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Understanding Market Risks Through HistoryIn this post, I'll be referring to the historical chart of the Dow Jones Industrial Average (DJI) in order to explain my perspective on risks associated with the market, and how to respond to current market conditions as a trader and investor. This is not financial advice. This is for educational purposes only . In my previous educational post, I discussed why the Fed's rate hikes were not as significant to us as we thought it'd be. I mentioned the idea of the market already pricing in not only the information itself, but also people's reactions to it as well. As announced, the Fed raised rates on the 16th of March, approving the first interest rate hike in more than three years. As anticipated in my investment thesis, the market handled this well, and the Nasdaq index alone has bounced over 10.49% since the lows of the past 5 days. Today, I'm going to talk about the war in Ukraine from a statistical standpoint, and how this is unlikely to lead to a multi-year recession . Historical Cases - In 1914, the assassination of Archduke Ferdinand marked the beginning of the first global scale war modern society would witness - The war lasted 4 years before Germany admitted its defeat and signed the armistice agreement. - During this time, the Consumer Price Index (CPI) hit record highs of 110%, making today's 7% figures look moderate. - After the war, the Dow Jones Industrial Average rallied a whopping 504%, before the American economy was struck with the Great Recession. - After the Great Recession, the world faced a second world war in 1939, which started with Germany's invasion of Poland. - The markets crashed, but not as severely as the Great Depression, and CPI recorded 74% during this period. - With Japan's surrender, uncertainty was resolved, resulting in the DJI delivering 523% returns. - Then came the Vietnam war in 1964, which started with the Gulf of Tonkin Resolution. - The market ranged sideways for almost a decade, creating lower lows, with situations deteriorated by the Oil Shock of 1973. - During this period, CPI hit record highs of 207% with factors of global uncertainty such as the war, which the US couldn't seem to win, and Oil Shock. - After the war ended and the economy recovered from the Oil Shock, DJI delivered a whopping 1,447% returns, until the market started shaking again with the 911 terrorist attacks against the United States. Lessons Learned - So what is it that the market tells us? - I've outlined what wars and regional conflicts do to markets in the post below: - Historical cases tell us that the market prices in information about the war, and corrects in advance. - Once the conflict actually takes place, the market starts to bounce from its local lows, as uncertainty has been resolved to an extent. - From a macro perspective, as seen through the historical chart of the DJI, the end of wars usually mark the beginning of a multi-year bull rally as negative sentiment will have been completely cleared by then. Market Risks - That is not to say that I'm irresponsibly bullish. I do think there could be probable cases that lead to a global expansion of the crisis, and the collapse of the financial markets. - For instance, Russia's use of weapons of mass destruction (WMD) could damage the markets to a greater extent than anticipated. - It seems as though the market is considering this to be an improbable case, which it is, but there's no reason to be too complacent. - According to an FSB whistleblower, it was recently revealed that Xi Jinping had plans to invade Taiwan this fall, depending on the success of Russia. - If that were the case, then it wouldn't be a huge logical leap to consider north Korea's possible initiation of war against South Korea, and a war breaking out at a global scale. Conclusion [/b It all boils down to uncertainty in the market, and people's irrational responses to it. I believe that a successful negotiation between Russia and Ukraine could lead the markets to swiftly rebound once again, though that is not the only factor of uncertainty at the moment. Inflation (CPI) will eventually cool down in an organic manner, as markets realize the stability that is being brought to the economy, and the Fed's actual influence on the market. People ignore bad news during uptrends, and they ignore good news during downtrends. I see a plethora of opportunities where companies that generate tremendous cash flow at an increasing rate with insane growth indicators, are neglected by the market. It's important that we clearly understand where we're at in terms of the market cycle. I believe that we're at a corrective phase of a bull market, rather than at the beginning of a recession. During corrections of bull markets, the smart move is to buy cheap stocks. It's worked effectively in making money 100 years ago, and I don't doubt that it'll work now as well. If you like this educational post, please make sure to like, and follow for more quality content! If you have any questions or comments, feel free to comment below! :)
TVC:DJIEducation
by Michael_Wang_Official
8
How the Fed's Rate Hikes Affect the Market (or Not)In this post, I'll be demonstrating how the Fed's rate hikes affect the equity market (or how they don't), through historical examples and analyses of market psychology. This is an issue that has been going on for a while, and one that has caught the attention of all market participants. Yes, tapering and rate hikes aren’t necessarily good news, but I don’t think that 1) they necessarily indicate the beginning of a bear market/recession, and 2) the Fed is as powerful and influential as we think they are. This is not financial advice. This is for educational purposes only. Introduction - There’s a myth, a misconception in the market that the Fed allegedly rescues falling markets with rate cuts and easing measures, and vice versa for when the market is overheated. - This myth began in 1987 during Black Monday, when Alan Greenspan’s Fed cut rates after the crash, creating an impression that the Fed was directly responding to the stock market. - This is when the (mis)belief that the Fed would put a floor under a a falling market stuck. - Nevertheless, if we analyze the data, it actually demonstrates that the Fed stood pat for most corrections, and cutting cycles typically arrive during bear markets, just as coincidence. Historical Cases - There are only two occasions in history where the Fed’s cutting cycles corresponded with market lowpoints. - The first is the aforementioned Black Monday of 1987, and even for this case. - If we take a look at the situation back then, it’s not so much that the Fed made international moves that contributed to history, but rather that the bear market started amid a global liquidity crisis. - With excess liquidity, the rates should have been flat, or down, but that wasn’t the case. - Thus, the Fed’s rate cuts were vital to unfreezing credit and ensuring banks and clearing houses would have access to liquidity they needed, while the market was under severe stress. - The second occasion was the rate cut in 1998, when stocks were reacting to the collapse of Long-Term Capital Management (LTCM). - There was fear in the market that this collapse would lead to a domino effect, ending in a banking meltdown. - Generally, when people fear a banking contagion, liquidity in interbank funding markets dry up. - The Fed’s action to cut rates during this time helped keep money moving, and ensured that banks met their regulatory obligations. Market Psychology - In order to understand the recent discussion revolving around the importance of the Fed’s actions, we need to understand human nature. - People love finding narrative threads and grand explanations because we’re biologically wired to make sense of the world that way. - They confuse correlation and causation, and zero in on evidence that supports their view and shuns whatever suggests otherwise. - But it’s important to remember that in most cases, a fact that everyone knows, tends to be closer to myth than reality, and even if it weren’t a myth, the fact that everyone knows it does not give us an edge in the market. Summary Market shocks are caused by surprises. News about a pandemic or cyber attack that catches investors off guard is much riskier than macro events that are predictable and can be anticipated. Given that the markets are efficient (which I believe they are), it's rational to assume that news about the Fed's rate hikes, and people reaction to it are already priced in. While short term volatility is definitely expected, I believe that the likelihood of this event becoming a trigger for a multi-year recession is extremely unlikely. If you like this educational post, please make sure to like, and follow for more quality content! If you have any questions or comments, feel free to comment below! :)
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TVC:IXICEducation
by Michael_Wang_Official
63
Zombie Companies and You!Much of the massive amount of new money the Fed is printing is going into Zombie Companies. How Zombie Companies Survive Zombie Companies are firms that don’t survive by producing value for their customers. Instead, they survive by parasitically draining resources from the overall economy by borrowing at near 0% interest from the Federal Reserve. The Federal Reserve just creates this money out of thin air. How this Harms Everyone So this borrowing has the same negative effect on everyone’s paycheck purchasing power as criminal counterfeiters do. Instead of consumers having the power to support businesses that do provide valuable goods and services, the Fed effectively steals that money from consumers and gives it directly to corporations without them having to produce value for consumers. Stolen Productivity Gains Productivity gains allow the government to do this without increasing the consumer price inflation too much. In the first half of the 20th century, the financial benefits of technological innovation and productivity gains were generally evenly enjoyed by society. Immediate Effects on the Stock Market The immediate effect of dumping money into corporations is that their stock value rises. You can see this in the recent explosive growth in the US stock market. However, it can’t go on forever, because it would lead to catastrophic hyperinflation as seen many times throughout history and most recently in Venezuela. Long-Term Effect of Sustaining Zombie Companies You can see the long-term fallout in Japan’s “Lost Decade”. Japanese banks continued to support weak or failing firms. The result was three decades of poor economic growth. Long-Term Effect of Killing Zombie Companies This effect can also be seen in the Stagflation of the 1970s. The US abandoned the Gold Standard in 1972 allowing the Federal Reserve to print as much as they wanted. What followed was almost no economic growth for a decade and a 17X explosion in the price of gold relative to the dollar. Then Jimmy Carter appointed Paul Volker the chairman of the Fed. Volker had a will of steel required to force America to endure the short-term pain of increasing interest rates. This pain took the form of massive unemployment as zombie companies went bankrupt or were forced to restructure to live within their means. However, the long-term result was two decades of great stock market performance through the ’80s and ’90s. Possible Future Scenarios Based on all past periods of massive monetary supply inflation like this, it’s very likely the US will eventually reach a point where the bubble pops and there’s a stock market crash. Pre-Crash Strategy Ideally, you’d have the Federal Reserve and Wall Street’s insider information that would help you predict the timing of the crash and get out in advance. Then you could keep enjoying the amazing returns from the bubble as long as possible. However, for the rest of us, the best we can probably do is put our money in precious metals ETF’s to be protected from these losses. Post-Crash Scenarios 1. Fed Responsibly Raises Interest Rates If the Federal Reserve begins behaving responsibly at that point, they would raise interest rates and force all the zombie companies to go bankrupt or restructure to begin surviving by providing value and earning money. This was the approach of Fed Chairman Paul Volker in 1979. Higher interest rates will temporarily increase unemployment and make the stock market sharply fall even more in the short term. However, after this correction, it will great opportunity to sell your gold ETF’s get back into the stock market at the bottom and enjoy significant future growth. 2. Fed Continues Low-Interest Rate Policy This was the approach of Japan in the ’90s. The zombie companies were kept on life-support. The result was that it took 3 decades for the market to get back where it was before the crash. Given that it’s unlikely anyone has the political will to cause the short-term pain of higher interest rates, this seems like the most likely scenario.
TVC:GOLDEducation
by mikepsinn
Impact of Fed Unchanged Interest Rate and Gold PricesHere I tried to show the movement of the day when Fed announces its unchanged Interest Rate decisions during the last 6 times. As you can see, the gold prices had been quite volatile during the last Fed decision on June the 16th and shed 1.45%. Since then, the yellow metal has not been able to overcome the loss and is in the downward trend. Please note that this is shared for educational and informational purposes only and is not intended for financial decisions. If you like the idea, please like and comment :)
OANDA:XAUUSDEducation
by UnknownUnicorn621491
The Dollar INFLATION? Part 1 Hello,Traders! The fears of inflation are now the reality, with the official FED number showing that inflation went from 1.6% in 2020 to 4.2% in April 2021, which means that the situation "on the ground" is even worse. Even just by looking at the charts of lumber, copper , and other commodities , while finding out that all the cars in your local dealership are sold out a year ahead, and the car prices are up, with the FED and the Treasury competing for the number of zeros on their official operating papers, the thoughts of «shortages» and «inflation» are naturally creeping into your head,followed by the question of "how it all came to it?" And while the Covid-19 and the lockdowns are the obvious culprits, the details are interesting. So let's dive into the mess of the Covid-19 consequences to find out. Generally, Inflation can be caused by any of the two components: excess money supply, directed towards consumption, as opposed to investments, or goods supply shortage, with the unchanged money supply. In 2021 we seem to have both, but the details are quite peculiar. Let's deal with the excess money supply bit first, as it is kinda obvious: In march of 2020, the FED added 2.3 Trillion dollars to the direct asset purchases program, while expanding indirect liquidity by relaxing bank reserves standards, and relieving other regulations of the money markets to facilitate lending and prevent broad money contraction. Most of that money, however, went into the financial assets, inflating the asset prices, which can be seen by looking at the prices of Gold , Bitcoin , S&P500 , and other key benchmarks. U.S. Fiscal Policy bit, however,was more directly relevant to the consumer goods inflation . Throughout March and April 2020, the U.S. government passed three main relief packages and one supplemental package, totaling nearly $2.8 trillion. After the passage of the supplementary package in April, nicknamed "stimulus phase 3.5," there was no substantial action on COVID-19 stimulus or relief from Congress for several months as each party proposed their own stimulus package. Then, after the election of President Biden in November, a $900 billion stimulus bill was passed in December 2020. Another $1.9 trillion American Rescue Plan, was signed into law by President Biden on March 11, 2021. 3 Trillion Dollars was actually spent so far, the remainder being available to congress for allocation. Most of that money was spent, not invested, and came from borrowing, not taxes, which, would have added to inflation even without the supply shock. The supply side of the equation, however, looks much more complicated, but we will dive into that in the next article, tomorrow! If you want to read the most interesting piece, please like comment, and subscribe!
Education
by TopTradingSignals
1
The Dollar INFLATION? Part 2. (see link to Part 1 attached below) Hello,Traders! As we found out in Part 1, the FED and The Treasury added 5.3 Trillion dollars to the money supply , with 3 Trillion Dollars being spent, not invested and all that coming from borrowing, not taxes, which would have created price inflation even without the supply shock. However, the supply side was also affected by the lockdowns, and below is a summary of how this happened! First of all, we saw a massive structural change, with the demand suddenly shifting from services to goods , as the majority of the former became unavailable to the indoors bound population. That additional demand for goods, would have strained the supply chain in any scenario, but several factors made it much much worse. First, the lockdowns in China, especially Wohan, a major logistics hub, brought some of the manufacturing and shipping to a halt, that led to the initial shortages, but the demand fell sharply too, so at first, the two canceled each other out. Then with China opening up at the end of 2020 faster than any other country, and the demand picking up in the US and other countries , China started shipping Covid-19 supplies and other goods to the rest of the world. But as manufacturing in China recovered, the United States were locked down, which affected two major ports in the US : the ports of Los Angeles and Long Beach. The thing is that 41% of all the US container traffic goes through just these two, and while the container traffic went up by 49%, the ports were operating at lower capacity, due to the dock workers either being sick with Covid, or being in quarantine. Loaded Ships were stranded for weeks , waiting to be unloaded, doubling the shipping time. As if that wasn’t enough, the shipping containers price went from 1800$ to 3500$ , because due to the lockdowns in the US there wasn’t much to be shipped back to China, and for every 100 containers that went in, only 40 were exported back . The ports operating at lower capacity didn’t have the resources to load empty containers onto the ships going back to China, and the truck drivers shortage lead to that the empty containers weren’t returned back to the ports, from inside the US. This led to a vicious cycle: shortage of shipping containers was worsening the shortage of shipping capacity, which was worsened by the shortage of port capacity, which in turn was worsening the shortage of shipping containers, which as in turn worsened by the shortage of truck drivers which worsened the shortage of goods. All that led to scarcity exacerbated by the debt funded, non-investment consumer spending, and worsened by a demand shifting from services to goods.A perfect storm situation, which nearly collapsed the «Just-in-Time» manufacturing based supply chains. All that led to the official FED inflation figures for April 2021 being 4.2%, which is A LOT ! And more is to come, if the lockdowns are not lifted, and, especially,if Biden's 6 Trillion budget gets passed. Please, Like comment and subscribe!
Education
by TopTradingSignals
8
🎓 EDU 5 of 20: FUNDAMENTALS ARE THE HOLY GRAIL OF TRADINGHello traders! In the previous Educational Post (4 of 20) we learned what FIST (Fundamentals, Intermarket, Sentiment, Technicals) is about and why you need to use this trading framework in your trading. I strongly believe that incorporating a range of analytical disciplines returns better trading results than focusing only on one tool. This is how big players play the market, and this is how you should trade too - if you want to become a consistently profitable trader. Most retail traders put too much emphasis on technical analysis. The majority of traders even trade solely with technical tools. In an earlier post, we have covered why you shouldn't trade only on technicals , so this might be a good time to revisit that lesson and read it if you haven't already. Most retail traders will wait for a signal like a pullback, MA crossover, overbought/oversold RSI conditions, MACD, and follow candlestick patterns and chart patterns to enter into a trade. Guess what? That's an easy way to blow your trading account! If you look at your broker's homepage, you'll see a sentence stating how many retail traders lose money. I have yet to find a retail broker where less than 20-30% of traders are profitable. The rest, 70-80% of clients, lose money on a consistent basis. I bet that, of those who lose money, the majority use technical strategies and/or have poor risk management skills. Institutional traders don't open a trade based on MA crossovers or extreme RSI levels. They follow a range of fundamental signals, analyze correlations between different asset classes, and follow the general market sentiment. Technical analysis accounts for 5% of their work. Technical levels are only used to determine entry and exit points - ONLY after they already know in which direction they want to trade. Fundamental Analysis Unlike technical analysis which is based on the premise that history repeats itself, markets like to trend, and all available news is instantly discounted in the price, the fundamental analysis aims to explore the underlying factors of why a market is going up or down. Technical analysis is all about charts. Technicians are not interested in the reasons behind price movements, which often creates an environment where technicals alone produce fake signals. I bet many of you have seen that: a failed triangle breakout, a failed trendline breakout, or the RSI remaining in oversold conditions as the price continues to trade lower. Fundamental analysis can be grouped into two groups: macro fundamentals, and micro fundamentals. In trading, macro fundamentals refer to the bigger picture fundamentals: interest rates, economic growth, inflation rates, and labor market conditions. Micro fundamentals are more subtle, but can also have a large influence on the price. Those are comments by central bankers, news, market indicators (PMIs, CPIs...), political developments in a country, etc. Central Bank Meetings My students often ask me whether they should follow central bank meetings and press conferences. My answer: If you want to make money trading, then yes! Nothing has such a large impact on prices as central bank meetings and interest rate decisions. And if you do your homework, you can profit from those meetings most of the time. Follow press conferences that are scheduled shortly after the meeting and listen to the Q&A session, and read the entire meeting report once it's out. You'll find it astonishing how much you can learn from those reports - and how easy it can be to make money in the markets. There are eight major central banks in FX: US Federal Reserve (Fed), Bank of Canada (BoC), Bank of England (BoE), European Central Bank (ECB), Bank of Japan (BoJ), Reserve Bank of Australia (RBA), and Reserve Bank of New Zealand (RBNZ). Create a bookmark for each of those central bank websites, and read their reports and articles at least once a week. I like to do it on weekends. You can even have very profitable trades after the Central Bank meeting is over and the market has already reacted to the news. Commercial banks and other sell-side institutions will often drain liquidity in the markets to purchase a currency at discount after a major news report or interest rate decision. If you know how to identify this liquidity drain, you'll be able to catch amazing trades in the future. Thanks for reading and stay tuned for Part 6: What Market Indicators do I Need to Follow?
Education
by MujkanovicFX
They have money to burn - you do NOT!FED-backed pumping or rather re-pumping of the popped bubble, has taken the DJI to unexpected levels. I think they're making the same mistake all over again. Have a look. No predictions. I don't do predictions. Tough. Disclaimers : This is not advice or encouragement to trade securities. No predictions and no guarantees supplied or implied. Heavy losses can be expected. Any previous advantageous performance shown in other scenarios, is not indicative of future performance. If you make decisions based on opinion expressed here or on my profile and you lose your money, kindly sue yourself.
FOREXCOM:US30Education
by Captain_Walker
ridethepig | Macro Flow & Restraint(1) The relationship between "macro flows" and "restraint" The former encourages plans from our opponent by enticing them into positions. What does it mean: suffering from the sad case of the last buyer? The concept of static and dynamic weaknesses. When it becomes appropriate to undo our opponents structure? Restraint can be imagined without the traditional presence of barriers in the orderblock; but real total economic restraint, loss of market access (regardless if you are for or against Brexit this is a fact in the short-term) reigns over whole stretches of the economy and gives the currency breathing difficulties. This is an important from the advantage of trapping our opponent. To what extent, you may ask, does an economy suffer from the said disadvantages? It is not simply enough to state that market isolation can be easily captured in the FX board and can be highly unpleasant to defend. This is because the monetary suffering is impossible to be offset by the fiscal side despite Sunak's loose budget. Equally it would be efficient to connect the highs with the opportunity of false hope for our opponent to break higher (e.g ridethepig | UK Elections ). The main cause of the suffering is that in an election advance there is always the formation of hope, a certain tendency to paralysis is made apparent with smart money all over the 1.35xx highs and loading sell positions. With a high of the range now located at 1.35, the formation can develop with macro sellers targeting 1.21, then 1.15 and finally 1.05 in cable via Brexit. But there is no support in the diagram, and thus the attempt to transfer the flow is absent (see brexit at the door ). What we are recognising here is the principle weakness of buyers to take 1.35 which we will dissect as dynamic weakness and make it impossible for buyers to construct the break. Rule: when our opponent possess the opportunity to go overboard, their structure is weakened and becomes worthwhile looking to push them into advancing before a strong rejection. With this in mind, in the UK elections after 1.35 was rejected, sellers must then attempt to provoke buyers into continuation with action - hence the chop fest in January. As long as buyers were allowed to hold onto 1.30xx/1.29xx, meanwhile smart money are loading the whole time while it is as obvious as a limp - when sitting down! The weakness only becomes visible once 1.30xx/1.29xx was broken. As well as static weakness, there is also the concept of playing GBP dynamically around event risk. Unlike the UK elections, the Chancellor reshuffle laid out bare when you "blag" the fiscal side, that is turn the taps on full blast and flood GBP supply side: Here the static weakness of the monetary and fiscal side is a great one: when both sides align GBP sellers gain advantage. Rule: When GBP buyers showed static weakness over the past few months it was time to advance against them and not be afraid of doubling down with momentum. While Covid-19 has taken the spotlight, the Brexit problem only half vanished. One part of the rose may disappear into thin air, but the petals left will suffer all the more. Now consider the position in the following diagram ( GBP Market Commentary 2020-01-14 ). Sellers encouraged with the technical break which would mean that the exploitation of the restraint at the highs may not be all that difficult. Next came EURGBP : And now GBP allowed itself to be tempted into an interesting attack the result of which would only be to open up the board and expose the hopeless position of those expecting a second referendum or soft exit. Reality continues to sink in.... Here the "win" for GBP sellers is coming in a no less imaginative style to the same highs we traded back in 2019 ... GBP sellers are therefore right in their choice and direction, the waiting strategy paid. The flank on elections paid. Ending hopeless expectations of a fairy tale exit paid. However, the "advance" was also possible because of the macro flow constituting weakness in the liquidity ladder. Sellers sacrifice the late buyers, an exchange at 1.35 captured all participation... ...where we can achieve our "restraint" and then look to target the same lows as in 2019. Another rule: Isolated event risk and compact flows should be challenged (= attacked by opposing swing). An opposing swing complex, which has not advanced but rather in development stage, should, on the other hand, first be goaded into action before being challenged, in other words let it exhaust first !!! (a) The only true strength of Macro flows As we have witnessed, a swing with restraint attached to it contains a specific latent weakness, which flags up only when the said swing advances. In our case it was with the break of 1.30xx/1.29xx to the downside. We will call this, as we have mentioned dynamic weakness . When on the contrary, the swing stands still (or is resting), it can be quite strong. After the squeeze towards 1.35xx cleared the board with a lot of effort to force buyers. I mean by this that GBP buyers scarcely have enough positional means to be able to force any decision since Brexit and this is because price dictates as always! On the other hand, this would be easier if we had cleared 1.21x last week. (b) A review of the best known swing structures... The strongest formation for swing trading comes from event risk and macro drivers; retail should hang on to the later as long as possible. After the Brexit referendum in 2016, it has been one-way traffic for GBP. Thus it is a strategic requirement for GBP sellers to force Buyers into traps. He should do this where possible and without the help of monetary policy as BOE was hijacked till the virus. Because after the monetary side bends a knee, a challenge would no longer be possible, nor would there be any chance to occupy the highs. In the diagram, you will notice how many players commit in error to the wrong side with desperation forcing them to get stuck. This goes against our principle rule (mentioned earlier!!), according to which we should first provoke into some action. One of the most beautiful blockading and restraint swings I have ever traded, I hope it has helped...thanks as usual for keeping the support coming with likes, comments and etc!
Education
by ridethepig
11
St. Louis Financial Stress IndexRecently the STLFSI retreated to its near-historical low levels. RSI is indicating a divergence that could indicate the index will head higher. Markets are also looking poised to resume their volatile trend to the downside after rallying this year. About the Index: The STLFSI measures the degree of financial stress in the markets and is constructed from 18 weekly data series: seven interest rate series, six yield spreads and five other indicators. Each of these variables captures some aspect of financial stress. Accordingly, as the level of financial stress in the economy changes, the data series are likely to move together. How to Interpret the Index: The average value of the index, which begins in late 1993, is designed to be zero. Thus, zero is viewed as representing normal financial market conditions. Values below zero suggest below-average financial market stress, while values above zero suggest above-average financial market stress
FRED:STLFSI2Education
by Trader6127
Exceptional speculation from mid April '18 onwardsUsing an updated chart of earlier posted opportunity around AUDUSD (AU) I like to highlight and illustrate the exceptional speculation that has been going on since mid April onwards. The first and many incidence of the same speculation has often seen coming in very sudden which indicates a single source instead of graduate forming of buying/selling pressure you see normally when larger long term trends are forming. Only news events cause such sudden incoming interest in the buying or selling of an asset when it's coming from a group, but then there have to be a profound reason for it been in the news and it always dies out within a few hours. Quite often we have seen USD buying surges since mid April not complying with any of these rules on top of that these volumes were sometimes hidden from public pools and planned very timely to exactly block a USD bearish cycle from bringing down the value of USD or a potential opposite interest such as London open. The latter is just too silly to observe, suddenly on Tuesday morning Asia timezone when there are normally low volumes until one hour before London open, there would be a ridiculous sudden surge of GU and EU selling at a time it was never seen before. There is simply also no reasonable explanation for anybody selling GU and EU at that time other to stopping GBP and EUR from being appreciated. Nobody says a word and nobody writes about it since that I have noticed these out of place events. There are some economists speaking in youtube videos but searching for manipulation of USD returns litle results on Google and first few entries are about China manipulating their currency and Google's very nice suggestion list doesn't show a single entry when typing it out into the search field. Well, everybody knows that every single central bank is doing it, all of them. They call it market operations and it published on their websites. Look at the implementation notes published by the FED May this year or read on about RBA market operations published clear in public, just to name two examples but all central banks list it as normal operational tasks as part of their portfolio of services. Yet search seems to return limited results, making everyone believe very few people are interested in this business. Something so important as a ring-network of almighty controllers manipulating the financial market on a daily basis and nobody would be interested. That doesn't glue very well with me, censored it is, big time, for only one reason, this network of market operators have a lot to hide. More than they trying to let the everyone believe with their website publications. The dangers are that like this year the speculators are all making to believe the sudden interest is genuine, just to grow a large group of supporters because the FED know it can't beat macroeconomic cycles. At one the these will overpower the built up speculative forces against the macros over 6 months and that contr force will be stronger than ever seen on the market and speculators will realise that at one point in time and start selling on top of the macro selling pressure. That combined could give us the strongest ever seen sling back down from high up reaching far below it normally would go, the so called overshoot could reach the opposite side of the market at USDJPY 67...
Education
by Deep-Peat-Shark
Prediction of the S&P500 and NIkkei based on financials and CPIIn the following content i will explain how you can forecast the market with CPI (inflation) and Financials: If we look at our figure we can say a few things, i will assume them below: 1. ABN AMRO (a dutch Financial) is highly correlated to the NIKKEI225 index. 2. Since nearly May 2016 we can see that the CPI (inflation)-chart has change 5 times. If we look at the Nikkei225 index we can see a few things: when the inflation in the US rose, the Nikkei225 fell 4 out 5 ( a chance of 90% or mathematical: a chance of 0.900). Using maths we know that ABN AMRO has an statistic correlation of 0.70 < r < 0.90 (70% - 90%) to the Nikkei225. Conclusion: The fInancials are following the NIkkei225, and in turn the Nikkei is following the US CPI (inflation) in a divergence/opposite movement. 3. We can use the inflaton from the US as a staircase for the movement in the S&P500 (on this moment a consolidating market) Sources: Bloomberg Markets, ING Technical Analyses NOTE: I don't make any predictions, making decisions based on my reports is at you'r own risk!
INDEX:NKYEducation
by tmp_cox