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Upside for Gold as rate expectation cooled by recession riskSummary The surge in energy and agricultural commodities in the past 6 months had materialized into serious inflation even down to the consumer end across the globe. To cope with inflation, the Fed has begun to raise rate at an accelerating pace. The rise in the interest rate of the USD causes dysfunction of traditional risk haven such as Japanese Yen FX:USDJPY and Gold COMEX:GC1! . However, with more evidence that the US is very close to a recession, the Fed might need to tune down to a more cautious approach to balance between taming inflation and speeding up recession due to higher borrowing cost (and debt repayment) for business. The stabilization in rate hike might soften the already strong dollar, hence providing room for traditional risk haven assets to rebound and restore some of their risk haven property . With still ongoing global political uncertainty (see appendix for more detail), there might be further upside potential beyond rebound. One should pay extra attention to the collective transition of power globally which is happening at a similar time coincidentally. Technical and trade planning Just like most commodities, the dominant force driving gold downward is the strength of the USD. The US Dollar Index TVC:DXY had reached a new high at 107.786, before retracing back to 106.895 to close lower last Friday, creating a reverse hammer candle. While the uptrend of the dollar index is still effective, however the bearish pattern hinted the peak might have reached (or at least the upside momentum is reducing) . Similar pattern in reverse was seen in many commodities including gold, which means opportunity for rebound trade. Note that gold currently is trading below most moving averages which means the downtrend is still in power. 20 days moving average trading below the 50 days, and both pointing downward double confirm the bearish view. In rebound trade it is very important to keep your cut loss and profit taking tight. One should also adopt strategies that allow more tolerance for error (e.g. longing call option with >30-60 days to expiration). Here are some technical levels trader of gold should be aware of: Downside support (to cut loss if dropped through) 1676.7: 2021-Aug hammer candle bottom 1721.8: 2021-Sep downside retest bottom Upside resistance (to take profit if fail to go further) 1785: May-16 bottom (broke on Jul-5) 1833: 250 days moving average 1878.6: Jul-3 rebound peak Appendix: Political events to keep an eye on Asia The former prime minister of Japan, Shinzo Abe was assassinated last Friday. Abe was seen as the de facto power of Japan. He initiated and was involved in lots of Japan economic policy and China-Japan relation issues. Close ties with global leaders, he was one of the early promoters of threat emerging from growing China, which later led to global boycott of China. He also showed his support to Taiwan as he saw the country as the first line of defense of Japan from China. One of his unaccomplished goals was to revise the country’s pacifist constitution to formalize the Japanese self-defense force as army, and broaden its military agenda outside of homeland defense, to be involved in regional security issues, such as Taiwan. The death of Shinzo Abe might help the constitutional revision to gain more supportive votes, which will worsen China-Japan existing tension. The 20th National Congress of the Chinese Communist Party will take place in November this year. One of the major topics is whether the current Chinese leader Xi Jinping will be re-elected for the next 5-years term. With lots of policy missteps that have caused material harm to the Chinese economy and financial stability, there are growing voices within the party that they might want a leader who can focus on reviving the Chinese economy instead of political ideals. At the same time, Xi is neutralizing the opposition force by revealing their evidence of misconduct and corruption (same strategy 10 years ago). The upcoming continuation or transition of power in China is going to be a very tricky one. Europe No end in sight for Russian invasion toward Ukraine, albeit increasing military support by the western powers. Inflation continues to make record highs in Europe with latest June CPI figures standing at 8.6%, energy talk with Russia is going to be very difficult especially for natural gas which is virtually impossible to get supply from other continents. The prime minister of the UK, Boris Johnson had resigned last week amid back-to-back scandals , with the Chris Pincher case became the last straw that broke the camel's back. The United States Recession risk, high gasoline price, baby formula shortage, the series of unfortunate events had taken a toll on the president Joe Biden approval rate, which dropped to just 30% in the new national poll. The negative sentiment toward democrats is likely to make the republicans take control of both the senate and the house. The democrats probably can take advantage of the recent Supreme Court’s decision of overturning Roe v. Wade, however the edge might not be enough to change much according to the latest forecast.
COMEX:GC1!Long
by geoffreyip523
The New Base Level in the VIX IndexThe VIX index is the Chicago Board Option Exchange’s CBOE Volatility Index, a popular measure of the stock market’s expected price variance of S&P 500 stocks. The S&P 500 is the most diversified of the leading stock market indices. Higher base levels in the stock market’s volatility index A correlation with the bond market Markets across all asset classes face many issues in 2022 As market participants head for the sidelines, volatility increases The buy zone for the VIX is the 20-25 level Market volatility comes in two forms, historical and implied. Historical volatility measures a market’s past price variance, while implied volatility is the consensus perception of the future price variance. The primary determinate of call and put options is implied volatility. Options prices rise when implied volatility increases and falls when the measure declines. Options are price insurance, and market participants tend to flock to the options market during bearish periods. Therefore, implied volatility tends to rise during downside corrections. In 2022, the S&P 500 has been trending lower, and volatility has increased from the levels seen in 2021. Meanwhile, the VIX index has been trending higher since reaching a low of 8.56 in November 2017. Higher base levels in the stock market’s volatility index The VIX index has been trending higher over the past five years, with two significant upside spikes. The chart highlights the spikes to 50.30 in February 2018 and 85.47 in March 2020 when the global pandemic gripped the stock market. Meanwhile, the base level for the VIX was around the 10 level from April 2018 through early 2020. In 2020 and 2021, the base rose to the 15 level, and the bottom for the VIX increased to the 20 level in 2022. In the VIX, upside price spikes tend to signal the kind of capitulation that leads to stock market bottoms. While all the leading stock market indices have been declining in 2022, the price action in the volatility index has yet to signal stocks are anywhere near the bottom. A correlation with the bond market Stocks and bonds compete for capital flows. As interest rates rise, money tends to flow from equities to fixed-income securities. Therefore, a falling bond market is bearish for stocks. The trend of higher lows in the VIX is a bearish sign for stocks and bonds. In 2022, the stock market has traded like a whack-a-mole game. While making lower highs and lower lows, declines have led to rip-your-face-off rallies, confusing market participants. However, the overall bearish trends in stocks and bonds and bullish trend in the VIX index is a sign that the bear continues to dominate the markets. Markets across all asset classes face many issues in 2022 Higher interest rates are bearish for the stock market and bullish for the volatility index. However, the markets face a lot more than higher interest rates in 2022: The war in Ukraine creates a unique side of problems for all markets. Rising energy and food prices have pushed inflation to a four-decade high, translating to pressure on stocks and bonds. The Fed’s interest rate policies remain far behind the inflationary curve, keeping real interest rates in negative territory and fueling even more inflation. The bifurcation between the world’s nuclear powers creates trade issues that distort prices, creating raw material shortages in some regions and gluts in others. The tensions interfere with the flow of goods worldwide. The mid-term US elections in November will determine the balance of power in the House of Representatives and the Senate. The election will be a barometer of support for the Biden administration. Polls point to losses for the ruling party, but the electorate remains divided, with emotions high on both sides. Voters tend to vote with their pocketbooks, but there is much at stake in November. US energy policy continues to address climate change by favoring alternative and renewable fuels and inhibiting the production and consumption of fossil fuels. The President recently said the pain of higher gasoline and fuel prices is necessary for consumers to shift to a greener path. Opponents contend that the energy shift will take decades, while supporters argue that hydrocarbons continue to power the world. The election will go a long way to deciding if the US continues its green route or shifts back to a drill-baby-drill and frack-baby-frack road to energy independence. Russia and Ukraine export one-third of the world’s annual wheat supplies and a significant amount of corn and other agricultural products as they are Europe’s breadbasket. Higher food prices and scarce availabilities over the coming months and years could spark a period of upheaval with hungry people in less developed countries dependent on Russia and Ukraine facing famine. These issues and the unknown are fueling uncertainty in markets across all asset classes with no solutions on the immediate horizon. Uncertainty is the stock market’s worst enemy. While the Fed attempts to address inflation with interest rate hikes, supply-side economic issues could mean the central bank is fighting an inflationary blaze with a water gun that will only hasten a recession or worse. As market participants head for the sidelines, volatility increases Market participants are nervous in June 2022. The price for all goods and services continues to increase as money’s purchasing power declines. Moreover, after the stock market gains over the past two years, monthly IRA and investment account statements are eroding at an accelerated pace. As of June 16, the tech-heavy NASDAQ had lost nearly one-third of its value from the late 2021 high. The S&P 500 was down more than 22.8%, and the Dow Jones Industrial Average fell around 17.5%. Consumer confidence has plunged, and a general disgust and malaise are settling over markets across all asset classes. Rapidly rising interest rates are making new home purchases prohibitive, even if prices come down. Meanwhile, we are heading into the peak summer months with the stock market in whack-a-mole mode. The odds favor a retreat to the sidelines for many market participants over the coming weeks and months. Less participation causes volumes to decline, and in the current environment, will likely increase price volatility. As many traders, speculators, and investors turn off their screens and head off on vacation, bids to buy are likely to disappear during selloffs, and offers to sell will evaporate during recoveries, making rip-you-face-off rallies even more dangerous. Higher volatility will only add to frustrations over the summer of 2022. The buy zone for the VIX is the 20-25 level The VIX was over the 33 level on June 16, but it fell as low as 23.74 in early June. The trend of higher base levels for the volatility index increases the odds of success for purchasing the VIX futures or VIX-related products on dips to the 20-25 area. The VIX is a trading, not an investment product. Approach the VIX with a solid risk-reward plan and stick to the program. Look for better than even odds opportunities, take small losses at risk levels, and look to increase profit horizons when the volatility index rises. When adjusting profit targets, remember to raise the risk points to levels that protect profits and capital. The trend in the VIX is higher, and the potential for a substantial upside price spike is rising. Trading the volatility index from the long side could be the optimal approach over the coming weeks and months as the market faces significant issues and liquidity is declining. Fasten your seatbelts as the whack-a-mole stock market could experience head-spinning moves over the coming weeks and months. -- Trading advice given in this communication, if any, is based on information taken from trades and statistical services and other sources that we believe are reliable. The author does not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects the author’s good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice the author provides will result in profitable trades. There is risk of loss in all futures and options trading. Any investment involves substantial risks, including, but not limited to, pricing volatility , inadequate liquidity, and the potential complete loss of principal. This article does not in any way constitute an offer or solicitation of an offer to buy or sell any investment, security, or commodity discussed herein, or any security in any jurisdiction in which such an offer would be unlawful under the securities laws of such jurisdiction.
CBOE:VIXLong
by Andy_Hecht
1
My plan for deploying cash over the next six monthsNTSX is an ETF that holds 60% S&P 500, 40% leveraged bonds. This is a highly efficient portfolio composition known as "return stacking" (recently popularized on Twitter by Corey M. Hoffstein). You get the best of several worlds: the lower volatility of the 60-40 portfolio, and the higher returns offered by leverage. Since leverage is used on the relatively safer part of the portfolio (bonds rather than stocks), it doesn't add too much extra risk. Stocks and bonds have sold off together over the last several months, creating a rare situation where there's been a large drawdown in 60-40 portfolios and in NTSX. I think there's an opportunity shaping up, but the hard part is going to be timing it. I've been sitting on a fair bit of cash for several months (you may have noticed I haven't posted much!) and am debating when to deploy it. It's likely still too early, but I think we're nearing good levels at which to deploy anywhere from a quarter to a third of it, and NTSX is a good vehicle for that. I'll likely hang onto the remainder of my cash till October. Macroeconomic Considerations Rates are soaring, and there's no question that will be a bit of a drag on growth. But it's offset by a strengthening dollar. The US is hiking rates faster than other developed markets, which has the dollar index soaring. A strong dollar is generally very good for US stocks. In fact, stocks usually rise as interest rates do, and it's only at the end of a rate hike cycle that we tend to see a recession. There's probably a recession coming in the next couple years, but we're not there yet. Several parts of the yield curve recently inverted, which usually signals a recession in the next 18 months. You might think that means it's time to get defensive, but stocks often go up quite a bit after yield curve inversion and before the recession hits. (Plus, this yield curve signal has been a bit wonky, because parts of the curve are steepening while others flatten. So it's hard to know how to interpret this recent inversion.) For the last several weeks, the Leading Economic Indicators index and the ECRI Weekly Leading Index have been steadily improving, a good sign for near-term growth. Meanwhile, commodities prices have weakened somewhat, with the GSG broad commodities ETF breaking its uptrend: It's possible we could even see some disinflation, which would obviate the need for the Fed to get so aggressive. There are certainly headwinds: China lockdowns, war in Ukraine, and rising US Covid cases. These headwinds need to be taken seriously. But there's also the possibility that any of these situations could suddenly improve at any time, especially if certain policymakers in Asia come to their senses. So I think it's worth having some exposure here. Policy Considerations So with the macro picture looking not too bad, why would I hold onto 2/3 of my cash? Because the Fed is about to start selling assets in May, including treasury and mortgage bonds. And when one of the biggest holders of assets starts selling, you probably don't want to be exposed. Now, the market has been front-running this move for the last several months, and bonds have already have gotten a lot cheaper. It's quite possible that a lot of it is already priced in, and that we could see some counter-trend asset buying that will offset selling by the Fed. The market is also pricing in really aggressive Fed rate hikes, with a 50 basis point hike at the May meeting and 75 basis points in June. That expectation may prove to be too hawkish. The Fed's own dot-plot projections imply a somewhat slower hiking cycle than the market rate does: www.cmegroup.com Any dovish surprise from the Fed might cause bond prices to pop. But I still think you want to play it somewhat conservatively here. The ten-year yield is still much too low for this level of inflation, so on balance, there's probably more downside than upside ahead for bonds. Seasonality Considerations Usually, May inaugurates the bullish season for stocks. But this is a mid-term election year, and mid-term election years are usually bearish from May to October. This may be an especially bearish year, because we're likely to hear a lot of talk tough from candidates about how they're going to stop inflation. The chart shows one possible scenario for how NTSX might move between now and October. I'm envisioning mostly sideways price action through July-August, followed by a summer selloff as we approach the election. If I'm right, then NTSX might even complete a full round-trip to pre-pandemic February 2020 levels by the end of the year. If this scenario does play out, then I'd probably deploy the rest of my cash around October. That might be the bottom, with the rate hike cycle mostly complete. Or it might be the beginning of a recession, as rate hikes cause the economy to blow up. But if it does turn out to be the start of a recession, NTSX won't be too bad a place to hide out. Stocks will go down in a recession, but bonds will likely go up as the Fed lowers rates to stabilize the market. That's part of what makes NTSX such an attractive vehicle.
AMEX:NTSX
by ChristopherCarrollSmith
6
Stock Market during Mid-Term Election and Inflation AnalysisThis is a historic timeline showing the following: Visuals: 1. Mid-term election years (Green Vertical Lines) 2. Peak Inflation (Yellow Vertical Lines) 3. Recession (Grey box) Charts: 1. Inflation CPI 2. FedFundsRate 3. Unemployment Rate You can note that there were two similar instances where inflation was getting higher during mid-term elections (1974 and 1980). In an inflationary environment, most likely the S&P bottoms when the inflation (CPI) has peaked. However, in 1980, the S&P went higher after mid-term elections despite inflation rising and having not peaked. So the S&P can bottom anywhere from June to October ( possibly at $3200- Fib lower level ), then rally after mid-term elections. If post-mid-term election, the unemployment rate starts going up, it can lead to a recession in the upcoming years. Feedback welcome! References: 1. List of recessions: en.wikipedia.org 2. Mid-term elections: en.wikipedia.org 3. Stock Market post Mid-Term elections: www.usbank.com
SP:SPXLong
by naveen31491
Losing faith in the Dollar $DXYDuring the begginning of the year there was some home for the dollar. it seemed as if we were within reach of making our most competitive currencies such as the British Pound, the Euro, The Franc, and The Canadian Dollar about as close as 1-to-1 as possible. Well Today, I think those dreams are farther than what they could've been. What's the reasoning for the shorting the dollar. Has the fed printed too much thus devaluing the currency as much more is in circulation than needed? Or are people looking for a new raw metal like gold, or are they looking for a completely new system like crypto? If you look at this daily chart, you can see that the dollar did hit an area of previous support, it was actually an order block (a down candle that caused displacement afterward) that was in the middle of the skyrocketing price. It was in June when the price decided it wanted to slide down and down and down and then it finally hit a floor in August it went sideways for the last few months. I thought it would eventually pick back up given certain consequences. Those consequences are now showing and I believe our fiat dollar will no longer be the worlds currency. It has been lower that what it is now, yes I know that. But that doesn't mean it's a good thing. Think about your monitary positioning now, what you will do with the money you have, how will you keep it strong. Ipersonally believe this is the beginning of the end of the USD. So position yourselves to earn from the fall, it can be done if you are wise. I'm not saying I'm the best and know everything. I'm just simply stating my opinion. In technicals of the DXY, just watch the key levels and see how price actions works at those key levels. Does it continue slipping? or does it consolidate for another few months and the revive? I'm going to guess that it's going to continue to slide. But what do I know? I'm just some rando guy that likes to post his ideas on tradingview and go on rants about what I believe so I could be absolutely WRONG. Oh btw, you're welcome to vent about anything in my comments section, some people just neeed that. But good luck and good trading :) TVC:DXY
TVC:DXY
by BodiesXWix
7
USDCHF Sell IdeaThe recent election fraud allegations made by President Donald Trump, and the amount of leaders from different nations holding themselves to congratulate President-Elect Joe Biden makes it pretty obvious that the political environment in the USA is going to get messy. Uncertainty at the highest level of power in the U.S. makes a lot of market participants speculate about the near future of the U.S. Dollar. We have seen how the dollar has recently been trying to go bearish in the last few weeks, and it wouldn't be surprising if the higher up Donald Trump's fraud allegations get, the further down the U.S. Dollar could go in value as well.
by joseafab
2
NZD/USD and USD/CAD on watch for me today.NZD/USD: • I will not be trading this pair until the legal action surrounding the 2020 US Presidential Election has reached its conclusion, but if once it has price pushes up to and ideally just above our mini rayline, it then impulses back down and a subsequent tight flag forms, then I'll be looking to get short on the break of the flag so long as all of the flag forms below the lower trend line of our most recent piece of structure. • If price simply drop out of structure impulsively as illustrated, then I'll also look to get short on the break of a subsequent tight so long as all of the flag forms below the start of the correction of our most recent piece of structure. • If neither of these setups present themselves then I will simply wait until another setup which meets my plan materialises. • If there's any ambiguity then I will not place any of these trades. USD/CAD: • I will not be trading this pair until the legal action surrounding the 2020 US Presidential Election has reached its conclusion, but if once it has price pushes down to and ideally just below our rayline, it then impulses back up and a subsequent tight flag forms, then I'll be looking to get long on the break of the flag. • If this setup doesn't present itself then I will simply wait until another setup which meets my plan materialises. • If there's any ambiguity then I will not place any of these trades.
by StewySongs
2
USDJPY sell off on BIDEN win#USDJPY: (1D): As expected, the downtrend continued to the downside, finally breaking the descending triangle after ranging in it since June. What we need now is a retest of it. Fundamentally, the sell off is to be addressed to Biden winning, which means more fiscal stimulus for the US and a freer approach to trade. This results in a weaker domestic currency. (4H): Having our bearish bias determined, we can now look for a trade. In this case, we can see a clear range on the triangle bottom, which was broken with a strong push to the downside. What we need now, is a pullback to retest the range and a strong rejection of its level.
Short
by Wikiwicks
The Most Important Levels for BTC/USD After The ElectionsThe elections in the USA have a strong effect on the price. After seeing the huge surge in the price of gold we also see the major increase in price of BTC. In just three days, the price has increased by 20%. The dominance of BTC is increasing as well, and alts are bleeding. This behavior is common when BTC is growing a lot in a short period of time. But there is hope, on several earlier occasions such a surge in BTC and BTC Dominance has led to a temporary alt season. When BTC consolidates and the market cap flows back into alts we will see many interesting trading opportunities arise. I will make sure to report on them whenever I see such opportunities on this account. For BTC itself however, we will struggle to do any technical analysis on shorter timeframes as the price is moving into new territories. In the chart above I show how to look at horizontal zones in order to find help in charting the current price. Other alternatives for charting such large moves is by using Fibonacci retracements. In today's analysis however I will focus only on horizontal levels. It's interesting to see that we see the most important levels around the $13,000 mark, the $14,000 mark, the $15,000 mark and the $16,000 mark. I highlighted two zones explicitly in red, because they are EXACTLY at the psychological levels of $16,000 and $14,000. I consider those extra powerful. The other levels have been created using the S/R flip principle. The key idea being that horizontal levels can stay important even after they have been broken. All further info about these levels can be found on the chart. For trades I suggest to keep an eye on the $16,000 and the $15,000 levels. More specifically I suggest to get a short trade in as the price has been ridiculously high recently. A short from the ~16,000 to the ~15,000 would be my first recommendation. Follow me for consistent high quality updates, with clear explanations and charts. Please like this post to support me. - Trading Guru -------------------------------------------------------------- Disclaimer! This post does not provide financial advice. It is for educational purposes only!
BITSTAMP:BTCUSDShort
by Trading-Guru
12
Election Results and the Future of the Stock MarketDisclaimer: this is a completely APOLITICAL analysis based solely on facts and my personal insight. This is not financial advice. This is for educational purposes only. In this post, I'll be discussing the current situation of the US presidential elections, and the market outlook depending on some of the probable cases. Election Results - To begin with, the election got complicated as Trump suggested the possibility of it being rigged. - He is asking for transparency of mail votes, and wants to settle the result in the supreme court. - Probable cases can be classified into three big categories: 1) Biden Wins - Based on the current result, and the poll results of the past, Biden ultimately winning the election wouldn't be a surprise - If matters are not taken to the supreme court, everything should go as initially planned 2) Trump Wins - The same story applies to Trump; - Had he not attempted to settle matters through the supreme court, what we could expect for Trump's winning situation is the following: - All votes are counted, and trump eventually wins over 270 votes. - While this is very improbable, it's not impossible. 3) Results Delayed - This is the situation we are faced with today - Trump wants the supreme court to settle the election, and to do so, the election results need to be delayed to his favor - Trump may have a strategic advantage over Biden, should his Plan B work out. - However, whether matters will be taken to the supreme court is unclear yet, as Trump's claims have very little to no base. So What About the Market? I'm sure the big question you might have in mind is: So what's going to happen to the market? What would be best for the market to remain bullish as it is? Based on the information available so far, it seems that Biden as president, and a republican dominant senate would be the most probable scenario. As people get a better grasp of what the potential outcome of this event, uncertainty, doubt, and fear induced through market psychology has diminished significantly. The S&P 500 Index (SPX) has risen, while the Volatility Index (VIX), also known as the fear index, has decreased significantly. This demonstrates that people weren't necessarily afraid of Biden becoming president. They were worried about the uncertainty of such event having an impact on the market. In regards to the most probable outcome at the moment, where we have Biden as president, and a republican dominant senate, this might be the best case for the market over the long run. The republican senate will be able to keep in check with , and neutralize Biden's rather radical stimulus packages and fiscal policies. The infrastructure package will also be implemented as planned, but possibly in a reduced manner. Overall, some of the policies we see will be democratic, and others will be republican. This gridlock that we might face, where both parties have each other in check at an equilibrium, might be the best case for the economy, and the stock market. Statistical Evidence - To begin with, we can see that the red graph demonstrates how the market return increases over time, during a presidential term. - Taking this into account, we can look at the Average Growth of Composite Index, which organizes the market returns depending on the political situation - It calculates the average return over 4 years - Statistics demonstrates cases of: a republican president, a democratic president, a republican sweep (red wave), a democratic sweep (blue wave), a republican and democratic divided congress. - We can see that the case for the democratic divided congress, which is the current scenario with the highest probability, demonstrates the highest market returns - There were 6 cases in which this political setting took place: - In recent cases, it was the example of the Obama administration in 2012, and the Clinton administration in 1996 - Both cases reported extremely high returns in the stock market. - However, at the same time, it's important to remember that there have only been 6 historic cases, and anomalies can always take place Conclusion There are a few things to take away from the statistical data, and probable scenarios regarding America's political setting. 1. The market doesn't dislike democrats. They dislike uncertainty and fear. 2. The gridlock created by a democrat president and a republican senate is a bullish sign for the economy. Combining all the information above, we can expect this current bullish rally to continue further, as the dust settles. If you like this analysis, please make sure to like the post, and follow for more quality content! I would also appreciate it if you could leave a comment below with some original insight.
TVC:SPXLong
by Michael_Wang_Official
The Most Important Levels for GOLD After The ElectionIn this technical analysis I will describe the most important levels for Gold at the moment. I will walk you through each of the levels on the chart and explain how you can use them. Based on empirical evidence, we can observe that the election moving in favor of Biden is good for the price of gold. We have seen that as Biden moves closer to a victory, the price of gold has moved linearly up as well. The future value of conclusions often get included straight away into the price, so don't expect a huge volatility spike after the final results are live. Instead, the real volatility is happening at this moment. This also leads to common mistakes by traders. For example, if a future decision would be expected to lead to an increase in price, people start already buying the asset when the probability of that decision happening gets higher. Now, when the actual decision makes the price can even decrease as the only thing that truly happens is calibrating the height of the earlier expectations with the actual moment of the decision. The price only moves based on the difference between the recalculated probabilities and the actual price, and not based on the final decision itself. Let's now look at the most important horizontal zones for Gold and why I added them to the chart. Horizontal Support Level II This is a place where we can find really solid support. The level around 1850 is a relatively low price area where the price movements have bottomed earlier on. It is not likely that the price will move anywhere below it soon, and as such this horizontal level can be used for a stop loss on any long trade. Horizontal Support Level I This zone is important mostly for determining if the price trend continues. The price is very bullish, but after a sudden spike up there is often a retracement. This horizontal zone can be used to see whether there is some support to continue a second bull trend. Horizontal Resistance Level I + II The first and second horizontal resistance levels could be a great level to be used for placing a take profit. Both of these have proven to show resistance earlier on and the price might face resistance here again. Especially zone II is very interesting here as it is near the psychological level of the $2,000 mark for gold. I suggest placing any take profit for a long position at least slightly under $2,000 to maximize your chances on taking profit. Horizontal Resistance Level III Level three can also be used for a bullish target setting. I expect that after breaking through each of the subsequent horizontal levels, the price will consolidate for a while between the levels. Especially for scalp traders, the moves between zones I, II and III can be great to get a few trades in on smaller time frames such as the 5m, 15m and the 1h. Horizontal Resistance Level IV All-time highs are a massive area of resistance. It is often very difficult for prices to break through areas like that. I would suggest exiting any long positions at this point as it is very difficult to estimate sane levels of take profit and stop loss above areas where the price has ever been before. If you decide to hold above it, think of using a strategy such as trailing stop loss to give some help of leaving the trade. Follow me for consistent high-quality updates, with clear explanations and charts. Please like this post to support me. - Trading Guru -------------------------------------------------------------- Disclaimer! This post does not provide financial advice. It is for educational purposes only!
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OANDA:XAUUSDLong
by Trading-Guru
32
American Jerk behind COVID surge : Derivatives of displacementCleaner Chart: The recent increase in acceleration (known as "jerk") of US COVID cases is "re-bending the curve". In this context the verbal descriptions of change, and its derivatives ,becomes both interesting and important Charts showing ongoing change in confirmed US COVID19 cases are themselves constantly changing. Understanding these 'charts of change' is a prerequisite for making informed public policy decisions, as well as individual decision making (to mask or not to mask?). Yet verbal explanations of change are outpacing graphical representations in mainstream media. This is the position taken in the NYT article "Bending the curve". To quote the author: As an old Chinese philosopher never said, “Words about graphs are worth a thousand pictures.” The public at large understands the concept of displacement: change over time. For example, is the number of new cases per day going up or down? However, the derivatives of displacement are not commonly understood. You may get a blank stare in response to questions like: 1) The US flattened the curve in the spring of 2020. Did that mean fewer new cases per day? 2) "A jerk is responsible for recent spikes in new cases" Is that: a) a description of change? b) a political statement? Methodology: The chart is a brief overview of the first 4 derivatives of displacement [Left panel and there application to recent (10/25/2020) data on he number of confirmedrUS COVID19 cases. Raw data was TV's ticker "COVID19:CONFIRMED_US" Each derivative was calculated on a 7-day SMA of the previous step. Both 5MA and 7MA are commonly used in summary graphs published by John Hopkins (2). Deritives are shown for Acceleration and Jerk. A BB% score shows that both Acceleration and Jerk are 2STD above their mean. It is statistically likely that ,as the Jerk becomes more prominent we may experience an upward "Snap" in US COVID cases. While its easy to visualize an acceleration or even a jerk in virus spread (both have exponential growth), it is much harder, and is left as an exercise for the reader, to visualize "snap" spread of a disease. Another conclusion is that any attempt to "re-flatten the curve" will fail in the presence of persistent jerk. (1) www.nytimes.com (2) coronavirus.jhu.edu
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by gb50k
41