Financial Crisis Impact on Different Asset ClassesA financial crisis is a severe disruption in the financial markets and banking system of a country or even the entire world. It typically involves a sudden and widespread loss of confidence in the financial system, leading to a range of negative economic consequences.
In this article, we provide a comprehensive overview of how different asset classes tend to behave during turbulent times of financial and economic crises. Some prominent historical examples uncover the dynamic interplay within these markets.
Impact of Financial Crisis on Equities
Shareholder investments depend heavily on company-specific factors; however, general economic conditions and market sentiment play a decisive role as well. Equity markets typically plummet during financial crises.
During a financial crisis, investor sentiment turns bearish as confidence in the stability of the financial system wanes, causing a domino effect through massive sell-offs on equity markets. Increased risk aversion imposes a higher risk premium to borrowing costs, and businesses may encounter significant challenges in securing loans for expansion or even daily operations. This difficulty in accessing capital negatively impacts corporate earnings, further eroding investor confidence in equities. Higher volatility is common in such conditions as well, and traders could turn the situation into an opportunity for short-term shorting profits.
Economic Crisis Examples Causing Stock Market Crashes
The Dot-Com Crash unfolded in the early 2000s, following a period of excessive overvaluation of internet-related and technology stocks. Having no earnings or clear path to profitability but going public on overhyped expectations, these companies enjoyed skyrocketing stock prices. The bubble burst when major technology companies initiated large sell orders for their own shares, confirming the extreme overvaluation and triggering a wave of panic selling. The Nasdaq Composite Index lost over 76% of its value, while the shock wave reached retirement accounts, investment portfolios, and mutual funds.
The housing market collapse in 2008 and the subsequent banking crisis also resulted in a severe stock market downturn. Major stock indices, such as the S&P 500, plummeted in early 2009, causing substantial losses for investors.
Financial Crisis Affects Fixed-Income Asset Classes by Risk
At times of financial crises, investors often seek safety in government bonds from stable countries, leading to increased demand and higher prices. Therefore, government bonds are widely used as safe-haven asset classes for investments. On the flip side, concerns about creditworthiness during financial turmoil can cause bond prices from corporate issuers to decline.
The scenario is different for corporate bonds. Negative sentiment causes panic selling and declining corporate bond prices, while positive sentiment, often due to government interventions or stimulus measures, can boost corporate bond prices.
Central banks also respond to crises by adjusting interest rates, affecting bond prices: lower rates can make existing bonds with higher coupon rates more attractive, driving up their prices, while raising rates can lead to falling bond prices.
Global Financial Crisis: The 2008 Mortgage Collapse
The global financial crisis of 2008 triggered diverse reactions in the bond market. As the crisis unfolded, the huge demand for government bonds caused yields to drop to historically low levels, driving prices up in early 2009.
In contrast, bonds tied to the housing and mortgage markets, such as mortgage-backed securities and collateralised debt obligations, experienced significant declines in prices due to heightened credit risk and concerns about mortgage defaults. A liquidity squeeze in the market exacerbated the pricing volatility, making it more challenging for investors to buy or sell bonds at desired prices. Central banks responded with measures like interest rate cuts and bond purchases to stabilise financial markets, influencing bond prices further.
Financial Crisis Impact on Asset Classes Like Commodities
The effects of financial crises on commodities are complex, with both safe-haven and risk-off assets experiencing fluctuations as investors seek to adapt to evolving market conditions.
Financial crises impact supply and demand dynamics in commodity markets. Traders can profit from significant fluctuations, taking long or short positions in different commodity types.
Precious metals like gold and silver are considered safe-haven assets by investors seeking refuge from volatile equities and currencies, which can drive their prices up. Conversely, industrial commodities, such as oil and base metals, may face declining prices due to reduced demand resulting from economic slowdowns and decreased industrial activity. Additionally, fluctuations in exchange rates due to monetary policies in response to the crisis can influence commodity prices.
Impact of the Global Financial Crisis: Examples
The 1997 Asian financial crisis caused severe economic contractions and currency devaluations. Key players like South Korea and Indonesia faced significant downturns in manufacturing and construction activity, leading to diminished consumption of copper and aluminium and a sharp decline in their prices. In Russia, the devaluation of the ruble in 1998 made it more profitable for Russian oil companies to export their crude, leading to an increase in oil production. Thus, a surge in supply combined with the reduced demand in Asia the year before resulted in a global oversupply of oil. Consequently, oil prices experienced a sharp decline.
A more recent oil price decline in 2018 and 2019 was also triggered by oversupply concerns, primarily due to the rapid growth in oil production. Trade tensions, the global economic slowdown, and uncertainty in the face of slowing economies were also contributing factors.
A Financial Crisis Is a Pivotal Moment for Currency Markets
A complex interplay of forces can create substantial volatility in the forex market during a financial crisis, reshaping exchange rates.
Heightened uncertainty and risk aversion among investors drive a flight to safety found in stable currencies, causing their values to appreciate. On the other hand, currencies of countries affected by the crisis, like emerging markets, often face depreciation due to economic uncertainty. Monetary policy adjustments by central banks, like interest rate cuts or quantitative easing, influence currency values further.
The European Debt Crisis
In 2010-2012, the depreciation of the euro significantly impacted currency markets. Concerns about the fiscal stability of several Eurozone countries led to investors seeking refuge in other major currencies like the US dollar and the Swiss franc. The European Central Bank's policy interventions played a critical role in managing the crisis's effects, highlighting the intricate relationship between regional economic and political developments and their impact on the global currency market.
Alternative Asset Classes: Cryptocurrencies*
Major cryptocurrencies* like Bitcoin and Ethereum can be seen as a hedge against crises in the traditional markets. Despite their different characteristics, purposes, and risk profiles, many major players see them as alternative investments because of an observed negative correlation at times.
In the early stages of a financial crisis, cryptocurrencies* have sometimes been seen as "digital gold" or a safe-haven asset by some investors. This perception can lead to an initial increase in demand and higher prices for them. However, while some investors see cryptocurrencies* as a hedge against traditional financial system risks, others view them as speculative assets. This duality can result in varying responses during crises, with some investors flocking to cryptocurrencies* and others selling off to raise cash or reduce risk exposure.
Bitcoin: The “Digital Gold”
At the end of 2020, the COVID-19 pandemic accelerated the narrative of Bitcoin being a digital safe-haven asset. Extensive monetary stimulus during the pandemic raised extreme inflation concerns, while fear of worldwide economic recession kept stocks from rising, making many investors see Bitcoin as a superior store of value. Additionally, the pandemic fueled the rise of decentralised finance (DeFi) and digital payment solutions, boosting cryptocurrency* adoption.
If you are willing to explore how various assets react to changing market conditions and hedge risks by diversifying your portfolio, you can visit FXOpen’s free trading TickTrader platform.
Conclusion
Financial crises bring to light the diverse behaviour of various asset classes. Stocks tend to collapse, bonds respond to interest rates and credit concerns, and commodities and currencies get volatile to reflect global dynamics. Amidst these, cryptocurrencies* emerge as an alternative store of value. Ready to extend your trading experience? You can open an FXOpen account and explore the opportunities.
*At FXOpen UK and FXOpen AU, Cryptocurrency CFDs are only available for trading by those clients categorised as Professional clients under FCA Rules and Professional clients under ASIC Rules, respectively. They are not available for trading by Retail clients.
This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
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Why All Traders Should Master Alerts: Cyber Monday SpecialWe've got great news...
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The act of creating alerts requires research, planning, and thoughtful analysis. In order to find the exact level you want to place an alert at, you first must research the chart in great detail. Then, once you've found your level, you'll want to create an alert at that level and wait for it to trigger. This entire process is the cornerstone of creating a plan and becoming more prepared for all the things markets may throw at you.
Alerts allow well-prepared traders with some edge to step back from the markets and allow the trades to come to them.
Ready to make your first alert? Here's how: Right-click on the exact price level and then select "Create Alert" from the menu. You can also use the keyboard shortcut Alt + A or on a Mac option + A. Lastly, at the top of every chart is a clock icon. Click that to open your alert menu and get started.
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Alerts take out the guesswork of entering and exiting a position. Set alerts for the prices you would like, then place a trade if, and only if, the conditions are met and that alerts triggers. Set the alert and wait patiently.
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TRADING BASICS: TRENDLINESTrend lines are the simplest and most basic concept of technical analysis. It is also, paradoxically, one of the most effective tools. Since almost all price patterns require the use of trend lines, the latter are the basic element of both pattern definition and its use. Now we will discuss what trend lines are, how to work with them and how to determine whether they are working.
A trendline is a straight line that connects descending lows in a rising market or highs in a falling market. Lines that connect lows are called rising trend lines, and those that connect highs are called falling trend lines. To make a falling trend line, we connect the first high to the subsequent highs. When the price breaks the trend line, it is a hint that the trend may change. Similarly, for a rising line.
How to draw a trend line? ✔️
For a trend line to be real, it must connect the previous highs or lows. Otherwise, there is no sense in such a line at all. This is called the major trend line. It is where the first low of a bearish trend connects to the first intermediate low. In the example below, the trend line is not particularly steep (it is at a low angle, and angles are important in a trend). Unfortunately, price then accelerates sharply after the next low.
In a situation like this, it's best to simply redraw the trendline as price moves further away. This is called a new line in the picture and it reflects the changed trend much better. This line will be a secondary trend line. Well, the downtrend lines are drawn in the same way, but in reverse.
Since the trend can go sideways, it is quite possible to guess that trend lines can be drawn horizontally. This is often the case when we find price patterns like the "neck" in the Head and Shoulders pattern, or the upper and lower borders of triangles. In such patterns, if the trend line is crossed, it is an indication that the trend is changing. The same is true for rising and falling trends.
It is also important to realize that drawing a trend line is a matter of using common sense, not a set of very strict rules.
A trendline breakout could indicate a reversal or consolidation
The completion of a price pattern can indicate:
1. reversal of the previous trend, aka reversal pattern;
2. continuation of the previous trend, aka consolidation or continuation pattern.
Similarly, a trend line breakout indicates either a reversal of the trend or a continuation of the trend.
An example demonstrates this concept for a downtrend.
In this case, the trend line connecting one high after another is broken in a downtrend. The fourth high will be the highest point of the bearish trend, so an upward breakout of the trend line in this case indicates the beginning of a bullish trend.
In the picture above we see again a rising trend and a trend line breakout, but this signal has a completely different outcome. The reason is that the break of the trend line caused the trend to continue, but at a much slower pace. The third scenario is when the price goes into consolidation (aka sideways) instead of reversing, which is shown in picture. Accordingly, when a trendline is broken, it is a strong indication of a trend reversal. A changed trend can eventually reverse or go sideways after rising or falling.
Unfortunately, in most cases we can't tell accurately what will follow a trendline breakdown. However, there can be some pretty good clues, such as the angle of the trendline. Since trends that run at an acute angle are less stable, their breakout more often leads to sideways rather than reversals. Useful hints can be hidden in the general state of the technical structure of the market. In addition, a trend line breakout often occurs at the successful completion of a reversal price pattern or shortly before.
Extended trend lines ✔️
Many beginners, when they see that a trend line is broken, automatically conclude that the trend is about to change and immediately forget about the line. After all, an extended trend line can be as important as the fact of its breakdown. For example, if a rising trend line is broken, the price very often returns to the same line, but later. This is called a throwback.
Significance of trend lines ✔️
So, we have it all figured out - a trend line breakout leads to either a trend reversal or a trend slowdown. Of course, it is not always possible to say what exactly happens there, but we need to understand how effective a trend line breakout is in general, which we are going to do now.
In general, the significance of this event depends on three factors:
The length of the line;
The number of touches;
The angle of inclination or rise.
1. Trend line length ✔️
A trend line is used to measure a trend. The longer the line, the longer the trend and the more such a line will become important to us. If descending lows come one after another for 3-4 weeks, such a trendline is less relevant. If the trend line lasts 1-3 years, its breakout is extremely important to us. The breakout of an old trend line is very important, it is a powerful signal. The breakout of a fresh (relatively) trend line is a less important signal.
2. Number of touches or approaches to the trend line ✔️
The more touches or interactions with the trend line, the more important it is, there is a direct correlation. Why is this so? Because the trend line represents a dynamic zone of support or resistance. Each successful touch of the line strengthens it, reinforces its importance as a support or resistance zone. Thus, the trend line's role as a guide for the trend as such is also strengthened. Approaching the trend line is no less important than touching it, because this is how the zone is actualized. If the trend line has become strong due to the touches, its continuation will be no less strong, but from the other side. After all, in an extended trend line, support often becomes resistance and vice versa.
3. Angle of slope ✔️
A very steep trend is usually unstable and easily broken, even by a short sideways movement. All trends break sooner or later, this is a fact. However, steep trends break much faster. The breakout of a steep trend is less significant than the breakout of a smooth and gradual trend. It sounds paradoxical, but the point is this - the break of a steep trend usually causes a short correction, sideways price movement, after which the trend resumes, but much less strong and smoother. Accordingly, the breakout of a steep trend line is a confirming pattern, not a reversal pattern at all.
To summarize
Trend lines are an easy tool to understand, but they must be used correctly and thoughtfully. A trend line breakout indicates a temporary interruption of the trend or a reversal of the main trend. The significance of a trend line consists of its length, the number of touches/approaches to it and the slope angle. A good trend line always reflects the underlying trend and forms significant support and resistance areas. Extended trend lines change former support/resistance in places, which should be paid special attention to.
Traders, If you liked this educational post🎓, give it a boost 🚀 and drop a comment
Sofi - A possible repeating patternA repeating pattern and potential opportunity
All three companies have some form of crypto offering.
NUbank, Coinbase and Sofi appear to have similar bottoming patterns with double bottoms and a head and shoulders style reversal. The charts are not identical but you can clearly see a repeating testing of levels and a price cluster (red shaded area) which appears to be the new base forming offering good enough support for a trade set up. Under the price cluster red shaded area there are double bottoms.
I have been in the NUBank trade since Jan 2023 at $3.51 and I noticed COIN had a similar bottoming pattern in June 2023 but it had not broken out yet, so I shared a comparative chart at the time and took a position in COIN, noting the stop as the bottom of the red box. I have shared individual charts on COIN and NU to this effect also.
Since June COINBASE has had 120% increase and I believe this will continue.
Whilst its price movement since the sharing in June is not identical to NUbank, you can clearly see a parallel channel bottoming, head and shoulders reversal and similar price clusters which i marked up.
I was most confident on the COIN trade when it had its strong pull back from Jul - Oct, here I double the position when it came back and bounced off the the 200 day moving average perfectly.
Two of the great trades of this year from me which I am still currently holding NYSE:NU and $Coin.
I believe there maybe an opportunity for this much smaller company $SOFI. A trade set up is there with a defined stop and good risk to reward (outlined on chart). I have not entered this trade yet, but i may in coming weeks. I will keep you posted.
PUKA
A Traders’ Weekly Playbook: The heat is onVolume and liquidity kick back into markets after the US Thanksgiving celebrations and we consider if the trend of a weaker USD, low cross-asset volatility, rising gold and Bitcoin can continue. Direction for this scenario will focus on the direction of travel in equity markets, and notably, whether the NAS100, US500 and even the JPN225 can kick higher.
The economic data and broad event risk offer no major landmines for traders to get overly concerned by, and I think we need to look further ahead at the US nonfarm payrolls (9 Dec) and US CPI (13 Dec) reports for the big part of the macro jigsaw.
At this juncture, for traders who cut their craft on higher timeframes (4hr, daily, weekly) there doesn’t seem to be many reasons to be aggressively short risk, and while price action will be dictated to by passive and portfolio flows, the news, and levels of implied volatility suggests if risky assets do kick then it could pay to chase.
The USD is central to broad market sentiment, and Friday’s close in the DXY below the 200-day MA may well be telling. With an eye on EU CPI, we focus on whether EURUSD can push through 1.0950/60, and USDJPY into 148, a factor which could see new cycle highs in gold with industrial metals also supported, although Chinese data could play a part in driving that trade.
I like USDCHF downside, with a stop above 0.8760. GBPUSD and AUDUSD also look like they could kick, although the latter needs to push through the 200-day MA and then the 0.66 level.
Bitcoin is making another run at 38k, and after consolidation, we’ll see if price can continue its ascent since mid-October. Clients believe this to be true and are positioned accordingly and many will be thinking Bitcoin can start 2024 with 40 as the big number.
Good luck to all.
The marquee event risks for the week ahead:
China Industrial Profits (27 Nov 12:30 AEDT) – coming off a low base, we saw profits gain 11.9% yoy seen in September. There is no consensus to work off, so pricing risk on the data is a challenge, so the data is unlikely to see too great an initial reaction in markets.
US consumer confidence (29 Nov 02:00 AEDT) – the consensus is that we see the index come in at 101.0 (from 102.6). A print below 100 could further weigh on the USD.
Australia monthly CPI (29 Nov 11:30 AEDT) – the market looks for the monthly CPI read to come in at 5.2% (5.6%), with the range of estimates set from 5.5% to 4.9%. Few expect a hike from the RBA on 5 December, but expectations of a hike in the February RBA meeting are delicately poised at 50%, so the monthly CPI print could influence that call and impact the AUD vs the crosses.
RBNZ meeting (29 Nov 12:00 AEDT) – the RBNZ will leave interest rates unchanged at 5.5%, with the markets ascribing no probability of a hike here. In fact, the argument is more on the timing of the first cut, with a 33% chance of a 25bp cut priced by the May RBNZ meeting, and 55bp of cuts priced by end-2024.
Sweden Q3 GDP (29 Nov 18:00 AEDT) – the market looks for Q3 GDP to come in at -0.2% QoQ / -1.4% yoy. After recording -0.8% in Q2, another negative quarter puts Sweden in a technical recession and accelerates the need to cut rates, where we see the door open for easing from June 2024. This GDP print should also mark the low point, where GDP should be less bad going forward, which is part of the reason why the market has been better buyers of the SEK of late.
China manufacturing and services PMI (30 Nov 12:30 AEDT) – the market looks for the manufacturing index at 49.6 (from 49.5) & 51.1 (50.6). Keep an eye on copper over the data, and for a possible upside break of $3.80 and the 200-day MA – a scenario which would likely put upside risks in the AUD.
EU CPI (30 Nov 21:00 AEDT) – the market looks for headline CPI inflation to come in at -0.2% MoM / 2.7% (from 2.9%), with core CPI at 3.9%. The swaps market sees the ECB hiking cycle as firmly over and looks for the first cut in April, which may be a touch optimistic. We also see the hedge fund community heavily short of EURs, so if equities can squeeze higher then EURUSD should follow suit with moves accelerated on short covering.
OPEC meeting (delayed - 30 Nov) – Expectations of deeper output cuts are low, with most commodity strategists seeing a higher risk that the current output cuts are extended into 2024. OPEC+ could shock the market of course, but looking at the price action in crude it seems the market is positioned short of Brent Crude into the meeting and betting OPEC+ don’t step up its attempts to reverse the recent bear trend. A close above $83 could see shorts square and even reverse.
US core PCE inflation (1 Dec 00:30 AEDT) – the market looks for 3.1% on headline PCE inflation (down from 3.4%) and core PCE at 0.2% mom / 3.5% yoy (from 3.7%). We look at trends in service prices and services ex-shelter, where slower prices rises should cement the view of adjustment rate cuts from the Fed in 2024.
Canada employment report (2 Dec 00:030 AEDT) – the consensus is that we see 15k jobs created and the U/E rate at 5.8% (from 5.7%) – There’s not a lot to like about the CAD at present, although the market is seeing even less interest in the USD at present. A break of 1.3692 would be welcomed by USDCAD shorts, and the jobs print may influence that flow. In rates, we see the first cut from the BoC priced for April and some 74bp cuts priced by end-2024.
US ISM manufacturing (2 Dec 02:00 AEDT) – the market looks for modest improvement with the diffusion index eyed at 47.7 (46.7). I’m not expecting a huge reaction to this data point as we know manufacturing is weak and we won't learn too much here.
Central bank speakers
RBA – Gov Bullock speaks from Hong Kong (12:18 AEDT)
BoE – Ramsden, Haskel, Bailey (30 Nov 02:05 AEDT), Hauser, Greene
ECB – Lagarde, Deo Cos, Panetta
Fed – Goolsbee, Waller, Mester, Powell (2 Dec 03:00 AEDT)
BoJ – Adachi, Nakamura
4 Types of Gap You MUST Know in Trading
Hey traders,
In this article, we will discuss a very common pattern that is called gap.
In technical analysis, the gap is the difference between the closing price of the previous candlestick and the opening price of the next candlestick.
📈Gap up represents a situation when the price bounces up sharply at the moment of a transition from one candlestick to another. The price gap that appears between them is called gap up.
📉Gap down represents a situation when the price drops sharply at the moment of a transition from one candlestick to another, the price gap between the closing price of the previous candle and the opening price of the next candle is called a gap down.
From my experience, I realized that with a high probability the gap tends to be filled. For that reason, once you see a gap, consider trading opportunities around that.
Depending on the market conditions where the gap appears, there are several types of a gap to know:
1️⃣Common gap appears in a weak, calm market. When the trading volumes are low and the market participants are waiting for some trigger, or the asset reached a fair value price.
Above, there is a perfect example of a common gap that was formed on Dollar Index on an hourly time frame.
2️⃣Breakaway gap appears in a situation when the price suddenly breaks a structure (support or resistance) in a form of a gap.
Such a gap usually confirms a structure breakout.
I spotted a perfect breakaway gap on Dollar Index. The market violated a solid horizontal support with that.
3️⃣Runaway gap usually appears when the market is growing or falling sharply. It signifies the dominance of buyers/sellers and highly probable continuation. Usually such gaps are not filled.
Runaway was a perfect indicator of a strength of buyers on US30 Index.
4️⃣Exhaustion gap is, in contrast, appears around major key levels and signifies a highly probable reversal. The exhaustion gap is usually confirmed by a consequent strong opposite movement that fills the gap.
US100 formed an exhaustion gap, trading in a strong bullish wave. After that the gap was filled and the market started to fall rapidly, forming a breakaway gap.
Learn to recognize gaps on a chart and learn to interpret them. It will increase the accuracy of your technical analysis.
Hey traders, let me know what subject do you want to dive in in the next post?
Ichimoku Cloud: How To GuideHave you ever considered using the Ichimoku Cloud, a powerful and versatile technical analysis tool that goes beyond traditional chart analysis?
💜 If you appreciate our guides, support us with boost button 💜
Discover the Ichimoku Cloud, technical analysis tool developed by Japanese journalist Goichi Hosoda in the late 1960s.
This method visually represents support and resistance levels, providing crucial insights into trend direction and momentum.
Let's delve into the key aspects of the Ichimoku Cloud, providing you with insights and skills to take another step up in your trading game.
1. Understanding Ichimoku Cloud
Components of the Cloud:
The Ichimoku Cloud comprises five key elements — Tenkan-sen, Kijun-sen, Senkou Span A, Senkou Span B, and the Kumo (cloud). Grasping the role of each component is fundamental to interpreting the cloud's signals.
- Kijun Sen (red line): The standard line or base line, calculated by averaging the highest high and the lowest low for the past 26 periods.
- Tenkan Sen (blue line): The turning line, derived by averaging the highest high and the lowest low for the past nine periods.
- Chikou Span (green line): The lagging line, representing today’s closing price plotted 26 periods behind.
- Senkou Span (red/green line): The first Senkou line is calculated by averaging the Tenkan Sen and the Kijun Sen and plotted 26 periods ahead. The second Senkou line is determined by averaging the highest high and the lowest low for the past 52 periods and plotted 26 periods ahead.
It’s not necessary to memorize the computations; understanding their interpretation is key.
2. Trading Strategies with Ichimoku
Kumo Twists and Turns:
The twists and turns of the Kumo offer valuable signals. A bullish twist occurs when Senkou Span A crosses above Span B, while a bearish twist is signaled by the reverse. These crossovers present entry and exit points.
The Power of Kijun-sen and Tenkan-sen:
The relationship between the faster Tenkan-sen and the slower Kijun-sen offers additional insights. A bullish crossover suggests a potential uptrend, while a bearish crossover may indicate a trend reversal.
Utilizing the Lagging Span:
The Lagging Span (Chikou) acts as a momentum indicator. Confirming its position relative to the price and cloud provides a powerful confirmation tool for trend strength.
3. Practical Tips for Ichimoku Trading
Timeframe Considerations:
Adapt your approach based on the timeframe. Longer timeframes offer a broader market perspective, while shorter timeframes can reveal short-term trends.
Risk Management:
Like any trading strategy, risk management is paramount. Set stop-loss orders, and ensure risk-reward ratios are carefully considered before executing a trade.
Backtesting and Practice:
Before going live, engage in extensive backtesting and paper trading. This will hone your understanding of Ichimoku signals and enhance your ability to interpret them in real-time.
4. How to Interpret Ichimoku Lines
Senkou Span:
- If the price is above the Senkou span, the top line serves as the first support level while the bottom line serves as the second support level.
- If the price is below the Senkou span, the bottom line forms the first resistance level while the top line is the second resistance level.
Kijun Sen:
- Acts as an indicator of future price movement.
- If the price is higher than the blue line, it could continue to climb higher. If below, it could keep dropping.
Tenkan Sen:
- An indicator of the market trend.
- If the red line is moving up or down, it indicates a trending market. If it moves horizontally, it signals a ranging market.
Chikou Span:
- A buy signal if the green line crosses the price from bottom-up.
- A sell signal if the green line crosses the price from top-down.
As a trend-following indicator, Ichimoku can be applied across various markets and timeframes. Emphasizing trading in the direction of the trend, it helps avoid entering the wrong side of the market.
With its combination of support and resistance levels, crossovers, oscillators, and trend indicators, Ichimoku simplifies complex analysis, making it an invaluable tool for traders seeking a comprehensive approach to technical analysis.
Dive into the charts, explore the strategies, happy trading!
Why Invest in Tradingview?As we approach the final stretch of Tradingview's Black Friday sales, I thought I would outline some reasons why you should invest in Tradingview, or more specifically, a paid membership.
Its the time of year where expenses start piling up. Christmas on the horizon. If you are a licensed professional, then you have to start renewing your license and insurance (I have two licenses to maintain sadly, which are extremely expensive). And if you live in the North Eastern United States or Canada (with the exception of you East Coasters out there), you're also looking at the heating costs and the dreaded winter tire expenses. So I get why having another expense added can be all so dreadful, especially if you are starting out as a trader and not quite profitable yet.
But here are some reasons why I think it makes sense and why I think you should support Tradingview (and yourself) through a paid membership:
1. Its tax deductible. Yup. It is. If you are a trader and relying on Tradingview in the conducting of your business, it is indeed tax deductible. Your laws and regulations may vary slightly depending on state and country, but in Canada, if you are a day trader and unincorporated, you are considered a Sole Proprietor and can write off the expense as a "business expense".
2. It provides more enhanced access to data . Not only can you use more indicators and all that fun stuff, but you can actually get more data, further back in history. As a premium member, I can pull data on the SPX from the 1800s, when people were trotting down to their local broker's office (maybe? Not sure if that was a thing but probably) in horse and carriage to sign for and purchase their very own shares in such things as the Mackintosh company.... No, not the computer company, but the very stylish raincoat manufacturer of the 1800s. Look it up.
3. Integration of brokerages: Tradingview allows you to integrate your brokerage into a more chic and functional chart platform. As I am Canadian, the brokers we have available here are pretty god awful in the functionality they permit you to do. Tradingview allows you to do far more tailored things to your charts and also provides you the ability to trade directly from your Tradingview chart! (If you are Canadian, currently only IB is the big one supported here).
4. Pinescript. I know I shill Pinescript a lot, but if you are a quantitative trader, or a trader who likes to use code and scripts in a meaningful way to help you trade, for the most part Pinescript and Tradingview are hands down the best and happy medium. While Pinescript cannot execute trades for you at this time, Pinescript, by default, has real time and direct access to exchange data, all compressed on a relatively easy to learn platform that will have you writing useful code that can really help you with a little bit of effort. I rely on Pinescript every day (see my post on Why you Should Learn Pinescript if you are interested in how it changed my trading for the better). If you want to use another platform, such as Python, your only alternative is yFinance, which has delayed data. For real time data, you would have to go to a provider such as Polygon who charges you, on average, 80$ per month to get the live data that Pinescript already has access to and is built into its native platform. And while you don't need a paid membership to use Pinescript, you need a paid membership to optimize pinescript to use more advanced or bigger codes that may take a bit longer to execute. As well, having a paid memebership grants Pinescript more access to more data (point 2 of this post).
5. Its a supportive community. Everyone on here all is doing the same thing and all has, generally, the same sense of how trading goes. We know that you win some, you lose some, you have hard days, you have bad days and your mood fluctuates with the market. No other community is as in-tuned with these nuances of the market as the Tradingview community. Trolling can and does happen sometimes on here, but not to the same extent as I have observed on other platforms, which can pretty hostile and.. let's say, unsupportive.
6. Tradingview supports all equally. Unlike Youtube or Insta or TikTok (I think? I'm Millennial so, boomer by TikTok standards) who reward you for your following, Tradingview doesn't. Having recently started their Editors Pick monetary rewards, they pick all types of people, with all types of ideas, who trade all types of instruments, regardless of their following numbers or preferred instruments. They support you and sharing your ideas, so it may be nice to return the favour to them. The same goes for Pinecoders. There have been editor's pick codes who were first time coders who just posted their first indicator. Its not the person themselves that matters to Tradingview, its the person's idea and passion and I think that's important in this type of community.
7. The vast access to tickers and exchanges! Tradingview offers you access to multiple tickers and indices and exchanges in multiple different countries. More access than any single broker does (at least, again, for us Canadians haha). In a matter of seconds, you can be checking out China's stock exchange, Germany's, Frances, London's, Canada's, Russia's, the list goes on!
8. And I forgot to add, they are constantly making improvements to their platform ! Introducing new things, like interviewing traders in livestreams, providing more functionality to Pinescript, providing more functionality for chartists, the list goes on! As we all try to improve as traders, Tradingview continually improves as a helpful platform!
Anyway, those are my thoughts. On that note, you have approximately 1 day left to get the awesome discounts, so chop to it if you want!
And if you are interested, I am not sure if it counts if you already have a Tradingview account, but you can use the referral code here, I want to say, to get 15$ if you are switching to a paid from unpaid or new account creator (hopefully I understood correctly):
www.tradingview.com
Use it, don't use it, doesn't really matter. The point I want to make is, its worth it if you are really passionate and interested and serious about trading!
That's it!
Safe trades everyone and take care!
HAPPY THANKSGIVING! Let's see Bitcoin's price on this date!Let me begin by wishing everyone in the TradingView community a Happy Thanksgiving! A day of joy, gathering and happy family moments!
Aren't you curious to see where the price of Bitcoin (BTCUSD) was trading on this day in the previous years? If so, have a look:
2010: $0.28
2011: $2.49
2012: $12.51
2013: $813
2014: $376
2015: $328
2016: $739
2017: $8,771
2018: $4,015
2019: $7,150
2020: $18,764
2021: $58,927
2022: $16,353
2023: $37,000
So the obvious question is this. Do you see the pattern??
Since 2009 there have been 10 Thanksgiving dates where the price of BTC was higher than the previous year and only 4 where it was lower. Only once we've seen two straight red Thanksgivings and at least two green Thanksgiving dates follow. This year we have a green one, more than double the price of 2022 and in fact this is the first time BTC doubled coming from a red Thanksgiving since 2016.
An interesting pattern that arises on this chart is that when measuring the line that connects the Thanksgiving closer to the Cycle Top back to years, we can see that its angle is lower (naturally) by a certain rate. From 2015 to 2017 it measured the previous angle x 0.64. From 2019 to 2021 it was the previous angle x 0.68. From 2022 to 2024 based on this progressive pattern, is should be the previous angle x 0.72 (0.68 + 0.04). That gives us a rough value just under $80000 for the next Thanksgiving (November 28 2024). It is very possible that the Cycle top will be priced higher a few weeks after on an aggressive spike above $100k, as BTC often does (only the June 2011 Cycle Top was way off, being in the middle of two Thanksgivings).
But what do you think about this model and its projection? Are you expecting a BTC price around 80k on the next Thanksgiving and if not, what is your estimate? Feel free to let us know in the comments section below!
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BITCOIN UPDATE (SCROLL DOWN)We are in an ascending channel pattern for 466 days now, which is a bearish pattern, we are hovering around $36566 price, we lots of volatility yesterday because the CEO of Binance stepped down.
For the price to still be where it is now is actually a good reaction from the market!
This does not mean bearish and bullish patterns always play out, what we can do is set alerts on the resistance and support levels and trendlines and identify the patterns so we can trade it accordingly.
US Small Cap 3000 at important levelUS Small Cap 3000 - TVC:RUA
Chart is approaching an important boundary
Pennant has clearly formed, compressing price
An upward sloping 200 SMA which is also acting as price support is a positive feature
Lets see how we deal with this diagonal resistance over coming weeks
PUKA
Create No Code Auto Trading Bot with Tradingview and OKXHello Everyone,
In this tutorial, we learn about how to create simple auto trading bot using tradingview alerts and OKX exchange built in integration mechanism.
Few exchanges have come up with this kind of direct integration from tradingview alerts to exchanges and as part of this tutorial, we are exploring the interface provided by OKX.
In this session, we have discussed
🎲 Preparation Steps
Preparing tradingview account
Webhooks are only available for essential plans and plus.
Enable 2FA in your tradingview account.
Preparing your OKX account
Create OKX account, and we prefer you do the initial tests under demo account before moving to active trading account.
Bots created in demo account will not appear in the active trading account. Hence, when switching to active account, you need to create all the setup again.
🎲 OKX Tradingview Interface Features
What is supported
Auto trading based on strategy signal
Custom signals - Enter Long, Exit Long, Enter Short, Exit Short
What is not supported:
Stop/Limit orders
Bracket orders/ Complex execution templates
🎲 Weighing Pros and Cons of Using Direct Interface rather than Third party integration tools
Pros
Latency is minimal as per our observation
Easy Integration with Tradingview and Pinescript Strategy Framework and no coding required
You save cost on third parties and also avoid one hop.
More secure as your data is shared between less number of parties.
Cons
No native support for Stop/Limit orders
Mean Reversion Trading Strategies and IndicatorsMean reversion is an important concept in financial markets, offering traders the opportunity to capitalise on price fluctuations around a long-term average. This article unpacks mean reversion and explores three key trading strategies augmented by specific indicators to fine-tune entry and exit points.
Understanding Mean Reversion
Mean reversion is a theory suggesting that asset prices and historical returns eventually revert to their long-term mean or average level. This concept is widely used in the equity markets, commodities, and forex trading. The idea is that an asset that has deviated significantly from its historical average is likely to revert back. Traders often use mean reversion trading systems to take advantage of these deviations.
Mean reversion in forex is particularly fascinating. Currency pairs tend to oscillate around a central point over time, offering plenty of trading opportunities. The concept relies on two core assumptions: that the market is stable over the long term and that temporary disruptions will self-correct. However, it's essential to remember that mean reversion is not foolproof. Market conditions change, and an asset can maintain its deviated state longer than one might expect.
Exploring Mean Reversion Trading Strategies
Now that we've established a foundational understanding of mean reversion, let's delve into three distinct reversion to the mean trading strategies. If you’d like to follow along, head over to FXOpen’s free TickTrader platform to access the tools discussed here.
10-Period RSI Mean Reversion
The 10-period RSI Mean Reversion trading strategy involves the Relative Strength Index (RSI), a momentum oscillator that measures the speed and change of price movements. For this strategy, traders typically set the RSI to a 10-period setting and establish overbought and oversold limits at 80 and 20, respectively. By focusing on shorter intervals, this strategy aims to capture quick reversals in price.
Entry
Traders may look for the RSI to reach or exceed 80 (overbought) or drop to 20 or lower (oversold). After reaching these levels, they often wait for the RSI to move back below 80 or above 20 before entering a trade.
Stop Loss
A common approach is to set the stop loss just beyond the entry point to minimise potential losses.
Take Profit
The trade is generally closed when the RSI reaches the midpoint of 50. This often indicates that the asset has reverted to its mean, fulfilling the primary objective of the strategy.
Fibonacci Retracement and Value Area Reversion
This strategy combines Fibonacci Retracement levels with a Fixed Range Volume Profile (FRVP) to identify potent entry and exit points. Fibonacci Retracement is a tool that identifies potential levels where price may reverse during a pullback. Here, traders focus on three key retracement levels: 38.2%, 50%, and 61.8%.
The Fixed Range Volume Profile, on the other hand, reveals where the highest volume of trades occurred within a specific range, indicating a value area. Traders look at the largest node as an area of value, often serving as a strong support or resistance level.
Entry
Traders often look for an established trend, typically entering positions in the same direction.
After a breakout, they commonly wait for a pullback to a Fibonacci level that aligns with the value area determined by FRVP.
Stop Loss
Stop losses are usually placed just beyond the next closest Fibonacci retracement level to safeguard against unforeseen reversals.
Take Profit
Profits are often taken at the most recent significant high or low, generally, the one that initiated a reversal.
VWAP and MACD Reversion: A Day Trading Mean Reversion Strategy
In this strategy, the Volume Weighted Average Price (VWAP) is used alongside the Moving Average Convergence Divergence (MACD). VWAP serves as a benchmark, calculating the average price based on volume at each price level. This indicator is often employed for intraday trading due to its responsiveness to immediate price and volume changes.
MACD, on the other hand, is a trend-following momentum indicator that helps signify potential price reversals. Due to the intraday nature of the VWAP, this strategy is particularly well-suited for day trading, enabling traders to capitalise on fairly quick, mean-reverting price movements.
Entry
Traders often monitor for situations where the price appears visually overextended from the VWAP, either above or below it.
A MACD crossover serves as the cue for possible entry, indicating that the price may revert toward the VWAP.
Stop Loss
Typically, stop losses are set just beyond the most recent swing point to mitigate risk.
Take Profit
The position is commonly closed when the price reaches the VWAP.
In the event that the price doesn’t touch the VWAP before the trading day ends, trades can be closed just before the day finishes when the VWAP is reset.
Additional Mean Reversion Indicators
While the strategies outlined above are popular among traders, there are other indicators worth considering in the realm of mean reversion.
Bollinger Bands: These are volatility bands that expand and contract around a moving average. When the price reaches the upper or lower band, a mean-reverting move could be imminent.
Moving Averages: Simple moving averages (SMAs) and exponential moving averages (EMAs) are often used in mean reversion and algorithmic trading. They help identify the 'mean' price level around which an asset is expected to fluctuate.
Stochastic Oscillator: This momentum indicator compares an asset's closing price to its price range over a specific period. An overbought or oversold reading suggests that a mean reversion may be likely.
CCI (Commodity Channel Index): This indicator measures the deviation of an asset’s price from its average price over a specific time period. CCI can be used to detect overbought or oversold markets.
MFI (Money Flow Index): This is a volume-weighted RSI, indicating overbought and oversold conditions. When used in conjunction with other indicators, it can provide additional validation for mean reversion trades.
The Bottom Line
In sum, mean reversion trading strategies offer intriguing avenues for traders to exploit price movements that deviate from long-term averages. While the strategies discussed are robust, they are by no means exhaustive. To delve deeper into these and other trading strategies, consider opening an FXOpen account, where you’ll gain access to a host of advanced tools and analytics to aid in your trading endeavours. Good luck!
This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
Risk, reward, and our absolutely EPIC Black Friday deal World-class climbers require the best equipment, gear, and preparation - they can't scale the most difficult mountains without anything else. For the world' best traders, they too must have access to the best tools and features. To climb to the top of modern markets, great research is a prerequisite.
Our sponsored athlete, Alex Honnold, is the best free solo climber on Earth, known for scaling Yosemite's 3200-foot El Capitan without a rope. He once told us the following:
"One way to de-risk my climbing is to practice on similar climbs until I have a high degree of confidence that I can successfully do whatever I've set out for. If I have a proven track record on very similar climbs then I know that the risk can't be too high. I guess the other way to say that is just to practice until a climb feels easy. If it's well within my comfort zone then it's no longer very risky."
This Black Friday, we want to give traders, investors and anyone interested in markets the tools they need to get to their goals. That means practice, it means getting out there, testing new ideas, and finding the perfect trading strategy. Starting today, all of you can get up to 70% OFF one of our paid plans from now until the end of the week.
That's right... our epic Black Friday deal has begun. Now's your time to get the tools required to summit markets, to become the glorious trader you've always wanted to be with one of our paid plans, which offers the following:
- Up to 8-charts layout
- Up to 25 indicators per chart
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- Up to 400 price alerts
- Up to 400 technical alerts
- Volume profile tools
- Time Price Opportunities
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- Indicators on indicators
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Remember: Our deal won’t last long, the clock is ticking. If you have any additional questions, check out the FAQ on our official Black Friday page.
Treat yourself to a plan and keep following us as we publish educational posts throughout the week. We'll show you several tips about using your new plan as each post will be designed to help you take full advantage of our epic Black Friday sale.
Love,
TradingView ❤️
Economic Lessons From 2023We entered 2023 with a pessimistic consensus outlook for U.S. economic performance and for how rapidly inflation might recede. As it happened, there was no recession, and personal consumption posted sustained strength. Inflation, except shelter, declined dramatically from its 2022 peak.
The big economic driver in 2023 was job growth. Jobs had recovered all their pandemic losses by mid-2022 and continued to post strong growth in 2023, partly due to many people returning to the labor force.
When the economy is adding jobs, people are willing to spend money. The key for real GDP in 2023 was the strong job growth that led to robust personal consumption spending. For 2024, labor force growth and job growth are anticipated by many to slow down from the unexpectedly strong pace of 2023, leading to slower real GDP growth in 2024.
And there is still plenty of debate about whether a slowdown in 2024 could turn into a recession. Followers of the inverted yield curve will point out that it was only in Q4 2023 that the yield curve decisively inverted (meaning short-term rates are higher than long-term yields). It is often cited that it takes 12 to 18 months after a yield curve inversion for a recession to commence. Using that math, Q2 2024 would be the time for economic weakness to appear based on this theory. Only time will tell.
The rapid pace of inflation receding in the first half of 2023 was a very pleasant surprise. Indeed, inflation is coming under control by virtually every measure except one: shelter. The calculation of shelter inflation is highly controversial for its use of owners’ equivalent rent, which assumes the homeowner rents his house to himself and receives the income. This is an economic fiction that many argue dramatically distorts headline CPI, given that owners’ equivalent rent is 25% of the price index.
Once one removes owners’ equivalent rent from the inflation calculation, inflation is only 2%, and one can better appreciate why the Federal Reserve has chosen to pause its rate hikes, even as it keeps its options open to raise rates if inflation were to unexpectedly rise again.
The bottom line is that monetary policy reached a restrictive stance in late 2022 and was tightened a little more in 2023. For a data dependent Fed, inflation and jobs data for 2024 will guide us as to what might happen next. Good numbers on inflation or a recession might mean rate cuts. Otherwise, the Fed might just keep rates higher for longer.
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
By Bluford Putnam, Managing Director & Chief Economist, CME Group
*Various CME Group affiliates are regulated entities with corresponding obligations and rights pursuant to financial services regulations in a number of jurisdictions. Further details of CME Group's regulatory status and full disclaimer of liability in accordance with applicable law are available below.
**All examples in this report are hypothetical interpretations of situations and are used for explanation purposes only. The views in this report reflect solely those of the author and not necessarily those of CME Group or its affiliated institutions. This report and the information herein should not be considered investment advice or the results of actual market experience.
New Kids on the Block: ETF StyleI recently released 2 libraries and an indicator that revolved around ETFs, their composition and their performance. Creating these libraries required me to do quite a bit of research on which ETFs are currently dominating the US market and which may be more obscure. It also lead me to discover that quite a few new ETFs with pretty powerful holdings have hit the market as recently as last month ($BCLR for example).
So I thought I would take the time to go over some of the new kids on the block, the ETFs that is, and also shed some light on potentially some ETFs that you may not have heard of but may be of interest to you. After 2022, I shifted my self-managed portfolios into mostly ETFs so this topic is something that is particularly interesting for me, hope it is for you too!
So let us go over the new release ETFs and whether they are a Buy, Sell or Maybe:
Blackrock Large Cap Core ETF (AKA NASDAQ:BLCR )
Hitting the market in October of this year and being managed by a big-name investment firm (BlackRock), this ETF is something you may want to seriously consider. With its biggest holding in MSFT, it does well in diversification. If you look at the chart above, you will see the breakdown by sector.
It is a very well-rounded ETF, though 27% of its sector holdings are tech, there is admirable diversity, especially through financial services, consumer cyclical, communication services, and Energy.
As it is new, we can’t see its performance over the past 252 trading days (1 trading year), but we can see that since it hit the market it has seen over 7% growth, likely due to its heavy investment into pretty relevant stocks.
This is on my 💰BUY💰 list, as I see this as being a hybrid of SPY and QQQ but at a better entry cost.
First Trust S-Network Streaming & Gaming ETF (AKA AMEX:BNGE )
This one hit exchanges in January of 2022 and is based on streaming and gaming services. Its biggest holding is in NFLX and NTES (an internet technology company based on various online services including streaming), we can see by its holdings there is quite a hefty holding in some pretty big streaming and gaming companies, including Nintendo ( OTC:NTDOY ), Sony ( NYSE:SONY ), Disney ( NYSE:DIS ) and EA ( SET:EA ).
Its past trading year history boasts a net gain of 36.54%. This is on my 🤷maybe🤷 list, as I am not big into the gaming sector and don't follow it too closely fundamentally.
Direxion Moonshot Innovators ETF (AKA AMEX:MOON )
This one came to exchanges in November of 2020 and, contrary to its name, has yet to seemingly reach the moon. This is an ETF I have mixed feelings about, as its largest holding is in Nikola Corporation. If you don’t remember, the Nikola Corporation, the corporation that was producing those electric trucks, got involved in a scandal when it turned out the prototypes that they displayed had no real engine and their stock dropped dramatically after that came to light:
This issue was only resolved in 2022 after extensive court proceedings. This resulted in the indictment of the founder Trevor Milton but not the company itself. That said, they have made progress and actually do have operational trucks that have been shipped and delivered, as of researching this they have sent out a total of 44. However, unfortunately, these trucks have, quite literally, been blowing up in flames. So yeah… not great. And probably not a great stock to lead your ETF with, but to each their own.
That said, the other holdings are quite admirable and not generally held on other ETFs. For example, they have a large holding on Robinhood ( NASDAQ:HOOD ), Coinbase ( NASDAQ:COIN ), and Snapchat ( NYSE:SNAP ). And yes, these companies also have their own problems and scandals to go along with them.
Because of the aforementioned, it's not generally an ETF that would interest me as it is predominately very speculative companies, but you can decide for yourself if it's holding interest you and your tastes of investments. It may not be a bad one to have a small holding in, in case NIKOLA or COIN ever get their stuff together. For me, this would be on my ❌SELL ❌ list.
U.S. Global Jets ETF (AKA AMEX:JETS )
If you are a huge aviation fan, this may be an ETF for you! While its pay year of trading has not been great, largely because the aviation industry is still feeling the shockwave effect of a post-COVID world, it does hold some very solid airline stocks such as American Airlines ( NASDAQ:AAL ), Delta ( NYSE:DAL ) and Air Canada ( TSX:AC ). It's in a spot where it has me considering a potential position myself, but I will let you be the judge of it! Overall, this would be on my 💰BUY💰 list.
U.S. Global Sea to Sky Cargo ETF (AKA AMEX:SEA )
Hitting the markets in January of 2022, SEA has not been a great performer thus far. I am not all that familiar with the Cargo or marine sector as this has never been a sector I have personally traded and thus, I have no exposure to reviewing earnings, performance, and fundamentals of various shipping companies, but a brief look at some of its holdings show that these are pretty well-established shipping companies. Take this anecdote with a grain of salt, however, as I have not fully reviewed earnings releases or their SEC filings as I have with companies like BA, NKLA, etc.
It is definitely worth checking out, for the sole reason that marine cargo and transportation will remain the gold standard for large material shipping for many years to come. But definitely do your due diligence before investing! This is on my 🤷 maybe 🤷 list.
Xtrackers Semiconductor Select Equity ETF (AKA NASDAQ:CHPS )
Coming to markets very recently, July of this year to be exact, this is another ETF that deals with the semiconductor and chip sector. Before, your options were SOXX and that was pretty much it, so this is a breath of fresh air for the chips industry.
As it hasn’t been on the market for very long, I can’t really speak to its performance, but if we look at its biggest holdings, it's quite a decent list. Its biggest holding is in Intel ( NASDAQ:INTC ), with Nvidia ( NASDAQ:NVDA ) and Qualcomm ( NASDAQ:QCOM ) coming in 3 and 4 respectively. SMH and MU are also in the top 10 holdings. If we draw a comparison to SOXX’s holdings, here we are:
There is a bit of diversity between the top 10 holdings, so if you are big into the chip sector, this is definitely a must-add, in my opinion. It is on my 💰BUY💰 list.
Procure Space ETF (AKA NASDAQ:UFO )
A very interesting ETF that bases itself with stocks that deal with space. I would absolutely love this ETF if it didn’t do the same thing as the MOON ETF, leading its holding with a company that should have gone bankrupt ages ago (aka Sirius XM). If you overlook that fact, the rest of the companies on this list are great and ones that I actually know a bit more intimately. NYSE:GRMN is a top one for me, as well as GSAT and IRDM. These are companies I really like. While AMEX:GSAT is kind of a non-mover, they are undergoing some major restructuring and redesigning of their infrastructure which investors are gaining increasingly more excited about. Same for $IRDM.
The rest of the holdings are well-established companies, such as Viasat ( NASDAQ:VSAT ) and Dish ( NASDAQ:DISH ). Despite the Sirus XM thing, this is on my 💰BUY💰 list.
U.S. Consumer Focused ETF by iShares (AKA AMEX:IEDI )
Hitting the markets in March of 2018, this is an ETF with its predominant holdings in consumer cyclicals. Its largest holdings comprise large retail names, such as Amazon ( NASDAQ:AMZN ), Walmart ( NYSE:WMT ), Costco ( NASDAQ:COST ), and Target ( NYSE:TGT ), as well as many others!
Its performance over the past trading year (252 days) has been approximately 6%. It's definitely an ETF I would keep my eyes on. It is on my 💰buy💰 list for the future as well. I just want to see how this giant monthly bear flag plays out 😉.
First Trust Transportation ETF (AKA NASDAQ:FTXR )
Last but not least, we have FTXR. It’s a bit older, having hit the markets in 2016, but still new enough to include in this list. With its largest holdings being Divided between UNP, GM, UPS, F, and TSLA, it has a pretty solid holding in the transportation sector. Some notable mentions are a 4.33% holding in PCAR and a 4.21% holding in FDX.
This is on my maybe list. I do like the holdings in Ford, UPS, FDX, and PCAR. It's definitely worth an addition to your watchlist, in my opinion!
Concluding Remarks
And that concludes the list of newly released ETFs that you may not have heard about! Hope you enjoyed reading. If you are interested in checking out the indicator, which allows you to:
👉 See the breakdown of ETF by top 10 holdings and by sector,
👉 Search for which ETFs hold your favorite tickers in their top 10,
👉 Search for ETFs by Sector and
👉 Search for ETFs by Interest
You can click here to check it out!
Thanks for reading and, as always, safe trades!
A Traders’ Playbook; 2024 a year of central bank easing With a new set of weekly candles to assess, we see the USD looking weak, with the greenback having fallen on the week against all G10 and EM currencies, bar the COP - the risk seems skewed for further downside in the buck.
EURUSD closed above the former rising trend (drawn from the March lows) and targets 1.0960 (the 61.8 fibo of the July-Oct sell-off), with USDCHF looking to pull below 0.8850, which would keep the bearish trend intact. GBPUSD closed above the 200-day MA, where a break of 1.2500 takes us to 1.2560. USDSEK was the big percentage mover last week, and we look ahead at the Riksbank meeting where a 25bp hike is touch and go.
USDCNH is starting to trend lower too, and eyes a break of 7.2000. The PBoC has made it clear that their preference is low volatility, and they have done a sensational job is just about killing off any pulse in the yuan - after trading a tight range since mid-August, will they now step in front of a weakening USD?
The fate of the USD resides in the data flow and Fed speakers – so far there has been limited pushback to the 100bp cuts priced for 2024, with US swaps pricing the first ‘live’ FOMC meeting for May. Many will see this as too soon and too punchy, but the market is betting against higher-for-longer, which is also the case in Europe, the UK, Canada, NZ, and others, with the market seeing the ECB kick off an easing cycle in developed economies in April.
Central bank easing is a theme that will be front of mind for 2024, with some debate as to why the markets are discounting such easing. The central thesis is that with absolute conviction inflation is heading towards target, labour markets cooling sufficiently and growth at far more subdued levels the need to take rates to a more equilibrium state and out of restrictive is the fundamental reasoning.
It’s when the market discounts front-loaded cuts that we see easing as a function of recession hedges, where a central bank would need to get policy rates below inflation.
If we look at forward rate differentials – we look at the difference between 1 or 2-year EUR forward rates and that of the US forward rates – we have seen no real skew for US rates to move more aggressively on a relative basis, which would justify the USD sell-off. However, clearly, the US CPI resonated, and the idea that the right-hand side (i.e., USD data is more exceptional than other countries) of the USD smile theory is losing USD support.
One could argue that if we work off pure central bank divergence – which has been a profitable way to capture moves in exchange rates throughout 2022 and 2023 – that 2024 could be the year of the JPY. Life is rarely that simplistic though.
In equity land, we see consolidation in US indices, and with one eye on moves in the US Treasury market as a guide, where a downside break in the 10yr of 4.37% would be helpful, we subsequently watch for an upside break of 16k in the NAS100 – Nvidia’s earnings could be key here. It’s the EU equity bourses where the momentum is right now, with the GER40, EUSTX50 and SPA35 in beast mode and swing traders will be looking for a pullback to initiate new longs into December.
I was positioned for outperformance in Chinese/HK indices but that has been a poor call and I have moved to the sidelines on that, waiting for more constructive flows to be seen.
The marquee event risks for the week ahead:
OPEC meeting (26 Nov) – the alliance meets in Vienna and with Brent crude in a steep downtrend, and having fallen 20% from the Sept highs, there have been headlines of imminent additional supply cuts to be seen at this meeting. As we head into the weekend meeting, traders with crude exposures need to consider the potential gapping risk in crude.
UK Autumn Statement (22 Nov) – Chancellor Hunt offers the autumn statement with talk the govt will focus heavily on imposing sanctions for people who claim benefits and encourage people to take up employment. It feels unlikely this will a vol event for the GBP, although traders will keep an eye out for any tangible fiscal measures that could stimulate growth.
Nvidia 3Q earnings (report 21 Nov after-market) – the market looks for another big earnings report from the best performing US stock in 2023 – the market prices Nvidia’s implied move (derived from options pricing) at 7.1% on the day. The market will go into the report positioned for an upside surprise relative to consensus, with expectations that we see data centre sales of $15b. There will be a strong focus on guidance on the impact of US restrictions on AI chips to China and how this could impact data centre sales for 2025/26. The bulls will want to see a fourth consecutive share price increase on quarterly earnings and will naturally want to see a break of $500, which has kept a lid on the share price on seven occasions.
US Thanksgiving holiday (23 Nov) – cash equities are closed, and futures have partial settlement.
Economic data to navigate:
• China 1 & 5-year Prime Rate decision (20 Nov 12:15 AEDT) – while the market is on edge for further policy easing – notably for a further cut to banks Reserve Ratio Requirements – few expect a cut to the prime rate, with the 1-year rate expected to remain unchanged at 3.45% and the 5-year rate at 4.2%.
• RBA meeting minutes (21 Nov 11:30 AEDT) - after hiking by 25bp I am not sure we’ll learn a lot of new intel from the minutes and traders are better listening to speeches from the RBA governor Bullock as the greater prospect of being an AUD vol event.
• US leading Index (21 Nov 02:00) – the consensus is we see the leading index fall 0.7% in October – some have seen this data point as a precursor to recessionary conditions, so a big downside miss may impact the USD.
• Canada CPI (22 Nov 00:30 AEDT) – the economist’s consensus is we see headline CPI at 3.1% yoy (from 3.8% yoy) and core CPI at 3.6% (3.8%). The expected drop in inflation justifies Canadian rates pricing with the first cut being priced for April 2024 and 64bp of cuts being priced over the coming 12 months.
• US FOMC minutes (22 Nov 06:00 AEDT) – after the recent Fed chatter, notably from Cleveland Fed president Loretta Mester (a known hawk), who failed to push back on market expectations for rate cuts and suggested the debate is now how long to keep rates restrictive, it’s hard to see the FOMC minutes being too much of a market mover.
• US Durable Goods (23 Nov 00:30 AEDT) – the market looks for -3.2% (from 4.6%). With US Q4 GDP running around 2.2%, a weak print here could see GDP Nowcast models being revised lower, which may see US bond yields pull lower and promote USD selling.
• UK S&P Global manufacturing and services PMI (23 Nov 20:30 AEDT) – the consensus is for manufacturing to come in at 49.9 and services PMI 50.4 – A services print below 50 may see bond yields lower, which would drag down the USD. A Services print above 51.0 would revisit calls of US exceptionalism and promote USD buyers.
• EU HCOB manufacturing and services PMI (23 Nov 20:00 AEDT) – the consensus is for manufacturing PMIs to improve modestly at 43.4 (from 43.1 in October), although that is still a woeful outcome. Services PMIs are eyed at 48.1, again a slight improvement from 47.8 – the EUR will be sensitive to the services print, where EU swaps markets price the first cut by the ECB in April and 86bp of cuts over the coming 12 months.
• Sweden’s Riksbank meeting – it’s a lineball call on whether the Swedish central bank hike to 4.25%, with swaps pricing 11bp of hikes and 50% of economists surveyed by Bloomberg calling for a 25bp hike. We could see some vol in the SEK, so watch exposures. USDSEK has been in a strong downtrend, so the market is likely positioned long of SEKs going into the meeting.
• US S&P Global manufacturing and services PMI (25 Nov 01:45 AEDT) – the market looks for the manufacturing index to come in at 49.9 (from 50.0) / and services at 50.3 (50.6) – we should see the USD, and risky assets more sensitive to the services print, and certainly if we see the index below 50.0 – the level where we see growth/decline from the prior month.
Central bank speakers
BoE – Gov Bailey speaks (21 Nov 05:45 AEDT)
ECB – 10 speakers – Schnabel (22 Nov 04:00 AEDT) and Lagarde (22 Nov 03:00) get centre focus
RBA – Gov Bullock speaks (Monday 10:00 AEDT & Tuesday 19:35)
How did the price of gold change from 1970 to 2023?Hello everyone
How did the price of gold change from 1970 to 2023?
And the events that affected him
The price of gold has continued to rise over the past five decades, from an average of $36 in 1970 to $2,080 in 2023.
Despite gold's status as a long-term investment commodity, its value has declined several times. The periods of highs and lows coincided with difficult political and economic developments - investors' demand for gold as a safe haven rises when there are problems in the global economy, and weakens when things are going well.
What can we learn from the past to be able to make predictions for the future?
Gold is priced on a standard scale per ounce.
1 ounce = 31.1 grams
1970 - The average price of an ounce of gold is $36
In August 1971 - US President Richard Nixon abolished the dollar's peg to gold. The dollar was no longer converted into gold at a fixed value, $35 per ounce, and gold could be traded at fluctuating market prices
In December 1974 - For the first time in 40 years, American citizens were allowed to keep gold bullion and coins.
In June 1980 - Gold rose to a record high of $850 per ounce, as investors turned to the precious metal amid rising inflation due to strong oil prices, Soviet intervention in Afghanistan, and the impact of the Iranian Revolution.
From 1982 to 1988 - Fluctuations in global currency exchange rates, increasing concern about the US trade deficit and banking problems, and debt in Third World countries factor into gold fluctuations between $300 and $490.
From 1989 to 1991 - this period witnessed conflict in the Arabian Gulf, the collapse of the Soviet Union, a decline in the role of gold as a safe haven, and weak economic growth in general throughout the world.
From 1992 to 1996 - Gold remained relatively stable.
In August 1999 - The price of gold fell to its lowest level at $251.70 when central banks began reducing their gold reserves and mining companies sold gold in the futures markets to protect them from the decline.
In February 2003 - The price of gold rose after it was considered a safe haven in the period leading up to the war in Iraq.
December 2003 – Gold surpassed $400, reaching levels at which it was last traded in 1988. Gold was increasingly purchased by investors as a hedging tool for their investment portfolios.
November 2005 – Spot gold trading exceeded $500 for the first time since December 1987, when it reached $502.97.
May 12, 2006 - Gold prices rose to $730 per ounce as investors turned to commodities as a result of the weak dollar, stable oil prices, and political tensions over Iran's nuclear ambitions.
On June 2, 2008 - Spot gold exceeded $850.
March 13, 2008 – Trading in the benchmark gold contract exceeds $1000 for the first time in the US futures market.
On March 17, 2008 - the price of spot gold reached its highest level at 1030.80 per ounce.
On September 17, 2008 - the price of spot gold jumped nearly $90 per ounce - a single-day record, as investors sought a safe haven amid turmoil in the stock market.
February 20, 2009 – Gold once again rose above $1,000 per ounce to reach $1,005.40 during the financial crisis.
December 1, 2009 – Gold exceeds $1,200 per ounce for the first time as the dollar declines.
On May 11, 2010 - Gold recorded a new high, exceeding $1,230 per ounce after investors resorted to gold as a safer investment haven with continued concerns about debt contagion in the Eurozone.
September 17, 2010 – Gold reached a new record high exceeding 1,282 per ounce, driven by a weak dollar and economic uncertainty.
September 2011 – The Eurozone debt crisis prompts investors to shift money into gold, causing its price to rise to 1,923 per ounce.
From 2012 to 2015 - Gold continued to decline as fears of a full-blown banking crisis eased after 2011, with gold reaching $1,094 in August 2015.
In June 2016 - Brexit and its unknown consequences fuel a gold rush. Gold rose to its highest level in two years at $1,358.
June 2017 – Gold reaches a year-high of $1,294 before falling back to an average of $1,200.
On August 3, 2020, gold rose to the highest level in its history at 2,075 per ounce, as concerns about the economic repercussions of the coronavirus outbreak prompted investors to rush towards safe havens.
Gold prices witnessed a record high with the start of the Russian invasion of Ukraine, exceeding the threshold of $2,070 per ounce.
Over the course of five days in March 2023, three small-to-mid-size U.S. banks failed, triggering a sharp decline in global bank stock prices and a swift response by regulators to prevent potential global contagion. Silicon Valley Bank (SVB) failed when a bank run was triggered after it sold its Treasury bond portfolio at a large loss, causing depositor concerns about the bank's liquidity. Silvergate Bank and Signature Bank, both with significant exposure to cryptocurrency, failed in the midst of turbulence in that market.
The escalation in Gaza directly affected gold, with prices rising by about $2007 per ounce, which reflects investors’ demand for safe havens.
I hope you got some knowledge from this!
if you have any questions let me know...
Thanks
trading movies and what they can teach about financial marketsthese incredible films bridge a gap between entertainment and education, providing insight about the global markets and what often goes by in the background and yet help keeping the boredom away.
1.THE WOLF OF WALL STREET - dir: Michael Scorsese. Dec 25, 2013 (crime/comedy)
this movie follows and reflects on the life of Jordan Belfort and his rise to wealth as a stockbroker selling penny stocks and blue chip stocks living his best life to his epic downfall caused by financial fraud, drugs. This film can teach traders how to sell any product and the importance of confidence in the trading/investing world.
2.THE BIG SHORT - dir: Adam Mckay. Dec 11, 2015 (comedy/drama)
this film is based on the true-life events of the 2008 financial crash which began with cheap and lax lending standards that fueled a housing bubble. The film follows 3 stories of Michael Burry(hedge fund manager), Jared Venett(trader) and Geller and Shipley(investors) who made a fortune from the housing market decline. This movie teaches traders/investors that unpredictable events take place in the financial markets and the psychological pressures that investors experience and understanding the complexity of various financial instruments and importance of risk management.
3.WALL STREET - dir: Oliver Stone. Dec 11, 1987 crime/drama
this crime film follows a junior stockbroker Bud Fox who enters a different league in the trading game getting involved in stock manipulation and insider trading while trying not to get caught doing all this to impress his supervisor Gordon Gekko. this movie teaches traders that greed is not always bad as MR.Gekko says himself
4.INSIDE JOB - dir: Charles Ferguson. Oct 8, 2010 documentary/drama
this is a similiar film as "the big short" but this one is distinctive as its a 5 part series bases on the 2008 financial crisis shows traders also on corruption and more in-depth look on how everything started, the bubble, the actual crisis and all that resulted after.
5.BOILER ROOM - dir: Ben Younger. Feb 18, 2000 thriller/drama
this film follows a student who drops out of college and also runs an illegal casino, with pressure to make tons of wealth a appease his father, he gets to work for a CEO of an investment company which is known for its shady dealings of pump and dump of unprofitable stocks with encounters from the feds using him to get to the big fish of the operation. This movie teaches traders about the importance of confidence and to increase it is to want, do and be more.
6.TOO BIG TO FAIL - dir: Curtis Hanson. May 23, 2011 drama
this is another film about the 2008 financial crisis based on a book of the same title by Andrew Ross. As the title says the movie focuses on the 'too big to fail" corporations and how their shortcomings can criple the global financial system. It gives an inside look on how Washington and Wall street try to tackle this and save the financial system. This film teaches traders the significance of stability and balance.
7.ENRON: THE SMARTEST GUYS IN THE ROOM - dir: Alex Gibney. April 22, 2005
his is one of the best scam/fraud movies of all time following the fall of Enron corporation showing the cracks on the wall of most modern big corporation scams. the movie shows how top executives of the firm's collapse through illegal activities like increasing stock prices and selling the at very high prices causing a crash in the market. This film however teaches traders/investors that greed has no honor and that a plan is needed for any kind of longevity and success to happen.
8.FLOORED - dir: James Allen Smith. Sep 1, 2009 documentary/indie film
this is documentary film that shines light on Chicago based traders trading on the Chicago Board Of Operations exchange floor. This documentary focuses on the trill and excitement and high energy paced work force of a trading floor. it gives retail traders an inside look on the kind of emotions traders on a floor go trough and how the rise of computer based trading has affected the livelihood of traders working in trading floors.
please do comment on your favorite trading/investing movies
put together by : Pako Phutietsile (@currencynerd)
SPX Oil Gold and Yields - Weekly preview 4400 is the level bulls want to hold on any pullback for spx, whether it comes next week or not is hard to say. IWM and DJT are not confirming an upward bias on the weekly chart yet, so it's possible they are saying something that most are not hearing. Gold and Silver both hard to tell what's going to happen right now, so waiting I'm for a confirming move up or down. Oil is at strong technical support, thus the bounce today. I think it goes higher, but it needs to take out 80 for the bulls to start gaining control. TYX (Yields) will probably get to the gap area near 5 at some point soon....
Good luck and have a wonderful weekend
