Get started

GFC

Is QE really around the corner? Let's compare to GFCThe argument for US Quantitative Easing soon and subsequent pumpamentals in the equity market are often discussed on socialmedia these days. Let's look at the GFC and see when they announced QE back then. February 7, 2007 – HSBC’s Subprime Losses July 31, 2007 – Bear Stearns Hedge Fund Collapse September 18, 2007 – Fed Begins Rate Cuts September 15, 2008 - Lehmann Brothers Bankruptcy November 25, 2008 - Fed announces QE: federalreserve.gov/newsevents/pressreleases/monetary20081125b.htm Were are we today? Stonks at ATH, Gold at ATH, Bitcoin ATH. Valuations historically expansive and growth expectations on stonks gigantic accompanied by a lot of passive investment. Okay so all I'm trying to say here is that there were times where they were very strict in doing QE and only as a last resort in the depths of a crisis. Also when it happens it is not the immediate start to a bull market (at least during a crisis event). Also the balance sheet of the FED seems still full to me with 7 trillion to burn through. Is it really time to increase again? I know that the argument for soon QE to create liquidity(inflation) to handle the looming global debt crisis everyone is talking about is also out there. I also think that they will be faster this time to announce QE, they might just still take couple of months and a little bit of crisis.
CME_MINI:ES1!
by entomologyx
The Turning TidesGermany, Europe's economic powerhouse, has consistently delivered impressive performance since the Global Financial Crisis (GFC) and the European debt crisis. This strong performance is rooted in Germany's strong manufacturing sectors and robust export activities. The country's economic strength is exemplified by the DAX's considerable outperformance of other European indices since the early 2000s. DAX (Deutscher Aktienindex) is a blue-chip stock market index comprising the 40 largest German companies traded on the Frankfurt Stock Exchange. Top constituents include internationally renowned firms such as SAP, Siemens, Allianz, Airbus, and Bayer. On the other hand, the STOXX50 index represents a much broader scope, encompassing 50 of the most liquid blue-chip companies in the Eurozone, including ASML, LVMH, and others. Since the dawn of the new millennium, the DAX index has surged by more than 180%, whereas the STOXX50 is only now approaching pre-2008 GFC levels. The DAX's relative outperformance becomes evident when looking at the regression channel of the ratio between these two indices. However, the prevailing narrative may be on the cusp of a significant shift. On a closer examination of the factors underpinning Germany's superior performance, it emerges that sector weightings and macroeconomic conditions have played pivotal roles. Notably, the DAX has consistently underweighted financials as compared to the STOXX50 index. Post-2008, the Eurozone's interest rates have witnessed a consistent downtrend. This period of extraordinarily loose financial conditions and low bond yields, largely a by-product of Quantitative Easing (QE), has favored technology and growth stocks. The main drivers are the availability of cheap capital and a stronger emphasis on growth potential over current valuations. Conversely, the same conditions have exerted considerable pressure on financials, as their earnings capabilities have been seriously compromised. This is precisely why the European banking sector has lagged considerably behind its US counterparts and has yet to recover to pre-GFC levels. This whole dynamics began to falter last year as inflationary pressures mounted, especially in European countries grappling with additional challenges, such as the Russian-Ukraine war and an energy crisis. The European Central Bank, following in the footsteps of the Federal Reserve and other central banks, finally embarked on a journey to raise interest rates, leading to one of the fastest-paced interest rate increases in modern history. Furthermore, Germany's export sector is encountering headwinds as the global economy edges closer to a potential recession, triggered by the tightening measures undertaken by central banks. Demand for products such as automobiles is likely to dwindle, particularly from major trading partners like China and the US. On the other hand, a healthier, more normalized yield curve is finally offering some respite to European financial institutions. This shift could eventually curtail DAX's persistent outperformance compared to other European indices like STOXX50. From a technical perspective, the price action also implies an impending change. The DAX/STOXX50 ratio has arguably completed a Head-and-Shoulder top and is currently sitting on the lower bound of the regression channel. A breakout to the downside could potentially signal the end of a two-decade-long uptrend, leading to a significant reversal in relative performance between DAX and STOXX50. A hypothetical investor looking to express this view could consider establishing a short Micro DAX and long Micro STOXX50 spread at a notionally equivalent amount. The added advantage of this relative trade is that beta exposure is substantially reduced. For example, if a global recession causes most equity markets to decline, this relative trade could still benefit if the DAX falls more than the STOXX50. Do note that a spread-trading strategy may incur additional commission fees versus a traditional outright strategy. Hot tip: Phillip Nova is currently offering zero-commission trading of the EUREX Micro-DAX® Futures and Micro-EURO STOXX 50® Futures. Click here to learn more. To create a notionally equivalent DAX/STOXX50 spread, an investor might short 1 Micro DAX futures (EUR 1 per index point) and go long on 4 Micro STOXX50 futures (EUR 1 per index point). The notional amount of the Micro-DAX futures would approximately be 15,800 EUR. Meanwhile, the notional amount of the 3 STOXX50 futures would approximately be 3 x 4280 = 17,120 EUR. The margin required for each contract of Micro-DAX would be 1,588 EUR while the Micro-STOXX50 would be 380 EUR (as of 10 July 2023). Disclaimer: The contents of this Idea are intended for information purposes only and do not constitute investment recommendations 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. A full version of the disclaimer is available in our profile description.
EUREX:FDAX1!
by inspirante
Robert Kiyosaki and now Larry Fink on Credit Suisse's demiseThis 2 charts reminds me of a James Bond movie, Skyfall. There is a claim by many that, these companies are too big to fail. Oh yeah? 7th largest investment bank in the world is get steamrolled. Yesterday about 6pm Malaysia time, Credit Suisse ($CSGN) got halted due to excessive selling. Robert Kiyosaki predicts this bank will be next. Today, Larry Fink of Blackrock is echoing Rich Dad Poor Dad author. 2nd largest Swiss bank is going under real soon and this will rock Eurozone badly. On to US banks, Moody's have place 5-6 banks under watch for downgrading due to contagion following SVB, Silvergate and Signature bank's catastrophe. The pack leader is First Republic Bank ($FRC). Since last week Thurs, already down 80%. Holy moly! Others will be Western Alliance Bancorp ($WAL), Intrust Financial Corp, UMB Financial Corp ($UMBF), Zion Bancorp ($ZION) and Comerica Inc ($CMA). This year will be crazy. Will Jerome Powell finally pivot? He got 2 options, raise rates and crush the economy OR pivot and deal with rising inflation again. What I think is, you will keep printing money. Like you always do and that's all you can do, dear central banks. Stop covering up simple stuff with euphemism such as Bank Term Funding Program (BTFP) to cover up for money printing. As if Quantitative Easing is not euphemistic enough. By Sifu Steve @ XeroAcademy
C
by XeroAcademy
S&P500 - Outlook - 2023 - 1st Week of January - 4 Hour ChartS&P500 Outlook for the 1st week of January 2023 on the 4 hour chart. Looking for a minor high, or the beginning of a strong move to the downside to HEAVILY short the market within the first few days, or first trading week of January. 1) Always have your stop loss in place. 2) Always have your 'take-profit' target planned before entering. 3) Always be open to being wrong, and exit when the market is not heading in the anticipated direction.
FX:SPX500Short
by U2Rinfinite
1
S&P500 - Outlook - 2023 - 1st Week of January - 4 Hour ChartS&P500 Outlook for the 1st week of January 2023 on the 4 hour chart. Looking for a minor high, or the beginning of a strong move to the downside to HEAVILY short the market within the first few days, or first trading week of January. 1) Always have your stop loss in place. 2) Always have your 'take-profit' target planned before entering. 3) Always be open to being wrong, and exit when the market is not heading in the anticipated direction.
FX:SPX500Short
by U2Rinfinite
1
Blood in every street! Stocks, Bonds, BTC, EEM, Oil, Gold, Comm Simultaneous 2W Red Bars for all the above*. SPY is in pink so it stands out (by popular request). This is relatively rare p= 0.028: 11 out of 387 bars since GFC The chart shows the 11 periods with a yellow vertical line. Each asset is shown independently (upper left) as well as a horde (bottom) Since the choice of ETF's was neither complete nor systematic, the table (top right) shows the 25 largest ETF's (out of the 1167 in the list) as measured by 21day $Volume (shown in rightmost column)*. Middle columns show the ETF's return over 1 day (using todays close 9/6/22) and over 5 days. Lot's of Red. Hope that's useful, Trade Safe. Analysis: When the smoke clears and there is time for analysis: What happens after the 11 cases? Qualitatively, my impression is that volatility (range) stayed high while momentum frequently changed direction (more then I expected) Also for follow up: when do we (irrationally) expect reversal vs continuation? Positive and negative recency has been studied extensively as the "Gamblers Fallacy" and the "hot hand". *Notes: Stocks: $SPY Bonds: $TLT Oil: $USO Commodities: $DBC Emerging Markets: $EEM Gold: $GLD BTC: $BITO IS 2W red as well but is also a new ETF so was omitted from the count. Currency (DXY) appears independently at bottom. **Table found on etscreen.com on 9/6/22 (link appears under the table). Its purpose is educational only as specified in "Fair use" section 107 of the U.S. Copyright Act.
AMEX:SPY
by gb50k
2
Gold To Testing New Heights And HighsOuter Perspective (Monthly Chart) Half way through the month of May and Gold is climbing seeing highs not seen since November 2012. Hopefully momentum and world dynamics in its favour to test levels depicted on the left hand side of the chart and breaks the wicks of 1795 and above. Area of Interest Looking to the highs. Gold is placed well into the close to open on Monday with a nice weekly candle. Buyers will see this fresh air on the charts and price levels having confidence. A test of the inner lows trend Line could be retested, so watch for bears playing here. Buyers will need to hold these levels steady. If highs are broken it tells you a lot about the economic sentiment worldwide at present.... Have a glorious weekend all. 📈Support & Resistance📉* Support Levels 1st Support Zone: 1721.336 2nd Support Zone: 1702.869 3rd Support Zone: 1673.126 Resistance Levels: 1st Resistance Zone: 1753.979 2nd Resistance Zone: 1783.75 3rd Resistance Zone: 1814.26 Price Level Consideration All Time High Half Way Point: 960.480 Prominent High: NOW Prominent Low: 1043.409 🐃 Bulls Verse Bears 🐻 🐃 Bullish above: BULLISH NOW 🐻 Bearish below: 1451.718 Comparative against Silver & Platinum
OANDA:XAUUSD
by LandenInternational
SPX 2020: CoviDebt Reset. History says markets should fall >50%? 2020 The Great CoviDebt Reset sees markets initially drop by -36%. FED pushes market back up by +33%, right near the monthly 20 EMA level. CB intervention continues to push markets higher which further widens the gap between the markets and economic reality. The last two major pullbacks during the 2001 tech bubble and 2008 global financial crisis saw >50% declines but 2020 has only seen a drop of 36%, thanks to the FED yet again stepping in with the largest stimulus in history. However, onlynusing the >50% declines in 2001 and 2008 as reference points implies we could see an additional 25% leg down from the March 2020 lows. Will the FED win in restoring total confidence in the face of creating the largest spread between markets and reality or will history intervene and see a >50% decline?
CME_MINI:ES1!Short
by arigolden
1
GFC to the Corona Virus: An Overview of Economic StimulusI've stuck with looking at M1 as a general proxy for economic stimulus more broadly for the sake of simplicity as this an overview. The primary implicit question here is whether or not more economic stimulus will be effective or not and to what extent under the present circumstances. The need for liquidity in the markets has certainly been evident recently, as is a response to the corona virus and its economic impact. Those things notwithstanding however, my own conclusions have been that with the dual deflationary effects of an aging population in the developed world, and the role of technology in reducing costs, has much to do with the failure of central banks to reach or sustain target rates of CPI or wage growth in most places globally. I believe the US has been relatively successful (more so than most) due in no small measure to the disproportionate success of its global tech giants (part of the aforementioned cost ructions trend). If we assume more economic stimulus will work to a degree, there is evidence of diminishing returns, are we getting close to a depression-type scenario or some other breaking point (like currency devaluation or inequality leading to political turmoil for example), or can it all be managed somehow by central banks and governments?
CME_MINI:ES1!
by Azorix
Chart of the Day 3/3: Avoid Banks, this time is differentAs we contemplate the convergence of long-term US rates with that of Europe and Japan as well as the Japanification of the global economy, it is useful think about the potential impact on banks. Yes, low rates are not good for banks and as we have seen in Japan, perpetual low rates does not equate to an increase in velocity of money. That chapter in financial textbooks need to be re-written. This series of charts will look at the American, European and Japanese banks and this time it is REALLY different. Not in a good way. As you can see, banks are testing long-term post GFC support levels. The key difference is, the last few times the banks tested trend line support, the stocks were oversold. This time, as you can see, banks are overbought on a weekly basis testing long-term trend support. Whether this is bank-specific or a prelude to the wider trend, the jury is still out. This much I will say, the Americans do not know what they do not know in relation to the Covid-19 situation in the US. For an economy which strength has been measured largely by increases in temporary employment, this is an interesting situation to be in.
TSE:8306Short
by WellTrainedMonkey
Chart of the Day 2/3: Avoid Banks, this time is differentAs we contemplate the convergence of long-term US rates with that of Europe and Japan as well as the Japanification of the global economy, it is useful think about the potential impact on banks. Yes, low rates are not good for banks and as we have seen in Japan, perpetual low rates does not equate to an increase in velocity of money. That chapter in financial textbooks need to be re-written. This series of charts will look at the American, European and Japanese banks and this time it is REALLY different. Not in a good way. As you can see, banks are testing long-term post GFC support levels. The key difference is, the last few times the banks tested trend line support, the stocks were oversold. This time, as you can see, banks are overbought on a weekly basis testing long-term trend support. Whether this is bank-specific or a prelude to the wider trend, the jury is still out. This much I will say, the Americans do not know what they do not know in relation to the Covid-19 situation in the US. For an economy which strength has been measured largely by increases in temporary employment, this is an interesting situation to be in.
FShort
by WellTrainedMonkey
Chart of the Day 1/3: Avoid Banks, this time is differentAs we contemplate the convergence of long-term US rates with that of Europe and Japan as well as the Japanification of the global economy, it is useful think about the potential impact on banks. Yes, low rates are not good for banks and as we have seen in Japan, perpetual low rates does not equate to an increase in velocity of money. That chapter in financial textbooks need to be re-written. This series of charts will look at the American, European and Japanese banks and this time it is REALLY different. Not in a good way. As you can see, banks are testing long-term post GFC support levels. The key difference is, the last few times the banks tested trend line support, the stocks were oversold. This time, as you can see, banks are overbought on a weekly basis testing long-term trend support. Whether this is bank-specific or a prelude to the wider trend, the jury is still out. This much I will say, the Americans do not know what they do not know in relation to the Covid-19 situation in the US. For an economy which strength has been measured largely by increases in temporary employment, this is an interesting situation to be in.
BShort
by WellTrainedMonkey