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I Smell a Santa Claus RallyWith inflationary expectations low, a decrease in CPI and Core CPI, a likely slowing in interest rate hikes, there's too much positive news in the short term to ignore the likelihood of a near-term rally. Still, some hinges on Jerome Powell's outlook tomorrow, but I expect him to keep language as soft as his last speech. Last month, he was still very domineering in his tone on inflation, but the last FOMC meeting was much softer. I expect that again with inflation ticking down as proof of low inflationary expectations. I mean, you can hear people freaking out about the economy everywhere. I don't think inflationary expectations are high lol. Listen to his last speech and you can hear a dramatic tone shift. Here's last FOMC Press Meeting After rate hike in mid November: www.brookings.edu HARD LANGUAGE Here's his "Inflation and the Labor Market" speech on 11/30: www.youtube.com SOFT LANGUAGE Long term? You'll have to look at my first post to see that. Enjoy, and you can find a link to an Economic Release calendar down below for you to save. InTheMoney
TVC:NDQLong
by InTheMoneyAdam
5
$SPX 3 Day Chart 2008 GFC Crash OverlayHistory never repeats but sometimes rhymes right? 2008 MBS bubble dropped the S&P 500 56% from the ATH, assuming we have an everything bubble after 6+ Trillion QE injection since 2020, I see similarities to the Great Financial Crises. Powell made it very clear yesterday, more hikes for longer if inflation is not brought down to 2% target so how will they ever pivot without dropping inflation quickly? Inflation YOY around 7% "according to CPI" assures corporate earnings collapse going forward IMO, so I think the market is over priced Early Pivot or no Pivot. Laszlo, MMGinvest 12/15/2022
SP:SPX
by Laszlo-MMG
4
Bitcoin and 10k all but guaranteed?Looking at the Weekly Bitcoin chart. We've mapped out a key level that Bitcoin shattered down through with the FTX news, but has since failed to reclaim and break back through. FTX collapse aside though, we can see that this 18K level is where Bitcoin skyrocketed past in late 2020. Thanks to Uncle Sam's stimulus checks of course... Over the coming weeks, this 18K level will be a strong indicator if we'll see more pain ahead. Bitcoin wasn't able to hold the 18K level it blasted past this week. The 10-12K range seems to be calling Bitcoin's name at this point. Combine that with CPI, the FOMC/FED and Powell's stances, the bearish sentiment has no reason to go away. Inflation came in lower (despite still being at 7.1%), but as Powell stated, they'll be continuing to hike until their targeted 2% level is achieved. We'll look for nice trade setups on the way up or down. As you should be too. Eyes peeled out there. -TucciNomics Chief Overlord, AlgoBuddy
Short
by QuantVue
1
USD/JPY takes a tumble after soft CPIThe Japanese yen is sharply higher on Tuesday. In the North American session, USD/JPY is trading at 134.97, down 1.95%. The US dollar is in broad retreat after US CPI was softer than expected. The November reading dropped to 7.1% y/y, down from 7.7% in October and slightly lower than the 7.3% consensus. The trend was similar for core CPI, which dipped to 6.0%, down from 6.3% and below the consensus of 6.1%. We've seen this story before - equities jump and the US dollar slides after a soft CPI report, as the markets speculate that the Fed could make a dovish pivot in response to falling inflation. What makes this inflation report even more interesting is that the Fed winds up its policy meeting on Wednesday. Today's CPI data hasn't changed the pricing of a 50-bp hike tomorrow, which has about an 80% likelihood. The markets will be listening carefully to the tone of Jerome Powell's rate statement and follow-up remarks, hoping for clues about the next meeting in February. There is a strong chance that the Fed will hike by 25 bp and then take a pause - this would be significant because it would that the rate tightening cycle would terminate at 4.75%, below the 5.00% level or higher which many forecasts projected for the terminal rate. In all the market enthusiasm, investors would be well to remember that even with the recent fall in inflation, it remains more than three times the Fed's target of 2%. The battle with inflation is far from over and we are yet to hear the Fed utter the magic phrase that "inflation has peaked".  Jerome Powell and Co. may continue to drum out a hawkish message, but the critical question is whether anyone in the market is listening. USD/JPY broke below support at 136.20 earlier. This is followed by support at 1.3453 There is resistance at 1.3734
by OANDA
Why the CPI Report Matters and Could be a Bullish Catalyst As long as inflationary expectations remained low after Jerome's last speech where he spoke about softening the increase in interest rates, which may or may not be the case, there is a good chance that inflation ticks down. This would confirm a 50bp hike for December, easing monetary policy and providing room for equities to continue their rally. While I think a lower CPI report is more likely in the near-term than a tick up in inflation, with a possible higher than 50bp increase and a decline in equites, it could go either way. Later, when the lagging effects of QT are felt, I expect a further decline in the market as discussed in my previous thesis. It is also possible that inflation stays near its current 7.7%, in which case there may not be too large of a response in equity markets tomorrow. The bigger the move in CPI, the bigger the move in equites. VIX is inching up in anticipation of this binary event. I am linking this thesis with "long" because I believe the negative CPI trend will continue and result in a near-term rally, but this is only because I feel there is a higher probability of this occurring, not that it is by any means certain. InTheMoney
AMEX:SPYLong
by InTheMoneyAdam
8
🟩 Anticipating FED pause - BullishThe market is a forward discounting mechanism and looking back my stance is that the stock market are anticipating a pause in the FED stance. Hinted on Wednesday by FED Chairman Powell who said "smaller rates increases are likely ahead" as soon as December. If the market is anticipating a pause, THE GENERAL MARKET INDECIES are likely to push forward. This of course is different to the actual stocks pushing up. So my stance is Discipline until I get good enough traction. The real question is HOW MUCH HAS BEEN DISCOUNTED already?
SP:SPXLong
by TintinTrading
8
Euro pauses after sharp gains, NFP loomsEUR/USD is unchanged on Friday, trading at 1.0524. The week wraps up with one of most important releases on the calendar, US nonfarm payrolls. The robust labour market is showing signs of cooling down, as rising interest rates have slowed economic activity. Nonfarm payrolls have been falling and the trend is expected to continue, with a consensus of 200,000 for November, down from 261,000 a month earlier. With the Fed holding its policy meeting on December 14th, the NFP report will be closely watched by policy makers, who have relied on a strong job market to press ahead with an aggressive rate cycle. The US dollar has been in retreat since Jerome Powell's speech on Wednesday. The speech was balanced, with Powell reiterating that inflation remained too high and rates would continue to rise higher. Still, the markets focussed on the fact that Powell strongly hinted the Fed would ease rates at the December meeting with a 50-bp hike, and the optimism sent equities higher and the dollar lower. The euro has made the most of the dollar's weakness, and EUR/USD posted its best month since 2012, with gains in November of 5.3%. Still, the euro has been on a prolonged decline and started 2022 close to 1.14. The outlook for the euro is weak, as the European Commission expects the eurozone economy to decline in Q4 2022 and Q1 2023. The driver of the expected decline is the huge jump in energy prices caused by the war in Ukraine. The eurozone has been hit hard by double-digit inflation, and the ECB will have to continue raising rates, despite weak economic conditions, until it is convinced that inflation has peaked. EUR/USD faces resistance at 1.0583, followed by a monthly line at 1.0683 There is support at 1.0490 and 1.03537
by OANDA
Soft German retail sales can't stop EUR/USDThe euro has climbed to its highest level since June 29th, as the US dollar continues to struggle. In the North American session, EUR/USD is trading at 1.0496, up 0.85%. German consumers are being squeezed by the double-whammy of rising interest rates and double-digit inflation, and the October retail sales report shows that consumer spending was sharply lower. Retail sales dropped 2.8% YoY, versus 1.2% in September and a consensus of -0.6%. On an annualized basis, retail sales plunged 5.0%, much worse than the September read of -0.9% and the consensus of -2.8%. The soft retail sales report couldn't dampen the shine on the euro, which has climbed sharply as the US dollar can't find its footing. The dollar found itself in full retreat after Fed Chair Jerome Powell's speech on Wednesday. Powell's comments were balanced and didn't stray from the steady stream of Fedspeak we've been hearing for weeks, but investors still treated the speech as dovish, sending equity markets higher and the US dollar lower. The markets were delighted that Powell essentially confirmed that the Fed would ease policy as soon as the December meeting. After four straight rate increases of 75 basis points, the Fed is poised to deliver a milder 50-bp hike, with perhaps smaller hikes in the new year. Powell said that smaller rate increases were less important than the question of high to hike and for how long. Powell added that the direction of inflation remains "highly uncertain", and that more evidence was needed to demonstrate that inflation had peaked. As well, he said that rates will likely rise "somewhat higher" than the September forecast. That certainly sounds like a hawkish stance, but the markets chose to focus on Powell's broad hint that the Fed would likely begin lowering rates as soon as next week. The Fed may not consider that a dovish pivot, but the fact remains that Powell's comments have renewed optimism, sending stocks higher and the US dollar lower. EUR/USD is testing resistance at 1.0490. Above, there is resistance at 1.0583 There is support at 1.03537 and 1.0264
by OANDA
The USD Outlook- Elliott WavePCE was out, seems like Inflation is stable. Powell noted they will slow down the hike, so even if data is strong they will probably stick to the plan. If data is bad, which is not impossible, considering that economy is slowing down, then the DXY will fall further. So I see win-win for the bears on DXY going forward. But there will be pullbacks of course. Here is another count I am looking at; potential impulse from a monthly channel top. I will turn back bullish if I see strong bounce from 103.80 and back to 109.
TVC:DXY
by ew-forecast
1
EUR/USD edges higher as CPI fallsIt continues to be a quiet week for the euro. In the European session, EUR/USD is trading at 1.0363. The ECB's number one priority has been bringing down inflation, which has hit double-digits. ECB policy makers are no doubt pleased that November CPI fell sharply to 10.0%, down from 10.6% a month earlier. This beat the consensus of 10.4%, and the euro has responded with slight gains. The drop in eurozone inflation was the first since June 2021, and investors will be hoping that this indicates that inflation is finally peaking. On Tuesday, German CPI showed a similar trend, falling to 10.0%, down from 10.4% (10.3% est). Still, eurozone Core CPI remained unchanged at 5.0%, matching the forecast. One inflation report is not sufficient to indicate a trend, and with inflation still in double digits, nobody is declaring victory in the battle against inflation. Still, the drop in German and eurozone inflation increases the likelihood of a 50 basis-point increase at the December 12th meeting, following two straight hikes of 75 basis points. With market direction very much connected to US interest rate movement, a speech from Fed Chair Jerome Powell later today could be a market-mover. Powell is expected to discuss inflation and the labour market, and his remarks could echo the hawkish stance that Fed members have been signalling to the markets over the past several weeks. The market pricing for the December meeting is 65% for a 50-bp move and 35% for a 75-bp hike, which means that the markets aren't all on the Fed easing rates. Even if the Fed does slow to 50 bp in December, it will still be a record year of tightening, at 425 basis points. EUR/USD is testing resistance at 1.0359. Above, there is resistance at 1.0490 There is support at 1.0264 and 1.0131
by OANDA
$SPX - What's next?$SPX - What's next? Important data coming out this week out of US as well as Powell tonight it would be a surprise if he's dovish I'd personally like a pull back in US indices and to get back in long, this principle is validated with metals as well, let's not forget NFP... As the market is forward looking, we have seen DXY decline as rates will be declining in the future as the recession heads further, the data is establishing weaker in certain areas. However, technically we are at a key area, do we pull back or do we extend further to the downside. AUD as china may open may benefit AUD - Keep a key eye as well as confluence of Indices and precious metals. The key pairs I am looking into going overall: DXY EUR YEN AUD XAU SPX DAX Looking for pull backs to go back into the trend at suitable levels matching my trade plan! Medium term positioning. All the best, Trade Journal
SP:SPX
by Trade_Journal
4