differential of the US and the EU plotted against the EUR/USD pair. If we approximate the range of the inflation differential with an upper bound of 1.5 and a lower bound of -0.5, we get a compelling signal for trading the EUR/USD pair. Buying EUR/USD when the inflation differential bottoms has resulted in success 4 out of the 5 times this signal was triggered. Repeating the analysis using the preferred inflation measures for both central banks – PCE for the Federal Reserve (Fed) and EU HICP for the European Central Bank (ECB) – yields similar results. Is this spurious correlation or is there more to this? Our guess is that the inflation differential drives expectations of one central bank’s move versus the other which affects the currency pair. The upcoming US PCE release on 28th April will provide insight into whether the inflation differential between the US and EU will continue to narrow. The validity of this data remains to be seen, but it's certainly an intriguing observation to consider! The rather eventful economic calendar over the next two weeks offers opportunities for this pair. Starting with the PCE Price Index released on April 28th, it is followed by the Fed meeting on Wednesday, May 3rd and the ECB meeting on Thursday, May 4th. With these events in mind, we want to position ourselves for the flurry of announcements coming out, which could play into EUR/USD strength. The long-term price action still seems to point towards an uptrend, with the 100-day Simple Moving Average (SMA) crossing the 200-day SMA and clearly marking previous swings. The current price is also consolidating at the 1.1000 psychological level, with parity and 1.2000 levels roughly marking the EUR/USD range for the decade. Zooming in, the EURUSD has been trading in an uptrend. An attempt to break above the 1.11 level was quickly rejected, with prices trading back to the trend support shortly after. We are currently witnessing another attempt to break this same level once again. Hence, a risk-managed trade could yield opportunities here with the upcoming onslaught of announcements. Setting up a long position at the current level of 1.1074 with a tight stop just below the trend support at 1.0945 and take profit level of 1.1400 would give us a risk-reward ratio of roughly 2.5. Each 0.00005 increment per EUR in the EURUSD futures contract equal to 6.25$. The charts above were generated using CME’s Real-Time data available on TradingView. Inspirante Trading Solutions is subscribed to both TradingView Premium and CME Real-time Market Data which allows us to identify trading set-ups in real-time and express our market opinions. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com Disclaimer: The contents in this Idea are intended for information purpose only and do not constitute investment recommendation or advice. Nor are they used to promote any specific products or services. They serve as an integral part of a case study to demonstrate fundamental concepts in risk management under given market scenarios. A full version of the disclaimer is available in our profile description. Reference: www.cmegroup.com
CME:6E1!Long
by inspirante
The end of an era.This week, the Bank of Japan governor’s Kuroda’s decade long term comes to an end. As such we would like to take some time to review what this means for the Yen and in particular, the AUDJPY. Firstly, central bank timings. In case you missed it, last Tuesday the Reserve Bank of Australia (RBA) snapped its consecutive 10 rate hikes, being the second major central bank in developed markets to pause after the Bank of Canada. On the other hand, the Bank of Japan’s (BOJ) inaction thus far, is in stark contrast to the rest of the world. Kuroda officially ends his second 5-year term. With the new Governor Ueda at the helm, we think a move away from the current policy stance is very likely for BOJ as inflation remains uncharacteristically high for Japan and unemployment still relatively contained. A shift in the BOJ’s policies could mean the end of the largely debatable Yield Curve Control (YCC) policies, either in the form of abandonment or yet another change to the policy band or target yield as it repeatedly trades close to the upper limit of the currently allowed range. In fact, the OIS Implied rates for the 10-year Japanese gov yields show a huge disparity from the BOJ’s policy ceiling of 0.5%. While it has corrected from the high, it still trades north of the 0.5% cap by a clear margin, indicating market participants’ expectations that the yield cap is likely to be abandoned or shifted higher again. Coincidentally, the BOJ can take a page out of the RBA’s book, where RBA faced an almost identical situation, when in 2021 it was forced to abandon its three-year yield target. Once it lost control, yield quickly shot up there after. If or when the BOJ lose control of its YCC program, this warrants a peek into what might happen to Japanese Yields. Market expectations of forward rates are completely opposite for these two countries, with participants expecting the RBA to execute multiple rates cut through 2023, while Japan is expected to hike rates. So what does this mean for the currency pair? Well one way to look at this is the real yield differential between Japan (JP) and Australia (AU). When the AU – JP yield differential collapses, the AUDJPY tends to follow suit. If RBA is to hold rates, while the BOJ is to raise, we could see this yield differential collapse from here, paving the path for the next downward move in the currency pair. On the technical front, the AUDJPY is trading near its upper resistance of a four decade long descending triangle. On a daily timeframe, although the pair's first attempt to break below the 88 handle was short-lived, it now sits just above this support, which could lead to a second coming. Of course, such a trade might take a while to play out given the decade long chart pattern as well as fundamental factors such as central banks’ policy shifts. Looking ahead, the next potential catalyst could be the Bank of Japan’s first meeting under a new leadership on the 27/28th of April, while the RBA’s next meeting is scheduled for 2nd of May. To express this view, one option is to use the CME AUDJPY currency pair, which allows you to short the currency pair directly. Alternatively, if liquidity and contract size are of concern, the same view can be expressed by selling one Micro USDJPY Futures and buying two Micro AUDUSD Futures to construct a synthetic AUDJPY pair. Setting up the AUDJPY currency pair this way allows a more palatable trade as the notional amount is on roughly 20,000 AUD or 10,000 USD. This synthetic set-up allows us to access a more liquid market in both contracts compared with the full sized one. Using the descending triangle structure as a guide, we set our stops at 94, close to the previous resistance and our take profit at 70. The charts above were generated using CME’s Real-Time data available on TradingView. Inspirante Trading Solutions is subscribed to both TradingView Premium and CME Real-time Market Data which allows us to identify trading set-ups in real-time and express our market opinions. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com Disclaimer: The contents in this Idea are intended for information purpose only and do not constitute investment recommendation or advice. Nor are they used to promote any specific products or services. They serve as an integral part of a case study to demonstrate fundamental concepts in risk management under given market scenarios. A full version of the disclaimer is available in our profile description. Reference: www.cmegroup.com www.cmegroup.com
AShort
by inspirante
A Crude Awakening!The surprise production cut announcement from OPEC+ on Sunday caught us off guard! With oil prices surging close to 7%, the question arises: will this trend persist? To put the production cut into perspective, the unexpected 1.16 million barrels per day reduction is a continuation of the cuts announced last October. In total, these cuts will represent roughly 3.7% of global demand. Since it has been some time since we covered oil, let's revisit some of the factors we see affecting oil now. Strategic Petroleum Reserve First, the US Strategic Petroleum Reserve (SPR) is currently at its lowest level since 1983. The remarkable depletion of the reserve to combat energy inflation finally ended in December. How has crude oil performed since then? It has been trading relatively flat, with the recent news pushing crude back to its December peak levels. We view this as a potential positive for crude oil, as the current low SPR levels indicate that supplies cannot be easily smoothed out by artificial market forces to suppress oil prices. Furthermore, the SPR will eventually require a refill at some point, adding buying pressure. Dollar weakness As crude oil is quoted in USD, the dollar's performance greatly influences oil prices. The chart above depicts the dollar (inverted) against crude oil. Over the past 20 years, periods of dollar weakening have been associated with higher oil prices. With the recent dollar decline, we have yet to see a significant response from crude. COT Positioning Another interesting note about oil is the reduction of non-commercial long positions over the past year as oil rallied from the depths of negative prices in 2020. As long positions close, net positioning (blue) has returned to 2016 lows. The current positioning landscape presents opportunities for a renewed surge in Crude Oil if market participants re-establish their longs. Term Structure The term structure of Crude Oil remains significantly in backwardation, indicating possible demand pressures, as measured by the Dec 2023 – Dec 2024 spread as well as the Jun 2023 – Jun 2024 spreads. The news on OPEC production cut resulted in a spike in the steepness of the term structure, further emphasizing the presence of price pressures. Political Gamesmanship Last but not least, as global powerhouses China, Russia, and Saudi Arabia jockey for positions on the world stage, it's undeniable that oil plays a pivotal role in their strategic arsenal. By leveraging their influence over this vital commodity, these nations may attempt to exert pressure on the US, seeking to tip the geopolitical balance in their favor and assert their dominance in the energy market. Looking at the charts, we see crude oil struggling to break lower after completing a descending triangle. The recent gap up has now positioned Crude Oil just above the 200-day moving average and descending triangle. Combined, the stage seems set for oil’s next leg higher as the low SPR levels, dollar weakness, term structure & net positioning act as potential tailwinds to propel Crude Oil higher. We set our stops at the previous support level of 73.15 and take-profit levels at 92. Each Crude Oil Future contract is equal to 1000 barrels of crude oil. Each 0.01 point increment in Crude Oil Futures is equal to 10 USD. The charts above were generated using CME’s Real-Time data available on TradingView. Inspirante Trading Solutions is subscribed to both TradingView Premium and CME Real-time Market Data which allows us to identify trading set-ups in real-time and express our market opinions. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com Disclaimer: The contents in this Idea are intended for information purpose only and do not constitute investment recommendation or advice. Nor are they used to promote any specific products or services. They serve as an integral part of a case study to demonstrate fundamental concepts in risk management under given market scenarios. A full version of the disclaimer is available in our profile description. Reference: www.cmegroup.com www.reuters.com
Editors' picks
NYMEX:CL1!Long
by inspirante
16
What’s next for Gold & S&P 500?Having covered Gold & the Equity Index last week, this week we will look at how we could leverage both to trade on the move we’re watching! Quite a happening market we first covered Gold two weeks ago. Firstly, the interest rates market had a sizeable correction, with the 10Y-2Y yield now trading at close to -0.45% instead of the -1% range just 3 weeks ago. Secondly, with FOMC out of the way, we have some clarity on what the Fed thinks of the current bank contagion episode as well as how markets reacted to the Fed’s statement. With all these in mind, one thing we want to point out is the relationship between yield curve inversions across the different tenures of the curve. Comparing the past 2 episodes of yield curve inversion on the shorter and longer end of the curve, we note a few things here. Firstly, the 10Y-2Y inversion generally leads the 2Y-3M inversion. Secondly, the past 2 times when both sections of the curve were inverted, we saw a significant sell-off in equities happening soon after. Thirdly, the inversions also marked the start of the next leg up for gold. With peak inversion likely to pass for the 10Y-2Y curve and 2Y-3M inversion at the all-time low now, we see some potential to buy Gold and sell Equity Indices, as we’re raised over the past 2 articles! When we use the S&P500 Futures Contract and the Gold Futures contract to view the ratio of the S&P500 / Gold, this ‘Selling’ point becomes clearer! With the past 2 periods falling 59% and 69% respectively and lasting more than 700 days, this trade could take a while to play out, but the risk to reward seems attractive. As to the hypotheses of why this relationship might exist, it could reside in the idea that abrupt rate cuts likely merely take place in a time of financial distress, hence the selloff in equities and flight to safe-haven assets like gold. When rates fall off, the non-yielding assets like Gold would start to look more attractive to yield-hunting investors, which could have added fuel to the Gold rally, too. Taking a conservative target of 35% lower from the current ratio level of 2, we position a short in the S&P 500 / Gold ratio by selling 1 S&P 500 Futures and buying 1 Gold Futures, at the current price of 1980 for CME April 2023Gold Futures (GCJ3) and 4010 for the CME June 2023 (ESM3 ) S&P 500 Futures, the notional value of the position for the long & short leg is almost equal at; Long GCJ3: 1980*100 = 198,000 Short ESM3: 4010 * 50 = 200,500 Setting up such a spread trade requires some monitoring of the difference in notional value to ensure that the position is properly hedged. Each 0.25-point move in the ESM3 contract is equal to 12.5 USD while a 0.1-point move in the GCJ3 contract is equal to 10 USD. Trading this spread would be eligible for a margin offset of up to 70%, meaning that the capital required to set up this trade is much lower. The charts above were generated using CME’s Real-Time data available on TradingView. Inspirante Trading Solutions is subscribed to both TradingView Premium and CME Real-time Market Data which allows us to identify trading set-ups in real-time and express our market opinions. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com Disclaimer: The contents in this Idea are intended for information purpose only and do not constitute investment recommendation or advice. Nor are they used to promote any specific products or services. They serve as an integral part of a case study to demonstrate fundamental concepts in risk management under given market scenarios. A full version of the disclaimer is available in our profile description. Reference: www.cmegroup.com www.cmegroup.com
TVC:US02YShort
by inspirante
Bitcoin CME Gap Chart AnalysisBitcoin CME Gape Chart Analysis:- Bitcoin CME Gap at $28,740 remains unfilled, leading to speculation about when it will be filled. In addition, there is anticipation for the next CME Gap at $35,180. However, many are wondering about the status of the $20,330 CME Gap. The $20,330 CME Gap refers to a price discrepancy on the Chicago Mercantile Exchange (CME) Bitcoin futures chart that occurred when the cryptocurrency experienced a significant price drop in March 2020. The price fell from around $9,000 to below $4,000, causing the CME Gap to form. Currently, Bitcoin is trading above the price range of the $20,330 CME Gap, leading some to believe that it may never be filled. However, it's worth noting that historically, Bitcoin has filled the majority of its CME Gaps, which means there's a chance that this one could be filled as well. While it's impossible to predict exactly when the $20,330 CME Gap will be filled, market analysts believe that it may happen in the future if Bitcoin experiences a significant drop in price. In any case, traders and investors should keep an eye on this CME Gap and be prepared for potential market movements if and when it is filled.
CME:BTC1!Long
by CryptoPatel
1
CME Gaps: Don't Ignore Them... How often have you heard this term “CME gap” on Twitter, Reddit and other social media platforms. People usually refer to CME gaps during and after the weekends. “There is a CME gap at $9800”, “Bitcoin is about to make a huge gap on the CME chart”, “gap has been filled” and so on. What is CME CME stands for Chicago Mercantile Exchange. It is the world’s largest financial derivatives exchange. This futures platform allows one to trade variety of asset classes like: agricultural products, energy, stock indices, fiat currencies, interest rates, real estates, metals and even they have futures trading options for weather. What is a GAP To put it plainly; A gap is simply an area on a chart that has no trades. It is basically an empty space between the close and open price of an asset. You can see the current gap just filled down at 19k-20k last week. CME Bitcoin futures gap: Bitcoin (BTC) is being traded 24/7 on majority of crypto exchanges, but not on CME. Bitcoin does not trade during weekends on CME and this causes gap on CME chart once the trading resumes on the platform. The CME gap on Bitcoin typically occurs when the price of Bitcoin moves after the CME futures market is closed. Once CME opens; the trade on CME resumes at the same price as other Bitcoin exchanges thus creating a gap on the CME chart. Why do they fill? Price gaps getting filled is not just a CME phenomenon and is not just a Bitcoin thing. It’s a common occurrence that can also be seen quite regularly within stock and traditional markets. In most cases the price tend to fill the gaps and due to this many technical analysts consider gaps when doing price analysis. But why do they fill? In physics there is a famous saying: “Nature abhors a vacuum“. This idiom is used to express the idea that any unfilled, empty spaces are unnatural and goes against the laws of physics and nature. This is based on Aristotle’s observation. Nature contains no vacuums because the denser surrounding material continuum would immediately fill the rarity of an incipient void. Could this possibly be the reason why the gaps are getting filled? Well, there are several different theories regarding this but the fact is no one exactly knows why gaps fill. Trading based on BTC gaps Although CME accounts for a large portion of BTC traded volume, the price of Bitcoin does not necessarily gravitate towards CME gaps. There are so many other factors such as Volume, momentum, buy / sell pressure, technical structures, support / resistance and many more.Traders consider gaps as an interesting marker on a chart. But they don’t necessarily trade on as they are not always a reliable indicator. They have high hit rate and so using them on your technical analysis will help you position yourself on the right side of the trade. However taking a trade solely based on this one factor is a wrong move. Trading gaps seems like an easy strategy but the risks are high and in most cases you’ll be on the losing side. So do not risk your trade account with just this one strategy. Use proper risk management, set stop losses and be sure to trade safe. Apart from this there are other types of gaps which traders use in their technical analysis like for example: Liquidity gap, Breakaway, Balanced price range, Fair Value gap and so on... I have located all the 'Unfilled' CME BTC gaps in the chart...
CME:BTC1!
by TraderE9
3
No one is safe when the floor falls out!UBS buys Credit Suisse, central banks liquidity provision, and a massive repricing in rates marked a significantly volatile week. As the storm of bank contagion continues to brew, one index in particular is trading unlike the others! We’re talking about the Nasdaq here. Trading higher while its peer indexes get beaten down in a somewhat unusual fashion. Another way to look at it, since this February, S&P500, Dow Jones & Russell 2000 is down 5%, 7% & 13% respectively, while the Nasdaq is pretty much flat. In one of our previous posts, we highlight how the ratio of Nasdaq/S&P500 topped higher than the 2000s Dot-com bubble. While the ratio traded lower after we covered it, this recent move basically put the ratio back to the level when we first highlighted it. The ratio also traded cleanly off the .236 Fibonacci line and the trend support. With the ratio now at the previous resistance level, and extended from the trend line, this could present another opportunity to consider a short. Interestingly if we use a Logarithm y-axis, the upward trend of the ratio becomes clearer. Here, we see all 3 ratios at critical resistance levels and away from the long-term trend. While it’s a bit challenging to pinpoint the exact reason, we think the chorus of lower target rates and more cuts priced in has propelled the possibly interest rate-sensitive benchmark higher. But, when the floor falls out, it doesn’t matter if you can jump the highest! We think the current springboard for the Nasdaq Index can only take it so far and here’s why: If a true contagion event does play out, then the sell-off is likely not going to discriminate. And looking at the 2000s period, Nasdaq continued to tumble while the fed paused and cut rates. Of course, we’re not blind to the fact that the 2000s was a whole different era and the crisis was driven by a tech bubble, so the Nasdaq would of course, face a larger correction. Our point here is to highlight that in a true contagion event, sell-offs do not discriminate. On the flip side, if a contagion event does not play out, the Fed is still faced with Inflation which has been way above its target. Not forgetting the Fed’s dot plot terminal rate at 5.1% and a hawkish Fed chair just days before the SVB bank collapse, if the coast is clear of any banking crisis then the path for further rate hikes or holding rates higher for longer could come back into play. Both of which could trigger a repricing in the Nasdaq. Given the opportunistic setup in all 3 index ratios, it is possible to establish a short on any of them. Using the Nasdaq Futures and S&P500 Futures as an example we could: - Short 5 Nasdaq 100 Futures - Long 2 S&P 500 Futures In this trade set-up, the dollar value of the two legs of trade will remain equal, despite the direction in which the Nasdaq or S&P moves. If NQ future moves by 1 point, the short leg of the trade (5 lots of NQ futures) would change by 100 USD. So does the dollar value in the long leg of the set-up (2 lots of ES futures). The same setup is possible with the Micro Nasdaq and S&P500 Futures as well, whereas in the latter case, the 1-point move is equal to 10 USD instead of 100 USD. Trading this spread would be eligible for a margin offset of up to 70%, meaning that the capital required to set up this trade is much lower. The charts above were generated using CME’s Real-Time data available on TradingView. Inspirante Trading Solutions is subscribed to both TradingView Premium and CME Real-time Market Data which allows us to identify trading set-ups in real-time and express our market opinions. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com Disclaimer: The contents in this Idea are intended for information purpose only and do not constitute investment recommendation or advice. Nor are they used to promote any specific products or services. They serve as an integral part of a case study to demonstrate fundamental concepts in risk management under given market scenarios. A full version of the disclaimer is available in our profile description. Reference: www.cmegroup.com www.cmegroup.com www.cmegroup.com www.cmegroup.com
CME_MINI:NQ1!Short
by inspirante
Side-step a potential storm!Just when we thought the hawkish narrative was pretty much priced in, SVB’s fallout basically threw a spanner into the hiking cycle. You’ve probably read quite a lot about the whole SVB debacle since Thursday’s trading session so we won’t harp on that. We instead want to turn your attention to two other markets that moved significantly since the SVB episode. Interest Rates & Gold. A sharp repricing has occurred in the expected rate path as markets digest the onslaught of SVB-related events. As a result, we saw the probability of a 50bps point hike jump from 30% to 80% and then back down to 20% as of today. Additionally, further rate hikes have also been priced out indicating market’s expectations of a more cautious Fed. Most importantly, the implied aggressive rate cuts starting from the end of 2023 caught our eyes here. As a reminder, the last time the fed paused and then cut rates, Gold responded with a 60% rally. As the potentially lower terminal rate and faster pace of rate cuts narrative begin to pick up momentum, we think Gold deserves more attention now than ever. The next FOMC meeting is only 10 days away. From there, we will get a sense of what the Fed thinks of the current situation. If they start to show signs of retreat from their hawkish stance, we believe it will be a catalyst for this trade. Another point of worry is economic data still coming in hot, at least for now. For those not keeping count, Non-Farm Payrolls numbers have beaten estimates to the upside for the past 11 months as the economy remains unusually strong. With the next set of CPI numbers coming out this Tuesday, a hot print could drive inflation worries further. If the Fed shows signs of easing on the hawkish narrative while Inflation numbers continue to be hotter than expected, higher Inflation expectations could once again drive investors into inflation-protecting assets like Gold. Key volatility gauges have pointed higher over the past few days and major indexes have edged closer to key price and technical levels. Given these, volatility is likely to compound from here as Commodity Trading Advisors (CTAs) potentially flip sides and funds rotate out of the banking sector. In such uncertain times Gold’s status as a safe haven asset could attract flows as investors sidestep the market turbulence. Looking at the price action, Gold still trades well clear of the 500 Day EMA mark which has marked the support for the price action and well clear of the 1800 physiological level. RSI is still middle of the road indicating that there is still room for Gold to run higher. Gold’s relationship with interest rates and position as an inflation-hedge/safe haven asset could very well position it for further upside from here. For now, we think it provides enough upside to sidestep the potentially volatile times ahead. We set our stops near the previous level of support and the 0.618 Fib level, 1755, and our take profit levels at 2065. Each 0.1-point increment in COMEX Gold future is equal to 10 USD. The charts above were generated using CME’s Real-Time data available on TradingView. Inspirante Trading Solutions is subscribed to both TradingView Premium and CME Real-time Market Data which allows us to identify trading set-ups in real-time and express our market opinions. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com Disclaimer: The contents in this Idea are intended for information purpose only and do not constitute investment recommendation or advice. Nor are they used to promote any specific products or services. They serve as an integral part of a case study to demonstrate fundamental concepts in risk management under given market scenarios. A full version of the disclaimer is available in our profile description. Reference: www.cmegroup.com www.cmegroup.com
COMEX:GC1!Long
by inspirante
1