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Macroeconomic History Tells Us Rough Times Are AheadIn 2023, I did a write up on TradingView about how there is a positive correlation between interest rates and equities, meaning that equites tend to decrease when interest rates decrease. However, correlation does not equal causation. The real correlation is between poor economic data and the stock market, where the poor economic data spurs interest rate cuts and causes a fall in equities. The recent surprisingly bad July jobs report jolted the markets, and reasonably so. The Fed decided to hold interest rates steady in July, causing some to think that they may be behind the curve. Not to mention the Sahm Rule flashed positive; an economic observation that has never been wrong in being a precursor to a recession. fred.stlouisfed.org I am of the party that the Fed is behind the curve In the past, Jerome Powell has stated that he doesn't expect a "severe" recession, and that there could be a "softish" landing, hinting at the difficulties that the Fed faced in preventing a recession altogether. I believe that the stock market will continue to fall, mixed with large rallies (which will make buying the bottom difficult), and I think this will play out for many months. So what's my plan? I sold my LEAPS before the poor jobs market data was released, saving my bacon to be honest. I sold my HOOD profits as well, as I had made a 100% return. I then took both and dumped the funds into QQQ. I do not hold cash in case I am wrong. I would rather be wrong and invested than wrong and sitting on cash. I plan on waiting until the Q's drop another 20% or so before buying LEAPS. Typically, I advise only to put 10% into LEAPS, but this could be a rare opportunity where risk on could pay of in a big way. When I do decide to jump in, I will buy LEAPS with expirations two years out. I want to give them the longest time frame possible because I know I won't be able to time the bottom perfectly. The real risk is waiting too long Wait too long, and I miss a big opportunity. However, being exposed to equities, I'll still ride the wave up. If I'm wrong altogether, I'm still invested in equities and will ride the wave up. I will still be somewhat hesitant to invest into LEAPS through this rate cutting cycle considering history warns against leveraging into QE. Thank you for coming to my Ted Talk. InTheMoney
NASDAQ:QQQShort
by InTheMoneyAdam
2
EUR/USD: Trends Amidst Fed Caution and Technical AnalysisThe foreign exchange market, a dynamic arena where currencies engage in a perpetual dance, is currently witnessing notable shifts in the EUR/USD pair. This analysis delves into the intricate interplay of both fundamental and technical factors influencing the Euro against the US Dollar. Against the backdrop of the Federal Reserve's cautious approach to monetary policy and recent technical developments, we explore the potential for a downtrend in EUR/USD. The aim is to provide a comprehensive understanding of the market dynamics, linking the Fed's commitment to interest rate management, the impact of slowing US inflation, and the technical chart patterns that may shape the future trajectory of this critical currency pair. Join us in dissecting the nuances that contribute to the potential downward movement of EUR/USD, with an ultimate target set at 1.05719 by the year's end. Fundamental Analysis: Cautious Fed Monetary Policy: In its recent meeting, the Federal Reserve (Fed) reiterated its cautious approach to interest rate management, choosing not to raise rates. This decision reflects a policy focused on economic stability and vigilance against potential negative impacts. Impact of Slowing US Inflation: The Fed's commitment to raising interest rates only when necessary, particularly in relation to inflation control, indicates a concern for the balance between economic growth and price stability. A slowdown in US inflation could alleviate pressure for interest rate hikes. Euro Strength Amid Dollar Decline: The Euro has strengthened against the US Dollar, partly due to market concerns about a potential decline in the value of the Dollar. Investors may be seeking alternative investments in the Eurozone deemed more attractive. Technical Analysis: Resistance at the November 21 Pivot Point: On November 21, EUR/USD encountered resistance at the pivot point of 1.09594, which represents the highest level in the past three months. Failure to surpass this level can be interpreted as a rejection by the market to push prices higher. Potential Bearish Reversal: Failure to breach the pivot point resistance could signal a potential bearish reversal, especially if followed by further price declines. This may indicate buyer fatigue and seller strength, potentially leading to further declines. Target Price of 1.05719: Aligned with fundamental analysis, the potential decline in EUR/USD could be a response to tighter US monetary policy and the increasing allure of the Dollar. The target price of 1.05719 is considered a realistic level given market conditions and supporting fundamentals. Conclusion: Fundamental analysis indicates that the Fed's cautious monetary policy and the decline in US inflation could provide additional support for Dollar strength. Meanwhile, technical analysis, with the pivot point at 1.09594 as the highest in three months, highlights resistance and the potential for a bearish reversal. This combination of factors forms the basis for considering a short position on EUR/USD, with a target price aimed at 1.05719 by year-end. Monitoring both fundamental and technical developments is crucial for risk management and making informed trading decisions.
Short
by fardycurry
2
Bitcoin's Bull Run to $39,968: Unleashing Strong MomentumOverview: Bitcoin has recently displayed a compelling technical pattern, forming a triangle with a notable high at $37,978 and a corresponding low at $35,784. The chart indicates a period of consolidation, setting the stage for a potential breakout on November 12. This impending move is further accentuated by a strong resistance level at $39,968, making it a key target for the anticipated upward movement. The bullish outlook is substantiated by fundamental factors, notably BlackRock's proposal to introduce a Bitcoin Exchange Traded Fund (ETF), currently awaiting SEC approval by October 2023. Additionally, the projected decrease in November USD inflation to 3.3% and Federal Reserve Chairman Powell's expressed inclination to lower interest rates create a favorable environment for BTCUSD. Technical Analysis: 1. Triangle Breakout: The technical analysis reveals a well-defined triangle pattern, signifying a consolidation phase. A breakout is expected on November 12, providing a clear signal for potential bullish momentum. 2. Target at $39,968: Historical data and meticulous technical scrutiny indicate a significant resistance level at $39,968, establishing it as a plausible target for the upward movement. Fundamental Analysis: 1. BlackRock's Bitcoin ETF Proposal: The potential approval of BlackRock's Bitcoin ETF presents a substantial catalyst. Approval could attract institutional investors, fostering positive market sentiment and potentially elevating Bitcoin's market position. 2. USD Inflation Decrease: The projected reduction in November USD inflation from 3.7% to 3.3% is a favorable macroeconomic factor. Lower inflation mitigates pressure on the Federal Reserve to raise interest rates, benefiting risk assets like Bitcoin. 3. Powell's Interest Rate Stance: Chairman Powell's vocalized desire to lower interest rates to 2% reflects a dovish stance. This dovish sentiment is typically conducive to the performance of Bitcoin, as it diminishes the relative attractiveness of traditional fiat currencies. Risk Factors: Market Sentiment: Rapid shifts in market sentiment or unforeseen events can exert influence on cryptocurrency prices. Traders should remain vigilant for sudden changes in the market landscape. In summary, a comprehensive analysis incorporating both technical and fundamental factors supports a bullish breakout scenario for Bitcoin around November 12. The potential target of $39,968 aligns with historical resistance levels and is strengthened by positive developments such as BlackRock's ETF proposal, decreased USD inflation, Potential Powell's dovish interest rate stance. Traders are advised to closely monitor SEC decisions and stay attuned to broader market dynamics for informed decision-making.
BITSTAMP:BTCUSDLong
by fardycurry
EURUSD Faces Headwinds as Dollar Strengthens?EURUSD struggled to build on yesterday's gains and experienced a decline since the start of Tuesday's Asian session. The surge in the US Dollar index exerted additional pressure on this currency pair, causing it to slip below the critical 1.0600 level. The anticipation of a more stringent stance by the Federal Reserve (Fed), supporting the upward trajectory of US bond yields and fortifying the US dollar, impeded EURUSD from extending its upward momentum seen in yesterday's trading. This aligns with the prevailing sentiment from the European Central Bank (ECB) that suggests no imminent interest rate hikes. This sentiment gained further credence from data indicating a deceleration in Germany's annual consumer inflation, dropping from 4.3% to 3.0% in October. This marks the lowest inflation rate since August 2021, a concerning development amid looming recessionary threats. Market participants remain confident in the Fed's commitment to its hawkish stance, given the resilience of the US economy in the face of persistently high inflation. However, all eyes are now fixed on the outcomes of the FOMC meeting and subsequent statements on interest rate policies. Today's Market Focus: Market participants are eagerly awaiting signals for today's potential market movements, with a particular focus on the release of Eurozone CPI data for short-term trading opportunities. Subsequently, attention will shift to the release of key macroeconomic data from the US, including the Chicago PMI and Consumer Confidence Index from the Conference Board. Trading Opportunities: As market projections suggest that the European Central Bank will maintain interest rates, and the Fed is expected to adhere to its hawkish stance, the weakening of EURUSD below the 1.0600 level remains a prevailing theme. This weakness is exacerbated by the strengthening US dollar and rising bond yields ahead of the FOMC meeting. Technical Analysis: In terms of technical analysis, the Fibonacci retracement at 23.6% (1.0643) acts as an immediate resistance level, followed closely by the 50-day Exponential Moving Average (EMA) at 1.0654. A potential reversal at these levels could instigate a decline in the EUR/USD pair. The technical dynamics of the EUR/USD pair indicate a notable weakening in momentum, notably signaled by the 14-day Relative Strength Index (RSI) dropping below the pivotal 50 level. This RSI movement suggests a bearish momentum, underscoring a broader sentiment of market weakness. Trading Strategy: Observing the current market conditions, it appears there is potential for executing a SELL action at the 1.0585 level should the EURUSD persist in its downward trend. In such a scenario, astute traders may contemplate a strategic approach by establishing a profit target at the 1.03500 level. Additionally, incorporating flexibility to adjust stop-loss levels proves to be a prudent measure, aligning with the individual considerations of each trader. However, it is imperative to underscore that trading decisions must consistently derive from meticulous analysis and a profound understanding of the associated risks. Deliberations regarding a SELL action or any trading maneuver should be approached judiciously. Traders are well-advised to take supplementary steps, such as staying abreast of current economic news or other market factors, before arriving at a definitive decision.
Short
by fardycurry
Dollar Got it's 50 day MA touch and should continue it's descentTraders, As you know everything is about the dollar rn. What it does determines what the rest of the U.S. market does. And, so far, what the U.S. market does has been helping us determine what Bitcoin will do. Bitcoin, being the lead dog, shows us what the remainder of the alt space will eventually do. This is how we follow the breadcrumbs to our next projected bull move. As you know if you have been following me for any length of time, I have been calling for a blow-off top in the U.S. stock markets. This will be followed by a more serious recession that very well could become hyper-inflationary in nature, meaning that it will take many, many more dollars to buy a thing. This "thing" would include anything from eggs to shares. The market is smart (but sometimes a little slow) and will eventually price this inflationary pressure (or dollar weakness in). When the dollar goes up, it's strong. It takes less dollars to buy a thing. So, markets generally go sideways or down. When the dollar is up and the VIX (fear index) is up, the markets almost always trend down. When the dollar is down and the VIX is down, the market will fly. The VIX is down currently. So now, we simply need to determine which way the dollar could continue. From my perspective, the overall trend remains descending. We have now touched the 50 day moving average, which, as you know, I had been hoping for for some time. The price movement is completed and we can now expect further downside and a retest of that larger Head and Shoulders neckline. Should that neckline break? Bye bye U.S. dollar. It is at this moment you will know the blow-off top has truly begun. We can expect new highs in our market to come before our recession. Best to you all in your trades during these times, Stew
TVC:DXYShort
by stewdamus
Inflation (CPI) - A Battle Already LostInflation ( CPI ) - A Battle Already Lost I've recently shared my outlook on CPI and where I think its headed in the months ahead but after further review, it seems that I've previously overlooked certain signals which should have altered my perspective in a way that it did not. Based on discovery of those signals, I have now updated my anticipatory CPI chart to highlight certain levels of interest. As we can see on the wavemap, the Consumer Price Index (a measure of inflation) has broken above its 40+ year bearish trend line. The breakout was very strong and should be considered as very significant. The format of the wave during this breakout has developed as what seems to likely be a zig-zag formation. Noticeably, the upside zig-zag wave has retraced 90% of the 40 year long bearish drawdown. Therefore, leaving little probability of it being a truly corrective wave. Aside from the macro bear trend-line, I have also highlighted the newly respected bullish trend-line. Finding resistance near 6.77, Fibonacci measurements suggest that the pending action will fall to retest the former price containing trend line and maybe even drop below it. Specifically, Elliott Wave Theory suggests that 0.99-1.01 should be the downside target range. Over the past 20 years, this level has also supplied nearly unbeatable support. If support is once again discovered near 1.00, the currently active wave could then be sent to retest the red bullish trend, at a level near 9-10. Ultimately, completion of the blue diagonal will signify that the CPI (and inflation) area headed for upside levels that the American economy has never witnessed. Personally, I believe that inflation is a byproduct of capitalism and there is no true containment possible. The next decade will prove to show if this is on point or simply farce.
ECONOMICS:USCCPI
by DigitalSurfTrading
How a Housing Market Crash Equals New Stock Market HighsTraders, I believe this chart is so important it warrants revisiting the data. Indeed, the fed has to be cognizant of this same data and is most certainly is watching it closely. Therefore, we must do the same. In this video, I am going to explain why the housing market data, even though it's week, supports my thesis of a blow-off top in the stock markets this summer. Stew ⛓️ 🔗 Useful Links 🔗 ⛓️ My Housing Market Chart: www.tradingview.com
ECONOMICS:USHMI
by stewdamus
1
It's happening! Blow-off top, Day 1.Traders, You all know that I have been expecting and discussing this day for many moons now, the day we break above our macro downtrend. Today is that day. Day 1 of what I expect to be a blowoff top that will surprise many investors, maybe a majority of investors. Before I get ahead of myself in enthusiasm, we will need another confirmation candle here on the daily. I'd love to see us close and open above the macro uptrend line as well, but that type of price movement is not necessary for confirmation. All we need to do is open and close tomorrow's candle above our macro downtrend and we are good to go. New highs in the U.S. stock markets should arrive sometime this year. I would anticipate by mid-summer to late fall. Enjoy the ride! Stew. [
ULong
by stewdamus
The Misconceptions of a FED Pivot...Investors often want the Federal Reserve (also known as "The Fed") to pivot its monetary policy because it can potentially have a significant impact on financial markets. A pivot refers to a change in the direction of monetary policy, such as shifting from tightening (e.g., raising interest rates) to easing (e.g., lowering interest rates). When The Fed pivots towards easing, it can signal to investors that it is willing to support economic growth and potentially stimulate asset prices. This can lead to increased demand for stocks and other riskier assets, as investors expect that these assets will benefit from the supportive monetary policy. However, it's important to note that The Fed's pivot does not always have the intended effect on financial markets. For example; 1. In 1986 , the Federal Reserve implemented a form of quantitative easing (QE) known as the Treasury-Fed Accord. This policy involved the Fed purchasing large amounts of U.S. Treasury securities in order to lower long-term interest rates and stimulate economic growth. 2. In 1989 , the Fed implemented another round of QE in response to a slowdown in economic growth. This time, the Fed focused on purchasing mortgage-backed securities in order to lower mortgage rates and support the housing market. 3. In 2000 , the Fed implemented QE in response to the dot-com bubble burst and the subsequent economic downturn. This policy involved the purchase of longer-term Treasury securities in order to lower longer-term interest rates and stimulate economic growth. 4. In 2007 , the Fed implemented QE in response to the global financial crisis. This policy involved the purchase of a variety of securities, including mortgage-backed securities and longer-term Treasury securities, in order to lower longer-term interest rates and stimulate economic growth. 5. In 2020 , The Fed pivoted towards a more accommodative stance in its monetary policy in response to the economic disruption caused by the COVID-19 pandemic. In conclusion, investors may want The Fed to pivot towards easing in the hope that it will stimulate economic growth and support asset prices. However, it's important to recognize that The Fed's actions do not always have the desired effect on financial markets, and there are many other factors that can influence stock prices. BUT .. As an investor, there are a few things you can do while waiting for the Federal Reserve (The Fed) to pivot its monetary policy: - Stay informed: Keep track of economic and market developments, as well as statements and actions by The Fed. This can help you understand the current economic environment and how The Fed might be considering changing its monetary policy. - Diversify your portfolio: Consider spreading your investments across a range of asset classes and sectors, as this can help reduce risk and potentially provide more stable returns over time. - Have a long-term investment horizon: The Fed's pivot may have an immediate impact on financial markets, but it's important to remember that the long-term prospects of investment are generally more important than short-term movements. By having a long-term investment horizon, you can potentially ride out any short-term market volatility caused by a pivot in The Fed's monetary policy. - Review your risk tolerance: Make sure that your investment portfolio is aligned with your risk tolerance and financial goals. If you are a risk-averse investor, you may want to allocate a larger portion of your portfolio to safer investments such as cash or bonds. - Seek professional advice: If you are unsure about how to navigate the investment landscape, consider seeking the advice of a financial advisor or professional. They can provide personalized guidance based on your specific investment goals and risk tolerance.
TVC:DJI
by ariefauliaa
Fulfilling projections expectations 2023On Wednesday 14th December, 2022 We’ve placed an order at $18 140 to SHORT Bitcoin following our projections and Biz plan towards 2030. Following our management plan; we expect to see more downside in Crypto Assets World. Last week, the FED gave us every reasons to believe that growth will be retained; till we are able to see a better Economic Landscape in projections to the mid-ending of 2023 to the beginning 2024. Carefully moving with wide eyes opened
Short
by JKAP-
1
Bitcoin 2023 |Fed Interest Rate Hikes & The Consumer Price IndexInflation is the keyword and we know how Bitcoin reacts negatively to the Fed rate hikes and inflation statistics nowadays. But... The CPI numbers will be revealed 13-December, the Feds meeting happens 13-14-December. This will affect Bitcoin and all markets negatively as it has been doing in the past but we expect a fast, strong and swift recovery right afterwards. We can expect something like this: 1) 2) 3) What's important really is what happens after mid-December. After the shakeout. We can see GREEN start to develop mid-December and give us a break for the rest of the year and a fresh start to 2023. Bitcoin, we start GREEN in 2023. Namaste.
BITFINEX:BTCUSDLong
by AlanSantana
28