Federalreserve
THE KOG REPORT - FOMCTHE KOG REPORT – FOMC
This is our view for FOMC, please do your own research and analysis to make an informed decision on the markets. It is not recommended you try to trade the event if you have less than 6 months trading experience and have a trusted risk strategy in place. The markets are extremely volatile, and these events can cause aggressive swings in price.
We’re expecting some volatility this Session with the pending FOMC statement so for this report we’ll again look at the extreme levels. We’ve done well already this week, no need to risk anything trying to capture tops and bottoms, so keep an eye on the levels but remember, the trade comes after the event.
The move started early in the week with the price hitting our resistance level and then making the move we wanted completing our first target. This has however left the completion of the move on the table, so we’ll stick with Sundays KOG Report idea for now, but expect a move to the upside potentially into that 2602-5 region and above that 2610! It’s 2610 as the extension that needs to reject the price in order for it make that move downside, as breaking above that will take us further into the 2625-30 region before any breather.
So, as the chart shows, if we get 2602-5 and reject, we could see price move downside to clear the liquidity sitting first at 2550-55 and below that 2525-30.
2525-35 if visited, we feel would represent an opportunity to capture the swing low and then attempt to target that 2550-55 region as the first target.
We’re going to play it safe this time and say if it works it works, if it doesn’t, it doesn’t. If you followed us this week, again we’ve done what we needed to for the week, everything else here is a bonus and should be treated with minimal risk on the markets, until they have settled.
Please do support us by hitting the like button, leaving a comment, and giving us a follow. We’ve been doing this for a long time now providing traders with in-depth free analysis on Gold, so your likes and comments are very much appreciated.
As always, trade safe.
KOG
Pre FOMC Rates Decision Analysis18th September
DXY: Consolidate around 100.90, (if 50bps cut) needs to break 100.60 to trade down to 100 round number support. (if 25bps cut) bounce from 100.60 to bearish trendline
NZDUSD: Buy 0.6220 SL 25 TP 75 (DXY weakness)
AUDUSD: Buy 0.6780 SL 20 TP 70 (DXY weakness)
GBPUSD: Look for test and reject of resistance area, Sell 1.32 SL 30 TP 80 (DXY strength)
EURUSD: Buy 1.1150 SL 25 TP 50 OR Sell 1.1110 SL 20 TP 50 (Straddle)
USDJPY: Buy 142.80 SL 50 TP 150 (DXY strength)
USDCHF: Sell 0.8420 SL 30 TP 45 (DXY weakness)
USDCAD: Sell 1.3560 SL 30 TP 60 (DXY weakness)
Gold: Could range between 2570 and 2590, Looking for a test of 2600 and possible correction lower
Rate Cut Incoming. Buckle Up"What the Yield Curve and Fed Moves Mean for Your Next Trade."
Historically, when the Federal Reserve lowers the federal funds rate while the yield spread is negative (also known as an inverted yield curve), it has often been an indicator of an impending market correction or recession.
Let’s break this down:
Historically, the bond market is a key indicator. Typically, long-term bonds offer higher yields than short-term bonds; This a healthy sign. When that flips and short-term yields surpass long-term ones, we get what’s called an inverted yield curve. This inversion signals that investors are getting nervous about the near-term economy. When the Fed then steps in to lower rates, they’re trying to stimulate growth, but it often comes too late.
Looking back at past events:
The dot-com crash of 2000: The yield curve inverted, the Fed cut rates, and a 35% market correction followed.
The 2008 financial crisis: Again, the yield curve inverted, rates were cut, and the market saw a major downturn exceeding 50%.
Going back even further, the same pattern held in the 1970s and 1980s.
The big questions are:
Why does this combination signal trouble?
Will this pattern repeat itself again?
While history tends to repeat itself, the data shows that when the Fed cuts rates with a negative yield spread, market corrections often follow. The inverted curve suggests tighter credit conditions, reduced lending, and lack of confidence, all piling on top of one another creating a recipe for disaster.
Stepping back even further, we see that investor sentiment and the bond market tend to lead the way. Credit tightens, and companies cut back on spending. Another a perfect recipe for an economic slowdown and market drop.
It's a familiar cycle. So lets buckle up.
Federal Reserve Interest Rate Decision!This Wednesday is the next Interest Rate decision by the Federal Reserve. This time last September the rate got raised to 5.5% & since then rates have not been lowered at all. Markets have been pricing in a rate cut down to 5.25% this week, for the first time in the past 1 year. If the Federal Reserve don't lower rates as expected, expect some serious market volatility!
What do you think the Fed will do? Cut rates or hold steady?
The Dollar Index Accelerates Its Decline!The dollar index has been losing strength recently, falling below the 100.50 level. Following the ECB's decision to cut interest rates, expectations for a rate cut by the Fed have also increased. According to money market pricing, there is a 51% probability that the Fed will cut interest rates by 25 basis points this week, and a 49% probability of a 50 basis point cut. This has pushed the dollar index below the 100.50 level.
Technically, if the index falls below the 100.45 level, the 100.30 and 100.00 levels can be considered support. However, if it recovers and moves above the 100.45 level, resistance can be observed at the 100.70 and 100.90 levels.
50-50 Odds for Big Rate Cut this Wednesday The Federal Reserve’s upcoming rate decision is teetering on a knife’s edge, with the odds of a significant cut climbing. According to the CME’s FedWatch tool, the chances of a 25 or 50-basis-point reduction are now evenly split at 50-50.
The decision from the cental bank comes in on Wednesday.
Former New York Fed President Bill Dudley, speaking last week, bolstered the case for a more aggressive move, stating the federal funds rate could be up to 200 basis points above neutral. Dudley argued there’s a “strong case” for the Fed to start big.
However, major banks are possibly leaning toward the Fed starting small. In a note, Bank of America’s analysts suggested “a small chance” of a 50bps cut, while UBS’s Brian Rose also acknowledged the possibility, though was not factoring it into his baseline.
GOLD: Buy, only a small retracement for current momentumWith the MACD having just crossed above the signal line on TVC:GOLD daily chart, there is little chance of the week starting off with any strong selling direction. I am holding and entering Buy positions.
I believe any meaningful retracement this week will be before Tuesday's Core Retail data and the market will look to position itself early in anticipation of major FED activity on Wednesday evening.
Support this week >=$2,530
Forecasted High of <$2,620
Trend to be more sensitive to ascending channel's mean that the support level indicated above.
I am very bullish this week.
Gold outlookPreviously Gold has made a new high in previous week now its all time high for the week is archived now in upcoming week gold can consolidate for the time being but as Feds rate cut is expected and gold can go for new high in upcoming week now as i am analyzing the pair we can expect a pull back to to its newly formed physiological support levels and can go further but as i said fed rate cut is expected gold can fly high and make new levels
Intel Corporation ($INTC) - Potential Squeeze After Rate CutIntel Corporation ( NASDAQ:INTC ) is setting up for an exciting squeeze potential following an anticipated rate cut. Here's why the technical landscape could be shaping up for a big move:
Fibonacci Support Holding Strong
The stock is currently holding well above the 0.786 Fibonacci retracement level, which is a critical area of support. Historically, holding this level is a strong indicator that a reversal could be imminent. A rate cut would provide a fundamental catalyst to accelerate a recovery from this level, as lower borrowing costs typically improve market sentiment, especially for large-cap tech stocks like Intel.
Worst-Case Scenario: Testing $13–$14 Support
While we are optimistic about the current setup, the worst-case scenario to watch for is a potential retest of the $13–$14 range. This level marks a significant historical support zone and, if touched, could provide a final flush-out of weak hands before the stock rebounds. Should this happen, it would likely signal a capitulation event, paving the way for long-term bulls to step back in at attractive prices.
Squeeze Potential and Rebound Targets
If Intel holds its current Fibonacci support, we could be setting up for a short squeeze driven by fresh liquidity entering the market post-rate cut. With technical and fundamental catalysts aligning, the stock has potential to rally toward the $40+ level over the medium term. This would mark a massive rebound, and a retest of previous highs would not be out of the question.
Key Levels to Watch
Immediate Support: 0.786 Fib level
Worst-Case Support: $13–$14
Upside Target: $40+
Fed’s Rate Decision to Set the Tone for Stocks, Gold and CryptoOfficials at the central bank are staying tight-lipped over the magnitude of the interest rate cut. What we know so far: there will be one. What we don’t know: is it going to be 25bps or 50bps?
Federal Reserve Chairman Jay Powell (or JPow if you’re a cool kid) is most likely having a hard time sleeping these days. Lurking in the near distance, September 18 to be precise, is a decision he should make that has the power to slosh trillions of dollars across global markets.
Stock valuations, crypto prices and the glow of gold all hinge on a single figure — the US interest rate ( USINTR ). Major central banks are on the move to unwind their restrictive monetary policies, especially when it comes to global interest rates . Investors have been trying to run ahead of the interest rate decision and position their portfolios to accommodate both a small casual trim to borrowing costs but also a bigger, juicier slash.
Clashing opinions over the size of the interest rate reduction have been swaying the financial markets in recent weeks. Fed officials haven’t sent out any comms regarding that question so markets do what they do best — speculate.
According to the FedWatch tool by CME Group, at the end of this week, investors were nearly even in their expectations for the upcoming interest rate cut with 55% calling for a 25bps (basis points) cut and 45% rooting for the fuller treatment of 50bps.
In any case, this would be the Federal Reserve’s first cut to borrowing costs in more than four years. The benchmark rate in the US is currently sitting at a 23-year high of 5.5% — a level that has stayed flat since July.
After a series of reports pointing to a wobbling economy — and on the back of mostly receding inflation — the central banking clique issued its uplifting guidance at their previous meeting, saying rates are about to go down when they meet again. But what they didn’t say — because they’re data dependent — is how much.
A 25bps cut to interest rates would most likely be already priced in across the spectrum. Stocks, the US dollar, gold and even cryptocurrency are now acting as if this level of rate cut is factored in. Moreover, some investors might even be disappointed to see a rate cut of that casual magnitude. Buy the rumor, sell the news, maybe?
A 50bps cut to interest rates could bring some needed fuel for the next leg up in stocks, gold and crypto. And, on the flip side, knock the dollar’s valuation.
Lower interest rates make money more affordable, enticing investors, businesses and consumers to get more cash out of the bank and spend more freely on big-ticket purchases. Obviously, investors shove the cash into various markets. Businesses expand operations and build new products. And consumers, well, they buy the new iPhone 16 and jam what's left in meme stocks ?
Perhaps even more importantly, lower interest rates help steer the economy, keeping it on an upward trajectory. Liquidity improves, because there’s more money flowing in the system, and valuations of public and private assets usually increase.
Take gold ( XAU/USD ), for example. Gold hit an all-time high Friday morning, pumping above $2,570 per ounce . Driving the gains was the relationship between gold and the prospects of lower rates, which make bullion more appealing because they reduce the opportunity cost of holding a non-yielding asset. At the same time, the US dollar loses some of its allure because the reduction in rates triggers a lower yield on dollar deposits.
Bitcoin ( BTC/USD ) is another interest -ing candidate to join the rate interplay. The OG token has been increasingly correlated to macroeconomic factors and the rate decision is already seen impacting its price in a positive way.
Stocks have been in choppy trading mode over the past couple of months largely due to the looming uncertainty about the looming rate-setting meeting.
So what do you think it’s going to be — 25bps or 50bps? And how would it affect financial markets? Shoot your thoughts below!
FOMC Showdown Poised to Ignite a Surge in Yield SpreadsWith inflation finally cooling and the Fed signaling rate cuts, it seems relief is on the horizon—until you look at the job market. As recession risks grow and Treasury yields falter, a steepening yield curve presents a compelling opportunity.
Positioning in the yield curve ahead of the FOMC meeting offers a more measured way to navigate the uncertainty.
COOLING CPI SIGNALS GREEN LIGHT FOR RATE CUTS
This week’s inflation report showed headline CPI cooling to 2.5%, the lowest since February 2021. With this release, inflation has finally fallen decisively below the stubborn 3% mark and is now just 0.5% above the Fed’s target range. PCE inflation reflects similar levels, likely giving the Fed the signal to start cutting rates.
JOB MARKET REPRESENTS MATERIAL RECESSION RISKS
Recent job market data suggests it may be too soon to declare a soft landing. The labor market is significantly weakening, and with household savings dwindling and credit delinquencies increasing, conditions may worsen before improving.
U.S. economic data from the past week indicates that the labor market is in a precarious situation. The August JOLTS report showed job openings dropping to their lowest since early 2021, reflecting decreased labor demand, while unemployment edged up slightly.
Additionally, the August jobs report revealed a modest gain of 142,000 non-farm jobs, falling short of expectations, with downward revision for July bringing those figures down to just 89,000.
As covered by Mint Finance previously a recession is likely to lead to a sharp steepening of the yield curve.
We covered average levels of the yield spread at the start of recessions in detail previously, but in summary with the current 10Y-2Y spreads at 15 basis points, there may be up to 85 basis points of further upside in the spread.
TREASURY YIELD PERFORMANCE
Despite a short recovery following the ominous jobs report on 2/August, Treasury yields have continued to decline. Unsurprisingly, short-dated treasuries have underperformed as 2Y yields are 27 basis points lower, while 30Y yields have only declined by 12 basis points and 10Y by 15 basis points.
Overlaying yield performance with economic releases, the largest impact on yields over the last few months has been from FOMC releases and non-farm payrolls while performance around CPI releases has been mixed. Potentially suggesting traders are more concerned about recession risk than moderating inflation.
OUTLOOK FOR SEPTEMBER FOMC MEETING
Source: CME FedWatch
FedWatch currently suggests that a 25 basis point rate cut is more likely in the upcoming FOMC meeting scheduled on September 17/18. However, probabilities of a 50 basis point rate cut are also relatively high at 43%.
Source: CME FedWatch
While the odds of a 25 basis point cut have remained in majority, the 50 basis point cut has been uncertain with probability shifting over the past week.
FOMC meetings have driven a rally in yield spreads over the past year.
With FOMC meeting slated for next week, it is interesting to note that performance in yield spread prior to meetings has been more compelling than performance post-FOMC meeting. Over the last 5 meetings, pre-FOMC meetings, the 10Y-2Y spread has increased by 4 basis points.
Performance is even more compelling in the 30Y-2Y spread which has increased by an average of 13 basis points.
AUCTION DEMAND FAVORS 10Y
Recent auction for 10Y treasuries indicated strong demand with a bid/cover ratio of 2.64, which is higher than the average over the last 10 auctions of 2.45. Contrastingly, the 30Y auction was less positive with a bid/cover ratio of 2.38, below the average of 2.42. 2Y auction was sharply weaker with a bid/cover of 2.65 compared to average of 2.94.
Auction uptake suggests higher demand for 10Y treasuries than 30Y treasuries and fading demand for near-term 2Y treasuries.
HYPOTHETICAL TRADE SETUP
Recent economic data has made an upcoming rate cut nearly certain. However, the size of the cut remains unclear. CME FedWatch currently indicates a 42% probability of a larger 50-basis-point cut, driven by the recent CPI report and weak jobs data.
With rising recession risks, the Fed might opt for a larger rate cut. However, if they choose a moderate 25-basis-point cut, market sentiment could stabilize. Historically, yield spreads around FOMC meetings suggest that positioning before the meetings tends to be more advantageous than after. This is especially relevant now, as moderating sentiment from a 25-basis-point cut could trigger a temporary reversal in yield spreads.
Considering the underperformance of the 10Y-2Y spread in September and increased auction demand for 10-year Treasuries, a long position in the 10Y-2Y spread may be the most favorable strategy for gaining exposure to the steepening yield curve.
Investors can express views on the yield curve using CME Yield Futures through a long position in 10Y yield futures and a short position in 2Y yield futures.
CME Yield Futures are quoted directly in yield with a 1 basis point change representing USD 10 in one lot of Yield Future contract. This makes spread calculations trivial with a 1 basis point change in spread representing PnL of USD 10.
The individual margin requirements for 2Y and 10Y Yield futures are USD 330 and USD 320, respectively. However, with CME’s 50% margin offset for the spread, the required margin drops to USD 325 as of September 13, making this trade even more compelling.
A hypothetical trade setup offering a reward to risk ratio of 1.46x is provided below:
Entry: 14.2 basis points
Target: 35 basis points
Stop Loss: 0 basis point
Profit at Target: USD 208 (20.8 basis points x 10)
Loss at Stop: USD 142 (14.2 basis points x 10)
Reward to Risk: 1.46x
MARKET DATA
CME Real-time Market Data helps identify trading set-ups and express market views better. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs tradingview.com/cme .
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PIMCO Warning on Fed's First Cut in 4 Years next week The only event that matters next week is the US Federal Reserve's interest rate decision, which could result in its first rate cut in over four years
PIMCO analysts, in a fresh note, outlined what could be in store for the U.S. dollar as the Fed embarks on its rate-cutting cycle. Historically, the dollar has shown a tendency to weaken, at least briefly, following the Fed’s initial rate cuts since the 1990s.
The Fed now faces a tight decision on whether to opt for a larger-than-expected half-point cut or stick with a quarter-point reduction.
An aggressive half-point move could raise concerns that the central bank is concerned about the economic outlook for the US, potentially prompting markets to price in further, more drastic rate cuts beyond the Fed's current trajectory.
Silver is Rising!With the weakening of the U.S. labor market, expectations for a 25 basis point rate cut by the Fed remain intact. In this context, U.S. 10-year Treasury yields have turned downward. The dollar's depreciation in yesterday's session led to a recovery in commodities, supporting a rebound in silver prices from the 27.75 level. The inflation data to be released today will provide further clues regarding the extent of the Fed's interest rate cuts.
From a technical perspective, if prices hold above the 28.90 resistance level, a rise to 30.0 and then to 30.80 could occur. On the downside, if the price falls below the 27.75 support level, it could decline to 26.75 and then to 25.70.
Watch out as U.S full time employment peaked in 2023 June.While the U.S. nonfarm payroll growth is still averaging 0.12% , just slightly below the average long term 0.14% growth in the past 12 months, the full time employment picture is somewhat grimmer.
The U.S. full time employment peaked in 2023 June, and since there is approximately 1.7 million less full time employee. Probably not a sign for a healthy labour market.
TLT + Rate CutsTLT bullish trend into 100 resistance with major Fed decisions coming in the next weeks/months. Has a gap to fill on the way to highest pt
Pts are 98.30, 98.70, and 100+
- Shifted narrative from inflation to labor market
- Data suggests Fed is very behind the curve
- Jackson Hole
- FOMC
Bitcoin's Eternal Wait for Rate Cuts ContinuesThe current market setup can be described as 'Waiting for Godot'. But in contrast to the Samuel Beckett play, markets are awaiting the Federal Reserve to finally start cutting interest rates. And hopefully, also unlike in the actual play, the wait will not be eternal.
Over the past week, market sentiment dropped even further. Jitters about the slowing US economy and rumours, later denied by the company, of a subpoena by the Department of Justice issued to AI stock darling Nvidia over antitrust matter led traditional markets downwards. Crypto markets quickly followed suit. Bitcoin has foreshadowed the slow slide downwards of the wider crypto market.
Ever since Bitcoin lost its parabolic momentum earlier in the year, it has trended down, first towards the $60k support. Once Bitcoin breached through the $60k level, and in the absence of any new positive momentum, we are now looking at the $50k price mark. Optimism right now is hard to come by for most traders.
The upcoming US jobs report for August has created further expectations of possible doom and gloom. Economists expect that the August jobs report will show that the labor market is cooling, but not dramatically. Consensus estimates are for a net gain of 160,000 jobs, which would be an increase over July’s estimated 114,000 gain according to FactSet estimates.
The outcome of the August jobs report will be an important driver for the extent to which the Federal Reserve will cut rates. The decision is both critical and difficult. Cut rates too much and markets could start raising inflation expectations. Do not cut them enough and the economy could weaken further as businesses reel from high rates on their debt. Whatever they do, the impact of lower rates will take time to show effects. In the meantime, markets can continue to struggle.
A final unknown variable in this setup are the upcoming US elections. It is likely that weaker economic performance will hurt the chances of the incumbent administration. Crypto markets clearly favour a Trump presidency due to his recently discovered pro-crypto stance. Not even the best analysts can predict the full extent of the the 2nd and 3rd order impacts of a weakening economy, possible rate cuts and a US election that is on knife's edge. Markets hate uncertainty. Unfortunately there seems to be plenty more of it to come before traders can finally start to look upwards once more.
$USINTR / US Federal Reserve Interest Rate 2024-2025US Federal Reserve Interest Rate 2024-2025
And here’s the chart of the interest rate. ECONOMICS:USINTR
I’ll just take a wild guess! Don’t judge me too harshly, but they might keep the rate steady, with a potential cut closer to the elections.
Logically, though, it would make more sense to cut it now, so the masses think there’s no recession coming and that the “Democrats” are saving the world like Chip and Dale.
But people seem to forget that it’s the Democrats who’ve hiked the rate from 0.25% to 5.5% over the past four years, putting the economy in its worst shape in the last 15 years. Getting excited about these 0.25-0.5 point cuts is, at the very least, naive.
So, at the November meeting, most likely just before the elections, we might see a “boost”—a rate cut of 0.5, or even a whole point (wishful thinking). This could lead to another spike in Bitcoin’s price.
These thoughts lead me to believe that the Democrats (Kamala Harris) will win, followed by one more meeting in December, where they might hold or lower the rate again with the new U.S. president in place.
And by late January 2025, the world might plunge into chaos, oops—I mean the rates will start climbing again. The next cut might not come until 2026.
That’s why I’d expect the recession we’ve been hearing about for over two and a half years to finally kick in.
Just my two cents!
The economy peaked in April 2023"JOBS, JOBS, JOBS!"
As Obama said during the recovery period post GFC
This chart shows the employment level --- how many people are employed in the States / divided by the unemployment level --- the number of people without a job. .
A simple Ratio
With all the official Recessions highlighted in the red box.
The dates of the recessions are from Wikipedia.
JOBS are the ECONOMY
Goods and services are still made by people. (That is obviously under attack by robotics and AI) --- but will likely lead to new economies being birthed and new jobs created.
THE #FED is late to cut
and will likely cut too slowly
guaranteeing a GDP contraction therefore further job losses.
HOLDING RISK ASSETS
IS RISKY
needless to say.
2020 Aug Sep Oct BTC price history during last FED Rate Cuts2020 Aug Sep Oct BTC price history during last FED Rate Cuts
A look at the 2020 rate cuts and BTC price action with comparison to NASDAQ
Questions:
What happened to BTC / Crypto the last time FED cut rates?
What happened to the Stock Market the last time FED cut rates?
Knock Knock. Who's There? Vibecession Ft. US Interest RatesHello Everyone,
IMPORTANT: ALL FED POLICIES LEAD TO NEGATIVE OUTCOMES
TLDR AT THE END
In February 2022 the Federal Reserve gave us the fastest rate raising campaign in history to try and combat very high inflation, but they were very late in raising rates causing one of the worst inflation in 40 years. During his speech at Jackson Hole he confirms rate cuts in September due to inflation being under control and the labor market "cooling." Good news is inflation is under control, however this is only the start of our labor market "cooling."
Jerome Powell is extremely late in cutting rates and will be cutting rates because we are getting BAD economic data and the cracks are showing in our labor market, commercial real estate, and banking sectors.
The Federal Reserve 100% KNOWS a recession is coming that is why they are cutting rates. We have Jerome Powell come up on stage sweet talk to us about a soft landing, inflation under control, and how he will cut rates to help the labor market. He's not going to be instilling fear in Americans as a chairman.
Just Remember, ALL FED POLICIES LEAD TO NEGATIVE OUTCOMES. Recession is coming, Sahm rule and inverted yield curve hasn't been wrong and it won't be wrong this time. This time it's not different.
TLDR: Jerome Powell is too late in cutting rates causing a recession
Macro Monday 61 - Fed Balance Sheet Signals Liquidity BounceMacro Monday 61
Fed Balance Sheet Hits Long Term Supporting Trend Line
The Federal Reserve Balance Sheet
The balance sheet is published weekly, typically on Thursday afternoons, and it provides valuable information on the direction of global liquidity and the fed’s monetary policy.
When the Federal Reserve’s balance sheet increases, it means that the central bank is acquiring more assets. This expansion can occur through purchases of Treasury securities, mortgage-backed securities, or other financial instruments. The increase in assets typically leads to greater liquidity in the financial system and can influence interest rates. Conversely, a decrease in the balance sheet indicates asset sales and reduced liquidity
The Chart - FRED:WALCL
▫️ Since April 2022 the Federal Reserve Balance Sheet has reduced from $8.973 trillion to $7.140 trillion (reduction of $1.833 Trillion).
▫️ Right now, the chart has signaled that we have hit a critical diagonal trend line support (red line on chart).
▫️ We have hit this red trend line twice in the past (Sept 2019 & Aug 2008) and on both occasions it bounced from the red trend line and the balance sheet thereafter increased significantly for 2 to 5 years.
If you follow me on Trading view, you can revisit this chart at any time and press play to get the up to date data and see if we have held the line or fallen below it.
What does the following mean to you?
✅High likelihood of interest rate reductions in Sept.
✅Apparent stabilization of the rate of inflation (U.S)
✅A current stable labor market in the U.S
⏳The possibility of the balance sheet bouncing from trend support and increasing from the support line as it did in the past for 2 years+ (Increasing Global Liquidity).
Versus
🚨 The yield curve un-inverting (moving above 0)
🚨 Sahm Rule Triggered
🚨 The marginal increase in the U.S. Unemployment Rate which is consistent with prior recessions.
🚨 U.S. Initial Jobless Claims and Continuous Jobless claims have had increases consistent with pre recession historic activity.
🚨Job openings reducing since March 2022 from approx. 12m to 9m (this would be the largest pre recession drop ever if followed by a recession.
🚨 Warren Buffet sitting on the biggest pile of cash ever.
Does this all say “soft landing” imminent or should we be worried?
In my opinion, we will know by Jan 2026. Its a big window of time, but the timing is the biggest challenge, and if we can take one thing from the above, volatility is guaranteed.
Happy Trading
PUKA