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Fed Decision and Sell-off, Tesla Reporting and Chip ShortagesThe main event of yesterday, and of the week as a whole, was the announcement of the results of the meeting of the Fed's Open Market Committee. Not to say that there were any special surprises, but the general hawkish tone of the Central Bank gave another reason for the sell-off in the US stock market. Of the main results, it is worth noting the fact that the rate was not changed as expected, but it was noted that it is not far off (March). At the same time, the asset purchase program will end at the beginning of March, and the balance sheet reduction will begin after the start of rate hikes. Actually there is something cleansing in these sales. On the one hand, they are massive (in the sense they sell shares of almost all companies), but you should not count on a massive recovery of all. In fact, there is a process of cleansing the grains from the tares and that which is dead will have to die. So we do not recommend buying everything in a row and indiscriminately. Well, you can’t help but pass by Tesla reporting. The electric car market is a topic too hyped to ignore. From the latest forecasts: BloombergNEF analysts predict that 10 million electric vehicles will be sold worldwide this year. But back to Tesla. Since the company publishes production and sales volumes in advance, no one expected any surprises from these key parameters and all attention was focused on when, for example, factories in Berlin and Austin will open, as well as what the company's vision is for the foreseeable future. So for the year, revenues grew by 65% ​​(better than expected), profit by 760% (also better than expected), and production in Austin and Berlin will be actively increased in 2022. Despite all this optimism, the hand does not rise to recommend buying Tesla shares - they are too overpriced, and for years to come. But as for the threats, they are quite real, but they are not included in the price at all. Take, for example, the main scourge of the automotive industry in 2021 - the shortage of chips. Yes, Tesla somehow managed to get away with it last year, unlike other manufacturers. But the situation continues to be extremely unfavorable - even Musk admits this, calling the shortage of chips the main limiting factor for the company. In general, according to the latest data from the US Department of Commerce, the average stock of chips fell 8 (!) times from 40 days to less than 5. That is, roughly speaking, any even the slightest supply failure, for example, due to bad weather or a pandemic outbreak, and many enterprises will be forced to stop production due to lack of components.
FOREXCOM:NAS100Short
by Trade24Fx
FOMC Results, and Markets Getting Ready for Crypto WinterThe financial markets are exceptionally restless and volatile. Tellingly, there is no unity among financial market participants. As a result, the US stock market and the cryptocurrency market are frantically chatting. Perhaps the direction will return to the price dynamics tonight. Everyone is waiting with bated breath for the outcome of the two-day meeting of the Fed's Open Market Committee. It would seem that everything is expected – the monetary policy parameters will be left unchanged today. But the markets are not interested in this, but in the future actions of the US Central Bank. Recall that some analysts are waiting not for 2-3 rate hikes in 2022, but from 5 to 7. In addition, the Fed's comments on the reduction of the Central Bank's balance sheet will be extremely important: when will it start? What scale does it provide? In general, markets are waiting for a signal from the Fed about the level of aggressiveness of the Central Bank. If the FOMC is focused on inflation and is ready to act as quickly as possible, then we will see a new round of sales of risky assets. But if the US Central Bank shows uncertainty and tries to take a wait-and-see attitude, there may well be cries of “buy a drawdown” in the markets. Taking into account the scale of inflation, its uncontrollability and obvious tendencies for further growth, we are inclined to the first option and prefer selling risky assets to buying them. After Bitcoin peered into the abyss on Monday, the situation somewhat stabilized and improved. But the losses of the cryptocurrency market are still very massive. And if the growth of inflation stimulates the growth of inflation, then the fall of the crypt stimulates the fall of the crypt. Let's take mining for example. Paying the already increased electricity bills at the price of bitcoin under 70K and around 35K are two big differences. Fewer miners means less hashrate. Less hashrate - the network works worse. Well, do not forget that the vast majority of cryptocurrency buyers are fans of fast money, and when the crypt is not only growing, but falling, you can’t earn not only fast money on purchases, but also no money at all. This means that the number of buyers will physically decrease, and we may well see a repetition of 2018-2019, when the crypt suddenly became uninteresting to most participants in the financial markets, bitcoin was freely sold at 3-4K and no one was excited about the word at all.
FOREXCOM:NAS100Short
by Trade24Fx
1
EURUSD before FED Today is the day when we expect the Interest Rate decision for the USD. It doesn't matter if there will be any changes, we're still expecting some moves. Because of the news and how risky and unpredictable they are, we suggest looking for an entry only when the news are over! We think that there is a higher probability that the downtrend will continue. If, during the news we see price going up to around 1,1400 in the first minutes and then rejecting those higher levels, then that would be a good sell signal. Quite often, during news you can see how price leaves long wicks in a certain direction to take out the retail traders and it then reverses. That's exactly what we're expecting to see today, and we have to be patient because we don't know in which direction that wick will occur. The only thing that's sure is that there will be a lot of volatility and that our analysis tomorrow will look at the potential opportunities after the news. Good luck!
Short
by ForexTrendline
9
USDCAD 4Hr Analysis, NY Session 1/25 JanMarket Structure is Bullish on the Daily TF However Market structure is bearish on the Weekly TF Not super excited to buy at these prices Looking for us to come back down to 1.257 Thats where I'd buy at least. This is Based off my DXY Bias , Where I'm anticpating a pullback from our daily resistance zone for liquidity in a trend. It is possible we continue to consolidate until cad interest rates tomorrow. We also have FOMC tomorrow.
Short
by ShrewdCatfx
4
Business Activity Worries Amid Energy CrisisYesterday were published data on business activity in Europe from Markit. On the one hand, everything seems to be not bad: business activity in the service sector and manufacturing is growing (indices above 50). On the other hand, in most cases the data came out worse than expected, and in the service sector of the Eurozone it is generally at the lowest level since April last year. Well, and another alarming signal (according to British data) more and more companies as a method of dealing with rising costs are choosing to raise prices for their products. That is, the inflationary spiral unwinds. It will be all the more interesting to follow the results of the meeting of the Federal Open Market Committee on Wednesday. Moreover, the competition among analysts who will give a larger forecast for the number of rate hikes in 2022 continues. According to Goldman Sachs, the Fed could raise rates 7 times (!) in 2022. In addition to this, according to Goldman experts, the Fed may announce the beginning of balance sheet reduction in May already in May. But we will talk about this in more detail on the eve of the announcement of the results, that is, tomorrow. And today I would like to note the high prices for energy assets. The threat of Russian military action against Ukraine greatly worries market participants, especially at the peak of gas consumption. Recall that it was the situation on the European gas market that provoked the energy crisis. In this light, the continued rise in oil prices looks quite natural. But our medium-term position is still unchanged - we believe that the worst-case scenario will not come true, which means that current oil prices are definitely overpriced. We also note that negotiations with Iran seem to be close to a happy ending. And this means the lifting of sanctions, which almost automatically means an increase in supply on the oil market.
FOREXCOM:NAS100Short
by Trade24Fx
Week in a Glance: Stock Market Nightmares, InflationThe past week can be safely called waking nightmares for buyers of risky assets. On Friday alone, the cryptocurrency market lost over 10% (and, by the way, there is no queue of buyers, and after all, Bitcoin is already 50% cheaper than it was just 2-3 months ago), and the US stock market, represented by the Nasdaq index, showed the worst week since spring 2020 and overall it was the worst January for the index since 2008. Since the spring of 2020 is the beginning of a pandemic, the start of lockdowns and complete uncertainty, and 2008 is a global financial crisis that almost buried the entire global financial system under it, it becomes obvious how bad things are now. Especially when you consider that nothing actually happened. You can't call the reporting season a failure. Even Netflix, which was kicked by everyone at the end of the week (shares down more than 20% - the worst result since 2012) actually showed more than decent financial results, exceeding earnings forecasts and did not disappoint on revenues. However, nothing surprising happens to us. We have been writing systematically for a long time that huge price bubbles have swelled in the markets for risky assets. And bubbles are not about the rational, they are about the irrational. So in this light, selling out of the blue is a classic example of the irrational. At the same time, the fundamental basis for sales was created a long time ago and is just now being worked out. We are talking about a total overvaluation of assets against the backdrop of an unwinding inflationary spiral. The mixture is extremely explosive, since the tightening of monetary policies by the leading central banks creates the prerequisites for a mass exodus from risky assets. By the way, this week on Wednesday we are waiting for the announcement of the results of the meeting of the FRS Open Market Committee. It is possible that it was precisely for this event that the markets were desperately trying to discount last week. Should the US stock market be buried? Definitely not. Can it still go down? Definitely yes. Will he do it this week? Unknown. Very often, markets tend to overreact, resulting in a correction.
TVC:DXY
by Trade24Fx
1
$NXST: COVID / Tech Hangover?This one may be a bit risky but valuations are below the historical average and there's is some possibility that the divisions we've been seeing over COVID vaccines leads to a more local-focused population. People getting back to what's real and the issues that actually affect them in order to recalibrate to a sense of normalcy. If there is a tech hangover, I believe you'll find it priced in here first. XLC has been slippery though so we'll see how this plays out.
NASDAQ:NXSTLong
by Fox_Technicals
Insider Info from Peloton, Netflix and the Bank of TurkeyNot so long ago, we wrote about insider sales, which in 2021 significantly exceeded the figures of the previous year. There was some more information yesterday. Total insider selling hit a record $170 billion last year, up from $94 billion in 2020, according to SmartInsider. Indicative in this regard is the example of Peloton. According to SEC filings, Peloton executives and insiders sold almost $500 million worth of their shares, and did so before the company's capitalization fell by more than 80% in 2021. So the old adage “corporate leaders and insiders sell their stocks near the highs” has been confirmed once again. The main question that is now tormenting everyone is whether the stock markets will get off with a slight fright or whether the bubble will burst. In this light, there is a number of positive news for buyers from the Bank of Japan and the ECB, which have unequivocally spoken out in favor of maintaining ultra-soft monetary policies. But the rest of the support is not very good. Reporting season is not yet able to extinguish the fears of the markets. Yesterday, for example, Netflix lost 11% after publishing quarterly reports. Profits are better than forecasts, revenues are within forecasts. It would seem, for which the streaming giant was beaten. The answer, as usual, lies in the dynamics of the number of subscribers. And not even according to the results of the 4th quarter, but the company's expectations from the 1st quarter of 2022, which the markets did not like (2.5 million against last year's value of 3.98 million). In general, the reporting was not bad, but the markets were looking for a reason to sell and found it. So far, there is nothing to catch buyers with such moods. In general, the month of January is quite interesting in terms of the local price pattern: sales in the last hour of trading became more frequent. So you can keep this in mind when making trading decisions, especially intraday trading. Common sense seems to be returning to the Turkish Central Bank. Apparently, they have finally moved to the stage of accepting the fact of the existence of economic laws and the inexorability of their action, which even applies to Turkey. So the Bank of Turkey did not dare to lower the rate again, leaving it unchanged at around 14%. Not that this is a reason for buying the Turkish lira, but it is probably worth fixing part of the profits in its sales.
FOREXCOM:NAS100Short
by Trade24Fx
If Inflation's Everywhere, How the Fed Raises Rates in 2022?Quite a lot of inflationary data was published yesterday. Prices in the UK grew at the highest rate in the last 30 years (5.4% on CPI). Similar figures for Canada - consumer prices rose by 4.8%. As a result, US Treasury yields continue to rise as markets discount for the tightening of the Fed's monetary policy. In addition, Germany's 10-year bond yield rose above zero for the first time since May 2019. Against the backdrop of such data, analysts continue to compete, who is more, in the competition of how many times the Fed will raise the rate in 2022. Anna Wong, chief economist at Bloomberg Economics, is in the lead and expects five increases of 25 basis points for the year (March, June, July, September and December). At the same time, some traders are even talking about a 50 basis point increase in March. Given that oil prices are not yet thinking of falling (the International Energy Agency in its latest report released yesterday raised its consumption forecast by 200,000 barrels per day, plus a fire on the pipeline from Iraq to Turkey, which increased fears about the already tense short-term supply outlook) and corporate costs continue to rise, there are all grounds for further inflation growth. In general, it is not surprising that the US stock market is under pressure, and Nasdaq Vera officially moved into correction territory, losing 10%. An interesting indirect sign in favor of further price cuts. Back in late October, Robinhood was the 9th most popular free investment app on the Apple App Store, according to Sensortower. Now it has dropped to 19th. Coinbase was #1 at the end of October. Currently, it is at number 5. That is, interest is falling and there will be less and less fresh meat.
FOREXCOM:NAS100Short
by Trade24Fx
Oil Rally amid Sales of Risky AssetsPerhaps it is too early to say with certainty that the wind in the financial markets has changed and turned from the north to the south, but the feeling that something is happening does not leave. One of the signs of a change in market reality is the formation of a desynchronization in the price dynamics of assets. The stock market, and the crypt, continue to crumble against the backdrop of the oil rally. Which is somewhat unusual, since in 2021 they usually grew at the same time. Although from the outside it looks quite logical. The stock market and the crypto are frightened by the outflow of liquidity due to the tightening of the Fed's monetary policy (a steady increase in the yield of Treasury bonds is a clear confirmation of this). Considering that these markets are the most overvalued, profit-taking first of all on the bottom looks quite logical. And the reporting season in the US started not so confidently. JPMorgan and Citigroup disappointed, while Wells Fargo confidently beat earnings and earnings forecasts. In any case, it is too early to draw conclusions, but the very fact of the heterogeneity of the results is definitely not in the treasury of buyers. The reporting of Goldman Sachs became indicative (shares lost almost 7% yesterday). The bank clearly demonstrated what we wrote about earlier: the growth of salaries provokes an increase in the costs of companies, and it will not be possible to endlessly shift them to consumers. So, Goldman's operating expenses grew by 23%, which naturally hit profits. So it is likely that this is one of the first swallows, and there will be more to come. The main event for the US stock market yesterday was the information that Microsoft will buy video game giant Activision Blizzard for $68.7 billion. The year started most successfully for the oil market. This was facilitated by the unabated energy crisis, which was also facilitated by frost, as well as the expectation of a further rapid recovery of the global economy, which will stimulate growth in oil demand. In addition, the Middle East is again restless (referring to the attack by the Yemeni Houthi group associated with Iran on the capital of the UAE, Abu Dhabi). Despite such convincing dynamics, we continue to believe that this is the last attempt to grow before a powerful correction, which will be caused by the transition of the oil market from a state of deficit to a state of surplus. In terms of news, today's day is interesting primarily for inflation data from the UK, the Eurozone and Canada. Another confirmation that inflation does not think to subside may provoke a new round of sales of risky assets.
FOREXCOM:NAS100Short
by Trade24Fx
GBP - The money is there, if you play your cards right. One would be forgiven for being distracted by the rigmarole that is British Politics at the moment. Is the Prime Minister on his way out? I think the writing is on the wall on this one. Nevertheless, this will reward those who seek to capitalise on the captain of the ship’s scalp being acquired by his backbenchers he helped shepherd in to office. Looking to the nearer term, inflation is on the rise, rates need uplifting, there is a cost of living crisis — fireworks will dominate today. Looking towards the news, at the outset I expect the UK news to the upside and the US news to the downside. Asia has set the tone for the global session, and indeed those who have heard her beckon, shall undoubtedly be rewarded. Make no mistake. GBP’s attractiveness with the possibility of a rate rise due to inflation and all of its woes, coupled with a Prime Minister who will seek to stay in the driving seat for a while longer (May elex will be important) Plan B measures are set to be scrapped, and for now, the luster of the pound will endure. Buyer beware, however, in the longer term, with the ousting of the PM, issues will again come to the foray such as brexit, the cost of living crisis and an eye watering NHS backlog. Be smart, be careful, be profitable. *this is my first contribution. I hope it helps. I hope I’m right. Right or wrong, I will continue to post my ideas and analysis of fundamental issues which will dominate the first two quarters of ‘22. Conversation is welcome, discourse is key. Thank you.
Long
by EXFXTRDING
1
US Dollar with a view to GBPOne would be forgiven for being distracted by the rigmarole that is British Politics at the moment. Is the Prime Minister on his way out? I think the writing is on the wall on this one. Nevertheless, this will reward those who seek to capitalise on the captain of the ship’s scalp being acquired by his backbenchers he helped shepherd in to office. Looking to the nearer term, inflation is on the rise, rates need uplifting, there is a cost of living crisis — fireworks will dominate today. Looking towards the news, at the outset I expect the UK news to the upside and the US news to the downside. Asia has set the tone for the global session, and indeed those who have heard her beckon, shall undoubtedly be rewarded. Make no mistake. GBP’s attractiveness with the possibility of a rate rise due to inflation and all of its woes, coupled with a Prime Minister who will seek to stay in the driving seat for a while longer (May elex will be important) Plan B measures are set to be scrapped, and for now, the luster of the pound will endure. Buyer beware, however, in the longer term, with the ousting of the PM, issues will again come to the foray such as brexit, the cost of living crisis and an eye watering NHS backlog. Be smart, be careful, be profitable. *this is my first contribution. I hope it helps. I hope I’m right. Right or wrong, I will continue to post my ideas and analysis of fundamental issues which will dominate the first two quarters of ‘22. Conversation is welcome, discourse is key. Thank you.
TVC:DXYLong
by EXFXTRDING
1
Hedge Funds Confirm the Good Old TruthAccording to classical economic theory in the field of financial markets, it is not possible to “beat the markets” (to consistently show higher returns than the market as a whole): “You can’t beat the market.” At one time (2007), Warren Buffett tested the theory in practice, making a million-dollar bet that hedge funds over a period of 10 years would not be able to show returns higher than the S&P-500 index. In 2017, the bet ended with the victory of Warren Buffett. For nearly 10 years, the S&P 500 has returned 85.4% versus 22% for five hedge funds. And despite all this talk about a new financial reality, about fundamentally different conditions for the functioning of markets, in fact, everything is the same, everything is the same, as shown by the results of hedge funds in 2021. So, in 2021, a group of the top 20 hedge funds made a profit of $65.4 billion after paying fees. At the same time, the TCI Fund Management hedge fund alone earned $9.5 billion for clients in 2021, recording its 13th profitable year in a row, and showed a return of 23.3%. In general, according to LCH Investments, the 20 largest hedge funds have achieved a return on assets of 10.5%, which is almost 2 times better than the industry average. It would seem that success is what it is. But there is one big “but”: the S&P 500 is up 28.7% in 2021, including dividends. That is, starting from the first publications of Fame in the 60s of the 20th century, absolutely nothing has changed in this regard. And finally, a rhetorical question: if the best of the best, operating in billions for decades, how children rejoice at a yield of 10-20% per annum, why do people without education and experience believe that they can “squeeze” hundreds of percent per annum out of the markets?
TVC:DXYShort
by Trade24Fx
7