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Controlled Inflation, Company Costs, and Omicron CollapseLooking at yesterday's data on consumer inflation in the United States, one involuntarily wonders what the Fed was counting on when they repeated the mantra about the temporality of inflation for six months and assured that it would resolve itself. It resolved to the highest growth rates since 1982 and an annual growth rate of 7%, which is unheard of for developed countries. Tellingly, everything points in favor of a further rise in prices: the energy crisis has received a second wind thanks to the winter and a cold snap, and the inability of automakers to meet demand due to a shortage of chips leads to an increase in prices for used cars. In light of such data, 2022 is simply bound to become the year of a comprehensive tightening of monetary policy, however, Powell officially confirmed all this on Tuesday, speaking in Congress. Recall that the Fed's target is 2%. Markets estimate the chances of a first rate hike as early as May at 79%. However, yesterday the markets once again decided to ignore reality and pretended not to notice either inflation or the consequences that it entails. But the consequences are not only a tightening of monetary policy, but also an increase in companies' costs. And endlessly transferring them to consumers will not work. Sooner or later, you will have to sacrifice margin and profit. Banks are already reporting tomorrow and the reporting season is entering an active phase. It will be very interesting to see how corporations deal with inflation this time around. If they decide to give up some of the profits so as not to lose customers, then the disappointment of buyers of shares can be transformed into a sale. The number of covid diseases in the world has jumped over 3 million (!) new cases per day. As a result, the FDA said extremely ominously in Congress that an unprecedented wave of omicronic infections across the country could provoke the inoperability of police, health care and transportation services. What can we say about non-emergency services - all kinds of production, services and other elements of the economic system. By the way, we wrote about this earlier - if everyone is sick at the same time, then there will simply be no one to work. And now everyone is getting sick en masse.
FOREXCOM:NAS100Short
by Trade24Fx
2
EURUSD LONG SETUP - US CPI NEWS - 1.15?Hello everyone! today's trade is on EURUSD, a pair with high volatility which is a favorable thing for traders. Why are we taking this trade? - Ascending triangle on EURUSD with a very strong uptrend and buying-volume. - Price above the 20-50-200 EMAs and the POC. - European Stocks Higher on Recovery Optimism. - Dollar edges off lows as U.S. inflation test looms. - As inflation continues, CPI news have a high probability to come negative for dxy. - Good RRR trade, 1:3 - Not going against price direction. Everyone will have a different entry based on his risk management! mine is Buy-limit at 1.134 hope it gets filled. Don't scalp! swing trade as high volatility might hit all your tight SLs. Good luck everyone.
Long
by dogofwallstreets
Aggressive Powell Against Omicron RecordsRisky assets were recovering yesterday, while the VIX Fear Index was declining. To say that there were some special reasons for this, perhaps, is impossible. On the contrary, the headlines of the leading news agencies set up rather gloomy thoughts. Let's start with the fact that Fed Chairman Jerome Powell said that the economy is in good enough shape for the Central Bank to start tightening monetary policy without fear. Recall that the Fed plans for 2022 are as follows: a reduction in the volume of the quantitative easing program (it should be brought to zero in March), followed by 3-4 rate hikes, and the reduction in the Fed's balance sheet will be the icing on this cake. It's strange that the markets go out of their way to ignore this elephant in the china shop. Apparently, they are waiting for the dishes to start beating. We continue to believe that it is possible to act ahead of the curve, the outcome is too obvious. Meanwhile, the number of Covid-19 patients in US hospitals has surpassed last winter's high, with the US reporting 1.5 million. Such is the "soft" omicron. In fact, what is expected due to a sharp increase in the incidence of diseases, even with a smaller proportion of hospitalizations, US hospitals are overloaded, which may well cause a local collapse of the healthcare system. China, meanwhile, placed under lockdown 5 million people living in the city of Anyang after two cases of omicron infection were reported there. In general, of any rational reasons for the growth of the US stock market this week, one can only note the start of the reporting season and extremely optimistic expectations of the markets, the implementation of which investors are trying to take into account by buying in advance.
FOREXCOM:NAS100Short
by Trade24Fx
2
Bad Omens: China, Crypto, IPO, Woods and InsidersBuyers in the US stock market were again uncomfortable yesterday. There were no new reasons on the horizon: all the same talk about tightening the Fed's monetary policy. Meanwhile, the number of bad omens is growing. The point is that although the US stock market as a whole seems to be in order, some of its elements (the most extreme) or other risky assets are already being sold out with might and main. In today's review, we just want to talk about these early signals. We have already written about some of them earlier, but we will repeat ourselves in order to form a more complete picture. The US tech sector in the form of the Nasdak index added almost 30% at the end of 2021. But at the same time, a similar Chinese index lost about 50% (!). Or here's another fact. Katie Woods, who tripled investor investment in 2020, managed to lose over 40% in 2021. Once again: with the market growing by 30%, Katie Woods, when buying, managed to show the result in minus 40%. Why is that? Because it works with the most extreme assets that have just started to crumble. These assets are extreme also due to the riskiness. By the way, about the most risky assets. Our entire cryptocurrency market Bitcoin has lost about 40% over the past couple of months. And somehow the predictions about 100K or 500K per cue ball are no longer heard. But all these are links of one chain. It's just that at first the most risky assets fell down, and the rest will follow. Well, and a few more words about risky assets. 2021 was a record year for an IPO. But in fact, the year was a year of a record number of disappointed expectations and investors. Of the 50+ U.S. tech companies that went public in 2021 through an IPO, SPAC, or direct listing, only one company is less than 20% below the peak price. More than 20 companies out of 50 have lost at least half of their value compared to their peaks. We have already cited an interesting fact: American billionaires sold $ 42.9 billion in shares by the beginning of December 2021, which is more than double the $ 20.2 billion sold in all of 2020. It would seem that everything is growing, the prospects are sky-high - we must take it. But people who perfectly understand the real value of the company and the state of the markets are selling, and in record volumes. In general, if we combine all these facts into a big picture, we get the classic flight of rats from the ship. Moreover, these are only the first rodents so far, the rest will follow them, because the ship is doomed and it is only a matter of time until it finds its reef and it does not matter if it is an increase in the FRS rates, a new wave of a pandemic, political destabilization or an energy crisis.
FOREXCOM:NAS100Short
by Trade24Fx
1
Week in a Glance: FOMC, OPEC+ Protocols & Risky Assets ProblemsThe past week turned out to be one of the worst for risky assets in recent years: crypts were falling, sales were going on in the US stock market. And it was not about the omicron, which, although it provoked new world records of the pandemic (the number of new daily cases of diseases approached the 3 million mark, and a couple of weeks ago only slightly exceeded 1 million), was nevertheless stubbornly ignored by the markets. The trigger was rather the publication of the minutes of the last meeting of the FOMC FRS. It followed from the text that the US Central Bank was going to uncover almost all of its anti-inflationary bazookas in 2022: tapering, rate hikes, as well as a reduction in the Fed's balance sheet. Moreover, judging by the latest data from the Eurozone, annual inflation does not even think that it will decline, but even stop growing, having reached a new historical maximum of 5% in December. Well, on Friday, an additional reason for sales in the US stock market was provided by data on the labor market NFP came out 2 times worse than expected and even worse than the previous value, showing an increase of less than 200K. Perhaps the only risky asset that showed growth was oil. But there is a separate story with Kazakhstan. At the same time, we note that OPEC + continues to increase production by 400K b / d every month and in February there will be another increase in oil supply. So we believe that selling not only the stock market and crypto, but oil as well. The coming week will be interesting primarily for inflation statistics from the US, as well as retail sales in the States. It is quite possible that the week will become a defining one for the cryptocurrency market. A mining recovery in Kazakhstan could bring optimism back to the market and push prices up. But if this does not happen, then the remaining buyers may disappear from the market, and we will see Bitcoin at 30K or lower in the foreseeable future. Well, the reporting season. Banks traditionally open it.
FOREXCOM:NAS100
by Trade24Fx
1
GME and the MediaGME tested strong high-volume support from March and earlier in 2021 and bounced up sharply off the ~$122 level rising to ~$174 in the AH yesterday. The AH spike occurred at a time when most retail was not in the market, likely to avoid FOMO and more specifically to effect the IV in a manner to curtail potential options trading by retail and other players in this equity. Smells of desperation. And the OBV for GME is amazing and continues to show that nobody is selling even during significant price drops. GME bulls will just not let go of their shares. Further, the Woodies CCI indicator had a fairly extreme reading this week and with the sharp bounce up off support, it appears that the near-term bottom may finally be in... In terms of the recent media coverage I heard it was "bad" for GME. I don't watch the media much if at all, but trading wisdom has always dictated that traders should 'SELL THE NEWS' - meaning smart traders will often buy/hold on bad news and sell on good news. Based on the OBV it looks like the smart money is adding and holding through this recent bad news...so am I. Not financial advice.
NYSE:GMELong
by Akksujean
2
How To Trade During the News?It's critical for forex traders to pay attention to big economic data releases, government statements, and geopolitical events. Why? Because this information generally represents a country's economic strength and can predict a currency's future direction. Trading the news might be tough and not fit for everyone, but the resulting volatility can provide a plethora of trading chances. You know what they say: with the big volatility, comes the big responsibility (or something like that, right? #InvestroyJoke), so beware of wide spreads and slippages. We must first determine whether news items are even worth trading before building a "Trade the News" method. "Which news releases should I trade?" is a question you want to be able to answer. The big event risks that have a significant influence on the major currencies should be familiarized by forex traders. Remember, we're trading the news because it has the potential to raise volatility in the near term, thus we'd want to trade just the news that has the most market-moving potential for the currency market. The news that tends to influence market action and create volatility generally consists of the following: Modifications in central bank policy (sometimes known as "monetary policy"). Changes in government policy (sometimes known as "fiscal policy"). Economic data releases have had unexpected results. Random tweets from a particular international leader who enjoys emblazoning his name on skyscrapers (not anymore), or a billionaire working on spacexploration. Pretty much everything marked red in the economic calendar (especially related to US). There is no single news trading approach. As traders assess the conclusion versus market expectations, the price tends to surge in one way or have a subdued reaction to the news. With this knowledge, there are two basic ways to exchange news: a) Having a bias in one way b) Having an asymmetrical bias When you have a directional bias, you expect the market to move in one way when the news is disclosed. When looking for a trading opportunity in a certain direction, it's helpful to understand what aspects of news stories lead the market to move. The non-directional bias technique is a more popular news trading strategy. This strategy ignores any directional bias and merely relies on the fact that a major news event will cause a significant movement. It makes no difference either way the FX market swings. We simply want to be present when it happens! When you have a directional bias, you expect the price to go in a specific way, and you've already placed your orders. When news is released, it is always beneficial to grasp the underlying reasons why the market swings in a particular manner. You don't care which way pricing goes when you have a non-directional bias. All you want to do is get activated. Straddle trades are a type of non-directional bias setup. Conclusion: In addition to the factors mentioned above, you should be willing to learn along the way by figuring out: which news are stronger than others, what is the difference that needs to be between forecast vs actual for volatility to skyrocket and which news you should never even try trading. All these things come from trading and trading only (moreover, bad news, market changes every year). Personal note: The way we do it most of the time is… we trade them way before release, as this is how market picks up the direction.
Education
by Investroy
15
Technical analysis of BTC DEC21"Why it moved the way it moved" Technical analysis on the past chart is of no use we have to be prepared for the next possible move before hand. But every time i start charting i feel this is not predictable might be because im busy, lazy or unmotivated. 😒 But that doesn't mean we can archive every move cuz next time maybe when it starts moving we can be prepared beforehand, Afterall we are deciphering charts to get each patterns, right? This month my overall portfolio increased by 0% heck i even liquidated my demo accounts. All in the hope that i will be prepared for the next month. BTC don't move because of the news. BTC moves are indication of a future news. Everything happens for a reason, its either long or short, we just had to be there at the right place at the right time Lesson: be in short and long position beforehand so even when we breakout we are already in a position
BYBIT:BTCUSD.P
by phenodev
Greetings from the Fed, Surprise from ADP and Risky Asset IssuesBuyers of risky assets were not in the mood for fun yesterday. The US stock market collapsed, commodity assets went into deep minus, crypto, of course, fell. Tellingly, nothing fundamentally new has happened. It's just that the Fed was reminded that 2022 will be the year of tightening of monetary policy in the United States. Although everyone knew about it. The minutes of the last meeting of the FRS Open Market Committee were published yesterday, which were extremely aggressive. To begin with, FOMC members believe the labor market is approaching full employment, while inflation is a major concern. That is, they made it clear what part of the Fed's dual mandate is now a priority. Recall that at the last meeting of the FOMC, it was decided to accelerate the reduction of the asset repurchase program, as well as updated forecasts for the FRS rates, which suggest up to 3 rate hikes in 2022. In addition to all this, in the text of the protocols, there was a mention of the reduction in the Fed's balance sheet, which finished off buyers. All in all, the worst news for the US stock market is hard to imagine. The central bank is clearly embarking on a warpath. The US stock market bubble was inflated mainly by the Fed by injecting trillions of cheap money. So the texts of the last FOMC meeting show that in 2022 the Fed will carry out the opposite processes - to withdraw money, with all the ensuing consequences for the stock market. The protocol texts that the US labor market is approaching full employment are in very good sync with yesterday's ADP employment data, which turned out to be the best since May 2021. The growth in the number of jobs in the private sector amounted to 807,000 per month, which significantly exceeded the forecasts of experts (375,000) and the November increase of 505,000. The main generator of new jobs was the leisure and hospitality sector (246,000 new vacancies). And finally, we note that the pandemic continues to break records. The number of new cases of diseases worldwide has exceeded 2.5 million per day. But even a couple of weeks ago, the number did not exceed 1 million. Since the data from ADP did not take into account the last couple of weeks of December, a very unpleasant surprise may await the markets next month.
FOREXCOM:NAS100Short
by Trade24Fx
2
OPEC + and Oil Surplus, Omicron's Six Zeros in the USThe main event of yesterday was the OPEC + meeting. But this time there was very little intrigue. Unlike a couple of previous meetings, when the markets were not sure about an increase in production by 400K (either because of the fall in oil prices, or because of the pandemic), this week everything went very casual. An additional 400K b / d will appear on the oil market in February. Recall that, according to many experts, including OPEC, at the start of 2022 the oil market will go into a surplus (according to OPEC, in the first three months of the year, production will exceed world demand by 1.4 million barrels per day). But the participants in the financial markets are not particularly worried about this and are in no hurry to sell oil. Rather, on the contrary, neither risky assets continue to buy oil amid growing demand. The US stock market closed mixed yesterday. On the one hand, going against a furious bull is a bad idea. But, on the other hand, buying at current prices is still crazy. In general, Buffett, with his strategy of sitting on a bag of cash and waiting for a crash, looks like a kind of "golden" and risk-free mean. Even the 6-zeros figure for the number of new coronavirus cases in the United States could not shake faith in the bright future of the markets. The United States reported a record number of new Covid cases on Monday, with more than 1 million new infections, according to Johns Hopkins University. Yesterday was published data on the number of open vacancies in the United States. More than 10.5 million jobs are waiting to be filled. So there is a shortage of labor. The fact that people do not really want to work is evidenced by the fact that in November a record 4.5 million Americans quit their jobs. Today, with the help of ADP, it will be possible to see how the supply is able to meet the existing demand.
FOREXCOM:NAS100Short
by Trade24Fx
New Year Kicks off with Records: Tesla, Apple, Ford & PandemicThe new year kicked off on a very optimistic note for risky assets. Tesla gave cause for optimism, having reported about 936K sold electric vehicles at the end of 2021. This is 87% more than in 2020. The growth rate is astounding, especially against the backdrop of the main scourge of automakers in 2021 - the lack of chips. And although Tesla shares were quite logically and naturally growing on this news, we cannot but note that all this does not negate the fact of their strongest overvaluation. And if the bubble in the US stock market starts to collapse, then one of the first victims will be Tesla with its sky-high prices. Although the markets ignored it, they wrote in a notebook that Tesla was recalling about 500K cars to fix something important there. And in general, if it seems to someone that Tesla is the king of growth in 2021, then here's a fact - Ford shares rose by 140% at the end of last year, which is more than the growth of Musk's shares. And although the bubble is not going to collapse yet, there is more and more evidence of its extreme phase. Let's take at least one more record of yesterday: Apple's capitalization reached $ 3 trillion. But not only Tesla and Apple are setting records these days. The new wave of the pandemic in volume has already exceeded two times the previous highs: 10 million new cases in seven days - this is almost double the previous weekly record of the pandemic. In Florida, for example, the number of new diseases has increased by almost 1000% in the last 2 weeks. And do not think that a milder course of the disease means that these numbers do not mean anything. At the very least, this is fraught with a temporary shortage of labor in the world. And as a maximum - new lockdowns. By the way, speaking of the labor force, the data on employment in the US from ADP will be published today, and on Friday we will see the official statistics on the US labor market.
NASDAQ:TSLAShort
by Trade24Fx
Buying Put Options as Protection against Omicron Amid DivergenceOmicron continues to amaze with the speed and scale of its spread. The numbers are really terrifying. In Europe, the number of cases has increased by more than 50% in just a week (in America, the figure is about 30%). As a result, the number of new cases in France is already under 200K (almost three times higher than a couple of weeks ago). A similar figure (180K) in the UK. The United States has approached the 500K mark (a new absolute record) and it is likely that already at the start of 2022, after the successfully celebrated Christmas, the country will exceed the previously unthinkable number of one million new cases of the disease per day. In this light, as well as in anticipation of a tightening of the Fed's monetary policy, more and more traders are trying to at least partially insure themselves against a possible fall in the US stock market. That is, it has not yet come to open massive sales, but put options are flying like hot cakes. SentimenTrader estimates that in the week ended December 17, approximately 23% of new retail options were put contracts, up from 16% in early November. It should be noted that 2021 was a record year for the options market. On average, 39 million options contracts were traded daily this year, up 35% from 2020. At the same time, retail investors account for 25% of all trading activity. Which only confirms the idea expressed in yesterday's review. In general, summing up the results of 2021, let us once again note their ambiguity. That is, on the one hand, this is a super successful year for risky assets. The S&P 500 Index added almost 30%, which is a lot. But at the same time, 40% of the companies included in the index not only did not grow, but generally decreased in price by a two-digit amount, and a good half of these two hundred companies lost over 20%. We have already written about Katie Woods and her “successes” in 2021. That is, growth cannot be called uncontested. Such divergences are a sign of internal market weakness. So in 2022, despite the rally of Santa Claus, we prefer to enter not with long, but short positions in the US stock market.
NASDAQ:NDXShort
by Trade24Fx
3