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Tapering

LEU - Finally a bullish signal with lots of room to the upsideI've been watching Centrus Energy (LEU) for the past few weeks considering they are a strong company and we're in a very strong controlled selling (yellow) algorithm for some time. I was waiting for a bullish sign of reversal prior to finding support at tapered blue - which we saw last week when price was picked up by teal buying continuation. We are now gapping up above our strong yellow selling algo and our next stop will be to test the breakout of orange more tapered selling. If we reject off of orange, we will be looking for one of our buying continuation channels, preferably yellow (very strong) to pick up price and take us out of orange where we will then have the opportunity to attempt a magenta tapered break. Will keep you posted with further analysis as price develops! Happy Monday and as always, Happy Trading :)
AMEX:LEULong
by ReigningTrades
META - Lots of room to move! Don't miss your chance againMETA is showing some extremely bullish signs and at the very least you can see that from all the bullish volume stepping in yesterday at the bottom of our orange range. That is confirmation for me that if we activate orange strong buying (which we did), we can expect a retest and soon breakout of this orange very tapered buying channel. Lots of profits to be made here - look for an opportunity with a retest and some structure to grab all the left shoulder liquidity we've built for this move up. See you at market open! Happy Trading :)
NASDAQ:METALong
by ReigningTrades
1
TSLA - Understanding recent PA and analysis on what to look forOrange is the all important algorithm that will prove whether we are tapering on the buy side and need to continue to build liquidity. We will need yellow stronger buying continuation to break us out of this orange taper. We now know why it hasn't happened sooner - because we've had the top of green channel in our way acting as strong resistance with orange. But the more green strays further up and away from orange, the more it's important for us to break out of that taper to prove continuation. We will be back live streaming today at market open! Hope to see you all there. Happy Trading :)
NASDAQ:TSLA
by ReigningTrades
CVNA - Trade setup that can yield big profits TODAY!This will be an excellent (and may I saw obvious) trade to look out for today. After a strong move post-earnings, we have already shown signs of buyer weakness at these levels. Today we are looking for that squeeze and proof of buy side tapering at the top of our yellow and blue tapered buying continuation channels. They line up perfectly and will be wedging with strong orange buying - which is great confluence for me along. If buyers are unable to continue higher using orange and fail to break yellow and blue, this means... If we can't go up, __________ (Hint: we go down!). Will take this short on proof of tapering at the top of these channels and as we see in pre-market action we will be opening up right around these levels. Come join us in the livestream to see this trade taken in real time if it presents itself! Happy Trading :)
NYSE:CVNAShort
by ReigningTrades
3
AAPL - Here is where we will find strong support!You can clearly see our tapered buying continuation purple (newly introduced to this chart). This is what is guiding price right now and will most likely be where price wants to go: This is for 2 reasons: 1. We still need to prove sell-side tapering away from teal by showing orange support. 2. That orange support and retest lines up perfectly with our purple tapered support and will act like a magnet for buyers who are in control to bring price to in order to make a stronger move up and break out of our teal and orange algos. So keep an eye out for this level to be reached - I will likely be shorting to there if price action gives me an opportunity today. Hope everyone has a great day trading and hope to see you on my livestream starting at 9:30 AM EST today! Happy Trading :)
NASDAQ:AAPL
by ReigningTrades
2
COIN - Lots of profits to be made - beautiful algo confluenceThis can break out of our controlled selling algorithms any day - especially as we started to see sell-side tapering via our teal algorithm on Friday. Look for Yellow strong buying channel to activate and break us out of the magenta/purple/teal algorithms which will lead us to a retest of highs at the $180-$185 level. We will be trading this today live on the stream if the opportunity presents itself - we have some clear levels and things we're looking out for and we don't want to miss this one. See you there! Happy Trading :)
NASDAQ:COINLong
by ReigningTrades
9
AAPL - Hovering around strong liquidity levels- Updated Analysis174 will be a huge level for buyers to kick in and activate the stronger buying algorithms needed to take us out of our current teal and orange selling channels. As we've seen in the past, this $174 level has brought in tons of buyers and kicked off our previous move to ATH's. In addition, more immediately we have the $180 level that is old-resistance turned support and if we drop below this level, I expect a retest of minimum bottom of orange channel and ideally, to gain as much liquidity for buyers as possible, a retest of that $174 level. Keep you posted with analysis as price continues to develop! Happy Trading :)
NASDAQ:AAPL
by ReigningTrades
The Rand in the rocky credit markets The economic calendar is wild this week so I thought it would be best to do a deep fundamental dive into the USDZAR . All the attention will be on the Federal reserve tomorrow and whether or when they will pause their rate hikes. We need to look past the hype around the interest rate and the “pivot" narrative. Focus should however be on how the markets will cope with the Fed’s liquidity drain and how it will impact the future price of money ( ie . Interest rates). Before we kick-off, correlation does not imply causation... I’ll start by explaining the chart you’re looking at. What you’re seeing is the positive correlation between the USDZAR and the difference between the South African government bond 10-year yield (ZA10Y) and the US 10-year treasury yield (US10Y). The interest rate differential is referred to as the carry trade potential. Investors can borrow money on the cheap from developed low-risk markets and invest the borrowed money in riskier destinations to earn more interest. The interest rate difference is then pocketed by the investor. The preferred vehicle to capitalise on the interest rate differentials between two locations are government bonds (they are low risk and liquid). The reason for the positive correlation between the USDZAR and the bond yield differential is because when there is risk-on sentiment in the market, investors tend to move funds out of the safety of US treasuries and into riskier assets. The sell-off in US treasuries causes US10Y yields to rise (decreasing the bond yield differential), and the rand tends to appreciate in risk-on phases of the market, citrus paribus. (Decreasing bond yield differential; USDZAR decrease due to rand appreciation). Conversely, when investors are risk-off they run to the safety of US treasuries. The buying of US-treasuries lowers the US10-year yield which increases our bond yield differential. We all know how rapidly the rand can depreciate in risk-off phases when the liquidity wave pulls back to the US, leaving the rand on the rocky shore. (Increasing bond yield differential; USDZAR increases). Our strong correlation however weakened in August 2022 when the US 10-year yield rocketed higher after the Fed started their hiking cycle. Let’s zoom in on the Fed since its Fed week. The most important chart in the market , the Fed’s balance sheet: www.federalreserve.gov . The Fed has so far tapered roughly 5.52% off its balance sheet since April 2022. The Fed is selling treasuries to taper its balance sheet and to soak up liquidity from the market (if there will be enough buyers, only time will tell). This is rand negative. Now let’s get to where all this week’s focus will be, the Fed’s interest rate decision. The Fed is expected to slow its rate hikes to 25bps this week and push rates from 4.50% to 4.75%. The Fed tends to follow the US02-year yield (US02Y) as guidance on its interest rates and it seems as if the US02-year yield has topped out between 4.75% and 5.00%. The Fed pause seems near, and the latest inflation figures from the US supports the narrative that the Fed has managed to cool inflation. The most concerning thing in the market currently is the inverted yield curve: History doesn’t repeat itself, but it rhymes. For the Fed to normalise the credit markets it will have to pause rates. That is usually when something the market breaks and the Fed is forced to cut rates and inject liquidity into the markets. When the Fed pushes easy money ( QE or whatever buzz phrase they'll use) into the market investors rotate from longer dated bonds to shorter dated bonds. To conclude, if and when the Fed pauses its rate hikes, the US10-year yield will melt higher which could be rand positive based off our correlation analysis. Just have popcorn (and gold , silver and other real assets) ready for when the Fed is forced to cut rates/ pivot because that will be caused by arguably the biggest credit market implosion in the history of fiat money. To end off I leave you with the words of Zoltan Pozsar: "commodities are collateral, and collateral is money."
by Goose96
How The European Energy Crisis Is Affecting The Euro‍The euro-dollar exchange rate captures the value of the euro in terms of U.S. dollars. It’s one of the most widely tracked and significant global currency indicators, given that Europe is a major economic region with a strong currency, and many international financial transactions are denominated in euros. Moreover, the euro has been under pressure in recent months because of renewed concerns about European debt and fears that the European Central Bank may curtail its massive stimulus program too early (Injecting Billions of Euros into Eurozone debt - pandemic-era bond-buying program), which would make it harder for countries like Italy to service their debt. With all this in mind, let’s take a look at why the Euro Declined Against the US Dollar and hit a 20 Year Low recently. The European Energy Crisis Energy is a critical aspect of any economic outlook. As such, it is no surprise that Europe’s energy crisis has exacerbated its economic problems. Europe currently relies on Russia for approximately 50% of its natural gas. Europe’s heavy reliance on Russian gas is a major source of tension between the EU and Russia. The EU has placed sanctions on Russian energy firms, making it difficult for them to acquire equipment and technology they need to develop their energy infrastructure. That has left Europe with few viable options for alternative suppliers. Effects of EU Sanctions against Russian The EU’s Largest Member States Are Suffering The most significant economic problems can be found in Europe’s largest economies: Italy, France, Germany, and Spain. And those four economies are suffering because of the energy crisis, a weak euro, Brexit, and rising interest rates. The euro has been trading at a relatively low level against the U.S. dollar for years. However, the euro’s weakness has recently accelerated, as the European Central Bank adopted a more hawkish tone. That has made it more expensive for other countries to buy euros. Ergo, pushing up borrowing costs for euro-zone countries that are heavily indebted like Italy, France, and Spain. It has also made it more expensive for the European Union’s most powerful economies to service their debt. Political Instability It’s important to mention political instability because it has been an ongoing issue in Europe for years, particularly in countries like Italy, France, and Germany. That’s led to significant political uncertainty that has kept investors away and made it more difficult for these countries to get the strong economic growth they need to deal with their debt problems. The United Kingdom has been a major trading partner with the EU, The political environment surrounding the Brexit has led to significant economic uncertainty. Eurozone Growth Is Stagnant One of the most important economic metrics is GDP growth, which is the rate at which an economy is producing goods and services. Eurozone GDP growth has been relatively low for years, and it recently fell to a 17-year low. That’s largely due to lack of investment in major economies like France, Germany, and Italy, which are the most significant contributors to the eurozone’s GDP. When the energy crisis hit the EU, businesses stopped investing in plant and equipment necessary for growth. As a result, GDP shrank throughout the region. That’s forced the European Central Bank to take strong action, including negative interest rates and quantitative easing. However, those policies have had only limited success, as Europe is still facing an investment drought. European Union Debt Crisis The EU debt crisis emerged in 2010 when major economies like Italy, Spain, and Greece racked up unsustainable debt loads. Although it has faded in recent years, it remains a major issue, particularly for Italy and Spain. That’s because the two countries have large debt loads, and they are suffering from slower growth, making it harder to service that debt. That’s created significant economic uncertainty, as investors have been reluctant to lend to these countries. The European Central Bank has stepped in, making it easier for these countries to borrow, including buying their debt. However, the ECB’s actions have also made it easier for other EU countries to borrow, which has contributed to the rise in interest rates that are hurting France and Germany. ECB Tapering As the energy crisis worsened and economic growth was weak throughout the European Union, the European Central Bank boosted its monetary stimulus to stave off a deeper downturn. That included purchases of billions of euros of assets, including government bonds, per month. That quantitative easing program has been credited with helping Europe’s major economies, particularly Germany, avoid a full-blown economic crisis, as well as keeping the value of the euro low. That has also bolstered economic growth in other EU countries, like France and Italy, that rely on exports to Germany. However, with the energy crisis easing and economic growth gaining momentum, the ECB began to taper its QE program, reducing monthly purchases to just €30 billion. boosting the borrowing costs of the European Union’s larger economies. Oil Price Impact The energy crisis has also driven up the price of oil and other commodities. That has put additional pressure on the EU’s most significant economies, as their industries have been affected by higher prices. That’s particularly true for France and Italy, which have been among the hardest hit by the energy crisis and oil price surge. That’s made it more difficult for those economies to export goods and services, which has contributed to the stagnation of their GDP. Conclusion The European energy crisis has been a major problem for the EU. It has driven up the price of oil and gas, while making it more difficult for countries to import those resources. That has put the EU at an economic disadvantage when compared to other major regions, like the United States. That’s made it harder for the EU to recover from a variety of economic issues, including a low growth rate, high debt levels, and political instability. It remains to be seen if the EU can overcome its energy crisis and get back on track to economic prosperity. EUROZONE INFLATION RATE Important Upcoming Events that will cause volatility in the market
Editors' picks
by EQTSHARES
30
$DXY update, $UUP-RSI inverse H&S formation, looks to be gaining strength and passing test at 50 RSI -Downward trend (orange trendlines) was broken. Now DXY is trading in a parallel channel (white borderlines, gray centerline) and has been bouncing off the bottom like a pinball and then hanging around the midway point of the channel consistently. -MACD is curling up and crossing. -US economy is stronger than ever. Tapering and rate hikes are typically bullish for the dollar and tend to make it more appealing, hence stronger -Targeting 97 or so for a medium-term target, back towards a 100 in the long-run -This of course could be a headwind for emerging markets if it plays out One way to play this if you don't have a forex trading account is to use the ETF UUP. Full disclosure, I am in UUP calls but you can also just buy the ETF outright if you prefer that.
TVC:DXYLong
by EBITDAtiger
Timing is everything! While the general direction for the US Fed and the ECB are similar, their timelines differ greatly! On the US Fed (USD) front, we are days away from the next FOMC meeting (4th May 2022) where market participants are expecting a 50 bps hike. On the ECB (EUR) front, the ECB is expected to taper its asset purchase program by early Q3, before it will consider any rate hikes. The difference in timelines of the Fed and ECB could provide some interesting hints on where the EURUSD is heading in the short term. With the Dollar being the first mover here, we expect strength in the dollar to drive the EURUSD lower over the short term before the ECB firms up its hike schedule. The EURUSD pair is also trading just below the 7- year support level. Zooming in on a shorter timeframe, we also spot a breakout and retest at this level, suggesting the move has begun. Entry at 1.08070, stop above 1.12080. Targets are 1.06760 and 1.03835. Disclaimer: The contents in this Idea are intended for information purpose only and do not constitute investment recommendation or advice. Nor are they used to promote any specific products or services. They serve as an integral part of a case study to demonstrate fundamental concepts in risk management under given market scenarios.
CME:6E1!Short
by inspirante
SPY the Bulls Are Back In Town...Hello Traders, I hope you all are doing well. I just wanted to shoot a quick update for anyone a little shaken by the market or confused as to what's going on. TLDR: Yes, there are still geopolitical concerns, but at the moment it's not important to the market, because we've already seen the response of the world and it has strengthened relations of NATO and basically blocked off Russia from World Trade and Financially. The Market's prefer hikes over inflation, and technical trading signals are still nearly perfect (as seen in above and below charts). So we have our answer as to who's economy is really likely to crash. Although the US would like to help more, there are limitations as to what we (the US) and other countries can do without sparking a Cold War or WW3, so the markets are pretty content that everyone is threading that needle. Now, why did the market bounce off the fed announcements? Many people without context assume that tapering and rate hikes are a bad thing for the markets; their thought process is that it makes valuations less attractive, due to more difficult borrowing for companies and consumers... This idea isn't wrong, it's just that they're missing a few pieces of information in that logic. First, the markets like policy that are good for the overall economy. Tapering and hikes will help fight inflation; monetary tightening is a signal that the Fed believes the economy is on firm footing. That is a good thing. The market easily prefers hikes over inflation worries. Second, historically, while stocks tend to fall the month following rate hikes, they typically end the year up around 5%. Lastly, there is progress on the geopolitical front. The World has condemned Russia's leader's actions; as we see a constructive movement in negotiations between Ukraine and Russia, signs from China that it will roll back its broad regulatory crackdown and play a little nicer with the rest of the world. We do also predict gas prices to continue in a downward spiral and fall substantially in the coming months due to the panic buying subsiding, along with other geopolitical and psychological factors, which need not go into too much detail on. (It's important to note for those unfamiliar, the US is the #1 producer of crude oil, with about 20% of global supply, Saudis at around 12%, Russia 11%, and Canada at 6%). As such, the US is not reliant on Russia for oil; unfortunately, some of our allies are, to some extent. The Chart As a technical trader, that was a lot of fundamental analysis. Sometimes it's good to have both, especially when catalysts are often the driver on big movers. As I mentioned in my previous posts, technical trading has been on-point. Almost to the penny. On Weds, March 16th, SPY gapped up, perhaps on the positive geopolitical news mentioned. Now we're sitting on a trend reversal and (yet again) a retest of the 200MA. Honestly, I think we will hang around the 200MA even if we do break to the upside, at least for a month or two as I had predicted back in January (see below) . Please see for references. January. If you appreciated this please: Like, support, share, follow. Sincerely, Mike (UPRIGHT Trading)
AMEX:SPY
by UPRIGHTTrading
4
How the Fed's Rate Hikes Affect the Market (or Not)In this post, I'll be demonstrating how the Fed's rate hikes affect the equity market (or how they don't), through historical examples and analyses of market psychology. This is an issue that has been going on for a while, and one that has caught the attention of all market participants. Yes, tapering and rate hikes aren’t necessarily good news, but I don’t think that 1) they necessarily indicate the beginning of a bear market/recession, and 2) the Fed is as powerful and influential as we think they are. This is not financial advice. This is for educational purposes only. Introduction - There’s a myth, a misconception in the market that the Fed allegedly rescues falling markets with rate cuts and easing measures, and vice versa for when the market is overheated. - This myth began in 1987 during Black Monday, when Alan Greenspan’s Fed cut rates after the crash, creating an impression that the Fed was directly responding to the stock market. - This is when the (mis)belief that the Fed would put a floor under a a falling market stuck. - Nevertheless, if we analyze the data, it actually demonstrates that the Fed stood pat for most corrections, and cutting cycles typically arrive during bear markets, just as coincidence. Historical Cases - There are only two occasions in history where the Fed’s cutting cycles corresponded with market lowpoints. - The first is the aforementioned Black Monday of 1987, and even for this case. - If we take a look at the situation back then, it’s not so much that the Fed made international moves that contributed to history, but rather that the bear market started amid a global liquidity crisis. - With excess liquidity, the rates should have been flat, or down, but that wasn’t the case. - Thus, the Fed’s rate cuts were vital to unfreezing credit and ensuring banks and clearing houses would have access to liquidity they needed, while the market was under severe stress. - The second occasion was the rate cut in 1998, when stocks were reacting to the collapse of Long-Term Capital Management (LTCM). - There was fear in the market that this collapse would lead to a domino effect, ending in a banking meltdown. - Generally, when people fear a banking contagion, liquidity in interbank funding markets dry up. - The Fed’s action to cut rates during this time helped keep money moving, and ensured that banks met their regulatory obligations. Market Psychology - In order to understand the recent discussion revolving around the importance of the Fed’s actions, we need to understand human nature. - People love finding narrative threads and grand explanations because we’re biologically wired to make sense of the world that way. - They confuse correlation and causation, and zero in on evidence that supports their view and shuns whatever suggests otherwise. - But it’s important to remember that in most cases, a fact that everyone knows, tends to be closer to myth than reality, and even if it weren’t a myth, the fact that everyone knows it does not give us an edge in the market. Summary Market shocks are caused by surprises. News about a pandemic or cyber attack that catches investors off guard is much riskier than macro events that are predictable and can be anticipated. Given that the markets are efficient (which I believe they are), it's rational to assume that news about the Fed's rate hikes, and people reaction to it are already priced in. While short term volatility is definitely expected, I believe that the likelihood of this event becoming a trigger for a multi-year recession is extremely unlikely. If you like this educational post, please make sure to like, and follow for more quality content! If you have any questions or comments, feel free to comment below! :)
Editors' picks
TVC:IXICEducation
by Michael_Wang_Official
61
Printer turned into shredder2020-going on: -Pandemic with failed vaccines and endless boosters -Supply shortages -Struggling job market -Skyrocketing bond purchases -Tapering right after -Never ending tensions between the US and China -Never ending tensions between the US and Russia -Extreme tensions between Russia and Ukraine + western countries -Small and mid cap stocks tanking non stop while the same tech stocks are pumping non stop over and over again, keeping the market alive Here is my opinion: I just don't see any logical reason to keep it going like that, like we have seen in the past months/years. You can't keep running non stop without collapsing and gravity always wins. All the perma pumpers, especially the new generation of meme and pandemic traders need a reality check. It's easy to scream non stop "to the moon...new all time high...stocks only go up...etc." in a propped up stock market. It's funny how they disappear in online forums when the market suddenly decides not to gap up non stop. They literelly don't know what to do. That goes for "small" traders, but also for traders who gained many followers during that time, acting like wise gurus. Have fun trading BOTH ways and trade the charts, not your hopes and wishes (or blindly follow others)
AMEX:SPYShort
by StockDogg
10
USD CAD Forecast and Analysis: Canada and US Jobs Data Preview check in-depth analysis here forexezy.com In December, the FOMC decided to abandon its previous remarks that the inflation surge is transitory. The committee decided to accelerate their actions to slow inflation. In January, February, and March, the bank will also slash these purchases by $30 billion each month respectively. As a result, the Fed these is projected to end asset purchases and injecting liquidity into the markets in March. Here are the key technical levels for now, with the strong resistance at 1.2935-1.2950.
by Forexezy_com
Southern Company Outlook for 2022Pour 2022 In my previous idea I'd said I was halting accumulation to see how SO was going to perform the rest of December. The main driver behind this decision was I didn't want to purchase shares at price levels SO hasn't been able to hold consistently. Basically: Anything above $63 I considered "wait and see". Building on my earlier idea, in 2022 I think this will change. My major expectation is for investors to search for safer assets: Bond-like equities. My reasons for believing this are two fold: Firstly, the investors of newer money are (I think) approaching the trough of the time vs. knowledge curve. Simply put: new money is learning enough about markets to know it doesn't know much. This will increase flows to safer sectors; namely: Utilities. Utilities, and the stable source of capital expenditure and profit they represent, will attract many investors unfamiliar with a stock market absent of Meme stocks and volatility. Secondly, economic conditions are tightening. Simply put, inflation is hot and has completely removed any momentum the already weak "recovery" had. 2022 will, in my view, have a major theme of a return to pre-COVID economics. Namely: disinflation, lower job openings, and slowing world trade. Utilities, historically, do very well under these conditions. Beyond 2022 As stated above, demographics and economic conditions will return to pre-pandemic structures. One of these conditions is a lowering birth rate. Seeing that SO supplies power to people, having less of them isn't a bullish indicator. However, COVID did introduce a very bullish condition for SO's area: migration. The flows of new people from liberal states into the southeast (mostly GA) will, in my view, continue clear through this decade. Financial conditions will also tighten significantly, regardless of FED actions. This has been the case for almost 40 years with Reserve actions having effects only at the margins. This is predominantly due to the fact that large monetary spending has placed significant bulwarks against American citizen's progression. Money can be printed but until it's cheap enough for the already over-indebted populous to borrow, debt will continue to destroy future purchasing power. The theme for the decade will be disinflation as the economy grinds to a near-halt under the weight of our own debt (this is a long process). Utilities and mega-caps will be the only place where capital can survive relatively un-molested. Flows into these assets (and the indexes that hold them) will grow parabolically as will their valuations. Price Targets I'd expect to see >$87 per share by or before the end of 2022. As for right now, the stock is overbought on rather silly news (an upgrade from hold to buy). I don't expect the present price to stand over the next few months and would expect a trend down to the mid-sixties. My new buy target, however, I've raised to $65. Anything below $60 I'd consider a very strong buy.
NYSE:SOLong
by forever_green
S&P 500 – The final combat zoneObservations: 1) Trend line from April 2020 till date is respected 4 times in the post corona rally. Present support point of the same is at 4514. 2) 50% Fibonacci retracement level of the last leg (from Oct 4 - Nov 22) is at 4511 3) Gann Fan line 4/1 is intersecting 50% level as at (2) above at 4511. Conclusion a) SPX has crucial support zone at 4495-4510 from where some relief rally can be expected. The last hope for Santa rally, if any. b) If this zone is broken decisively, accelerated pace of downfall can be expected. SP:SPX
SP:SPX
by Rajesh_Ramchandani_Delta
2
XAUUSD LONG TO 1837I am currently looking to buy Gold again as a retracement. Last month we saw Gold drop roughly 1000 PIPS to the downside in a very sharp move showing that Gold is currently in a downtrend. Looking at market structure, we can see that Gold has been been creating a corrective pattern which also indicated a loss of momentum for sellers, hence why we've seen ZERO Gold moves this ENTIRE MONTH. This here was officially Wave 1 of the new downtrend. The move back up to 1826-1837 will be the corrective wave (Wave 2). Depending on how market reacts around that zone, we can start looking at a deeper move down towards 1670-1640 as our next target. I will be catching this move on behalf of myself & my Account Management investors. Drop a like if you agree with the analysis and want to see more!
FXOPEN:XAUUSD
by BA_Investments