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Jacksonhole

What Jackson Hole Means for the Stocks and the EconomyStocks swiftly sold off as the markets digested comments from the Jackson Hole retreat. This is a gathering of central bankers from around the world, and while no 'official' policy decisions are made, the markets pay great attention to comments made by key members. In particular, Jerome Powell came off sufficiently more Hawkish than anticipated , and the markets reacted as such. The dollar soared past highs along with bond yields and stocks tanked. Powell even said that Americans should expect 'pain' which was a particular somber note and drove the selloff further. At this point a 75bps or even a 100bps rate hike are not off the table for September. Also, particular mention was given to how rate hikes may impact the labor market, with some sources suggesting it could cost up to 4 million jobs . The S&P 500 tumbled to the base of the 4K handle at our very last level at 4009, a level we have been identifying for weeks. If this level breaks, we will return to the 3K's again, with 3978 and 3963 the next levels of support.
FX:SPX500Short
by quantguy
1
SPDR S&P 500 ETFwe are channel trading/consolidation. and this will probably continue till the meetings coming up. my main thesis is based off a few things. the up coming Jackson Hole meeting followed by Fed Jpow Friday. i believe we get under that 410 area. by Sept October. there is alot of factors influencing this, inflation, rate hikes, etc. 390 would be the area im looking for. i dont see us making a new 52wk low. Hedge funds. from that 4300 are net short on the spx and cash heavy. more then normal. and this is why i also think we have a santa claus rally. we get the pull back in sept. sept and oct are the worst performing months. this pull back will bring you into a wonderful area of support at 390 and inflation keeps coming in at good clips. hedge funds are gonna say crap. inflations coming down. fed slows rate hikes. they will have to cover those short positions. and they can not go into the end of the year that cash heavy and that can bring you back to that resistance level . when hedge funds are usually this one sided. it usually doesnt work. look at august 2020 when they were in this same position. they were wrong and got completely rolled over. anyway. this gives traders tremendous opportunity. On the longer term we have an inverse head and shoulders forming. the july 17 low being the head. even on the shorter time frime we have one and we are on the right shoulder right above the neck line around that 412/414 area. now i only point this out because its alittle interesting. some technical analysis . fun fact- since 1950 the spy has never rallied pass the 50% fib retrace off a recession low and made a NEW low. just fun fact. but the targted (oval- general area/zone) would be a long term buying opportunity if you missed the july 17th low. or if you arnt fully invested it could be a buyable pullback imo. just my thoughts hope you like or got something out of it.
AMEX:SPYShort
by Jbridgez
12
SPX500/ES1 - Watch Out for the Jackson HoleLast week saw SPX and Nasdaq's bear market rally finally clip into April and May highs before the week finished notedly, albeit not too terrifyingly, lower. All along the way, none of the Twitterati or the media cartel has so much as issued a peep about the Federal Reserve's critical Jackson Hole meeting lying in wait at the end of August. Notably, two of the three Jackson Hole days land on the Thursday and Friday trading days. Much of the rally was predicated on there being no FOMC this month, which would in theory mean no rate hikes until September. However, with how things have been set up, what do you suppose is going to happen in both the lead up to and during Jackson Hole? Perhaps what the market endures at Jackson Hole is something like an "unforseen" and "Black Swan" 200 bps rate hike that shocks the markets and sends them in an astonishingly quick descent below the June lows. Then, everything depends on whether September's FOMC is stimulus and QE again. October could be a critical starting point for a "return to normal" bubble rally or a Bump and Run Reversal. Either way, the expectation that there's more moon ahead after a 8+ week bear market rally is really not very realistic, or very intelligent. After days of buying, it's time for some selling, because that is how volume is generated. And for SPX, that means numbers that sound like 40xx and 39xx are likely on their way. Consider that SPX used to trade in parallel with BTC. On Friday and through the weekend, BTC and Ethereum suffered a 20%+ wipe out and are about to endure more. SPX and Nasdaq are lagging behind in that pattern, and although they won't lose 20% overnight like crypto does, 100-150 point down days on SPX are big losses if you're holding a fat bag of SPY and QQQ. What to do? You can buy the dip, aiming for a "return to normal" at 4400-4800. But what if this is the quiet fulcrum moment that things have gone from rally to doom and you're catching knives? It's an easy way to incur massive losses and wipe out the gains from the previous run if you were long. Be careful. This is the most dangerous time in history. The Federal Reserve, which the Chinese Communist Party has been subverting since at least 2013 , will say and do anything to manipulate the global markets.
CME_MINI:ES1!
by LordWrymouth
BTC: Bulls are back!Bitcoin Intraday - We look to Buy at 21251 (stop at 20688) Trading within a Corrective Channel formation. The trend of higher lows is located at 21200. Dips continue to attract buyers. Our profit targets will be 22648 and 23148 Resistance: 21700 / 22500 / 23000 Support: 21000 / 20800 / 20000 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.
VANTAGE:BTCUSDLong
by VantageMarkets
1
NQ Power Range Report with FIB Ext - 8/26/2022 SessionCME_MINI:NQU2022 - PR High: 13183.00 - PR Low: 13130.25 - NZ Spread: 116.75 Evening Stats (As of 1:25 AM) - Weekend Gap: -0.18% (open > 131250) - 8/19 Session Gap: -0.04% (open > 13540) - Session Open ATR: 267.50 - Volume: 19K - Open Int: 256K - Trend Grade: Bear - From ATH: -21.7% (Rounded) Key Levels (Rounded - Think of these as ranges) - Long: 13794 - Mid: 13531 - Short: 12959 Keep in mind this is not speculation or a prediction. Only a report of the Power Range with Fib extensions for target hunting. Do your DD! You determine your risk tolerance. You are fully capable of making your own decisions.
CME_MINI:NQU2022
by mv3trader5
EUR/USD near parity, Powell speech nextThe euro has posted gains today and briefly punched above the symbolic parity line. In the North American session, EUR/USD is trading at 0.9978, up 0.11%. It seems that whatever angle you examine Germany's economy, things are not looking good. Services and manufacturing PMIs both remained in contraction territory (below 50.0) for a second straight month. The labour market, which had been a bright spot in the economy, saw the pace of job creation fall to a 1.5-year low. Today's releases didn't add any cheer. GDP in Q2 rose a negligible 0.1%, revised from 0.0%. As well, German Ifo Business Climate fell to 88.5, down from 88.7. This wasn't a sharp drop, but it was significant since it marked the index's lowest level since mid-2020. What is no less alarming than the weak numbers is the pessimistic outlook. As the war in Ukraine drags on with no end in sight, the energy crisis could get significantly worse in the winter, as Western Europe is vulnerable to a cutoff of Russian oil and natural gas. Germany appears headed towards a recession later in the year, and the rest of the eurozone will likely fare no better. The US economy contracted for a second straight quarter in Q2, but second-estimate GDP was revised upwards to -0.6%, up from -0.9% in the initial estimate. This follows a 1.6% decline in the first quarter. The upward revision was good news for the US dollar, as a weak GDP reading could have raised speculation about a Fed U-turn in policy and sent the greenback lower. The dollar's next test comes as soon as Friday, with all eyes on Fed Chair Powell's speech at the Jackson Hole Symposium. If Powell reiterates that the Fed will continue to tighten aggressively until inflation is curbed, the dollar could gain ground. However, if the Fed Chair's message is less hawkish than expected, we could see sharp gains in the equity markets at the expense of the dollar, as was the case following the surprise drop in US inflation earlier this month. EUR/USD is testing support at 0.9959. Below, there is support at 0.9877 There is resistance at 1.0113 and 1.0195
by OANDA
NQ Power Range Report with FIB Ext - 8/25/2022 SessionCME_MINI:NQU2022 - PR High: 12956.50 - PR Low: 12940.00 - NZ Spread: 37.0 Evening Stats (As of 12:05 AM) - Weekend Gap: -0.18% (open > 131250) - 8/19 Session Gap: -0.04% (open > 13540) - Session Open ATR: 272.02 - Volume: 16K - Open Int: 258K - Trend Grade: Bear - From ATH: -22.7% (Rounded) Key Levels (Rounded - Think of these as ranges) - Long: 13794 - Mid: 13531 - Short: 12959 Keep in mind this is not speculation or a prediction. Only a report of the Power Range with Fib extensions for target hunting. Do your DD! You determine your risk tolerance. You are fully capable of making your own decisions.
CME_MINI:NQU2022Long
by mv3trader5
GBP/USD jumps on weak US housing dataThe British pound has jumped 0.82% today, as the currency has rebounded somewhat from its worst week of the year. GBP/USD plunged 2.53% last week, as the US dollar has found its mojo after weeks of beating a retreat. GBP/USD has climbed today after US New Home Sales dropped to 511 thousand in July, down from 585 thousand in August and well below expectations. UK manufacturing slides The UK Manufacturing PMI crashed into contraction territory in August. The index fell to 46.0, down from 52.1 in July and shy of the estimate of 51.1. The dismal reading is part of a pan-European downward trend in manufacturing, which has been made worse by the prolonged war in Ukraine. Output has been hampered by higher costs, a drop in demand and supply chain problems. CBI Manufacturing Output fell by 7% in the three months to August, according to the CBI, down from +6% in the three months to July. This was the first decline in output since February 2021. Manufacturers are also affected by rising energy bills and higher interest rates, and the situation is only expected to get worse. The energy cap will rise in October and the BoE will have to continue raising rates in order to defeat inflation. There was better news from Services PMI, which was almost unchanged at 52.5, pointing to weak expansion (52.6 prior). Still, it's hard to see how the UK can avoid a recession with weak growth and spiralling inflation. Business optimism is dropping, and that will likely lead to a cutback in spending, hiring and investment, which won't help the economy one bit. There is plenty of anticipation ahead of Jerome Powell's speech at Jackson Hole on Friday, but investors shouldn't overlook some key events prior to Powell's speech. Durable goods orders will be published on Wednesday, with the headline reading expected to slow to 0.6% in July, down sharply from 2.0% in June. Thursday brings US GDP for Q2, which is expected to come in at -0.8% QoQ, after a 0.9% reading in the first quarter. With the Fed stating that US data will be critical in determining its rate policy, the dollar could show some movement after these releases, just as it fell sharply today after the soft New Home Sales reading. GBP/USD faces resistance at 1.1924 and 1.2005 There is support at 1.1699 and 1.1568
by OANDA
1
Euro drops to new 20-year lowEUR/USD has stabilized after a rough start to the week. In the European session, EUR/USD is trading at 0.9931, down 0.10% on the day and its lowest level since November 2002. After weeks in retreat, the US dollar has rebounded and is showing broad strength. The euro has taken it on the chin, falling 2.12% last week and down another 1.07% this week. It looks like the euro has more room to fall and we could see EUR/USD gazing up at the parity line for some time to come. German PMIs for August were mixed and the euro shrugged in response. Services PMI fell to 48.2, down from 49.7. This missed the estimate of 49.0. Manufacturing was slightly better, rising from 49.3 to 49.8 and beating the forecast of 48.2. The readings are worrying, as they indicate that both manufacturing and services have been in contraction for two straight months, with readings below the neutral level of 50.0. The economic outlook for the eurozone's number one economy remains bleak, as high inflation and rising interest rates threaten to tip the economy into recession. Unsurprisingly, confidence levels amongst manufacturers and businesses remain low. Germany's labour market has been a bright spot in the economy, but there is room for concern here too. Employment in the private sector rose in August, but the pace of job creation fell to its lowest since March 2021. With the economy in a downturn, the downside risk to job creation will likely increase. The markets are anxiously awaiting Fed Chair Powell's speech at Jackson Hole on Friday, but there are some key US releases that could have an impact on the direction of the US dollar. New Home Sales will be released later today, with a forecast of 575 thousand for July, following 590 thousand in June. Durable goods orders will be published on Wednesday, with the headline reading expected to fall to 0.6% in July, down sharply from 2.0% in June. With the Federal Reserve in data-dependent mode, investors are keeping a close eye on key US events and we could see some movement in the currency markets following these releases. 0.9959 has switched to resistance. Above, there is resistance at 1.0113 There is support at 0.9877 and 0.9723
by OANDA
1
$EUR - Be prepared...!$EUR - Be prepared...! $EUR - What a mess! We've shifted gears this morning. Fundamental reasons as I stated in my previous posts and various others there is no good data coming out of EUR. Now as you look across the board its DXY move and you have precious metals, crypto, Indices and majors under pressure. This could continue! However, further insight will be happening at Jackson Hole. Which is another event to see what Powell has to say - Dovish or Hawkish. Europe shot themselves in the foot when it comes to further sanctions, as Europe overall heads into an energy crises. Germany & French electricity prices keep climbing, hit fresh records. German year-ahead power is on a nine-day rising streak. Contract rose 1.4% to record 545 euros per MW/h. Europe year-ahead coal futures climbed 2.1% to a record $311.50 a ton, and the river Rhine having issues due to low levels and lastly German producer prices on record (+5.3% MoM). It really doesn't look very pretty at all! Have a great weekend, TJ
by Trade_Journal
The tale of a 1001 golden bullish pipsWelcome back traders to the last month of Q3. It was quiet from my side for some time, due to the summer holiday break and major risk events on the horizon. A lot has changed in a few weeks. The market was pricing in tapering and interest rate hikes by the FED in early June, but the sentiment changed quickly after a disappointing speech for dollar bulls by Powell during Jackson Hole. The NFP came in very disappointing last Friday, and the stagflation drums are beating again. Jackson Hole So alot hinged on Powell's speech during Jackson Hole. As always Powell was very vague, however he did mention a couple of interesting things; 1. They will start tapering this year 🔹Not clear how much, could be $1 billion or $10 billion per month 🔹Not clear when (September, November or December FOMC-meeting) 🔹Since the August NFP missed its forecast and came in lower than 500k, it is unlikely they will announce tapering at the September FOMC-meeting 🔹Leaves us with the November and December FOMC-meeting as possible tapering announcement moments 2. No interest hikes for the foreseeable future 🔹Cheap money in abundance for the foreseeable future Yes, there will be tapering in place this year (most probably December), however the FED will keep drowning the market with cheap money in the meantime. Take note that tapering doesn't mean that they will take money out of the market, however it means they will slow down the money injections into the market. Reading between the lines it means the FED balance sheet will keep growing, however at a slower pace (currently $8.4 trillion). Eurozone The shift of attention of traders moves to the next world reserve currency. With the Eurozone economy growing at its fastest pace on record and inflation set to rise further, pressure on the ECB to taper its Pandemic Emergency Purchase Programme (PEPP) is building. It is widely expected by economists and analysts that there will be an announcement during the ECB-meeting coming Thursday to start taper its PEPP-program in December. This will obviously be bullish for EURUSD and have bearish implications for gold (somewhat) and the dollar. Technicals DXY Although I expected the dollar would break out after the August NFP, it did not so. Currently it seems the dollar bears have been building a bearflag on the daily chart and the third test of 89.5 might do the trick for a breakdown towards 88 and lower. Gold Gold made some good bullish moves since the flashcrash of early August and we are back above 1800, however it failed again to close the day and week above the 0.382 fibo retracement level ($1829). This implies bullish weakness and I am expecting a bearish retracement first towards the 1770-1790 zone and bullish continuation towards 1875, 1925 & 1960 afterwards due to dollar weakness to complete an inverse H&S pattern. A solid break of 1835 on the daily chart will make things extremely bullish in goldyland, as this will confirm the triple bottom and this will invite bigger bulls to the arena. EURUSD On EURUSD I am very bullish due to the Bullish Wolfe Wave on the weekly chart (send me a DM if you see it too) and the touch of the bearish trendline that broke July 2020 and turned bullish support. I am expecting to see the break of 1.235 before end of year with endtarget 1.28 (Q1 2022). Indices I am still bullish on indices as long as the Dow Jones (US30) hasn't touched the 36.6k mark and I am expecting one more blow-off top before we see a market correction of at least 20% (if not more). However I am not buying and I do not advise to buy all time highs to anyone. Rather I would like to stay put and wait for my projected reversal point to sell the equities market to the highest bidder. Beautiful days ahead with a lot of pips to be collected. Love and hugs, Cesaro 😎
OANDA:XAUUSDLong
by CesaroPelucci
2
Will Stocks Make New Highs After Jackson Hole??Stocks dipped, finding support just above our level at 4462. We are currently testing 4487, which should provide resistance. The Kovach OBV is rounding off with the price action suggesting the overall momentum is petering out. Watch for news events from Jackson Hole to influence the price, and for stocks to remain in the value area between 4462 and 4487 until then. Our next target above is 4504 again, or highs. News from Jackson Hole could easily bring us to new highs again.
FX:SPX500Long
by quantguy
Big moves on GOLD today! Today we expect to see big fluctuations in price on GOLD during and after the Powell press conference. That will happen in less than 2 hours! After the event we would expect a more clear direction for a little longer period of time. If you've been following our analysis, you know what we expect in the long-term. Today we will be watching closely what happens during and after that press conference. Do not rush to enter any trades in the first few minutes as this could be a false direction. Wait for a confirmation signal! One of the main scenarios is price climbing up to 1825-30 and then rejection of that zone and possibly going below 1770! In order to make an entry though, we want to see some confirmation before that.
FX_IDC:XAUUSD
by ForexTrendline
29
Copper prices may turn lower after re-testing former supportCopper prices are retesting support-turned-resistance in the 4.26-4.45 zone, marked by the intersection of a six-month inflection area, the uptrend from the Covid-induced March 2020 low, and a neckline support from early March. Signs of indecision in the daily candlestick structure and negative divergence on short-term momentum studies warn of topping. In all, the setup suggests that a corrective upswing following a major bearish breakout has run its course, with the emerging downtrend aiming to reassert itself in the near term. The first major layer of support lines up near the 4.00 figure. Fed-speak at the Jackson Hole symposium - particularly the speech from Chair Powell - may emerge as the catalyst for weakness. A measured-move projection implies a move below 3.40 may ultimately materialize.
COMEX:HG1!
by IlyaSpivak
Do not trade before PowellToday we expect Powell's press-conference which at Jackson Hole. This will definitely affect price and provide us with some trading opportunities. However, short-term positions prior to that are quite risky. If you're looking for any day trading opportunities, I would suggest that you wait for that press-conference first. Before that we could see price trading in both directions. Our expectations are still the same. We think that we could see possible reversals in the zone of 1,1788-1,1828. We will be watching each candle inside of this zone for a possible entry signal. In case price begins a downside move, then the key level will be 1,1723. If market goes below it, then that would confirm our idea. You could also use this level to add to your position. The main target is still 1,1640. Follow our daily analysis to see how this setup will develop!
Short
by ForexTrendline
18
Gold & Jackson HoleHello traders and welcome to the grand finale event of the year. Jackson Hole We are nearing the Jackson Hole speech by Jerome Powell, where he will lay the groundwork of the FED's monetary policy & strategy. Jackson Hole is extra important this year, as traders and investors are expecting a change of strategy by the FED for the coming year. The FED-cartel Powell himself has been mildly dovish, but his sidekick Bullard has been vocally hawkish in his interviews. Usually the FED-President uses his sidekick to send a signal to the market before the real decisions will be announced. Clarida & Kaplan on the other hand had a change of heart by suggesting to wait with tapering until the effects of the new delta-variant become more clear. The situation can't get more confusing. What to look out for? Traders will be looking out for clues from Powell on tapering the unprecedented bond-buying program. Most likely Powell will remain vague (as we know him), but he might start giving a timeschedule on when he plans to start slowing down the bond-buying with the first 40 billion a month. The expectation is that the FED will remain supporting the market with 80 billion dollars per month (currently 120 billion per month) until end of next year. Technicals We are nearing the 1815-1820 (1st major resistance) and the 2nd major resistance (1830-1835) in a bearflag formation that broke on Wednesday. Next to the bearflag there is also a Head & Shoulders and an H4 Bearish Gartley pattern developing that is aiming for the $1725 major support. We are also still below the daily deathcross and this is a strong bearish signal for gold, while the DXY is operating in a daily golden cross. Buy or Sell? The big question for many. My personal opinion is to stay out of the market until the situation calms down and see how the market will digest the event after the weekend. While this is still a gamble, I do think the gold bears are in charge below 1830. If you want to take the gamble, then I would say a short has a higher risk:return ratio currently. Tomorrow we will get the answer. Good luck and may the blue pips be on your side. Cesaro
OANDA:XAUUSD
by CesaroPelucci
1
A sell zone on EURUSDWe're expecting another downside move on EURUSD. We now have the zone at which we will be looking for short position and that's 1,1788-1,1828. In order to make an entry we will be watching each candle inside of this zone. Once the downside move begins another key level will be 1,1723. Price breaking below it will only confirm the drop. This level could also be used for an additional entries. The main target is still 1,1640. Make sure to follow us and watch out for our daily analysis to find out how this setup develops!
Short
by ForexTrendline
23
USDOLLAR Momentum Has shifted Up Into Jackson Hole SymposiumThe above chart shows the weekly FXCM USDOLLAR chart. We note that the higher trough followed by the higher peak has the greenback in uptrend. The momentum of this trend is defined by the gradient of the green trendline. However, we also note higher trough2 followed by higher peak2. These two points are defined by the orange trendline. I.e. the gradient has shifted upwards as the USDOLLAR’s momentum increased. We are heading into the Jackson Hole virtual symposium and market participants are looking forward to the Fed Chair’s delivery on Friday at 2:00pm GMT. The market will be listening for clues regarding the Fed’s tapering timetable and it will be interesting to see how this chart reacts, especially in relation to the steeper orange trendline.
FX:USDOLLARLong
by FXCM
2
Jackson Hole and Eur-UsdIt is only a day away from the start of the central bankers' symposium on Thursday in Jackson Hole, Wyoming. Jerome Powell has already been making it clear to the markets for several days that the Federal Reserve's stimulus plan is coming to an end. Stop with the ultra-accommodating policy, zero-cost money and massive purchases of government bonds (120 billion a month): it is time for tapering. The markets did not react positively. However, as the days passed (two days, in fact), investors realised that the Fed will not allow a stock market crash, creating chaos. So yesterday, the S&P500 index has once again touched its all-time high. What is on the horizon is a split between the Fed and the ECB. After years of walking arm in arm in the name of growth and the fight against inflation, the Federal Reserve and the European Central Bank are about to part ways. With GDP at 6.5%, a steadily improving labour market and, above all, inflation already above 5%, the Fed is preparing to reduce stimulus. On an economic level, monetary tightening means that access to credit will become a little more expensive and thus less money will be available for families to consume and businesses to invest. As far as the currency market is concerned, all this translates into a strengthening of the dollar. There is some concern, especially because of Covid-19, which is far from being averted also because of its variants. Treasury Secretary Janet Yellen expressed her fears in a letter to Congress, in which she warned that the Delta variant of the virus could damage the economy. On the other side of the Atlantic, the ECB has no intention of changing its stimulus plan and rates will remain at zero for a long time to come, as Christine Lagarde confirmed when answering journalists' questions at the ECB's latest meeting, “there is still a long way to go before the damage to the economy caused by the pandemic is offset” and again, “none of us would want to tighten prematurely.” The only thing that remains to be seen is the timing of the Fed's tapering, most likely before the end of the year. Now, quickly a look at Eur-Usd to try to understand what could be the future scenario of the currency pair. Above, you can see the chart with the most important levels highlighted. If what is written above is confirmed and the US will set a date for the start of tapering, then for Eur-Usd the doors of decline will open wide. In this case, I don't think the rebound will continue any further. If there will be hesitations, second thoughts, and only hypotheses and ideas understudy, then I think that Eur-Usd can continue to rise with first targets 1.17800, 1.18200 and 1.18750/1.19250 area. So, from tomorrow, eyes on the symposium in Jackson Hole.
by TradingwDavid
Powell's taper comments coming-up: Potential scalp opportunitiesI have set-out my logic in prior posts of how I am exiting the SP500 market from prior longs bought more than 18 months ago - by selling into rallies. If an infrastructure deal goes ahead and debt ceiling issues are dealt to successfully, I will reconsider my current stance. However, I am happy to scalp particularly from needless / senseless market over-reactions for short term scalp trading opportunities. We may see an opportunity coming up with Powell and the Jackson Hole meeting coming up. My rationale set-out below: - tapering is simply a reduction in the Fed's open market operations (OMO) whereby treasuries are purchased from dealers (secondary market) with the result being that cash from trader's is deposited into the Banking system. This cash is also known as reserves ( Refer blue Histogram ) - The effect of this QE style OMO is to strip credit interest out of the non-government sector that would have otherwise been paid to holders of treasuries as one form of money (treasurites) is replaced with another form (Bank cash / reserves). - the banking system is 'pull system' , not a 'push system'. Banks need capital to make loans; not deposits as the Fed, like all Reserve Banks, they act as lender of last resort. Stuffing the banking system full of cash does not benefit Banks, rather it makes regulatory capital management harder for Banks and produces scarcity of interest bearing securities, with downward pressure on rates. - to offset some of this effect, reverse repos have been employed by the Fed as a 'temporary' measure - but is its like a senseless merry-go-round. Why am I saying all of this? - where you have record high fiscal growth supporting a market (risks looming in the background - debt ceiling), and potentially needless market panic regarding the word 'taper', which is actually positive not negative for the market, then that's a great short term buy opportunity to scalp back to the mean. What level will I buy at: I would like to buy around the cost basis of swing traders which is marked on the chart and which represents around 20% market capitalization. I will be checking out my Market Risk indicator which looks at a range of factors including futures spreads for a potential long scalp trade. Instead, call writing maybe your go-to strategy here instead but there's not much Vol to sell (yet!) #MMT
AMEX:SPY
by Adam-Cox