Follow the trend, until the endThere is no bull market without crossing the trend line and retouching the line. Technicals aside BTC is a speculative asset, there is no intrinsic value. So there will be no bull market while fed does QT.
Federalreserve
Master of MarketsIn 2008 the U.S. central bank purchased
$1.25 trillion in mortgage-backed securities
$200 billion in agency debt
$300 billion in long-term Treasury securities
2008 was named QE1 and would continue for the next 6 years before the FED paused and eventually began to tighten.
During times of QE, banks, companies, markets all perform great.
There is plenty of liquidity to operate, margin is cheap.
When the fed tightens, markets get volatile.
Margin becomes expensive.
Most companies will survive this volatility.
They just pass the cost on to the consumer.
This creates inflation. Sticky inflation. Fed has to tighten more to fight inflation.
At this point it’s all they can do. But they risk crashing the markets.
The fed controls just how much air is let out and how fast.
That’s why you saw Jay Powell start with easing, into light QT and now in September the amounts they will be selling are very likely to put more down pressure on the markets.
Just realize the FED can manage the market pressure, it’s the unexpected events during times of low liquidity and high volatility that concerns me.
See the effects of Net liquidity on VIX over the past 15 years.
Never reaching above 30 except during extreme events like the flash crash and china crash..
You can see we’re in a time of extreme volatility as clusters of volatility reaching over 30 4 times since Nov 2021.
What is Net liquidity?
Net liquidity is a formula I found on Fintwit that is supposed to predict the markets movements 2 weeks in advance.
I don’t know if I believe that, but I did some Covariance analysis and there are certainly times during QE with high bullish correlation and QT there is high bearish correlations.
To determine Net Liquidity you need to take
The total assets of the Federal Reserve Balance sheet at 8.8 Trillion.
Subtract The Treasury General Account at 617 Billion
Then Subtract the 2.1T Overnight Reverse Repo
You get 5.9 Trillion in Net Liquidity.
Changes in the level of Net Liquidity (step up or step down) are claimed to predict the S&P 500 direction 2 weeks in advance.
The claim is that of a 95% correlation since the transitory quantitive easing and reverse repo were implemented.
I was curious to see if the claims were true.
More on that tomorrow.
$DYDX - BULLISH DIVERGENCEHello my Fellow TraderZ,
Today we'll be talking about $DYDX. We all know #DYDX is a Decentralized Exchange's native token. One of my favorites for the long term portfolio.
Here we see that in the recent pump price got rejected by the High Confluence Zone(containing TL1 + DESCENDING CHANNEL TL + HORIZONTAL RESISTANCE) and now back to its SUPPORT once again.
Clearly a BULLISH DIVERGENCE on 4HTF is easily visible and I personally very excited to take this Trade. Ofcourse we should not overlook #BTC as it is heavily co-related to SPX500 which is itself in bearish pressure due to FED's Hawkish Rate Hikes. But still keep $DYDX in eye .
Japanese yen - calm before the storm?After some mid-week volatility, USD/JPY has settled down. In the European session, the yen is trading quietly at 143.59.
For anyone following the Japanese yen, next week promises to be interesting, at the very least. The Federal Reserve will hold its policy meeting on September 21st, with the Bank of Japan officials meeting the next day. The Japanese yen continues to lose ground against the dollar, and fell to 144.99 earlier this month, a new 24-year low. Japanese officials have responded with well-worn rhetoric about how Tokyo is concerned about the yen's depreciation and warning that all options are on the table. We've heard this all before, but is this time different? Is Japan seriously contemplating a currency intervention to prop up the ailing yen? There has been some speculation that 145 could be a line in the sand for the MOF, but in fairness, there was similar talk when yen hit 130 and then 135, and the MOF and BoJ stayed on the sidelines.
The likelihood is that Tokyo will avoid such a dramatic move, which last occurred in 2011. The Ministry of Finance (MOF) and the Bank of Japan are not happy with the rapid descent of the yen, but an intervention would require the consent of the G-20, which is unlikely to give its consent. The BoJ made waves this week after a report that it had conducted a rate check, which was viewed as a possible prelude to an intervention. Finance Minister Suzuki has been coy about what moves he might make, and refused to comment on whether the BoJ had made a rate check.
The BoJ has rigidly maintained its ultra-loose monetary policy in order to stimulate Japan's fragile economy. As part of this policy, the BoJ has kept a firm hand on its yield curve control, and the price for this stance has been a freefall in the yen, which is done an astounding 30% against the dollar this year. With the Fed looking to hike next week by 75 basis point, and an outside chance of a massive full-point increase, the yen's downtrend is likely to continue, barring a spectacular response from Japanese officials.
1.4363 is the next line of resistance, followed by 144.81
USD/JPY has support at 142.56, followed by 141.88
GBP/USD dips on strong US data, UK GDP nextThe British pound is in negative territory today and has fallen below the 1.15 line. In the North American session, GBP/USD is trading at 1.1497, down 0.38%.
US retail sales rose 0.3% MoM in August, rebounding from -0.4% in July. Excluding gasoline, retail sales were up 0.8%, as consumers responded to lower gas prices by increasing spending on other items. The data indicates that consumer spending is holding up, despite an inflation rate of 8.3%. There was more positive news as US initial job claims fell for a fifth consecutive week, falling to 213 thousand. This follows the previous release of 218 thousand and beat the consensus of 226 thousand.
These releases are especially significant, as the Federal Reserve relies on a strong labour market and solid consumer spending in order to remain aggressive with its hawkish policy as its grapples with high inflation. The Fed is expected to increase rates by 75 basis points next week, with an outside chance of a massive 100bp hike. Inflation has proved to be more resilient than expected, and with the Fed continuing its steep rate-hike cycle, we may see more demand destruction which raises the likelihood of a recession.
The UK wraps up a busy week with retail sales on Friday. Consumers have been hammered by the cost-of-living crisis and predictably are cutting back on spending, which will only exacerbate the grim economic landscape. Retail sales fell by 3.0% YoY in July, and the markets are bracing for an even worse month of August, with an estimate of -3.4%. A release of -3.0% or worse could extend the British pound's losses.
GBP/USD is testing resistance at 1.1548. Next, there is resistance at 1.1689
There is support at 1.1417 and 1.1306
Nasdaq 100 index analysis: US real yields dominateThe Nasdaq 100 index ( US 100 ) has moved in the opposite direction of US real yields ( DFII10 ), which are the difference between nominal Treasury yields and market-based inflation expectations (also known as Breakeven yields). Real yields serve as a measure of the Fed's rate tightening aggressiveness.
The 30-day correlation between Nasdaq 100 and US real yields is currently at -0.83, indicating a strong and inverse negative relationship.
US real yields have risen dramatically since the start of the Fed hiking cycle in mid-March, from -0.7% to around 1% as of this writing, reflecting increased market expectations of a more stringent monetary policy.
This means that the nominal yield on a 10-year Treasury (3.45%) is currently about 1% higher than the market measure of inflation expectations for the next 10 years (2.45%).
Positive real returns on a safe asset like US Treasuries undoubtedly act as a deterrent to investing in riskier assets like stocks.
Technology stocks are also way more sensitive to changes in Federal Reserve interest rates than stocks in other industries. Higher interest rates reduce the long-term expected cash flows for tech companies. As a result, tech stocks fall more than the overall stock market. The Nasdaq 100 has underperformed the broader S&P 500 ( US 500 ), which is down 17.7% year to date versus -26.5% for the tech-heavy index.
After the US inflation rate continued to beat market expectations this week, markets have already fully priced in a 75 basis point hike at the FOMC meeting next week.
The chances of another 75 basis point hike in November are also increasing, which would bring US interest rates to 4% ahead of the December meeting. Stronger rate hikes could put additional pressure on the tech-heavy Nasdaq index .
USD/JPY slides after BoJ rate checkThe Japanese yen has posted sharp gains today. USD/JPY is trading at 143.09, down 1.00% on the day.
The yen has taken investors on a roller-coaster ride this week. On Tuesday, the dollar shined, posting broad gains against the majors and climbing 1.19% against the yen. The catalyst for the upswing was the US inflation report, which was higher than expected. The yen has recovered most of these losses today, after reports that the Bank of Japan had conducted a rate check, which could signal currency intervention in order to prop up the ailing yen.
The BoJ has rigidly maintained its ultra-loose monetary policy in order to stimulate Japan's fragile economy. As part of this policy, the BoJ has kept a firm hand on its yield curve control, and the price for this stance has been a freefall in the yen, which is done an astounding 30% against the dollar this year. Japanese policy makers have fired verbal warnings about the yen's depreciation causing deep concern, but the markets have learned to ignore the rhetoric, which hasn't been backed up by any action.
The yen hit 144.99 last week, a new 24-year low, and there has been speculation that 145 is a line in the sand for Japan's Ministry of Finance, which would be responsible for a currency intervention by purchasing a massive amount of yen with US dollars on the currency markets. Japanese officials haven't ruled out intervention, but there is a legal hurdle as Japan cannot intervene in the currency markets without permission from the G-20. The last time Japan intervened to prop up the yen was in 2011, in the middle of a financial crisis in Asia. Still, investors will be paying close attention to the BOJ's meeting on September 22, which comes just one day after the Fed's next meeting. Any hints of intervention could send the yen sharply higher.
If, however, Japan decides once again to stay on the sidelines, the yen has more room to fall. The Fed is likely to raise rates by 75bp at the upcoming meeting, but there is a reasonable possibility of a massive 100bp hike as well. With the yen at the mercy of the US/Japan rate differential, I expect the yen to continue to lose ground, barring some dramatic action from Tokyo.
1.4363 is the next line of resistance, followed by 144.81
USD/JPY has support at 142.56, followed by 141.88
Taf's Gun to the HeadSell USOil at Market!
Looking to play the bigger medium term bearish trend on the back of a doji daily candle showing the correction higher is stalling.
Entry: 86.24
TP: 81.37
SL: 88.29
RR: 2.41
Disclaimer – Signal Centre. Please be reminded – you alone are responsible for your trading – both gains and losses. There is a very high degree of risk involved in trading. The technical analysis , like all indicators, strategies, columns, articles and other features accessible on/though this site is for informational purposes only and should not be construed as investment advice by you. Your use of the technical analysis , as would also your use of all mentioned indicators, strategies, columns, articles and all other features, is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness (including suitability) of the information. You should assess the risk of any trade with your financial adviser and make your own independent decision(s) regarding any tradable products which may be the subject matter of the technical analysis or any of the said indicators, strategies, columns, articles and all other features.
US03MY increases more, Markets surprised at CPI data !?😲CPI the Core inflation, which is the focus of most traders, rose 0.6 percent in August, a larger increase than in July.
Although the US inflation decreased in August; But it was still higher than economists had expected, signaling that the US Federal Reserve will remain aggressive in raising interest rates.
Also Eight days before the new Federal Reserve interest rate meeting, the 3-month bond yield has increased by 0.75% in the transactions so far.
After announcing the inflation data, the yields of government bonds with different maturities increased by +6%.
The point being that the 3month is highly correlated to the federal funds rate,
It seems ,the Federal Funds Rate continues to rise , likely at a more modest pace and maybe with less regularity.
-------------------------------
Bond Yields:
The yield on a government bond is the interest rate that the government borrows at. Government bonds, because they are safe, therefore tend to have a lower yield because investors are not demanding a high rate of interest for lending to the government.
Bond yield is the return an investor realizes on an investment in a bond.
A bond can be purchased for more than its face value, at a premium, or less than its face value, at a discount .
The current yield is the bond's coupon rate divided by its market price.
Price and yield are inversely related and as the price of a bond goes up, its yield goes down.
-------------------------------
This Economic informations update is provided for informational purposes only .
✌️ Good luck with your trading and investing and remember: Trade smart…OR JUST DON’T TRADE!
--------------------------------------------------------------------------------------------------------------------
👉This analysis is my personal opinion ,not a financial advice ,so do your own research.
💚 if you're fan of my analyses please follow me , drop a comment 🗯 and Boost me 🚀🚀
CPI-inflation Based on the data, it is unlikely that inflation will decrease, and if something does happen, it will likely be in a direction that can be corrected, not the end.
Follow me, like, comment, and write questions.
GBP/USD steady after solid UK job dataGBP/USD is in positive territory today. In the European session, the pound is trading at 1.1731, up 0.42%. GBP/USD continues to take advantage of US dollar weakness and has gained 240 points since Thursday.
Inflation has hit a staggering 10.1% and the Bank of England is projecting that inflation may not peak until 13%, with some analysts predicting an even higher peak. The manufacturing, services and construction sectors are either in contraction or stagnation and the country is going through a major change, with a new prime minister and a new monarch. The UK has phased out energy imports from the UK, but the weak EU economy is taking a toll on the UK, as the two are close trading partners.
The UK labour market remains robust, one of the few bright lights in a grim economic landscape. Unemployment has fallen to 3.5%, a 50-year low, but wage growth in the three months to July rose 5.5% YoY, up from 5.2%. Employment rose by 40 thousand, down from 160 thousand prior and well below the forecast of 128 thousand.
For the Bank of England, the job numbers actually increase the odds of a supersize 75 basis point hike next week, as wage growth continues to rise and the labour market continues to tighten. The BoE, which has failed to show until now that it can curb spiralling inflation, may regain some credibility with a 75bp move.
All eyes are on the US inflation report, which will be released later today. The markets could be treated to mixed results - headline inflation is expected to drop to 8.1% (8.5% prior), while core CPI is forecast to rise to 6.1% (5.9% prior). With the Fed intent on remaining aggressive in order to tame inflation, the markets have priced in a 75bp increase at the September 21st meeting. The inflation release should be treated as a market-mover for the US dollar and has additional importance as it is the final key release before the Fed meeting.
.
GBP/USD faces resistance at 1.1790. Above, there is resistance at 1.1931
There is support at 1.1689 and 1.1548
XAUUSD Weekly AnalysisAccording to latest Gold Weekly analysis ,the price had entered an important Bullish Order Block. By this movement we expected this range to prevent Gold from Downward trend further.. In the last two weeks , When the price entered the 1690$ range , it faced a positive reaction and this order block was finally able to stop the heavier Fall! during this week ,If the weekly candle closes above 1730$, we can expect a new upward trend in the price , whose mid-term target can be in the range of 1800$ to 1830$! Hope this analysis was useful to all the traders.
BTC Can move like this chartAss you can see this week is so important for all Crypto users .So BTC needs to hold 22000$ level. But we have A FVG in 20500$-21500$. I think BTC have to pullback to this zone and clear all buy limit orders and there is a important point about bitcoin is the 99 moving average is a strong level to hold the price ever time the btc wants to break this MA more buyers open more long position. So pay attention more for break down of it This analysis will be updated. 9.13.2022
Euro climbs to 3-week highThe euro is red hot, having gained close to 2% in just two days. EUR/USD is trading at 1.0144, up 0.97% on the day.
The ECB showed last week that its hawkishness was not limited to words, as the central bank delivered a massive 0.75% rate hike, for only the second time in its history. The markets are paying attention, and the move has triggered an impressive rally by the euro. The ECB sent a powerful message that it is committed to curbing inflation by raising rates, even at the risk of a recession. President Christine Lagarde said at the meeting that she expected three or four more hikes, and the markets have priced in 0.50% increases at the October and December meetings.
The economic outlook in the eurozone remains grim, with PMIs pointing to weakness in manufacturing and business activity. Russia has shut down the Nord Stream 1 pipeline which supplies gas to Germany, raising fears that the eurozone countries could face an energy shortage this winter. It should not come as a surprise that confidence levels are weak. The ZEW Economic Sentiment index remains mired in a deep freeze, and slowed to -60.0 in July, down from -55.5 in September.
Has US inflation peaked? We'll get a look at US CPI for August, with the markets expecting inflation to fall to 8.1%, down from 8.5% in July. Following the unexpected drop in July's inflation release, market exuberance that the Fed would make a U-turn on its aggressive tightening sent the equity markets up and the US dollar sharply. The Fed has remained consistent with its stance and the markets appear to have internalized that the tightening cycle has some more room to run. The markets have priced in a 75 basis point hike at the meeting on September 21st. Tuesday's inflation report will be doubly important, as it marks the final economic release before tomorrow's meeting. If inflation hits 8.1% or higher, it would likely cement a 75bp move by the Federal Reserve.
EUR/USD has support at 1.0107 and 1.0008
There is resistance at 1.0152 and 1.0257
WIX: Bear market rally?Wix.Com
Short Term - We look to Buy at 65.69 (stop at 58.33)
Although the bears are in control, the stalling negative momentum indicates a turnaround is possible. The trend of higher lows is located at 60.00. A weaker opening is expected to challenge bullish resolve. Support is located at 65.00 and should stem dips to this area. Preferred trade is to buy on dips.
Our profit targets will be 84.99 and 92.00
Resistance: 85.00 / 110.00 / 200.00
Support: 65.00 / 53.00 / 34.00
Please be advised that the information presented on TradingView is provided to Vantage (‘Vantage Global Limited’, ‘we’) by a third-party provider (‘Signal Centre’). Please be reminded that you are solely responsible for the trading decisions on your account. There is a very high degree of risk involved in trading. Any information and/or content is intended entirely for research, educational and informational purposes only and does not constitute investment or consultation advice or investment strategy. The information is not tailored to the investment needs of any specific person and therefore does not involve a consideration of any of the investment objectives, financial situation or needs of any viewer that may receive it. Kindly also note that past performance is not a reliable indicator of future results. Actual results may differ materially from those anticipated in forward-looking or past performance statements. We assume no liability as to the accuracy or completeness of any of the information and/or content provided herein and the Company cannot be held responsible for any omission, mistake nor for any loss or damage including without limitation to any loss of profit which may arise from reliance on any information supplied by Signal Centre.
Gold amid rising yields and dollar strengtheningSince we last covered gold , most of our views have played out, as real yields rose and dollar strengthened significantly.
As central banks remain committed to fighting the greatest inflation seen in decades, we see continued headwind for the yellow metal. Going back to our real-yield and dollar analysis framework, we see 2 key points.
Firstly, real yields have increased significantly as US Interest rates rise at unprecedented levels due to back-to-back rate hikes. Central bankers have continued to pre-empt the markets on the rates hiking path, and we see no reason for the US Federal Reserve to change its stance anytime soon. Thus, we think that real rates are likely to continue upwards.
Secondly, the dollar is now trading at a 20-year high. With no major resistance until the 120 level, we see a clear path upwards as the backdrop of higher yield continues to favor the dollar.
Looking at the charts we see a potential double top chart pattern, for gold. With the first peak slightly higher than the second and current prices trading near the neckline, we think the bearish set-up is almost complete for gold and prices are likely to decline from here.
Barring any surprise data points from now till the next FOMC meeting in 2 weeks’ time, it is highly likely for the Fed to continue its hiking path which will drive real rates & the dollar higher. This presents a strong headwind to gold which could tip lower if we see a clear break of the neckline. As such we think gold is caught between a rock (higher yields) and a hard place (stronger dollar).
Entry at 1723, stop at 1830. Target at 1530 and 1360.
The charts above were generated using CME’s Real-Time data available on TradingView. Inspirante Trading Solutions is subscribed to both TradingView Premium and CME Real-time Market Data which allows us to identify trading set-ups in real-time and express our market opinions. 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
Disclaimer:
The contents in this Idea are intended for information purpose only and do not constitute investment recommendation or advice. Nor are they used to promote any specific products or services. They serve as an integral part of a case study to demonstrate fundamental concepts in risk management under given market scenarios.
INFLATION HAS TOPPED OUT!Good day
We have all heard the news regarding the FED increasing interest rates in order to solve the inflation "crisis" we are currently enduring. Some say this is great, some say this is horrible, however, overall this move was inevitable as markets such as this are cyclical and manipulatable by those who control monetary policy. For those who are in the market for a quick buck that follows the advice of so-called pro traders, this may not be the greatest time for you. On the other hand those with diamond hands, the smart money understand the benefits of this very rare occurrence in time. Not only will you be handed a highly decreased asset to invest in, in the next few days/weeks but, your spending power will increase due to the FED's attempt to bring inflation to 2% on top of a substantial increase in wealth once we are out of the thick of it. (2024)
It is not possible to know when inflation will reach 2%, only those who control the market fluctuation know these dates but for now, we need to understand that we are going to be in a recession most likely for the better part of 2 years, which coincidentally will line up with the cyclical bull market structure of BTC. Could this be a coincidence or are we heading for a bull market never seen before? it could be argued that the crypto space specifically has been held back in the recent bull market and like a spring will eventually jump to levels only one could dream of.
This statement will be strengthened dramatically as the world moves into a space where digital currency becomes the framework of the exchange of value internationally and in all aspects of the current macroeconomic structure. This narrative will only be pushed on an institutional level once the ever-desired and increasing space achieves regulatory clearance of some sort in order to enable governments to sustain some sort of market dominance. This idea is widely unexcepted by the retail investor as most feel governments must be done away with in order to open up for a fully decentralized network to govern our financial sector globally... as great as this sounds it just sounds more and more like a pipe dream.
We as people need to have some sort of governance and a system that regulates our decision-making on a financial level or else chaos will break out leading to potentially societal collapse. But on the bright side, the crypto space will eventually allow for a stable deflationary environment where our wealth will have a safe haven to grow.
All we need to do is sacrifice complete decentralization in order to achieve a potential innovation of the financial system that will revolutionize finance forever... In this case, we all win...
@TradingView
Winter is Coming to Financial MarketsWTI crude oil is currently trading at $83 a barrel.
Who would have thought that with OPEC cutting oil production and Russia shutting down natural gas distribution, petroleum would be $10 cheaper than when the Ukraine War first started?
Winter is coming to global economy. And financial markets everywhere would be bracing for a deep freeze in the coming months.
On Wednesday September 14th, I will be delivering a keynote speech titled “Option Strategies Focusing on Global Crises” at the trading floor of CBOE Global Markets (Chicago Board Option Exchange).
Those who follow my writings on TradingView know that I first unveil “Event Driven Strategy Focusing on Global Crisis” three months ago, in this writing on June 7th.
I warned my readers of the upcoming bear market on June 22nd.
On July 3rd, “Have Gasoline Price Already Peaked” became the No. 1 trade idea featured in TradingView Weekly newsletter.
“Market Impact of the US Mid-term Elections” was selected as an “Editors’ Picks” on August 17th. TradingView Weekly newsletter with the title “Midterms are Coming” were emailed to millions of subscribers including you and me.
On August 29th, “The Great Wall Street Repricing” became my 7th “Editors’ Picks” trade ideas, and made it to TradingView Weekly for the 3rd time.
If you are in Chicago next Wednesday, it would be great to meet up in person. Besides the seminar, you could observe the market close bell ringing and mingle with other traders in our networking cocktail party. If you aren’t in Chicago, you could join us online.
Details for event registration could be found at my Twitter (please check my account profile). To comply with House Rules, I could not disclose more information here.
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.
LYV: The music just stopped!Live Nation Entertainment
Short Term - We look to Sell at 90.13 (stop at 93.80)
The medium term bias remains bearish. A bearish Head and Shoulders is forming. The measured move target is 81.00. Further downside is expected although we prefer to sell into rallies close to the 91.00 level.
Our profit targets will be 81.20 and 79.00
Resistance: 93.00 / 99.50 / 127.00
Support: 81.00 / 74.00 / 60.00
Please be advised that the information presented on TradingView is provided to Vantage (‘Vantage Global Limited’, ‘we’) by a third-party provider (‘Signal Centre’ ). Please be reminded that you are solely responsible for the trading decisions on your account. There is a very high degree of risk involved in trading. Any information and/or content is intended entirely for research, educational and informational purposes only and does not constitute investment or consultation advice or investment strategy. The information is not tailored to the investment needs of any specific person and therefore does not involve a consideration of any of the investment objectives, financial situation or needs of any viewer that may receive it. Kindly also note that past performance is not a reliable indicator of future results. Actual results may differ materially from those anticipated in forward-looking or past performance statements. We assume no liability as to the accuracy or completeness of any of the information and/or content provided herein and the Company cannot be held responsible for any omission, mistake nor for any loss or damage including without limitation to any loss of profit which may arise from reliance on any information supplied by Signal Centre.
CRYPTO TOTAL MARKET CAP MAKING MOVES!Good evening all!
The total market cap is currently ranging even though it has had a large bearish candle on the 4 hourly charts. I cannot predict the market however, I can put a few psychological indicators together and estimate the most likely event to follow.
The most recent move can be seen as a breakout of a bearish flag formation. we are still in a range however, this pattern sets a target that will see the price breakout of this consolidation area if the bears are able to stay in power.
Range explained: The support and resistance levels are placed using the fib retracement on the daily chart, these levels happen to be the strongest levels of support/resistance (50% and 68.2%) thus any move below/above would most likely result in a continuation/reversal. My opinion leans towards the bears as the overall market is bearish and my indicators show strength in the bears.
The 972B price had been tested a couple of times and has been solidified as a strong level of support\resistance to break in the future, as it added confluence in the strength of the bears. This Level is to be carefully watched on the way back up.
If the market had to remain healthy after this dramatic decline in a short period, I would like to see a retracement up to the 944-942B price in order to have more confidence in the flag breakout as well as a prosperous decline to the potential target which lies at 867B
. The 944-942B level acts as a strong middle point in the consolidation range and thus will make a great reflection point before the price continues downwards.
Thank you for your much-valued time! Please feel free to give me your opinion and like the article if you found it interesting.
@TradingView
Unemployment is inevitable according to market history.Graph of the inflation rate with unemployment rate laid over top.
EVERY TIME that inflation has peaked and rolled over, unemployment has spiked shortly after.
If you wonder why Powell says things like "The labor market is unsustainable." it's because he and every central banker in the world (more or less) are trying to kill inflation.
Inflation dies, it takes out employment.
So the next time someone points to labor statistics as a sign of economic health, you can tell them that employment is transitory.
As policies continue to diverge…For readers who have been following us right from our first ever TradingView idea, you’ll recall our first ever trade idea on long USDCNH. It’s been a fun 5 months writing and sharing our thoughts with the community.
Much has happened since April, but two critical things stayed the same. The US Federal Reserve remains hawkish, raising rates, while the PBoC remains dovish, continuing with its easing stance. The result? USDCNH trading beyond the 6.9 level, surpassing both our target levels.
With the next Federal Reserve meeting coming up, we think it’s time to review this idea again. The CME FedWatch Tool allows us to gauge what market participants are expecting the Fed to do. The prevalent consensus seems to be that the Fed is likely to raise rates till the end of the year before holding rates at the 3.75 – 4.00 % level for the next year.
On the other hand, the PBoC has continued to ease, cutting reserve requirement ratios & lowering its medium-term lending facility. With China still battling Covid via lockdowns, persistently low inflation numbers, and weak economic numbers, we see further easing on the cards from PBoC.
Looking at the charts, the USDCNH pair has just completed a symmetrical triangle chart pattern. After breaking out to the upside and a brief pull-back, prices continued upwards with strong momentum. Using classical charting techniques, the target levels for the breakout can be set to the distance of the high and low of the symmetrical triangle and applied to the top of the triangle. With the target price of 7.1180, there is still upside for this trade.
It seems that policy divergence will remain for these two major economies, which is likely to strengthen the USD and weaken the CNH further, driving up the USDCNH pair. Using technical to identify target levels where we will be comfortable, we think that there is room for more upside.
Entry at 6.9500, stop at 6.8545. Target at 7.1180.
The charts above were generated using CME’s Real-Time data available on TradingView. Inspirante Trading Solutions is subscribed to both TradingView Premium and CME Real-time Market Data which allows us to identify trading set-ups in real-time and express our market opinions. 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
Disclaimer:
The contents in this Idea are intended for information purpose only and do not constitute investment recommendation or advice. Nor are they used to promote any specific products or services. They serve as an integral part of a case study to demonstrate fundamental concepts in risk management under given market scenarios.
Reference:
www.cmegroup.com
FED Pivot?This chart suggest a FED pivot arriving much sooner than some may suspect. Compared to 2016 - 2019, the fast & big drop that usually follows a euphoric peak, came much quicker for this year. Given how much money printing went on during the pandemic, it's worth considering that this might be simply the first and second Elliott Waves for commodities, but there will be big corrections along the way, and since inflation is the rate of rising prices, not the price change itself, it would not be surprising for the FED to declare victory sooner than later. As for the fact that recessions often coincided with rates dropping, today is not comparable because the FED only started raising rates recently. It is arguable that the FED actually raised rates roughly around the right time, not "too late" as some would argue.
