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Understanding Economics: Exploring Micro and Macro ConceptsWelcome to my first ever post! Starting today, I will be embarking on a journey to try and spread the knowledge about the world of economics. As a 16-year-old student who is undertaking their A-Levels, I want to share some of the knowledge I am getting and I am excited to share my knowledge and insights on micro and macro economics over the next year and a half. Through this journey, we will delve into essential topics such as Individuals, Firms, Markets, and Market Failure. We will explore the fundamental concepts of supply and demand, market structures, and the consequences of government interventions. Together, we will develop a solid foundation in microeconomic principles. In the second phase of our exploration, we will turn our attention to the macroeconomy. I will guide you through the intricacies of the circular flow of income, aggregate demand, and aggregate supply analysis. We will unravel the complexities of fiscal policy, monetary policy, inflation, unemployment, and their impact on the macroeconomic landscape. Whether you are a student, a professional, or someone simply seeking to enhance your understanding of economics, this blog aims to provide valuable insights and practical knowledge. I encourage you to actively participate by sharing your suggestions and questions as we embark on this educational endeavor together. Join me as we dive into the world of economics and unravel its mysteries. Stay tuned for regular updates on my blog, where we will explore various economic concepts and their real-world applications. If you wish the take a look at what I will be going through, I will list them down below, but apart from that Good luck! MICRO 4.1 Individuals, frms, markets and market failure 4.1.2 Individual economic decision making 4.1.3 Price determination in a competitive market 4.1.4 Production, costs and revenue 4.1.5 Perfect competition, imperfectly competitive markets and monopoly 4.1.6 The labour market 4.1.7 The distribution of income and wealth: poverty and inequality 4.1.8 The market mechanism, market failure and government intervention 4.2.1 The measurement of macroeconomic performance Macro 4.2.2 How the macroeconomy works: the circular flow of income, aggregate demand/aggregate supply analysis and related concepts 4.2.3 Economic performance 4.2.5 Fiscal policy and supply-side policies 4.2.6 The international economy
Education
by CosmosTradingGroup
Corn Prices Fizzle on Bumper HarvestCorn prices have fallen 14% since the start of 2023. The latest USDA report points to further downside. Corn prices are expected to fizzle with expectations of a bumper harvest combined with tepid demand. The USDA expects a record harvest of 15.27 billion bushels. The 2023/24 forecasts signal rising corn supply boosting ending stocks to their highest level since 2016/17. To hedge against falling corn price, this case study proposes a short position using CME Corn Futures (ZCN2023) expiring in July with an entry of 586.25 and a target of 433.25, which is hedged by a stop loss at 654.25, is likely to yield a reward-to-risk ratio of 2.25x. RECORD CORN HARVEST IS ANTICIPATED RESULTING IN SOARING ENDING STOCKS WASDE, short for World Agricultural Supply and Demand Estimates, is a monthly report released by the US Department of Agriculture (“USDA”) that tracks the supply and demand for various agricultural commodities. In the latest WASDE report, released on May 12th, USDA expects a record 15.3 billion bushels of corn to be harvested in the US this year. The US is the largest producer of corn, representing 32% of total global production. Global corn production is expected to rise 6% YoY in 2023-24. While production is robust, demand and consumption are not expected to grow as fast. Global demand is expected to rise 3.7% with US consumption expected to climb 3.4%. This will result in an oversupply of corn with soaring inventory levels (i.e., Ending stocks). Ending stocks represent the supply of corn that is carried over to the next year. They are expected to rise 56% YoY to 2.2 billion bushels, the highest level since 2016-17. This leaves plenty of supply to accommodate any demand expansion. A bumper harvest in October is expected to cause an oversupply pushing corn prices lower. Despite the recent decline in corn prices, they remain significantly higher than pre-pandemic levels. With ending stocks now expected to reach pre-pandemic levels, prices will likely follow. WEATHER MAY UPSET BUMPER HARVEST EXPECTATIONS The WASDE estimate assumes stable weather conditions as well as demand assumptions regarding China. Weather conditions play a huge role in final harvested yield. In the current year, drought conditions & intense heat in Argentina led to lower crop yields. With extreme weather events rising globally, it is possible that unfavorable weather may reduce the final US corn output. China is the largest consumer of corn. With hopes of strong economic recovery still simmering, demand in China may spike higher than USDA expectations. If supply fails or demand spikes, Corn prices may remain steady or even rise. Asset Managers and Options Markets are positioning for Corn price to plunge CFTC’s Commitment of Traders Report shows that asset managers have more than doubled their net short positioning in Corn futures over the last twelve (12) weeks. Other reportable traders have reduced their net long positioning by almost 50% in the same period. Both indicate rising bearishness about corn prices. Similar sentiment is reflected in the options market. Although June and July contracts have Put/Call ratio of ~0.85 (more calls than puts), this is before the bumper harvest is expected (August-October). The September and December contracts which expire after the harvest have a Put/Call ratio of ~1.2. The futures forward curve, which is in backwardation, also shows expectations for prices to drop following the harvest. TRADE SETUP Each lot of CME Corn Futures provides exposure to 5,000 bushels of corn. A short position in CME Corn Futures expiring in July (ZCN2023) with an entry of 586.25 and a target of 433.25, which is hedged by a stop loss at 654.25, is likely to yield a reward-to-risk ratio of 2.25x. • Entry: 586.25 ¢/bushel • Target: 433.25 ¢/bushel • Stop: 654.25 ¢/bushel • Profit at Target: USD 7,650 • Loss at Stop: USD 3,400 • Reward-to-risk: 2.25x MARKET DATA CME Real-time Market Data helps identify trading set-ups and express market views better. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com DISCLAIMER This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services. Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
CBOT:ZC1!Short
by mintdotfinance
POLKADOT: Classic Accumulation, Rally Phase NextBINANCE:DOTUSDT Hi Traders, Investors and Speculators of the Charts 📈📉 Ev here. Been trading crypto since 2017 and later got into stocks. I have 3 board exams on financial markets and studied economics from a top tier university for a year. In today's analysis, POLKADOT presents a great buying opportunity with a low risk and high reward setup. Currently trading in accumulation phase of the Wyckoff Method market cycle phases, you may still get another chance to buy lower BUT expect the price to continue trading in the accumulation zone ranges (within the support zone and resistance one pointed out in the green box) . The timeframe of six months is significant because most market cycles / phases start to show signs of change after 6 months of a specific trend being observed as in this case, a bearish trend was observed for about 6 months. After successfully confirming a bottom on both the chart as well as on the Technical Indicator, flashing an oversold with the built in RSI, it seems that the most logical next phase is the upwards phase, however you might need some patience as to "when" this rally will happen. _______________________ 📢Follow us here on TradingView for daily updates and trade ideas on crypto , stocks and commodities 💎Hit like & Follow 👍 We thank you for your support ! CryptoCheck
Long
by CryptoCheck-
16
A Primer on Soybean Crush SpreadSoybeans are one of the most versatile and important agricultural commodities in the world, consumed extensively by humans, livestock, and industry. Soybean prices have an undeniable impact on the global economy and their importance is only increasing with the rapidly growing bio-diesel industry. In our previous paper Heavy Exports Weighing Down Soybeans , we described factors affecting the supply of Soybean and their seasonality. Supply is largely driven by harvest cycles and crop yields. Demand can shift for multiple reasons. Live stock feed, Cooking oil and Biodiesel form the largest demand source for Soybean. These are all derived from the two by-products of Soybean – Soybean Meal (“Meal”) and Soybean Oil (“Oil”)). During Soybean processing, the seed is crushed to separate the oil from the meal. These by-products can be traded as separate commodities. Traders can harvest gain from the shifting relationship between the by-products and soybean using the crush spread. This paper will describe the crush spread, its computational methodology, and the methods for investors to harvest gains from it. The paper will also look into the factors defining the crush spread in 2023. The Crush Spread The Soybean crush spread refers to the value of Soybean’s gross processing margin, which is the difference between the value of the outputs (Meal Price + Oil Price) and the value of the inputs (Soybean Price). The crush spread is traded on the cash and futures markets and is often used by Soybean processors to hedge their margins for the actual process. It can also be used to harvest gains from the shifting dynamics between Soybean and its byproducts. Factors That Affect the Spread The crush spread can be influenced by the price of soybeans, the demand for its byproducts and the cost of production. Production costs can vary due to energy prices, labor conditions, carryover stock, and health of supply chains. Demand for by-products is driven by some common factors such as macro-economic conditions but also by factors unique to each commodity. Meal is used for livestock feed while Oil is used as a cooking oil and as biodiesel. Livestock feed demand is driven largely by China to feed its large swine population. Like soybean supply, feed demand also shows high seasonality. Due to a shortage of grass in the winter, Soybean Meal is consumed during these months leading to higher demand. Additionally, unlike other commodities, Soy Meal cannot be stored for longer than 3 weeks. So, during the US harvest (October), Soy Meal prices plummet due to oversupply. Cooking oil demand is sensitive to the supply and price of Palm oil, which is also widely used for cooking. Both can be used interchangeably; they are the so called substitute products. So, the decision of which product food producers choose depends on prices, supply, and import/export policy decisions. Moreover, Soybean Oil is far more suitable for the production of biodiesel than Palm Oil. This is why Soybean Oil generally trades at a premium of $100-$150 tonnes to Palm Oil. In the US, Soybean Oil demand for biodiesel is even higher owing to a fast-growing renewable diesel industry. Shifting Dynamics of Soybean By-Products Downbeat Macro With recession risks and inflation running high in many countries, the macro-economic outlook is downbeat. This weighs on the demand for Soybean and its by-products, resulting in lower prices and a narrowing spread. China’s Reopening China’s reopening from pandemic restrictions last year is in full swing. Although initial recovery was sharp, conditions have started to cool due to downbeat macroeconomic conditions weighing on export demand and still weak domestic demand. China’s large swine population is a major driver of meal demand. Heading into the winter, in case domestic demand starts to recover, it would lead to far higher meal demand and prices resulting in a narrowing spread. Rising Demand for Soybean Oil In the past, crush demand was driven largely by demand for Meal, Oil was considered a surplus without enough uses. However, rising demand for green energy across the globe and tax incentives for producers have led to a sharp increase in demand for Soybean oil in the past few years, particularly in the US. Biodiesel production capacity nearly doubled between 2021 and 2022. Since then, markets have normalized with higher planting of crops and increased Soybean crushing capacity installed. Despite the downbeat economic conditions, demand for Soybean Oil is expected to increase 4.9% this year after surging 6.5% last year, according to the USDA. With higher demand for Soybean Oil, crush demand will also increase. This would result in a change in the price relationship between Meal and Oil as well as a narrower crush spread due to higher volumes. Harvesting Profit from Crush Spread Investors can take a position on the crush spread in a capital efficient manner using CME’s Soybean (ZS), Soybean Oil (ZL), and Soybean Meal (ZM) futures. CME offers margin offsets for a crush spread position using these contracts. In addition, the Soybean crush can be executed on CME Globex as a single trade. Each of these 3 contracts are quoted in different units. ZS is quoted in cents/bushel. ZM is quoted in dollars/short ton. ZL is quoted in cents/pound. As such, in order to calculate the value of the spread, the price of each contract needs to be converted to cents/bushel. A bushel of Soybean (60 pounds) yields 11 pounds of Soybean Oil and 44 pounds of 48% protein Soybean Meal. The conversion factors are given below Soybean Oil per bushel: ZL Price x 0.11 Soybean Meal per bushel: ZM Price x 0.022 Crush Spread ($/bushel) = (Soybean Oil per bushel + Soybean Meal per bushel) - ZS Price/100 As per each contract's exposure size, a long crush spread position using CME futures comprises long eleven (11) Soybean Meal futures contracts, long nine (9) Soybean Oil futures contracts, and short ten (10) Soybean futures contracts. This position would normally require a margin of $67,625 for the nearest month contracts. However, with the 88% margin offset, investors can go long on the crush spread with exposure to 50,000 bushels for just ~$8,115 in margin. Alternatively, investors can also get direct exposure to the crush spread using CME’s options on the Soybean Board Crush Spread. Each contract gives exposure to 50,000 bushels. Example Trade Like Soybean prices, the crush also shows seasonality. This is due to the combined seasonal effects of Soybean and each of its byproducts. In our previous paper, we highlighted that Soybean prices are at their lowest in October due to the US harvest. Due to a low input cost (Soybean price), Board crush expands during this time. The same uptrend can be seen during the summer months representing the harvest from Brazil and Argentina. It should be noted that seasonal trends are not a guarantee as other factors can have outsized effects on markets. A long position in the Board crush would represent a short position of 10 Soybean contracts and a long position in 11 Soybean Meal contracts & 9 Soybean Oil contracts. As an example trade, consider the board crush in Jan 2019. Going long on the board crush on 9th Jan with an entry level of USD 1.02/bushel and an exit at USD 1.37/bushel would yield 34% profit. However, investors should note that the board crush value is highly volatile, as it is derived from three volatile underlying drivers. So, stop loss needs to be adjusted for the high volatility. Positions on 9th Jan: ● Short 10 ZS1! at entry level of 924 c/bushel ● Long 11 ZM1! at entry level of USD 323.4 /short ton ● Long 9 ZL1! at entry level of 28.6 c/lb Note that the crush declined to 0.91 on 15th Feb representing downside of 10.7%: ● ZS1! at price level 921.5 resulting in profit of USD 1,250 ● ZM1! at price level 310.5 resulting in loss of USD 14,190 ● ZL1! at price level 29.95 resulting in profit of USD 7,290 Net loss: USD 5,650 Crush started to rise in April and peaked at 1.37 (+34%) on 30th May: ● ZS1! at price level 877.85 resulting in profit of USD 23,075 ● ZM1! at price level 327.4 resulting in profit of USD 4,400 ● ZL1! at price level 27.8 resulting in loss of USD 4,320 Net Profit: USD 21,155 Key Takeaways 1) Board Crush or the Crush Spread represents the Gross Processing Margin (GPM) of crushing Soybean into its by-products as quoted by cash and futures markets. 2) Board Crush allows traders to replicate the Soybean Processing Value Chain. It enables traders to harvest gains from changing crush margins while enabling crushers to hedge their GPMs. 3) Board crush can be volatile which requires astute risk management while trading it. 4) Trading board crush using CME futures is margin efficient due to substantial margin offsets (88%). MARKET DATA CME Real-time Market Data helps identify trading set-ups and express market views better. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com DISCLAIMER This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services. Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
CBOT:ZL1!Education
by mintdotfinance
6
Bitcoin Quarterly Time Pattern A chart can help frame your mindset for whats to come and I hope this chart and outline below helps you frame and prepare yourself to the 9 bull quarters remaining (over 2 years of waiting ahead or 27 months). I used the Heikin Ashi candles as visually I found them better at inflection points for determining the trend change from bear to bull (5th to 6th Quarters). Main take aways from this chart - MAIN THING IS PATIENCE AND TO BE ON OUR TOES IN Q4 2026. We should be taking profits as early as October and the majority in November. - There are 4 years between all time highs so we project next ATH Quarter will be Q4 2026. - 5 Bear Quarters are followed by 11 Bull Quarters. - We are in the 2nd Quarter of an 11 Quarter Bull Run. Patience required. - We have never seen just one green Heikin Ashi Candle so we can expect another relatively green quarter in Q3. This is saying a lot and is not the expectation. That does not mean that we could bounce off the Q2 lows of $23,190. Regardless probability Q3 would finish green (based on history) is high despite BEAR NEWS. No guarantees, just more probable based on the chart. In contrast, the weekly candles look like they could in fact turn over to the red, however we are looking at the Quarterly chart and even with some weekly red candles Q3 could still be Green. All Time Highs on this quarterly chart are all in late Q4 and 4 years apart. December 2013 - $1,258 December 2017 - $19,789 November 2022 - $32,210 to $68,675 (Fib Ext 1.618 to 2.618) November 2026 - $109,781 to $176,000 (Fib Ext 1.618 to 2.618) AGAIN!!! The MAIN THING IS PATIENCE AND TO BE ON OUR TOES IN Q4 2026. We should be taking profits as early as October and the majority in November. Patience Friends PUKA
INDEX:BTCUSDLong
by PukaCharts
Bitcoin Explosion imminent!? Mini-Bull Market Watch!The bull markets of 2011 and 2019, which developed in early Crypto Spring, produced an explosive move to the upside heading into the second quarter of the year. In this video we briefly take a look at these moves and other possible scenarios. The "pillars " drawn here in ever Crypto Spring run from April 1st to October 1st on the horizontal axes and 50% above the future halving price on the vertical axes. If bitcoin follows this same pattern we will see an explosive move up to the future halving price in the 2nd quarter followed by a dump back below the future halving price in the 3rd quarter. What are your thoughts? Let us know in the comments below.
INDEX:BTCUSDLong
by TheCryptoWeatherChannel
✨ NEW: EQUITY POSITION ✨ AMC (1D) ✨ TP3 @ 7.61 (closing ALL BuyTP3 @ 7.61 (closing ALL Buy Orders) TP2 @ 7.00 (shaving 25% or closing) TP1 @ 6.33 (shaving 25% or closing) BLO1 @ 5.55 ⏳ BLO2 @ 4.10 ⏳ ADDITIONAL INFO: 00:00 Shout out to @Casey_Louis 🙌 00:50 Curve Analysis 01:47 Buy Orders 02:56 Key Take Profit Levels 03:27 Gaps, Resistance, and ISR 05:52 Fundamental Analysis 00:00 Boost, Follow, Comment, Join FUNDAMENTAL ANALYSIS Soon, AMC Entertainment expects to report a loss per share of 17 cents. This loss, of course, is much narrower than the 65 cents-per-share loss it posted in the first quarter of 2022. The investor sentiment is that they hope to see a significant improvement to AMC's balance sheet in the first quarter, including a decrease in the company's debt. But AMC investors should be aware of management's plan to convert APE units into common shares, which will likely continue to create volatility in AMC stock.
NYSE:AMCLong
by ProfessorCEWard
$BTC October 28th, 2022. Bold predictions.Here's my thesis.. Summer ends.. Diminishing Cycles.. Aka Diminishing bear markets..to the tune of 63.5% less.. based off previous bear phases which occurred directly after a 3D death cross.. 165 days of chop makes sense.. with a potential sweep of the lows once again.. and sprinkle in a 40% probability of a wick down to 12-14k .. Until then.. I think we chop sideways until October.. Parabolic bull phase resumes post 2024 election and halving with a 150k-160k USD target before topping out in November 2025. Sorry moon-boys, no million dollar target this decade. -- R.I.P. to my dear friend Andreas who passed on today at the young age of 34. --
INDEX:BTCUSD
by TheTraderAndy
2
Sell Bitcoin in May and Walk Away?'Sell in May and walk away' - does it apply to #Bitcoin? Historically, selling in May results in missing out on gains. However, a simple strategy that buys COINBASE:BTCUSD in Oct and sells in May is profitable 60% of the time, with a net profit of 4.15%. The strategy's effectiveness depends on the current market cycle. Selling in May misses gains in a recovering market, but helps avoid losses in a bear market. So, is Bitcoin in a bear market now? Evidence suggests not. Adjusting the strategy to sell in May only if in a downtrend results in lower net profit, but allows for capturing larger trends. Currently, Bitcoin is trading above the 200-period Simple Moving Average, with a significant low & growing on-chain fundamentals. Based on the strategy, selling in May 2023 may lead to missing out on summer gains. From a technical perspective, Bitcoin is in an uptrend since the beginning of the year. Resistance at $30K, support at $26K. Long break of $30K targeting 35-$37K. Daily Baseline support at $24K; as long as price is above, market is bullish. A Head & Shoulders pattern is forming, projecting a downside target of 23,171. A similar scenario in March rallied to new yearly highs. For Bitcoin investors: Hold BTC, avoid Ethereum (Bitcoin outperforming). To hedge, short all or part of BTC in the current range. If Bitcoin breaks $30K, unhedge to catch the breakout. Hold short to 23K, then re-evaluate. In summary, while the "Sell in May" strategy can be profitable, its effectiveness depends on the market cycle. Currently, it may not be the best approach for Bitcoin. Instead, consider holding and hedging to maximize potential gains.
COINBASE:BTCUSD
by CrackingCryptocurrency