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Quantitativeeasing

Buy Gold and Sell StocksThe S&P to Gold Ratio has effectively traded sideways for the last few years. The ratio has now broken out to the downside. I would say that a 30-80% correction in the stock markets remains a threat despite Fed rescue efforts. I believe over the next several years that gold will outperform the s&p500. Contrary to popular belief, US stocks have not greatly outperformed Gold since 2015. Jeff Gundlach of DoubleLine Capital in an interview from March 4th talked about the corporate bond bubble beginning to burst. He said the Fed would cut rates 50 basis points at the next FOMC. (They very well might cut before that.) He said he believes gold will go to a new all-time high. He also talked about how financial stocks in Japan are down 85% ever since they adopted zero rates 20 years ago. For that reason I think there's little reason to think that the SPX or the NASDAQ is going to bounce into a mega rally. I think there's a lot of reason to think that lots of money is going to flow into gold and silver. Even in the worst case scenario - a 2008 style crash - gold will fall much less than stocks. Gold stocks may take a significant beating. For that reason it may be strategic to reduce mining exposure here and increase gold and silver exposure gradually. The speed of the DXY 's fall the last 2 weeks tells me that it has the potential to fall a lot further if Fed Monetary policy expands tremendously. If that is the case, I don't think gold has much downside in this scenario versus 2008. But I think US indices as well as gold stocks have higher risk here. If the Fed is slow in cutting rates and never steps in front of the market until it crashes, then expect a 2008 type of event that may not be gold-negative.
TVC:SPXShort
by Ludwig_Von_Mises
Silver Junior Miner Value Hunting - SPA / SPAZFSpanish mountain has very little debt and is highly leveraged to the price of silver. Very little downside here, tons of mid & long-term upside potential. Intrinsically undervalued company & assets. They're sitting on a literal mountain of silver trading well below their 2016 peak. Conservatively I see SPA / SPAZF increasing 150% in 2020. All this requires is SPA getting back to its 2016 high when silver was at $19. If we get $21 or $25 silver, which I believe is highly likely in 2020, then a 1.5 bagger in Spanish Mountain is pretty much guaranteed. It could fall from 9 cents to 6 or 5.5 cents, which is a 30-40% loss, and it could easily rise 150%. That's an extremely favorable risk-reward. If silver were to rise to $30, SPA could rise 400%. 50$ silver would give us close to 1000% gain in SPA. And eventually, when we get 3 digit silver. Whether that's $100 silver or $500 silver. Juniors such as Spanish Mountain could become 20-100x baggers. Think long-term ;)
TSXV:SPALong
by Ludwig_Von_Mises
1
Gold Mining Sector is a No-Brainer. Cheapest it has ever beenGold miners versus the price of gold itself is the cheapest it has ever been. The gold mining sector cannot go to zero and it is the closest to zero it has ever been. How often does one get the opportunity to enter a sector at generational Value investors should love this sector. - fundamentally undervalued. basing at all-time lows - Gold achieved 6-year highs in the dollar this year and all-time highs in all other currencies. - Tremendous amounts of malinvestment and toxic debt. - Central banks openly expressing they will provide all the liquidity the market needs. Increasing acceptance of negative interest rates, including in the US Federal Reserve. No signs in sight of money printing slowing, precisely the opposite.
TVC:XAULong
by Ludwig_Von_Mises
5
AUDUSD based on no QE See annotations, and linked idea below. The QE announcement will have an effect on the longer term value of the pair; we will outline the possible effect on both scenarios. We believe QE will not go ahead any time soon, if it does it will be announced mid next year (June) – even though very unlikely. However, we can expect a gradual decline in interest rates (continued trend since 2011) with the attempt to boost economic growth. Even with low interest at 0.75% GDP targets have not been met. Therefore, we can expect interest rates to be reduced to 0.50% then potentially 0.25% - a bearish effect on the AUD. We however predict that interest rates will remain the same on the upcoming Tuesday announcement and can expect a reduction of interest later next year. As bullish structure is presented around 0.67500 we can potentially anticipate price accelerating to the upside of 0.6900-0.7000 before continuation to the downside. This could also be a great correlation with the assumptions and timeline we have established above. Furthermore, adding to our assumptions, further confluence for upside can be due to the Chinese official November PMI announced over the weekend which beat the market estimates; having an effect on the USD do the the trade wars. Later in the week we have the US ISM Non-manufacturing data being announced which will have an effect on the smaller time frames (hopefully in time for the shorter term correction). We then finish off the week with non-farm payrolls which we believe will be a surprise as the job market according the US reports and data is said to be positive. This also should have an effect on the chart from the H4 and below. In a brief outline and conclusion, we have briefly discussed our assumptions and attempted to put a timeline together in conjunction with price; we therefore believe price will reach 0.6900-0.7000 before further downside acceleration continues. As outlined we will now demonstrate how price will be effected if QE goes ahead and if QE does not go ahead. Once we have demonstrated these scenarios we will provide a forecast for the potential upside move to 0.6900-0.7000.
Long
by SERGENAYTUG94
Trading the Coming Pop in CommoditiesI don’t think its a coincidence that commodities across the board are looking bullish at exactly the same time as the economy is slowing down and the Fed is quietly conducting QE4. Fed bought twice as many bonds this month than their monthly total during QE3. October rate cut odds are at 90%. I don’t think inflation is going to explode tomorrow but I do think its coming. When the Fed launches their new QE program that will be larger than the first 3 QE’s combined, inflation will definitely tick up. DBC is not a long term hold due to decay, but it is a good way to trade commodities. I’m researching individual commodity companies to get maximum leverage during this next bull market. Go take a look at natural gas, soybeans, corn, copper, platinum, silver. They all look ready to take off. The CRB index also looks ready to take off. The relative strength index shows that commodities have strong support and are gearing up for a bull trend.
AMEX:DBCLong
by Ludwig_Von_Mises
1
Bond Market Indicating Risk On Environment?If you follow my work, you know how the Bond market is crucial to my analysis. It is the largest market in the world, and we are heading to a period where central banks really have no ammunition anymore and are using rhetoric to maintain confidence in the system. The history of humanity is cycles of hard money and soft money. It seems we are reaching the end of this soft money cycle. Of course Ray Dalio mentioning how there are many similarities to the 1930's-40's. Today we are hearing about the repo market. How money has to be injected to ensure the system is propped up and interest rates do NOT spike up to double digits. Lot of argument whether is is Quantitative Easing (QE) or not. Remember, the Fed cannot mention QE because it could trigger a confidence crisis. QE was supposed to be a one time desperate policy to prevent another 1930's like great DEPRESSION. If it is mentioned we are on QE again people will realize that central bank policies did not work and we are stuck in 0 to negative interest rates forever with QE infinity. QE was a way to inject money into the system by the Central bank buying up bonds. Repo is when the central bank directly gives money to the banks and receives collateral in return...they say this is US treasures but it could very well be toxic assets. The difference between QE and Repo is really new bonds/debt vs old bonds/debts. It still is about injecting money into the system to more importantly, keep interest rates suppressed. Because of this environment, I have said bonds are a great long term trade because central banks will be cutting to 0. Specifically Canadian bonds because I believe the market has not priced in Canadian rate cuts until this past week. Historically, bonds are not meant to be traded. As the European Fixed Income traders say, we basically buy bonds because we believe we can sell it to a greater fool who will buy it. Bonds brought in reliable income, and a decade ago when you retired with say 1,000,000 dollars, you would buy government bonds yielding 5-8% at the time which would provide you with 50,000-80,000 a year...which is enough to live off when retired. Today you would get 15,000-30,000. When Central Banks started QE and began keeping interest rates low, they caused money to flow to the stock market and real estate as money had to chase yield. Again, if you follow my work, today there is nowhere to go for yield EXCEPT the stock markets and why I think they will continue to go up. So let us look at the bond charts. So I am showing the yields. Remember there is an inverse relationship between bonds and yields. When bonds go up the yield drops and vice versa. On the ten year yield, we have a potential bottoming pattern here. Yields bounced at the important support level of 1.40. I am one who believes the Fed will cut one more time this year...something the market has not priced in yet but could very well be pricing in the closer we get to December. This is what would keep yields dropping lower and bonds moving higher as more people price in more rate cuts. This move in yields currently may be a relief move. We have trended (downtrend) for sometime with multiple waves. We have broken into all time new highs in stocks (again not surprising if you follow my work. Have been saying this would happen because of chasing yield). When people buy stocks and exit bonds, we call this a risk on environment. Whereas when one sells stocks and goes into bonds, we call this risk off. Remember, money managers cannot really be in cash all the time. It has to be working somewhere and most of it goes into bonds during times of uncertainty, volatility and risk etc. The Bond chart is also showing a topping pattern (so remember inverse with yield): Just a crazy environment we are in really but continue to watch the Bond market. I expect in the longer term bonds to go higher because central banks will cut rates even more. We then get to a point, which Ray Dalio calls the paradigm shift, where it will not make sense to buy and hold bonds (currently you can still sell it to a bigger fool).
TVC:TNX
by Uncharted-FX
Commodities are Getting Ready to POP!!Gold typically leads commodities by a few months and so given the surges and breakouts in gold, silver, and platinum, I think the CRB index is next. Looking at the chart, its clear this is a chart that has been gradually shifting in trends. In my opinion, most of the heavy selling is over. CRB index has been forming a sexy looking base and looks like it could begin surging. Timing wise, this coincides perfectly with the Fed & central banks globally beginning new easing cycles. Its still early, as the breakout has not started, but its looking ready to get its first real pop sooner rather than later. In my view the CRB index presents tremendous value over the next several years, especially now at these ridiculously suppressed prices.
TVC:TRJEFFCRBLong
by Ludwig_Von_Mises
3
EURCAD Weekly forecast. fundamental and technical overviewThe price i currently at the 0.886 Fibonacci level (drawn from (0) to 1.54729 Where i could see the price be in a range zone from 1.55713 to 1.53964 which is also between 0.886 and 1.13 on fibonacci. The price have been in a strong uptrend, where a trend channel also have formed on the daily chart. The price made a new high before starting to decrease, and can be an indicator of further downside so come. the price performed a Bump and run formation, (see my other chart from Mar 18) Long trade levels will be 1.52110 which is also the support line in the daily trend channel and 1.386 on fibonacci. while confer trade in the range area can be made before any breakouts. Short trade levels is the current level where a break of the 1.53964 can give further downside to the support line in the trend channel at 1.52110/1.52000 that is also a psychological level. break of this level will force a new analysis of a new short target. The price can have some struggles to make gains, as geopolitical tensions rise, and therefore rising oil prices, that can give the CAD a boost. also we have a oversold indicator on the RSI that signals a weakness in the upward momentum for further gains. There is a lot of high volatility macroeconomic data coming out the coming 2 weeks. where interest decision and removal of quantitative easing program will be watched closely by investors/traders. _____ Long trade. 1. Sold out on RSI. 2. removal of quantitative easing program in talk. 3. easing geopolitical tensions. 4. More output of oil from US 5. Support at 1.53964 that can give a new run to test the latest top. _______ Short trade. 1. Break of the range zone level 1.53964 2. Weeknes in the RSI. 3. 5 wave sequence 4. Geopolitical tensions. 5. rise in oil prices. 6. steady Interest rate decision with no talks about removal of quantitative easing programs, or postponement of the program 7. Week data Euro zone and Germany
Short
by Fx-AlphaStrats
Long GBPAUD - Anticipating No Surprise to MPC VoteSo generally the MPC vote is expected to be Neutral and if we look through a bit, if it does comes out 7 Hold to 2 Hike as expected, GBP should be weaken. Now my intention is to look for clue if the market has already priced this in: on average, up to this point GBP is down with the most down being GBPAUD. Let's say the trend continues to in the next hour, my conclusion is the market has priced in the base case expectation. What I will do is to Enter Long GBPAUD as I bet if the outcome is Neutral GBP will rebound. The scenario where I will lose money will be not all of the results came out as expected i.e. one of those data point is even more bearish (increase in amount of APF, more than 0 dovish vote). Technical level: it is hovering around 1.6476 - 1.65, I will make Entry with Stop-loss below these, TP is around 1.6574 - 1.66
by vietbach1990
News Compilation ahead of Draghi's Speech (Long Bias)Draghi is due to speak tonight during the ECB Press Conference. I guess today this is all market will talk about. The morning session up to this point has not hinted much, aside from EURAUD moving up due to AUD bad data, the rest is kinda sideway. Running into this event I don't have any particular insights, given the structure of first statement, followed by Q&A, there will be a lot of choppy price action during the broadcast. What I'm trying to do in this post is to compile the news watch from various source to get a sense of market's expectation. All in all, not likely to trade this like the CAD rate hike as this is not very direct impact on the currency (yet), I'd prefer to avoid the choppy news. News Compilation: MarketWatch: citing Carsten Brzeski, chief economist at ING "The stronger euro has made the ECB’s taper tiptoeing even more complicated . While a clear hint on tapering at this week’s meeting could send the euro even higher , potentially undermining the recovery, room to postpone tapering is limited due to bond scarcity" => Weak to Neutral " A Reuters report last week said the rising euro is worrying more policy makers, leaving an announcement on QE tapering at Thursday’s meeting highly unlikely. The report said an announcement might not be ready until December ." => Weak to Neutral “As the ECB is probably not yet unanimous on the first option, we expect that Thursday’s meeting will again be about what Draghi did not say, rather than what he did ,” => Confusion expected Bloomberg: "the ECB is likely to support the consensus view in the marketplace that, as of January 2018 , it will be reducing the pace of monthly asset purchases ." => Strong "This belongs in the context of a gradual phasing out of the program, combined with rate hikes and, much further down the road , an outright contraction of a balance sheet" => Strong " markets have become very comfortable in interpreting the lack of official guidance on the policy normalization as a green light to increase financial bets on the continuation of a low volatility " => Interesting point, if Draghi don't make a clear guidance or if he does make a hawkish one, EUR will still strengthen BK Asset Management: "For this reason, we think the ECB will go ahead with reducing asset purchases on Thursday" => Strong "Most economists expect the ECB to cut asset purchases by 20B euros and if that’s all we see, EUR/USD will break 1.20 but probably struggle to extend its gains above 1.21. If they cut by 30B or more, EUR/USD should hit 1.21. However if they forgo reducing asset purchases and postpone the decision to October or December, EUR/USD will fall to 1.1800 and possibly even lower." => a very clear guidance and scenario analysis from BK The Guardian: "Time to raise eurozone interest rates , says Deutsche Bank chief" => Strong "The ECB is pumping €60bn a month into the markets in an attempt to stimulate growth, making a total of €2tn, and has operated a negative interest rate since 2014." => now BK's estimate makes sense, that's about a 30% to 50% cut to the supply of EUR in the market My interpretation so far is that general market expecting a strong EUR thus the alpha bet is on the short side. We should watch for a very specific talking point of 1) a guidance of how they gonna taper and better yet 2) an announcement of tapering itself. Paring this kind of sentiment with AUD weak data, I think the pair will drifts past resistance 1.495. We still need more meaningful price action from UK session to get a hint of what European big boys thinking but I will just go ahead and play into the news with a very wide stop and exit before the news announcement.
Long
by vietbach1990
4) Repeat: The European Central Bank created artificial pricesAugust 14, 2016 This is the text from my comments on the charts: January 2015: These levels above 4530-4600 are totally artificial .It was an aberration created by the European Central Bank (Quantitative Easing), which helped the CAC40 hits its long term diagonal resistance before it would collapse. Greece and China were merely excuses. Greek CDS (Credit Default Swaps) clearly showed that Greece had a bond default probability of about 85% in January 2015. Well done ! Can you see that by the end of 2015, the price of the CAC40 went back to its last value of about 4550? It was a lost year. And yes you are not seeing it wrong: that is the infamous Head & Shoulder pattern, as I mentioned many times here and elsewhere. European + US indices will certainly start plummeting in a month or two in my high opinion. The blue lines being shown merely depict one possible path and cannot be taken for granted. You guys can perform an Elliott Waves analysis and see. I do not currently possess enough knowledge/information nor the right skills to tell whether this would work or not. We shall see how it plays out !
INDEX:CAC40Short
by UnknownUnicorn569872
3
Pound Sterling and CABLE WEAKNESS is Signaling Monetary SurpriseRE: Global Macro Update Regarding European Union, #ECB, and UK The way the #Euro is strengthening relative to the Pound, and particularly the way the #CABLE $GBPUSD cross-rate is falling out of bed is about to unleash shock-waves of negative #sentiment through the European Euro STOXX Equity Markets $FEZ. According to RunningAlpha.com Capital Markets Intelligence, this currency market action is portending a monetary surprise announcement; and any rate hike in Europe to stem a soon to be out of control falling CABLE would backfire, as it would just put dangerous downward pressure on UK's GDP and Britain's Industrial production, ultimately further weakening the #Pound #Sterling Best regards, Efrem -- Looking for better times ahead in the USA after this initial start of the year shock in USA equity markets abates in the not too distant future ( as indicated in prior memos at Running Alpha.com; as the situation rapidly deteriorates in Europe, capital will likely migrates out of Europe into the USA in earnest.
FX:SPX500Short
by runningalpha
AUDNZD: Time and price target for a reversalOk, some traders noticed this vertical advance and want to short it. I do too, but not for now. I'll wait for confirmation before going short, but it looks like a potentially very good trade. It's reassuring that we are at the start of a new quarter, and many trends will start to reverse, and many pairs will come out of consolidation patterns as money managers take profits to show results to their investors, and also, the Grexit drama rears its ugly head once again, during tonight's Asia/London session. I'm considering this trade, once the price in the daily and 4h charts confirm the entry. For now, keep a close watch to both time and price, since this zone is critical in my view. I'll update the chart with my entry. Good luck, Ivan.
Short
by IvanLabrie
19
Upcoming Short Opportunity on U/J I've written down the notes for the trade on the chart, all self explanatory. I'm only looking for short opportunities on this pair as it has broken 200 EMA support. Yes the fundamentals of BoJ QE are still in play, but the current trend is currently in control of the bears. And remember the Yen is tied to commodities, and the market appetite for risk. And always remember that in the markets, fear is much greater then greed. Inter-market analysis all points to a Risk-Off environment which sub-sequentially strengthens the Yen as it is a "safe haven" currency. Current short will be taken based off of price confirming a rejection of the angled grey resistance box. With reasonable stops above the 200 EMA take profits will be at 116.00 - A break above current resistance (200 EMA) will switch this over to strictly long opportunities with TP set at 120.70, and possible short opportunities with tight yet reasonable stops above 120.800 for shorts at major resistance with TP at 119.00 and 116.00. -Let price come to you, no need to catch a falling knife. Remain unbiased when trading, trade what price is telling you, many times price will ignore longer term fundamentals. Cheers, happy trading traders =D
Short
by Daniel.B