Recession Indicator New Orders vs Job OpeningsShowing the causation between new orders data and job opening data.
When new orders fall, new jobs fall.
RN, new orders have fallen. New jobs haven't fallen yet.
Recession
GDX GOLD MINER may bottom@24 or 21 zone to retest channel.GDX seems to be doing a BIG UPCHANNEL started from the 2016 low & retested at the 2018 low. If this lower channel is to be retested, GDX may bottom at the 24 green zone. This is the most probable since this is also the 2016 VWAP & the FIB 0.618 retracement from 2016 low.
However, if you look at the VOLUME PROFILE, then GDX may fall more to the 21 zone to create a divergence, ending wave 1 of wave III.
BULLISH longterm: Gold & gold miners will be a good hedge during rising inflation or recession. Every portfolio should have this insurance policy & some other defensives like XLV health, XLP staples & XLU utilities. TLT bonds will also rise during recession while US10Y rates go down in a deflationary environment. GDX may be just in the early stages of the longest wave III rally & has a long way to go.
GDXJ Junior miners fell a lot more so I think percentage wise it will have to rise more just like today. Miners tend to be the leading indicator for GOLD. Gold may fall more to the 1670 to 1760 zone. Gold recovering 1800 will be very bullish while GDX reclaiming 30.37 wave 1 top & previous neckline pivot will also be bullish.
Not trading advice.
$SPX breaking downtrendS&P 500 index looks to be finding its footing. It just broke through the 20-day moving average with gusto. The 20-day MA is a good gauge for shorter-term momentum.
This all hangs on being able to hold above the 20-day MA, if so, the next test will be at 3,978, which is approximately right where the downtrend line and the 50-day moving average meet. If it can break through this downtrend line and hold above it while making higher highs, we could be saying bye-bye to this bear market.
Oddly enough this is also right where the gap that is yet to be filled is.
Those of you that don't think stocks can do well during a recession have not read your history books or done your due diligence. I am not in the recession camp though. I am in the "definition for recession is no longer relevant in today's financial world" camp. Yes, based on the old technical textbook definition, 2 negative GDP quarters in a row=recession.
I think we are going to still have the next roaring 20s, I'd put my money on a rally/rage into the end of the year then an economic boom when some of the macro and geopolitical bugaboos get solved with time.
Happy to discuss and answer questions.
Thanks,
Tiger
EURCHF breaks below parity. A further drop expectedThe last time this pair dropped below parity, investors chose the CHF over the Euro. However, the SNB was worried about the deflationary aspects of such a move and acted to reverse the move.
This time, the fundamentals are more or less the same or different depending on how you interpret it.
The Euro zone investors are worried about the block tipping into a recession due to high energy costs. In Germany, for example, regulators have warned that entire industries could come to a halt should Russia fail to reopen the Nordstream 1 pipeline gas flows. The Yamal pipeline has also seen huge drops in gas supplies.
With this in mind for Euro fundamentals, the question remains whether the SNB is going to do anything. A stronger CHF is definitely going to the reduce inflationary pressures for Switzerland.
In my opinion, I expect the pair to head lower toward the Jan '15 bottom.
Risks to trade
Historically, strong moves in one direction tend to reverse with similar momentum.
The EURO - SWISS bond yield spreads show that the downward move may not be sustainable since FX tends to move in lockstep to spreads
The SNB raised rates by a whooping 50bps for the first time in a long time. In typical fashion, Swiss bond yields jumped, some out of negative territory. However, the yields have retraced most of their earlier moves. This may imply that the markets are pricing that the SNB will not raise rates as much in the face of a recession in Europe.
This might reduce the strength of the CHF with weakness showing up in the USDCHF.
PS: I already have an open position ( This is not trading advice)
With that in consideration, I'll be short the Euro for Q3.
Unemployment is inevitable part 2INVERTED GRAPH
Unemployment rates in black.
INVERTED Michigan consumer index in blue.
As consumer sentiment falls, unemployment rises.
Every.
Time.
The consumer index just fell to all-time lows.
Unemployment hasn't risen.
Either we have done something completely unique in the history of the stock market redefining how modern economics work...
Or there's a lot of unemployment coming.
Recession concerns dominate the headlinesEUR/USD 🔼
GBP/USD 🔽
AUD/USD 🔼
USD/CAD 🔼
USD/JPY 🔽
USD/CHF 🔽
XAU 🔽
WTI 🔽
As the dollar remained strong, EUR/USD reached a 20-year low of 1.0160 on Wednesday. Amidst predictions of a local recession and an impending energy crisis, the shared currency is among the weakest.
The GBP/USD exchange rate fluctuates about 1.1930, under pressure as the UK government crisis intensifies. Over thirty officials resigned, and many others begged Boris Johnson to quit. The 1922 Committee, comprised of Conservative backbenchers, sought to alter the rules that shield PM Johnson from the second vote of no confidence.
The FOMC issued the Minutes of its most recent meeting. The memo demonstrated that Federal Reserve officials concurred that rising inflation necessitated restrictive interest rates and are willing to become even more stringent if inflation persists. In addition, most respondents perceived an adverse risk to growth and a "substantial danger" that rising inflation may stay entrenched. The US Federal Reserve opened the door for another 75 basis point rate rise.
Wall Street struggled to register gains throughout the day, but significant indices ended higher. Although the FOMC Minutes' hawkish tone, policymakers refrained from discussing a 100 basis point (bps) rate rise, despite committing to do everything necessary to combat inflation. In addition, policymakers abstained from discussing the recession.
The yield curve for US Treasuries remains inverted. Currently, the 10-year note yields 2.93 percent, while the 2-year note yields 2.97 percent. Typically, an inverted curve is viewed as an early indicator of a recession.
Against the U.S. dollar, commodity-based currencies exhibited minimal movement. The AUD/USD exchange rate is around 0.6780, while the USD/CAD exchange rate is approximately 1.3040.
The USD/CHF exchange rate touched a new monthly high of 0.9743, while the USD/JPY pair finished at 135.85.
Gold reached a new 2022 low of $1,732.19 per troy ounce before the end of the trading day. The current price of a barrel of WTI crude oil is $98.40.
More information on Mitrade website.
Inflation is over now time to deflate It all comes down to Newton’s third law “what goes up must come down”. With the pressure of the federal reserve and the U.S. government doing what they can to hedge inflation. Oil is well on its way to a downtrend the Sp oil and gas exploration index will follow suit. Rising wedge has broken likely next move is down.
Bear Flag on 4H chartThere is a bearish divergence in the 4-hour graph of the # BTCUSD , which could bring the price of bitcoin even lower, to 7K levels. For now, what seems is that we are in a Bull trap, and then fall even more, derived from the global financial crisis, uncertainty and possible economic depression that we are about to reach. All cryptocurrencies could fall at abnormally low prices, even some disappear such as LUNA. You have to be very careful and ready for the worst, and try to win and take advantage of this moment.
This is only a personal opinion, and should not be taken as a financial advice.
SPX - Calculating the odds of a RecessionUnderstanding the possibility and consequences of a recession by determine the strength of U.S Economy using key economic indicators
GDP - In order to sustain the economy consumption must be increased meanwhile, Fed trying to tame inflation by implementing policies that will
going to reduce the demand. Ergo, The GDP is expected to fall by 1.25 next quarter.
UNEMPLOYMENT RATE - Every time a huge trend of layoffs starts 45 days prior to a recession. at this point, No major corporate layoffs have taken
place and currently the unemployment rate is at historically low levels.
INFLATION RATE - High oil prices, Supply Chain disruption, Hyper inflation risks across the globe and most importantly higher interest rates, There
is no doubt that inflation rate will counting rising.
CONSUMER SENTIMENT INDEX - Current level is below 60 which reflects lower consumer confidence which will result in lower consumer spending
DOLLAR's PURCHASING POWER - U.S Dollar getting stronger against other fiat currencies, However it's purchasing power is eroding, High interest
rates have strengthened the U.S dollar and it's expected to continue rising.
10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity - Short term vs Long term treasury inflows, Whenever yield nears the
zero or becomes negative then recession follows.
Federal Funds Rate - Interest rates are expected to hit 3.75% by the end of this year, There will be several rate hikes in the following months that will result in global economic slowdown.
Geopolitical Risk - Disruption of world order has already begun with Russia's Invasion of Ukraine, Growing risks of China and Taiwan conflicts, Shri Lanka's Crisis, Turkey's Hyperinflation risk and if U.S economy crashes then a new world order is imminent.
Conclusion: Current Health status of U.S economy is bearable However, projection for upcoming quarter is uncertain,
the most optimistic part is low unemployment rates, Financially strong businesses and Strong households
with higher savings rate, in turns following rate hikes cannot be associated with an inevitable recession.
Health care and defense sectors with high dividend yield stocks are greater alternatives to invest in.
Crude Oil may fall rapidly to the 85 to 92 zone supportCrude oil futures CL1! Is making an ABC zigzag correction & may reach 92 where A=C. 88 is the 0.618 Fib retracement while 85 is the Nov2021 Top. This strong support zone will enable crude oil to retest the blue upchannel base before resuming rally thru 2022.
Crude oil is falling due to recesion fears & demand destruction. This should be temporary due to the supply issues created by the invasion & sanctions which will not go away soon.
Not trading advice
RUSSELL 2000 respecting FIB levels; ABC may reach 1500 vol zone.The smallcaps Russell 2000 futures RTY1! (also the IWM etf), a leading market indicator like the transports, may complete an A=C correction ending in the volume profile zone near 1500. (IWM seems to be consolidating in tranches of 200…ex…230, 210, 190, now @ 170 & maybe 150 around 4Q2022.) This will complete the final wave 5 of C-wave.
As you can see in this weekly chart, Russell 2000 respects impt FIB levels. 2100 zone is Fib 0.236, 1900 is Fib 0.383, the current 1700 zone is Fib 0.50 & the projected 1500 bottom zone will be Fib 0.618, the most likely zone for a reversal.
THE BULLISH CASE: if Russell 2000 holds the 1700 zone, the bounce will be very quick due to the 2 LOW VOLUME zones. The target will be 2100 with some consolidation near the 1900 zone.
Not trading advice
BTC Daily TA Neutral BullishBTCUSD Daily neutral with a bullish bias. Recommended ratio: 58% BTC, 42% Cash. *USD hit a 20-year high, Oil, Treasuries and Gold are down, and cryptos and equities are up slightly as global recession fears continue to be exacerbated by higher inflation numbers. The Euro is crashing due in large part to the ECB failing to raise central bank interest rates to combat inflation in time. Key dates: CPI report is published at 830am (EST) on 07/13. Bitcoin has been testing $20k for twenty one sessions now.* Price is currently attempting to break out of a twenty one day consolidation at $20k and if it is able to continue up it would likely form a local Double Bottom (short-term). Volume is Moderate and currently on track to favor buyers for a third consecutive session if it can close today's session in the green. Parabolic SAR flips bullish at $21500, this margin is mildly bullish. RSI is currently trending up at 40 as it quickly approaches a test of 42 resistance; if it breaks above 42 resistance then it would likely test the descending trendline from January 2021 at ~48. Stochastic remains bullish for a second consecutive session and is currently trending up at 73 as it closes in on a test of 78 resistance. MACD remains bullish and is currently trending up at -1600 as it quickly approaches -1435 resistance. ADX is currently trending down at 42 as Price is pushing higher, this is mildly bullish at the moment. If Price is able to continue up from here then it will likely test $24180 minor resistance (and would confirm a short-term Double Bottom). However, if Price breaks down here, it will likely retest $19417 support before potentially testing the uptrend line from April 2017 at ~$15k for the first time since September 2020. Mental Stop Loss: (one close below) $19417.
Consumer Sentiment's Role in Long-Term Buying Opportunities Consumer Sentiment is just one tool for investors to use when choosing whether to buy, sell, add, or trim stocks. But it can be a very useful tool, especially when markets are heavily skewed in one direction as they appear to be today.
There have only been four (the three breaches during the 08 crisis I count as one) occurrences in the past when the U.S. consumer sentiment has dipped below the 57.40 mark. As we are currently quickly approaching 57.40 I have taken the liberty to map out the five-year returns of each of the four previous lows in consumer sentiment (assuming a buy-in during the month of the 57.40 breaches).
11/1974: 43.6% five-year return
04/1980: 76.02% five-year return
06/2008: 16.31% five-year return
11/2008: 81.33% five-year return
02/2009: 116.35% five year return
08/2011: 58.77% five-year return
Average nominal five-year return on the S&P500 since 1957: roughly 53%
Importance of these data? The takeaway here is that historically low consumer sentiment (sub 57.40) has in the past provided great opportunities for patient investors to enter long-term positions in stocks and yield abnormally high returns. Basing an investment decision on one economic metric is not an intelligent strategy, but using consumer sentiment to help time your buying position appears to be an effective method going off of historic price action.
Recession and inflation gone worse .. more plumpingUS fears the mount of recession and yet inflation had gone high and higher interest rates it just nearly 80% here in USA.
Bitcoin had tried to back up but admit the US fears mount of rescission and inflation.. the bear market isn’t over.. again stop saying we are in the bottom we aren’t officially at the bottom yet.
We are forward to see another big crash in history.. even so the Bitcoin experts said Bitcoin bottom should expect 10 or 13K to make the massive bullish rally over 100K +
If we are waiting for the buy then wait for the bottom to be bottom in.
Time to buy short-term treasuries?A recession is incoming, the yield curve has turned negative and the euro is collapsing.
Three good arguments for buying short-term treasury notes.
And you still get 2,8 % return for a very safe investment.
I think it is a strong buy.
AUDJPY breaks 50 Day Moving averageThe pair has been pivoting to reverse May - June gains. The pair has been printing lower highs forming a descending triangle. A confirmation of the break on the daily timeframe will warrant a short-sale.
Fundamentally, the AUD is struggling in the face of a global economic slowdown. The currency, a bellwether for global risk sentiment, weakened after the RBA raised rates further to 1.35%. The commodity linked currency is falling as commodities prices dip in the face of a possible global recession.
The JPY safe-haven properties are starting to show up following risk-off sentiments as traders weigh in on recessionary fears making this the ideal pair to trade for the rest of the year.
Risks to this trade remain in the back of my mind. Australia, as opposed to other major economies, is doing a lot better. China's recovery could support the currency. Further inflationary economic releases could push global bond yield higher lifting the interest rate differentials the therefore the the pair.
Trade with caution
Euro headed towards parity?The Euro hit the lowest level since 2002 this morning on reports that a key Russian gas pipeline had stopped sending gas to Europe. This has sparked recessionary fears across European markets. Further downside could be in the works despite being oversold. The ECBs anti-fragmentation tool may keep the ECB monetary policy stance for longer
Theory 3 of 3 for SPX--MOST LIKELYI have narrowed the likely future paths down to 3 theories.
THEORY THREE: Current position is Primary wave 4 of Cycle A of Supercycle 2.
Theory 3 is on a faster path while the wave structure is similar to Theory 2. The preliminary bear market bottom would be in somewhere between Election Day 2024 and March 2025. The path for the next month would see the market move up for a few more weeks as it attempts to finish Primary wave 4 (SKY BLUE). It appears Intermediate wave A (PINK) has concluded and it is even possible the low 2 days later was the end of Intermediate wave B down. It remains possible for further downswing this week to complete Intermediate wave B but it likely will not pass below the June low at 3636.87. Wave B CAN go below this level but it would bounce above it quickly. Early models have Primary wave 4 lasting around 28 days, we are 9 days into it so far.
IMPORTANT MOVES:
There are no duration restrictions on future movement at this time. A break above 3945 before a drop below 3636 would continue to keep this theory in play.
PROS:
This model appears to be riding election cycles. After Primary wave 4 ends, the market will swoon down again for a few more months with the bottom occurring around October/November this year. The 6-12 months afterward would move up before the final leg down takes the market to around 2400. The correction at the beginning of the millennium saw the overall decline last for about 9 years (March 2000 – March 2009). This was a larger macro event then our current correction. A 2-4 year correction makes more sense for this micro wave set we are likely in.
CONS:
Negatives are not glaring with this model at this time.
Theory 2 of 3 for SPXI have narrowed the likely future paths down to 3 theories.
THEORY TWO: Current position is Intermediate wave 4 of Primary wave 1 of Cycle A of Supercycle 2.
Theory 2 still has the bear market finding a final bottom 5-8 years from now. The path for the next month would see the market move up for a few more weeks as it attempts to finish Intermediate wave 4 (PINK). It appears Minor wave A (YELLOW) has concluded and it is even possible the low 2 days later was the end of Minor wave B down. It remains possible for further downswing this week to complete Minor wave B but it likely will not pass below the June low at 3636.87. Wave B CAN go below this level but it would bounce above it quickly.
IMPORTANT MOVES:
There are no duration restrictions on future movement at this time. A break above 3945 before a drop below 3636 would continue to keep this theory in play.
PROS:
If this model holds out, it will provide ample time for investors to ride the waves up and down during the current recession.
CONS:
The correction at the beginning of the millennium saw the overall decline last for about 9 years (March 2000 – March 2009). This was a larger macro event then our current correction. It is unlikely that this event will last nearly as long as that one. This would likely imply the current political pressures on the market are not resolved until after the 2028 election cycle.
Theory 1 of 3 for SPXI have narrowed the likely future paths down to 3 theories.
THEORY ONE: Current position is Minor wave 3 of Intermediate wave 5 of Primary wave 1 of Cycle A of Supercycle 2.
Theory 1 has the bear market finding a final bottom 5-8 years from now. The path for the next month would see new lows below 3636.87 which was the recent low from June.
IMPORTANT MOVES:
Currently Intermediate wave 3 is the shortest between waves 1 and 3 at 31 days. This would force wave 5 to be less than 31 days which is set for July 19. Minor waves 1 and 2 as marked (YELLOW) have accounted for 17 of the 31 days. This means we must complete Minor waves 3, 4, and 5 within the next 14 days which will be a very tight timeframe. This theory will be ruled out if we break above 3945 before we break beneath 3636. The futures right now are pointing to this theory being disqualified.
PROS:
If this model holds out, it will provide ample time for investors to ride the waves up and down during the current recession.
CONS:
The correction at the beginning of the millennium saw the overall decline last for about 9 years (March 2000 – March 2009). This was a larger macro event then our current correction. It is unlikely that this event will last nearly as long as that one. This would likely imply the current political pressures on the market are not resolved until after the 2028 election cycle.
There is also an Elliott Wave violation inside of Intermediate wave 3 (the span between PINK 2 and PINK 3). Minute wave 4 ends beyond where Minute wave 2 ends.
This violation likely negates the Minor waves inside of Intermediate 3 and its end point.
ETH Daily TA Neutral BullishETHUSD Daily neutral with a bullish bias. Recommended ratio: 53% ETH, 47% Cash. *MONDAY SCARIES. Cryptos are rallying today as US equity markets are closed for July 4th. It's still premature to call this a bottom so it's prudent to be wary of a potential Bull Trap.* Price is currently attempting to break out to the upside after testing $1k for eighteen consecutive sessions, confirmation of a short-term breakout would require Price to reclaim the lower trendline of the descending channel from October 2021 at ~$1200 as support. Volume remains Low and is currently on track to favor buyers for a third consecutive sessions if it is able to close today in the green; the Low volume is concerning and adds to risk of a potential Bull Trap. Parabolic SAR flips bullish at $1270, this margin is mildly bullish at the moment. RSI is currently trending up and testing 37 resistance with no sign of peak formation; the next resistance is at 55. Stochastic is currently crossing over bullish at 57, the next support is at 47 and resistance at 81. MACD is currently trending up slightly at -132 after defying its first attempt at a bearish crossover, the next resistance is at -91 and support at -197. ADX is currently trending down slightly at 46.50 as Price is pushing higher, this is mildly bullish; if ADX continues lower as Price goes higher this would become increasingly bullish. If Price is able to continue up here then it will likely test the lower trendline of the descending channel from October 2021 at $1200-$1250 as resistance . However, if Price breaks down here, it will likely retest $1k one more time before potentially testing $775 support for the first time since breaking above it in January 2021. Mental Stop Loss: (one close below) $1k.
USOIL: Last run before get dumpedHi Folks,
As you can see the chart says everyone,add more comments here would be unnecessary :)
Actually,the only thing I would say is that fuel cost will not follow the dumping,as it was on March 2020. That's the greatest joke,once again.
If you have any comments or ideas please share them down in the comments !
Thank you for reading,happy trading everyone :)
EURUSD: Long term viewHi Folks,
As you can see the charts speaks for their own: on a long term view we can clearly see a weak Euro against US Dollar.
The European currency is currently on a downtrend since last year,when it tried to break through resistance at 1.22,and since then keeps loosing dominance in the FX market, as well for his purchasing power which is decline since EUR inception as a main currency in the European Community.
As we can see from the chart on the left EUR is currently testing support at 1.05,a key support level which possibly will give a bit of breath to the currency before the downtrend continuation.
For the next months I am expecting EURUSD to get back around 1.12 ( where there is a massive gap on a Daily time frame) before continue his downtrend towards main support at 0.98,a continuation of negative trend given by negative performance of European Indexes and also because ECB will keeps rising Interest Rates until 2023 at least,on the hope to maintain low inflation rate in the Euro Zone.
Please share your ideas or opinions in the comments below,and thanks for reading !!
Also check my previous analysis on DXY on the link below,any comments are welcome!
Happy trading everyone :)
