What You Need To Know; Bitcoin Trading Pre Fed MeetingHey Traders,
So tomorrow comes the FOMC meeting regarding US interest rates.
Now is the time to study Entry/Exit zones so you get things right with a long term structure.
Watch for more.
Fed
US100 awaiting POWEL speechThe calm before the storm
Meanwhile, the market is waiting for what the heck he's going to say, a gold spot for trading has been created.
No matter what Powell states, the price will move in one direction or another.
Enjoy trading safely.
Use always SL
Don't bet more than 1% of your balance.
Your money is finite, but the chances of making millions are Billions.
Note: the trades are triggered once the price crosses the channel boundaries, thru pending orders.
This is not a financial adv!
XAUUSD Potential Forecast | 21st March 2023Fundamental Backdrop
1. Plenty of instability in the market due to the SVB crisis and other banks being heavily affected by it.
2. GOLD, as a safe haven asset, flew to the highs to 2000 and is currently rejecting.
3. This is fuelled by the instability with the USD.
Technical Confluences
1. Price could potentially retrace back to the H4 support level at 1959.24 before heading back up.
2. Price went parabolic to the 2000 regions.
3. Bullish pressure is still intact and will be looking for longs.
Idea
Looking for price to break new highs beyond 2065 and this is just the beginning.
NOT FINANCIAL ADVICE DISCLAIMER
The trading related ideas posted by OlympusLabs are for educational and informational purposes only and should not be considered as financial advice. Trading in financial markets involves a high degree of risk, and individuals should carefully consider their investment objectives, financial situation, and risk tolerance before making any trading decisions based on our ideas.
We are not a licensed financial advisor or professional, and the information we are providing is based on our personal experience and research. We make no guarantees or promises regarding the accuracy, completeness, or reliability of the information provided, and users should do their own research and analysis before making any trades.
Users should be aware that trading involves significant risk, and there is no guarantee of profit. Any trading strategy may result in losses, and individuals should be prepared to accept those risks.
OlympusLabs and its affiliates are not responsible for any losses or damages that may result from the use of our trading related ideas or the information provided on our platform. Users should seek the advice of a licensed financial advisor or professional if they have any doubts or concerns about their investment strategies.
No trades on EURUSD As we already mentioned, tomorrow is the most important news at the moment and before that, often there are no clear movements.
Therefore, we prefer to wait, before looking for new entries.
Upon passing above previous top, an important resistance is 1,0840.
In case of larger fluctuations there is chance to be reached during the news and to see pullback from that level.
USD Hangs in the Balance: Bank Chaos vs. Inflation The US Federal Reserve is about to begin its two-day policy meeting and will announce its latest interest rate decision 48 hours later. During the meeting, officials will weigh the possibility of raising interest rates due to inflation, which is still considered high, or whether the current turmoil in financial markets should be given more weight. Unfortunately, the pre-meeting blackout period prohibits officials from commenting on the situation.
UBS shares, which had dropped over 14%, managed to recover by closing 1.2% higher after the bank provided a 3 billion Swiss franc ($3.2 billion) emergency rescue package for its troubled domestic rival, Credit Suisse. The large size of Credit Suisse's balance sheet, which stands at around 530 billion Swiss francs as of the end of 2022, is a concern for the global banking system, as it is twice the size of Lehman Brothers' when it collapsed in 2008.
The Federal Reserve, in response to the Credit Suisse crisis and the failures of a few US regional banks, has begun offering daily currency swaps to central banks in Canada, Britain, Japan, Switzerland, and the euro zone in order to ease funding stress in global markets.
With all this going on, traders are uncertain whether the Federal Reserve will raise its benchmark policy rate on Wednesday (US time). The dollar index fell below 103.5 on Monday for the third session in a row as investors anticipate that the Federal Reserve might not increase rates as much as previously expected due to the banking crises.
Fed funds futures reflect a 70% probability of a quarter-percentage point rate hike, with a 30% chance of no change. A significant drop in near-term inflation expectations is also contributing to the expectation of the Fed pausing its rate hikes, as expectation for the near-term inflation reached nearly a two-year low last month.
In other news, oil prices declined to their lowest point in 15 months on Monday due to concerns that the risks in the global banking sector may lead to a recession. Gold prices, which had surged 6.4% in the previous week, fell to $1,980 an ounce on Monday but remained close to the one-year high of $2,009 hit earlier in the session.
EUR/USD Advances Beyond 1.0700 As Investors Await FOMC VerdictThe EUR/USD pair gained ground at the start of a new week, climbing above 1.0700 as investors are betting on higher odds the Federal Reserve will raise rates at a slower pace on Wednesday.
At the time of writing, the EUR/USD pair is trading at 1.0723, 0.6% above its opening price, after hitting a daily high of 1.0730 and a low of 1.0632.
The financial crisis, triggered by the downfall of several U.S. banks, has lifted expectations global central bankers will take a step back in their tightening cycles.
On Sunday, the Federal Reserve announced a joint-collaboration plan with the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, and the Swiss National Bank to improve liquidity provision via the standing U.S. dollar liquidity swap line arrangements. The move came after Swiss authorities intervened to have UBS buy Credit Suisse to prevent a disorderly bankruptcy of the latter.
U.S. Treasury yields have recovered after falling sharply earlier on the day, with the 10-year note yielding 3.498% and the 2-year note rate at 3.974%. Meanwhile, Wall Street main indexes are trading in the green, reflecting the improvement in sentiment.
Ahead of the FOMC verdict on monetary policy on Wednesday, the bets of a non-hike decision increased somewhat. Still, according to WIRP, investors continue to bet on higher possibilities of a 25 bps raise on Wednesday.
From a technical perspective, the EUR/USD pair's short-term outlook has turned positive according to indicators on the daily chart, while the price continues to print higher highs above its main moving averages.
On the upside, short-term resistance levels are seen at the 1.0760 zone and the 1.0800 psychological level. On the flip side, support levels line up at the 20- and 100-day SMAs, currently at 1.0625 and 1.0575, respectively.
FED Printer Hello Friends,
The FED printer has been turned on? Check what happened in the past when we got close to my MA lines.
Most probably we are going to see on the next FOMC meeting,21/22 March 2023, a 0 or 25bps rate hike.
Let's see how this develops.
cheers,
Kripti.
BTCUSD will probably correct today, till the FED report on WedBTCUSD's trend on the shorter time frames is getting weaker (bearish divergence), which is OK. On the bigger timeframes, this is the 1st elliot wave of another group of waves. And based on the fibonacci retracement tool, it looks like a retracement to 26.6 is HEALTHY.
I personally will not purchase my bitcoins now, I will wait till around the FED report to get a better look on the markets.
I am posting a longer video tomorrow commenting on the expectations from the FED interest rates report/meeting. Make sure to follow me now, and check-in for this video (maybe I will make a stream too for Q&A).
BTC/USDT, the Fed, and what's next?#Omicronits
The famous quote by Ch. Munger, "The big money is not in the buying and selling, but in the waiting," is highly relevant to the current market conditions. As an investor, patience is crucial, especially during times of turbulence and volatility.
The recent instability in the banking sector has caused a ripple effect in the crypto market. The market's belief in the approaching end of the high-interest-rate policy and the beginning of quantitative easing has led to higher volatility in crypto assets. However, predicting future economic behavior is not straightforward, and it's essential to consider multiple variables.
The Federal Reserve's recent actions aimed to maintain the stability of the banking system, not to fuel the economy. Despite slowing inflation, the Fed continues its restrictive monetary policy and has even temporarily implemented a form of quantitative tightening to pull capital from the market. As an investor, it's essential to keep these factors in mind and not assume that the current hyper-optimism in the crypto market is based on solid ground.
Looking at the BTC/USDT chart, the current value of 28,000 seems too high, and a deeper correction may be necessary. As an investor, it's crucial to have a plan and set realistic sell-stop orders. In this case, setting a sell-stop pending order at the level of 25,750 BTC/USDT is advisable. If the market goes up during or after Powell's appearance on March 22 and hits 30,000 USDT, moving the pending order to 27,000 BTC/USDT may be a prudent move. However, if there is a consistent breakout above 30,000, it's better to wait for further developments and not take any immediate action.
In conclusion, as an investor, it's essential to maintain a patient and cautious approach in the current market conditions. Following the wise words of Ch. Munger, it's not about buying and selling, but about waiting for the right opportunity to make a sound investment decision.
Important week for EURUSDLast week ECB announced the Interest rate, now is FED's turn.
A new increase up to 5% is expected and this is the most important news at the moment.
Often before such news the direction is unclear and we see misleading movements.
In such a case, it is advisable to wait for confirmation and passage of the news before entering into trades.
The more likely direction remains for strong USD and we will be looking for grounds and entry opportunities.
DXY Potential Forecast | 10th March 2023Fundamental Backdrop
1. USD continues to face uncertainty and volatility due to the SVB crisis.
2. All eyes will be on the FOMC meeting and the Fed Fund Rate.
3. More dovish on the USD will lead to EURUSD heading higher.
4. Fed might be restricted to hike rates by 50bps due to the instability of the banking industry in the US.
Technical Confluences
1. Price rejected off the resistance at 105.3.
2. Price can potentially come lower to reach support level at 102.65.
3. Given the uncertainty and fear, DXY has reason to continue heading down.
Idea
DXY can tap into the support area at 102.65.
NOT FINANCIAL ADVICE DISCLAIMER
The trading related ideas posted by OlympusLabs are for educational and informational purposes only and should not be considered as financial advice. Trading in financial markets involves a high degree of risk, and individuals should carefully consider their investment objectives, financial situation, and risk tolerance before making any trading decisions based on our ideas.
We are not a licensed financial advisor or professional, and the information we are providing is based on our personal experience and research. We make no guarantees or promises regarding the accuracy, completeness, or reliability of the information provided, and users should do their own research and analysis before making any trades.
Users should be aware that trading involves significant risk, and there is no guarantee of profit. Any trading strategy may result in losses, and individuals should be prepared to accept those risks.
OlympusLabs and its affiliates are not responsible for any losses or damages that may result from the use of our trading related ideas or the information provided on our platform. Users should seek the advice of a licensed financial advisor or professional if they have any doubts or concerns about their investment strategies.
Gold Shines amid Global Financial DistressCOMEX: Micro Gold Futures ( COMEX_MINI:MGC1! )
Gold prices surged Friday as a wave of banking crises shook global financial markets. Spot gold climbed 3.1% to $1,977.89 per ounce, its highest level since April 2022. Gold price is now within $100 of its all-time high of $2,074.88.
In the futures market, the nearby April contract of COMEX gold futures settled at $1,973.5, where the far-month June 2024 contract closed at $2,076.9.
The year-long Fed rate hikes cracked the US banking system. Within two weeks, we have witnessed the collapses of Silvergate Bank and Silicon Valley Bank in California and Signature Bank in New York. First Republic Bank, a mid-sized bank in California, received $30 billion emergency injection from 11 largest American banks, led by JP Morgan.
Interestingly, it was J.P. Morgan who organized a $30 million rescue plan to avert the collapse of Wall Street in 1907. That crisis led to the creation of Federal Reserve System.
A century later, the cost of bank bailout increases by 1,000 folds. However, bank runs have already spread. Credit Suisse, a prestigious investment bank, is under distress. On Sunday evening, fellow Swiss bank UBS announced that it is acquiring Credit Suisse.
Gold Price Rises in Times of Major Crises
In the past two decades, gold price peaked in times of market turbulence.
• The 2008 financial crisis
• The 2010 European debt crisis
• The 2018-19 US-China trade conflict
• The outbreak of COVID pandemic
• The Russia-Ukraine conflict
• The March 2023 bank run
Gold price is also negatively correlated with the US dollar. Last year, when Dollar rose on the back of Fed tightening, gold took a beating. Now, as investors expect the Fed to slow rate hikes, gold shines through the chaos.
Investing in Gold: what in there for you?
• Diversification: Gold helps reduce the overall risk of your portfolio by providing a hedge against inflation and currency devaluation
• Tax efficiency: Long-term capital gains on gold investments are taxed at a maximum rate of 28%, which is lower than 37% for other long-term capital gains
• Protection against rising prices: Gold has historically been a good hedge against inflation, and it can help protect your purchasing power
• Liquidity: Gold ETFs and Gold Futures are highly liquid financial instruments. Many brokers also buy and sell gold bars and gold coins, with a commission.
• Hedge against difficult economic conditions: Gold is a global store of value, and it can provide financial cover during geopolitical and economic uncertainty
• Portfolio diversifier: Gold can act as a hedge against inflation and deflation alike, as well as a good portfolio diversifier
In a previous writing, I showed that gold did not work well as a hedge against inflation.
However, gold holds up extremely well during major crises where other assets lost value.
Hedging against Known and Unknown Risks
Risk on, gold goes up. Risk off, gold declines. Some risks are expected, while others come as a surprise.
Fed rate actions are scheduled events and can be considered known or expected risk. CME FedWatch Tool shows the likelihood that the Fed will change the Federal target rate at upcoming FOMC meetings. It analyzes the probabilities of changes to the Fed rate and U.S. monetary policy, as implied by 30-Day Fed Funds futures pricing data.
As of March 19th, FedWatch estimates a 38% chance of Fed keeping the current rate unchanged at 450-475 bp, and 62% odds of increasing 25 bp to 475-500 bp.
By providing $300 billion in emergency lending to member banks, the Fed has effectively put Quantitative Easing at work. In my opinion, the Fed has switched its priority from fighting inflation to crisis management. Managing the systemic risk in the US banking system outweighs the battle against inflation at this time. It’s a matter of priority.
What’s unknown is the potential failure of any bank not yet exposed in the news. US banks are estimated to sit on unrealized loss in hundreds of billions of dollars in their bond portfolio, largely consisted of Treasury and US agency bonds. As the “held-to-maturity” asset will be sold or marked down, these banks could run into trouble by a run of depositors and investors. In this unusual time, no news is good news.
Short-term Trading Strategies
The upcoming FOMC meeting on March 22nd make a compelling reason for event-driven trades on Micro Gold Futures.
Here is my logic:
• If the Fed keeps the rate unchanged, stock market would rally. As a major risk is removed from the financial system, gold price would fall
• If the Fed raises 25 bps, stock market would fall, and gold price would rally, potentially breaking the current record high
Micro Gold Futures (MGC) contract has a notional value of 10 troy ounces. At $1,993.4, an April 2023 contract (MGCJ3) is valued at $19,934. Initiating a long or short position requires a margin of $800. This is approximately 4% of contract notional value.
If gold price moves up to $2,050, a long futures position would gain $566. Relative to the initial margin, this would equate to a return of +70.8%, excluding commissions.
If gold price moves down to $1,900, a short futures position would gain $934, a theoretical return of +116.8%.
Unexpected market event could be a trigger for gold price to rally. An event-driven trade idea could be constructed around it. In my opinion, comparing to the distress of regional banks, the systematic risks triggered by a Big Bank failure could send global market in shock at ten times the magnitude. If the Fed raises rate next week, I expect more bank failures to coming in the next few months.
Happy Trading.
Disclaimers
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
CME Real-time Market Data help identify trading set-ups and express my market views. 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
EURUSD Potential Forecast | 20th March 2023Fundamental Backdrop
1. ECB most recently hiked rates by 50bps.
2. USD continues to face uncertainty and volatility due to the SVB crisis.
3. All eyes will be on the FOMC meeting and the Fed Fund Rate.
4. More dovish on the USD will lead to EURUSD heading higher.
Technical Confluences
1. Support level at 1.0519 where price rejected off.
2. Price can potentially come up to tap into the resistance level on the H4 at 1.0794.
3. Price action continues to be very choppy.
Idea
EURUSD have further potential for bulls and I am anticipating for price to continue heading up.
NOT FINANCIAL ADVICE DISCLAIMER
The trading related ideas posted by OlympusLabs are for educational and informational purposes only and should not be considered as financial advice. Trading in financial markets involves a high degree of risk, and individuals should carefully consider their investment objectives, financial situation, and risk tolerance before making any trading decisions based on our ideas.
We are not a licensed financial advisor or professional, and the information we are providing is based on our personal experience and research. We make no guarantees or promises regarding the accuracy, completeness, or reliability of the information provided, and users should do their own research and analysis before making any trades.
Users should be aware that trading involves significant risk, and there is no guarantee of profit. Any trading strategy may result in losses, and individuals should be prepared to accept those risks.
OlympusLabs and its affiliates are not responsible for any losses or damages that may result from the use of our trading related ideas or the information provided on our platform. Users should seek the advice of a licensed financial advisor or professional if they have any doubts or concerns about their investment strategies.
CRYPTO MARKET UPDATE! WHAT TO EXPECT THIS WEEK?Hi Snipers,
Please refer to the recording for the next price levels and scenarios.
Thanks
MS
$BTC $170K by Halloween 2023, believe it. If the same technicals of growth, volatility, and previous lows and highs math estimates are correct, then as strange as it may sound, Bitcoin is 23% likely to reach $170,000 by Oct 31st 2023.
Not to mention the fertile environment for Bitcoin given;
1. The recent turmoil in the regional banking world and the lack of trust of the banking system being reinforced.
2. The decline of BTC in 2022 was arguably related to the massive interest rate hikes by the Fed, and they (The FED) are now likely to stop raising rates due to #1.
3. The correlation btwn Gold and Bitcoin has re-emerged in recent weeks
Is this VIX Bull Flag indicating more bank wreckage to come?Just asking for my investing friends ;-)
Cuz' this bullish fear pattern seems to indicate something more is coming.
Stew
The FED HAS already pivoted! Who cares what the FED does next?Apologies for the click-baity title, but I did want to get your attention to make (once again) my point that inflation is ON now and that the FED has actually pivoted while many are watching and don't see it that way. Let me explain.
Back when the FED started raising rates rapidly I grew worried that at this unprecedented pace of rate hikes, something would break. I stated this all along through each of my post. Foolish people and businesses simply do not have the acumen to hedge against the rapidity of dried-up liquidity in the markets. I did not know the banks would become the first culprit exposed in their foolish investment endeavors. But here we are.
Banks are failing because of their own stupidity and guess who gets to pay for it once again? That's right, you and I do through the continued devaluation of our U.S. dollar.
"But the dollar's getting stronger", you emphatically retort.
Yes. It was. As the FED moved to increase rates in a reactionary manner, as they always are, the dollar did gain strength and is currently fairly strong, relatively speaking. However, things will soon change and many do not even know it as they are focused on the wrong indicator, FED rate hike action and future interest rates. While this is certainly still important, it does not tell the whole story.
As you know, I have been calling for a pause or pivot from the FED soon. That pivot has already come. "How so?", you asked. The FED has not articulated strong indicative language regarding a pause or pivot. That's true. But while the banks were failing, the FED did begin to guarantee depositors their money due to 'systemic risks'. I've heard this before (think 2008 and the BIG 3).
In guaranteeing depositors their funds, the FED mushroomed its balance sheet by roughly $300 billion dollars last week alone! And this may just be the beginning! Incredible.
This is the pivot that I was looking for from the FED. So, while everyone else continues to focus on what the FED will do next in terms of interest rates, savvy investors have already spotted the change and recognize that it's now inflation ON!
This subtle (or not so subtle, pending perspective) change in direction correlates with three important thesis points that I have been making all along:
That something will break
That the FED will pause/pivot
That we will see a blowoff top in the US stock market
It also aligns with current technicals.
As you can observe from the chart above, price action has retested our macro-downtrend line precisely as anticipated, has bounced from there as anticipated, and is currently trending up as anticipated.
I do believe this is the beginning of our blowoff top with a price target of US500 to be at or around $5,500 to $6k by early to late fall. Maybe early winter. Timing is difficult.
Best to you all,
Stew
GBPUSD Potential Forecast | 17th March 2023Fundamental Backdrop
1. Inflation in GBP continues to be heightened.
2. A lot of instability in the US due to the Silicon Valley Bank crisis triggering a chain reaction to many other banks involved.
Technical Confluences
1. Price has broken the uptrend as seen by the trendline.
2. Price can potentially retrace back to the trendline or the H4 support level at 1.1961 before heading up.
3. Structure has been broken to the upside.
4. Price is resting well above the ichimoku cloud.
Idea
GBPUSD can create a new higher high on the larger timeframe and given the instability surrounding the USD, GBPUSD have potential to continue heading up.
NOT FINANCIAL ADVICE DISCLAIMER
The trading related ideas posted by OlympusLabs are for educational and informational purposes only and should not be considered as financial advice. Trading in financial markets involves a high degree of risk, and individuals should carefully consider their investment objectives, financial situation, and risk tolerance before making any trading decisions based on our ideas.
We are not a licensed financial advisor or professional, and the information we are providing is based on our personal experience and research. We make no guarantees or promises regarding the accuracy, completeness, or reliability of the information provided, and users should do their own research and analysis before making any trades.
Users should be aware that trading involves significant risk, and there is no guarantee of profit. Any trading strategy may result in losses, and individuals should be prepared to accept those risks.
OlympusLabs and its affiliates are not responsible for any losses or damages that may result from the use of our trading related ideas or the information provided on our platform. Users should seek the advice of a licensed financial advisor or professional if they have any doubts or concerns about their investment strategies.
The SVB Collapse and Why It Matters To YouInteresting situation with the collapse of SVB (SIVB), the people have yet to realize we control the market not the central planners. and the collapse of SVB is a realization of that power. So , here is what i know from the very little articles and podcasts that I listen to and I will give you guys the why its important.
From what i know is that SVB business model was somewhat risky in the first place, and their main consumer base was startups, and tech startups. hence the name Silicon Valley portion of Silicon Valley Bank.
Now a little money education... in the world of money and currency (remember currency as current it will become important later) there is a concept called the velocity of money, basically the volatility of money. for my stock traders think the VIX. when the VIX is low there is no money to be made because money is not moving. but when the VIX is high there is plenty of money going around so why not use your dollars as napkins, right or "fun coupons"! this is the velocity of money the faster a person can make money move the more money they stand to make. the banks know this. So when you go to the bank and deposit your check your money is already out the door into something else before you're able to but your wallet in your bag or pocket. this happens because of what is called as the "fractional reserve system" and to be honest its a "F"ed up idea but has worked thus far. what this system means for every dollar you put into the bank, the bank can lend out 10$.
A bank is a business it makes its profits by lending money, and when you save your money it cost the bank money, because of your .01% interest rate. the reason for the big push for open accounts is because the more open accounts the bank has means the more money they have liquid, which means the more they can loan out, which means the more they stand to profit. now as an insurance policy the US government makes the banks keep a fraction of their total account balances on site incase of what they call a "bank run" happens (get to what a bank run is later)
Now, normally you dont notice this or even care because when you go to the bank and want to pull 100$ from your account its no big deal whats a 100$ when your dealing with 100s of thousands. you want a 100$ you get 100$ instantly.
But want to see the system become a problem for you, if you have more than lets say 25,000$ or more in an account go try to pull ALL that money out and see what type of road blocks you encounter. they will make you give ID, reasons for shutting down the account, basically your first born child and your blood type. partly is because they really want to know why you're closing the account, because thats profits walking out the door.
but the main reason is, they have to reach out to sister branches and other banks to pool that money together to be able to give it to you and this typically happens like over night. so if you think you're about to waltz into your local bank and demand a 25,000$ check right then and there you're sadly mistaken. the same exact process happens when you take out a mortgage, now your talking $200K and up so now there are more road blocks. whether you're the buyer or the seller. you sell your house for 500K and you think that check you deposited is there right when you get it... yeah its not!
back to the currency comment money is now a currency it has to keep moving to keep its value. think of it as a river, mostly you can drink water from a river and be okay because bacteria cannot grow in moving water but drink water out of a pond and you just might catch Syphilis (sarcasm intended). money is the same way, the faster you can make it move the more you stand to make and the healthier the money is, if take money out of the river and stick it in your pond as a savings account inflation will eat it alive making it very unhealthy. Even historically before all this crazy inflation started happening the savings rate in a savings account was like 0.01% and inflation was around 2 percent.
Now the importance of this lays with the SVB. When looking at their business model it seems solid... "invest in high beta companies, or higher risk endeavors, then to off set this risk we will load up on the safest paper assets money can buy... the US 10Y bond." Officially the US hasn't defaulted on loans before... i mean we will print more money before we default. I mean it sounds like counterfeiting if you ask me, but who am I just a low key, low level, low volume trader with a computer living in my moms basement :) sarcasm... or is it?!
Well from the looks of it it would seem SVB bought a ton of these 10Y bonds in 2021 when the economy was ripping and roaring. So, when bond yields are down their prices are way up. So in the full swing of the "roaring 20's" yields were around 1.12X or keeping it simpler 1.1XX. so that must mean the value must of been sky high. My only rational thought for this type of purchase was the risk manager must of thought he could off load the bonds in the bond market for a nice profit thinking good times were going to continue. On the surface it seems okay high risk business model with a low risk counter weight.
But "We the People" were leaving SVB, and going back to what i said about taking your 25,000$ savings out, and they were running out of reserves and their bonds were worth less than the paper they were "printed" on, so they filed a loss on their report. on the surface this was fine, because only die hards read a companies 10Q or 8A but all it takes is one... and there is always that one Guy... and not this Regular Guy either. I personally dont like the instability of the tech industry. i mean i do believe we will make a full blown terminator but i dont want to gamble on which company that is regardless of what the gain is... might as well go gamble in my opinion.
So, because there was a mass exodus of accounts they were having a hard time fill orders so file your 8A detailing you're offering more stocks to drum up some money and it falls flat. people read said 8A and see that you dont have cash so the word got out and the consumers made a bank run. Dont get it twisted either this can happen to any commercial bank JP Morgan, BofA, Chase, Citi, Credit Suisse and the like.
a bank run is when the majority of depositors want their money back now and they do it in close succession of each other forcing the bank to say "we dont have your money" so they in essence "run" to the "bank" to get their worthless paper.
Now, what i just learned is back in '08 our amazing government passed legislation basically stating they will no longer bail out banks. (honestly if you guys know the piece of legislation please post it in the comments) I agree with this legislation because when I lost 15k on a bad USDCHF trade 7-8 years ago the government didnt bail me out. that was all my money... just gone in a matter of seconds. So the US government came out and said " we will make sure all depositors will get their monies back...
How?
step in Bail-Ins
And again a bail in is something i literally just learned about... i swear at this point were just making -ish up at this point... ok so we know what a bail out is... basically the US government funnels all this cash into a failing business(s) and the tax payer picks up the tab. so what is a bail-in?... glad you asked
a bail-in is when the depositors pick up the tab...
How?
well the FDIC picks up the first $250K and anything over that 250K is now funneled into bank to help offset the loss.
so if you have $500K in the bank the first $250K is yours... uncle sam gives it back via FDIC (which that money has been long gone spent, so i dont know where theyre going to pull money from to keep this facade of the FDIC up) and the next $250K is the banks... So congratulations you have just become a unwillingly silent partner of a failing bank. -ishy news is that the current administration is trying to give more power back to the IRS and bring it back to its glory days like it was in the 80's so you wont be able to claim those losses on your taxes, if you had a business friendly administration you might actually have a fighting chance.
i have a feeling the whole world is watching what is about to happen, because the entire banking system relies on high value accounts. if the US says tough luck that might send uneasy shock waves to all the high income earners and might make them want to pull their funds out of the banking system...
there is a very interesting article on Credit Suisse that i want to read
so ciao!
Dollar Index -16/03/2023-• Today I am discussing the long term trend for the USD
• I went back in history (2014) to give you a quick study on the US Dollar's behavior throughout the years
• Back in 2014, the Dollar index rallied from the 80s level to the 100-105 as you can see the sharp up trend
• After that, correction started and bottomed as soon as we touched the 50% retracement level
• We then traded sideways between the peak and the 50-61.8% retracement level for few years
• In July 2021, the rally resumed and broke the previous swing highs and surged to levels around 115 ( same rally as the one back in 2014-2015 )
• The greenback reached the top in October 2022 and retraced back to the 50% level.
• If the history were to repeat itself, we will be trading somewhere between the recent swing high and the 50-61.8% retracement level before breaking up again.
• The other scenario is breaking down below the highlighted support area which is very critical in this scenario and going back to lower levels ( below 100 )
• Given all the uncertainties in the market currently, the bullish scenario is more favorable, given the safe haven attribute the US Dollar has, and this doesn't seem to change in the near term.
EUR/USD -16/03/2023-• Technical picture in favor of the bears
• 2 bearish patterns on daily chart
• First pattern is the broadening pattern highlighted in yellow
• Second pattern is head and shoulders highlighted in green
• 1.0500 support is very critical at the moment ( neckline of head and shoulders and previous pivot low )
• Yesterday's drop penetrated the 20 MA which is now acting as resistance
• Bulls need to overcome 1.0730 resistance to turn the trend in their favors
How FED / ECB Interest rates set trendsWatch how interest rates decisions set trends in EURUSD and Dollar Index impacting the entire forex market.
I marked all the previous interest hike decisions by FED and ECB.
2023 EURUSD bullish reversal was triggerred by ECB starting to raise iterest rates (after EUR hit the alarming 1.00 level). EUR might continue bullish until next tow hikes. From what I read ECB does not plan to hike rates for the rest of the year after May meeting (rates will stay at 4), so it is likely to trigger bearish reversal from May.
Likelwise, 2020 EUR bullish ride (and dollar weakness) was triggerred by FED lowering interest rates (in March 2020) after COVID hit.
FOR EDUCATIONAL PURPOSES ONLY.
Good luck in your trading! God bless!
XAUEUR breaking the up trend channel for more upside push!At the beginning of the year OANDA:XAUEUR broke the down side channel. While banks are bankrupting, we see once again gold is the safe heaven for many people. Most importantly for the central banks which have been accumulating physical gold. FED and ECB will struggle to further increase the interest rates. We may see new ATH within a couple of months! Crazy times again.
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