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Upside for Gold as rate expectation cooled by recession riskSummary The surge in energy and agricultural commodities in the past 6 months had materialized into serious inflation even down to the consumer end across the globe. To cope with inflation, the Fed has begun to raise rate at an accelerating pace. The rise in the interest rate of the USD causes dysfunction of traditional risk haven such as Japanese Yen FX:USDJPY and Gold COMEX:GC1! . However, with more evidence that the US is very close to a recession, the Fed might need to tune down to a more cautious approach to balance between taming inflation and speeding up recession due to higher borrowing cost (and debt repayment) for business. The stabilization in rate hike might soften the already strong dollar, hence providing room for traditional risk haven assets to rebound and restore some of their risk haven property . With still ongoing global political uncertainty (see appendix for more detail), there might be further upside potential beyond rebound. One should pay extra attention to the collective transition of power globally which is happening at a similar time coincidentally. Technical and trade planning Just like most commodities, the dominant force driving gold downward is the strength of the USD. The US Dollar Index TVC:DXY had reached a new high at 107.786, before retracing back to 106.895 to close lower last Friday, creating a reverse hammer candle. While the uptrend of the dollar index is still effective, however the bearish pattern hinted the peak might have reached (or at least the upside momentum is reducing) . Similar pattern in reverse was seen in many commodities including gold, which means opportunity for rebound trade. Note that gold currently is trading below most moving averages which means the downtrend is still in power. 20 days moving average trading below the 50 days, and both pointing downward double confirm the bearish view. In rebound trade it is very important to keep your cut loss and profit taking tight. One should also adopt strategies that allow more tolerance for error (e.g. longing call option with >30-60 days to expiration). Here are some technical levels trader of gold should be aware of: Downside support (to cut loss if dropped through) 1676.7: 2021-Aug hammer candle bottom 1721.8: 2021-Sep downside retest bottom Upside resistance (to take profit if fail to go further) 1785: May-16 bottom (broke on Jul-5) 1833: 250 days moving average 1878.6: Jul-3 rebound peak Appendix: Political events to keep an eye on Asia The former prime minister of Japan, Shinzo Abe was assassinated last Friday. Abe was seen as the de facto power of Japan. He initiated and was involved in lots of Japan economic policy and China-Japan relation issues. Close ties with global leaders, he was one of the early promoters of threat emerging from growing China, which later led to global boycott of China. He also showed his support to Taiwan as he saw the country as the first line of defense of Japan from China. One of his unaccomplished goals was to revise the country’s pacifist constitution to formalize the Japanese self-defense force as army, and broaden its military agenda outside of homeland defense, to be involved in regional security issues, such as Taiwan. The death of Shinzo Abe might help the constitutional revision to gain more supportive votes, which will worsen China-Japan existing tension. The 20th National Congress of the Chinese Communist Party will take place in November this year. One of the major topics is whether the current Chinese leader Xi Jinping will be re-elected for the next 5-years term. With lots of policy missteps that have caused material harm to the Chinese economy and financial stability, there are growing voices within the party that they might want a leader who can focus on reviving the Chinese economy instead of political ideals. At the same time, Xi is neutralizing the opposition force by revealing their evidence of misconduct and corruption (same strategy 10 years ago). The upcoming continuation or transition of power in China is going to be a very tricky one. Europe No end in sight for Russian invasion toward Ukraine, albeit increasing military support by the western powers. Inflation continues to make record highs in Europe with latest June CPI figures standing at 8.6%, energy talk with Russia is going to be very difficult especially for natural gas which is virtually impossible to get supply from other continents. The prime minister of the UK, Boris Johnson had resigned last week amid back-to-back scandals , with the Chris Pincher case became the last straw that broke the camel's back. The United States Recession risk, high gasoline price, baby formula shortage, the series of unfortunate events had taken a toll on the president Joe Biden approval rate, which dropped to just 30% in the new national poll. The negative sentiment toward democrats is likely to make the republicans take control of both the senate and the house. The democrats probably can take advantage of the recent Supreme Court’s decision of overturning Roe v. Wade, however the edge might not be enough to change much according to the latest forecast.
COMEX:GC1!Long
by geoffreyip523
Updates of Options Strategy on Wheat FuturesCBOT:ZW1! On June 15th, I issued an options trading strategy on CBOT Wheat Futures. At the time, I expected wheat price to experience a very large move but was unsure of its direction. Consequently, I recommended a Long Strangle options strategy : Purchase both an out-of-money (OTM) call and an OTM put on September Wheat Futures. The original trading idea may be found here: . Let’s review how this trade performed five weeks after its initiation: Initial market conditions on June 14th: • September Wheat Futures (ZWU2) is quoted at $10.54/bushel. • An OTM call with a $12.00 strike price is quoted at 17 cents. • An OTM put with a $9.00 strike is quoted at 4.625 cents. A Long Strangle will cost $1,081.25, as each call and put contract is based on 5,000 bushels of Chicago wheat. This is the maximum amount you could lose if wheat price did not break out the upper ceiling or fall through the lower floor set by the strikes. At this writing on July 18th: a) ZWU2 futures is quoted at $7.81/bushel, down $2.73 or -26%. Our expectation of big price move is proven to be correct . b) Call options with $12.00 strike price is quoted at 10 cents, down 7 cents. Even though futures price declines, there is still time value in the OTC call options. c) Put options with $9.00 strike is quoted at 85.5 cents, up 1749%. Due to the nonlinear nature of options pricing, our put is hugely profitable as it is now $1.19 deep in-the-money. What can we do today? There are two options: 1) Sell both the call and put with offsetting trades. The call would realize a loss of $350, and the put has a profit of $4,043.75, making the combined total at $3,693.75. Taking the $1,081.25 premium we paid upfront as our cost base, gross profit will be $2,612.5 per contract, or +242% return in a five-week holding period. 2) Hold the positions . There are five more weeks left before the August 26th options expiration, and wheat price could make bigger move. For illustration purpose, let’s use today’s price as exercise price. The Call would expire worthless as it is out-of-the-money, and we lose the $850 initial investment. However, by exercising the put, we gain $1.19 (=9.00-7.81) per bushel, and $5,950 per contract. The combined gross profit will be $4,018.75, or +372% . Why does this trade work? The key lies with a properly set-up strategy. It’s time to revisit our Three-Factor Commodity Pricing Model: Commodities Futures Price = Intrinsic Value + Market Sentiment + Crisis Premium In February through May, the Russia-Ukraine conflict put a huge Crisis Premium on wheat price, driving it from $8 to $12-$13, before moving lower to around $10. Since June, surging inflation, aggressive rate hikes, and recession fears overtake supply concerns as the main market driver. As fighting in Ukraine drags on, the impact from crisis diminishes, and Bearish Market Sentiment takes over. Commodities markets from energy, metals to agricultural products all suffered a huge loss. Looking forward, I expect that Intrinsic Value, or traditional supply and demand factors, would come back as key market mover. The recently released World Agricultural Supply and Demand Estimates report (WASDE) from the U.S. Department of Agriculture set a bearish tone in the grain market, sending wheat price to fall further. For our CBOT Wheat Strangle options trade, I favor closing the positions now over holding it to expiration. Here is my reasoning: In a classic economic supply and demand chart, fundamental factors move market price along the supply line and demand line. Price movement tends to be moderate and within a narrow band. This is what the Wheat price chart shows before February 24th. On the contrary, crisis premium pushes either the supply line or the demand line to shift sideway, resulting in big price jumps. In the case of Wheat futures, investors are concerned that a loss of Russian wheat would reduce global supply by as much as 25%. Wheat price responded by a series of limit-up days and jumped 40% in two weeks. Note that daily price limit (up or down) on wheat futures is 70 cents per bushel. In the absence of conflict escalation in Ukraine, volatility in wheat price would likely stay muted going forward. Additionally, time value, which is part of the options premium, will decrease quickly as contract expiration nears. In the Black-Scholes Model, options price is positively correlated with volatility. Expected low volatility combined with diminishing time value will make it difficult for our Long Options to increase in value. This is my argument against holding on to the options. As the likelihood of global recession grows, food crisis will stay on as a major global issue in 2022 and 2023. Famine could hit weaker economies. Agricultural commodities will be a good risk management tool to hedge the rising food cost. Happy Trading. Disclaimers *Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
Editors' picks
CBOT:ZW1!Short
by JimHuangChicago
21
$CRK oil hedge 2.0 👁‍🗨*This is not financial advice, so trade at your own risks* *My team digs deep and finds stocks that are expected to perform well based off multiple confluences* *Experienced traders understand the uphill battle in timing the market, so instead my team focuses mainly on risk management Recap: Our last time entering this thing was at $20 on 6/9/22! We carefully avoided taking a big hit on this trade by exiting on 6/15/22 at $17.42 per share. Today my team entered oil company Comstock $CRK again, but this time dirt cheap at $12 per share. Take profit is unknown but the set-up looks extremely bullish! OUR ENTRY: $12 STOP LOSS: $11 If you want to see more, please like and follow us @SimplyShowMeTheMoney
NYSE:CRKLong
by SimplyShowMeTheMoney
4
Bitcoin Bear Targets in case Ukraine x Russia tensions riseUntil the rising of the tensions between Ukraine and Russia, I was bullish about Bitcoin because of the fundamentals and on chain analysis. Now that my hopes on a diplomatic solution fades as war is in fact happening, my vision tends to change to a more bearish scenario. So I made a very simple analysis based on price levels and volume and the head and shoulders figure that was upsetting me and a lot of people on the market.
BITSTAMP:BTCUSD
0
by PedroGamaTrade
2
US500/SPX enters into a bear market The last time this happened was in 2018 but the market some how management to rally which resulted in a false breakout. In 2020 the market came back to this level and spiked around this area before turning into an almost 2 year rally. 2007 was a different story as market broke structure and the result was a sell of that lasted one year. What will happen in 2022? Will the bulls take control and result in the SPX hitting another all time high. Or will we see similar events of what happened in 2007 which resulted in a huge sell off that one year.
OANDA:SPX500USDShort
by NDOBObanks
The New Base Level in the VIX IndexThe VIX index is the Chicago Board Option Exchange’s CBOE Volatility Index, a popular measure of the stock market’s expected price variance of S&P 500 stocks. The S&P 500 is the most diversified of the leading stock market indices. Higher base levels in the stock market’s volatility index A correlation with the bond market Markets across all asset classes face many issues in 2022 As market participants head for the sidelines, volatility increases The buy zone for the VIX is the 20-25 level Market volatility comes in two forms, historical and implied. Historical volatility measures a market’s past price variance, while implied volatility is the consensus perception of the future price variance. The primary determinate of call and put options is implied volatility. Options prices rise when implied volatility increases and falls when the measure declines. Options are price insurance, and market participants tend to flock to the options market during bearish periods. Therefore, implied volatility tends to rise during downside corrections. In 2022, the S&P 500 has been trending lower, and volatility has increased from the levels seen in 2021. Meanwhile, the VIX index has been trending higher since reaching a low of 8.56 in November 2017. Higher base levels in the stock market’s volatility index The VIX index has been trending higher over the past five years, with two significant upside spikes. The chart highlights the spikes to 50.30 in February 2018 and 85.47 in March 2020 when the global pandemic gripped the stock market. Meanwhile, the base level for the VIX was around the 10 level from April 2018 through early 2020. In 2020 and 2021, the base rose to the 15 level, and the bottom for the VIX increased to the 20 level in 2022. In the VIX, upside price spikes tend to signal the kind of capitulation that leads to stock market bottoms. While all the leading stock market indices have been declining in 2022, the price action in the volatility index has yet to signal stocks are anywhere near the bottom. A correlation with the bond market Stocks and bonds compete for capital flows. As interest rates rise, money tends to flow from equities to fixed-income securities. Therefore, a falling bond market is bearish for stocks. The trend of higher lows in the VIX is a bearish sign for stocks and bonds. In 2022, the stock market has traded like a whack-a-mole game. While making lower highs and lower lows, declines have led to rip-your-face-off rallies, confusing market participants. However, the overall bearish trends in stocks and bonds and bullish trend in the VIX index is a sign that the bear continues to dominate the markets. Markets across all asset classes face many issues in 2022 Higher interest rates are bearish for the stock market and bullish for the volatility index. However, the markets face a lot more than higher interest rates in 2022: The war in Ukraine creates a unique side of problems for all markets. Rising energy and food prices have pushed inflation to a four-decade high, translating to pressure on stocks and bonds. The Fed’s interest rate policies remain far behind the inflationary curve, keeping real interest rates in negative territory and fueling even more inflation. The bifurcation between the world’s nuclear powers creates trade issues that distort prices, creating raw material shortages in some regions and gluts in others. The tensions interfere with the flow of goods worldwide. The mid-term US elections in November will determine the balance of power in the House of Representatives and the Senate. The election will be a barometer of support for the Biden administration. Polls point to losses for the ruling party, but the electorate remains divided, with emotions high on both sides. Voters tend to vote with their pocketbooks, but there is much at stake in November. US energy policy continues to address climate change by favoring alternative and renewable fuels and inhibiting the production and consumption of fossil fuels. The President recently said the pain of higher gasoline and fuel prices is necessary for consumers to shift to a greener path. Opponents contend that the energy shift will take decades, while supporters argue that hydrocarbons continue to power the world. The election will go a long way to deciding if the US continues its green route or shifts back to a drill-baby-drill and frack-baby-frack road to energy independence. Russia and Ukraine export one-third of the world’s annual wheat supplies and a significant amount of corn and other agricultural products as they are Europe’s breadbasket. Higher food prices and scarce availabilities over the coming months and years could spark a period of upheaval with hungry people in less developed countries dependent on Russia and Ukraine facing famine. These issues and the unknown are fueling uncertainty in markets across all asset classes with no solutions on the immediate horizon. Uncertainty is the stock market’s worst enemy. While the Fed attempts to address inflation with interest rate hikes, supply-side economic issues could mean the central bank is fighting an inflationary blaze with a water gun that will only hasten a recession or worse. As market participants head for the sidelines, volatility increases Market participants are nervous in June 2022. The price for all goods and services continues to increase as money’s purchasing power declines. Moreover, after the stock market gains over the past two years, monthly IRA and investment account statements are eroding at an accelerated pace. As of June 16, the tech-heavy NASDAQ had lost nearly one-third of its value from the late 2021 high. The S&P 500 was down more than 22.8%, and the Dow Jones Industrial Average fell around 17.5%. Consumer confidence has plunged, and a general disgust and malaise are settling over markets across all asset classes. Rapidly rising interest rates are making new home purchases prohibitive, even if prices come down. Meanwhile, we are heading into the peak summer months with the stock market in whack-a-mole mode. The odds favor a retreat to the sidelines for many market participants over the coming weeks and months. Less participation causes volumes to decline, and in the current environment, will likely increase price volatility. As many traders, speculators, and investors turn off their screens and head off on vacation, bids to buy are likely to disappear during selloffs, and offers to sell will evaporate during recoveries, making rip-you-face-off rallies even more dangerous. Higher volatility will only add to frustrations over the summer of 2022. The buy zone for the VIX is the 20-25 level The VIX was over the 33 level on June 16, but it fell as low as 23.74 in early June. The trend of higher base levels for the volatility index increases the odds of success for purchasing the VIX futures or VIX-related products on dips to the 20-25 area. The VIX is a trading, not an investment product. Approach the VIX with a solid risk-reward plan and stick to the program. Look for better than even odds opportunities, take small losses at risk levels, and look to increase profit horizons when the volatility index rises. When adjusting profit targets, remember to raise the risk points to levels that protect profits and capital. The trend in the VIX is higher, and the potential for a substantial upside price spike is rising. Trading the volatility index from the long side could be the optimal approach over the coming weeks and months as the market faces significant issues and liquidity is declining. Fasten your seatbelts as the whack-a-mole stock market could experience head-spinning moves over the coming weeks and months. -- Trading advice given in this communication, if any, is based on information taken from trades and statistical services and other sources that we believe are reliable. The author does not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects the author’s good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice the author provides will result in profitable trades. There is risk of loss in all futures and options trading. Any investment involves substantial risks, including, but not limited to, pricing volatility , inadequate liquidity, and the potential complete loss of principal. This article does not in any way constitute an offer or solicitation of an offer to buy or sell any investment, security, or commodity discussed herein, or any security in any jurisdiction in which such an offer would be unlawful under the securities laws of such jurisdiction.
CBOE:VIXLong
by Andy_Hecht
1
BTC is about to invade 2 year Moving Average 😰☠️*🐻*☠️😰Hi everyone 👋🏽 🕊 Wish y'all have a profitable lifestyle 🍀 📌 BTCUSD- Daily Time Frame - Candlesticks 📌 Support Zone - Demand Zone - Fibonacci - Tops and bottoms - Fundamental - Sentimental 👋🏽 I would like to say hi to anyone reading this 📍 So with all these chaos happening early 2022, let's talk about BTCUSD and decide whether we are already in a bear market or not. 📍First of all I would like to name a view of these chaos happening all around the world and why 2022 IS a very wild year :) 1- Internet shutdown in Kazakhstan; because of protest against oil price 2- Russia threatening Ukraine and a possible war between these 2 countries 3- Truckers protests in Canada 4- China Taiwan dispute 5- Hyperinflation 📍 So far, 2022 didn't start very well, did it? So it would be no surprise if BTC is dipping in these months but what is going to happen ? ✍🏼 Based on historical technical analysis we have a very strong technical indicator which is 2 Year Moving Average: In simple word if the price touches or closes below the lower band there could be a bullish momentum and if it does touch or open above the upper band there could be a bearish momentum 📍 We are getting closer and closer to the lower band and prices continues to fall, so we might get back to 30k's range or even lower for a bigger move ✍🏼 I've already introduced several TOPs and BOTs in the chart. The TOPs are based on Fibonacci extension levels such as 1.27% or 1.618% , etc. and the BOTs levels are the 0.23% , 0.382% , 0.5% , etc retracements 📍 I personally think we might see another dip to the 30k's level before another rally. ⚠️ But, I have another case scenario: Because of all these bad news happening all around the world we might be seeing very lower prices and it may be harder to BTC to recover from that.
BNC:BLXShort
by C_EWAVE13
3
GOLD - XAUUSD Hello traders? As I expect the dollar to fall this week, it is natural that gold, with its reverse movement with the dollar, will be an ideal rise, and the news supports its rise, as the G7 decides to ban the import of Russian gold to increase restrictions on Moscow with the continuation of the Russian-Ukrainian war and • Britain, America, Japan and Canada ban the import of Russian gold. This is likely to open the week with a large gap for gold. As for the movement of gold this week, it will be positive to support the price's rise. . . Important rules: 1: Use a small lot 2: Don't be greedy 3: Stick to the goals 4: Don't add deals to losing trades 5: Stick to your stop loss Good Luck To Everyone .
OANDA:XAUUSDLong
by zaidhatem
2
Jamie Dimon’s Hurricane and the Bond Market in Early JuneIn 2021, as the US central bank and the Secretary of the Treasury continued to call rising inflation a “transitory” and pandemic-inspired event, the bond market declined. Bonds watched prices rise while the economists were pouring over stale data. Meanwhile, the Fed and government planted inflationary seeds that sprouted during the second half of 2020, bloomed in 2021, and grew into wild weeds in 2022. The consumer and producer price data began to flash a warning sign in 2021, with the economic condition rising to the highest level in over four decades. The Fed and the Treasury finally woke up. While the Biden administration was already “woke,” the data awakened them to a point where late last month, Treasury Secretary Janet Yellen admitted “transitory” was a mistake. However, there was no admission and self-realization that monetary and fiscal policies created the inflation, and ignoring the warning signs only made it worse. A storm forecast from JP Morgan Chase’s leader Bonds are sitting near the lows The Fed’s FOMC meets on June 14 and 15 Higher rates are on the horizon Expect lots of volatility in markets The bond market was far ahead of the Fed and the Treasury, which should have been another warning sign. Consumer and producer prices have skyrocketed, and the central bank is using demand-side tools to address the economic fallout. Meanwhile, the war in Ukraine, sanctions on Russia, and Russian retaliation have only exacerbated the inflationary pressures, as they create supply-side issues making demand-side solutions impotent. The Biden administration blames the rise in energy prices on Russia, but they were already rising before the invasion and sanctions. The shift in US energy policy to a greener path is equally responsible for record-high gasoline and other fuel prices. At the end of 2021, a conventional 30-Year fixed-rate mortgage was just below the 3% level, and in less than six months, it rose to 5.5%. On a $300,000 loan, the move increases the monthly payment by $625, a significant rise. We are in the early days of an economic storm that began with the pandemic, continued with a lethargic Fed and government officials, and was exacerbated by the first major war in Europe since WW II. We have not seen the peak of the storm clouds gathering for more than two years. A storm forecast from JP Morgan Chase’s leader Jamie Dimon, the Chairman and CEO of JP Morgan Chase, called Bitcoin a “fraud.” A few short years ago, he said he would fire any trader “stupid” enough to trade cryptocurrencies on the bank’s behalf. As recently as late 2021, he said he believes Bitcoin is “worthless.” So far, he has been dead wrong on the asset class. The financial institution he heads replaced real estate with cryptocurrencies in late May, calling them a “preferred alternative asset.” In his latest comments on markets across all asset classes, Mr. Dimon issued a warning. Quantitative tightening that will ramp up to $95 billion in reduced Fed bond holdings and the Ukraine war led him to tell market participants, “You’d better brace yourself. JP Morgan is bracing ourselves, and we’re going to be very conservative with our balance sheet.” He began by saying, “You know, I said there’s storm clouds, but I’m going to change it…it’s a hurricane.” Mr. Dimon believes QT and the war create substantial changes in the global flow of funds, with an uncertain impact. The leading US bank’s CEO is prepared for “at a minimum, huge volatility.” His forecast on cryptos aside, the warning is a call to action. There is still time to hedge portfolios and establish a plan for the coming storm. Volatility is a nightmare for passive inventors, but it creates a paradise of opportunities for nimble disciplined traders with their fingers on the pulse of markets. Bonds are sitting near the lows Quantitative tightening not only removes the put under the bond market that had supported government-issued fixed income instruments since early 2020, but it also puts downward pressure on bonds and upward pressure on interest rates further out along the yield curve. The long-term chart of the US 30-Year Treasury bond futures highlights the decline to the most recent low of 134-30, declining below the October 2018 136-16 low, and falling to the lowest level since July 2014. At the 135-20 level on June 10, the bonds are sitting close to an eight-year low, with the next technical support level at the December 2013 127-23 low. The Fed’s FOMC meets on June 14 and 15 The market expects the US Federal Reserve to increase the Fed Funds Rate by 50 basis points this week at the June meeting. The move will put the short-term rate at the 1.25% to 1.50% level. The Fed remains far behind the inflationary curve, with CPI and PPI data at an over four-decade high and coming in hotter each past month. While the central bank determines the short-term rate, the bond market has been screaming for the Fed to catch up, warning that inflationary pressures were mounting. The bottom fell out of the long bond futures in 2022 as the Fed began to tighten credit. However, the Fed’s economists will only put the short-term rate at 1.50%, with inflation running at many times that level. A 75 basis move to 1.75% would shock the market, which is not a path the Central Bank wants to follow. Higher rates are on the horizon The Fed may have awakened, realizing it must use monetary policy tools to address inflation, but the central bank remains groggy and slow to adjust rates to levels that would choke off rising prices. The economists do not have an easy job as they face supply-side economic problems created by the war in Ukraine. Had they been more agile in 2021 and nipped the rising inflation in the bud with a series of rate hikes, the US Fed would be better positioned to address what has become a no-win situation. The war has caused energy and food prices to soar with no central bank tools to manage the situation. Last week, gasoline rose to a new high, crude oil was over $120 per barrel, natural gas was over $9.65 per MMBtu, and grain prices remained at elevated levels. Rate hikes and lower bond prices are not likely to cause prices to fall as US energy policy, sanctions on Russia, and Russian retaliation are supply-side issues that leave the central bank with few answers. Higher food and energy prices will keep the inflationary spiral going and will continue to push bond prices lower. Expect lots of volatility in markets The US and the world face an unprecedented period that began with the 2020 global pandemic. Artificially low interest rates and the government stimulus that addressed the pandemic were inflationary seeds. The pandemic-inspired supply chain bottlenecks exacerbated the inflationary pressures. A shift in US energy policy increased OPEC and Russia’s pricing power in traditional energy markets. Meanwhile, the war in Ukraine has turbocharged the economic condition, making a solution challenging for the central bank. The current US Treasury Secretary, and former Fed Chair, Janet Yellen, once said that monetary policy works together with the government’s fiscal policies. In the current environment, fiscal policy and the geopolitical landscape have become the most significant factors for rising inflation. Jamie Dimon is worried, and the head of the leading US financial institution is battening down the hatches on his balance sheet for a storm. Even though he was mistaken about cryptos, we should heed his warning and hope he is wrong. Markets reflect the economic and geopolitical landscapes, which are highly uncertain in June 2022. Hedge those portfolios, and make sure you develop a plan for any risk positions. Expect the unexpected because 2022 is anything but a typical year in markets across all asset classes. Fasten your seatbelts for what could be a wild and turbulent ride over the coming months. -- Trading advice given in this communication, if any, is based on information taken from trades and statistical services and other sources that we believe are reliable. The author does not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects the author’s good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice the author provides will result in profitable trades. There is risk of loss in all futures and options trading. Any investment involves substantial risks, including, but not limited to, pricing volatility , inadequate liquidity, and the potential complete loss of principal. This article does not in any way constitute an offer or solicitation of an offer to buy or sell any investment, security, or commodity discussed herein, or any security in any jurisdiction in which such an offer would be unlawful under the securities laws of such jurisdiction.
Editors' picks
CBOT:ZB1!Education
by Andy_Hecht
12
💥➡ Gas is going to explode?Fundamentally, I think natural gas is going to "explode". I don't know if this will happen in the next months or, as the demand tends to drop during the warmer months in the northern hemisphere, we will see the peak in fall. You're seeing a projection of last year's rise here with its high in the 1st half of October. But I think this could be extremer. Germany/Europe will demand Russian gas, which will get more expensive and/or less exported. So they will, of course, require US natural gas. And worldwide inflation plays another role in this ...
AMEX:BOILLong
by p4917
6
Global headwinds for copper?Copper has attempted a rebound from technical oversold levels in recent days, following a 20% drawdown from its all time highs, thus officially entering a bear market. Is this an indication that investors have already priced in a global economic downturn and that the worst is now over? Or are we merely experiencing a copper bear market rally, with further declines to come? The previous days have acted as a relief rally in all assets that had declined in recent months. That's because interest rate fears cooled as inflation peaked. The market is beginning to believe that the Fed may not go all-in with rate rises and will thus need to release the brake to prevent more damage (a recession). However, the most significant concerns associated with copper, particularly Covid-19 in China and the negative repercussions on global growth, have not dissipated. If current geopolitical and economic challenges, such as Covid in China and the conflict in Ukraine, derail globalization efforts, copper prices may face further headwinds in the coming months as trade flows stall due to a drop in global consumer demand amid real income losses. Copper prices exhibit an extraordinarily close link with South Korean exports ECONOMICS:KREXP — one of the world's most open economies and a gauge of the health of global trade flows. Read more...
CAPITALCOM:COPPER
by Capitalcom
MOS/USD Daily TA Neutral BearishMOS/USD Daily neutral with a bearish bias. * Fed minutes were released today and confirms that the Fed is committed to two more rate hikes in June and July of at least 50 bps with potential for another 50-75 bp hike in September, and that they will sell mortgage backed securities (rather than let them roll over) if necessary as a means of reducing their balance sheet. Equity markets are currently responding positively but this could be short-lived. Additionally, to address the global food shortage, last week the U.N. proposed a plan for Russia to unblock grain exports from Ukraine through the Black Sea in exchange for reducing Western sanctions on fertilizer exports from Russia and Belarus; considering that Russia has found willing buyers of their fertilizer at higher price points, this is unlikely to pass anytime soon.* Recommended ratio: 40% MOS, 60% cash. Price is currently breaking down out of the uptrend line from 01/24/22 but is still technically testing it as support at ~$60. Volume remains high (moderate) and alternating between buyers and sellers every other day for what is now twelve consecutive sessions; this is indicative of potential consolidation. Parabolic SAR flips bullish at $66 which currently coincides with the 50 MA, this margin is neutral at the moment. RSI is currently trending up at 45.48 but is still technically testing 40.33 support; if it is able to establish support here it will likely test 58.12 resistance. Stochastic crossed over bullish in today's session and is currently trending up at 59; the next resistance is at 80.49 and support at 39.11. MACD remains bearish and is currently trending sideways at -1.65 as it continues to hover just below the Signal line (-1.54); if it is able to break out above -1.54 it would be a bullish crossover. ADX is currently trending up slightly at 19 as Price continues to fall, this is mildly bearish. If Price is able to reclaim support at the uptrend line from 01/24/22 (~$60) this would also imply that it has broken out of the descending trendline from 04/18/22 and would likely prompt a retest of $64.22 resistance. However, if Price continues to break down here then it will likely retest $55.79 minor support before potentially testing the 200 MA (for the first time since 12/01/21) at ~$46.28. Mental Stop Loss: (two consecutive closes above) $60.40.
NYSE:MOS
by dailytaguy
Pound rises on US inflation, GDP loomsThe British pound is in positive territory, as the currency tries to break a four-day losing streak. In the European session, GBP/USD is trading at 1.2355, up 0.36% on the day. US inflation dipped in April, but still came in above the forecast. Headline CPI dropped from 8.5% to 8.3%, above the estimate of 8.1%. Core CPI came in at 6.2%, down from 6.5% but above the estimate of 6.0%. The US dollar is broadly lower as a result, although the decline would have been sharper had the estimates been right on. Today's inflation data will no doubt result in some headlines proclaiming an "inflation peak", but I would caution that it seems premature to declare that inflation is on its way down after just one release. Higher interest rates will do the job and curtail inflation, but it will take time. In the meantime, today's inflation report will not change the Fed's stance, and the CME's FedWatch has pegged the likelihood of a 50-bps rate hike in June at 89%. Looking forward, inflation gazing has become even trickier in the current environment. There are huge unknowns around price pressures due to the Ukraine war, as well as the extent of China's slowdown and the impact on supply chains due to China's uncompromising zero-Covid policy. With energy prices at very high levels, it will be difficult for headline CPI to come down. Over in the UK, we'll get a load of data on Tuesday. The key release, Preliminary GDP for Q1, is expected to slow to 1.0%, down from 1.3% in the fourth quarter. The UK economy is showing an unhealthy mix of slower growth together with soaring inflation, which has raised concerns about stagflation. The BoE has been raising rates to curb inflation, but investors have not been impressed, as the pound has hit hard times and hit a 23-month low earlier this week. There is support at 1.2199 and 1.2056 GBP/USD faces resistance at 1.2272 and 1.2418
by OANDA
Time for a USD retrace move? The US Dollar has been bullish for months... Global economic uncertainty caused by inflation, COVID, and the Russian and Ukrainian conflict have caused cash to flow to USD assets. Could the USD be currently over-valued? My analysis suggests that USD price is due a retrace move, especially on very over-extended pairs such as USDCHF, USDJPY, EURUSD and GBPUSD... Analysis for USDJPY and GBPUSD below... USDJPY - 9 consecutive bullish weeks (almost a record?) Weekly RSI currently hitting over 88. Lower time-frames show weakening upside momentum. Possible retrace move due to previous monthly resistance at 124.00. I am expecting the retrace move to start by the end of June (hopefully this week as I am already holding out of the money USDJPY put options) GBPUSD - testing key support area around 1.2200. Weekly RSI hitting around 22. Possible inverted head and shoulder trend reversal pattern (or range) on the weekly time-frame. I am expecting the retrace move to start by the end of June (hopefully this week as I am already holding out of the money GBPUSD call options). Don't get me wrong, I expect the USD bullish trends to continue, perhaps now is just a good time to get off any long positions and open those shorts... Fingers crossed!
by Samuel_Morton_Trader
Waiting on Trendline Support or Fail For MoveThis currency is technically is a very large range, and the war isn't making it get any more steady. Even though my bullish trendline has been very respected, I'm starting to think it may have run out of steam this week. If my trendline is broken, we'll probably make it back to 38810 zone and even further down to the 34652 zone. If the trendline is supported, we should make it to 49188 zone for a solid higher high. Here are the TPs: BULL: • 41620.37 • 43660.12 • 46090.47 • 48781.20 BEAR • 41056.18 • 39797.61 • 38929.63 • 37150.27 • 35804.90 • 34936.92
BITSTAMP:BTCUSD
by NikaJourney
EURO under pressure - Key element to watchEURO under pressure - Key element to watch Context : Since 2000 EUR/USD is evolving between 0,82 and 1,60 providing two clear floor and cap level following the trend of global macro economy and the strategies deployed in the differents major central banks. The last past weeks following the decision to lower the Quantative Easing, the different actions took in the world in order to control the inflation and the good figure confirming the pursuit of the accumulation of the growth (even slower than last year) in the develop countries - The consensus for the Euro were quiet clear => main research highlighted 1,08/1,12 as strong support area and 1,18/1,23 as strong resistance for a further trading range without significant element for EUR or USD to take significant advantage regarding Growth, inflation and monetary policy. Today the situation is a bit different with less visibilty regarding the situation in Ukraine and even if we can exclude potential risk of global war, we can't ignored the risk about bilateral sanction between NATO countries and Russia. It means significant problem with energy/metals/commodities supply and price, political destabilisation, cyber attack, etc... This kind of modification take time to be absorbe and modified in order to set up a new strategy were russia will stay isolated from global economy for a while. The first economy to be impacted will be definitely the Europe in this crisis and the EURO since one week is in a free fall mode. So what to understand from EURUSD chart and what to focus on? : - Only a Weekly Chart Basis 1/ The previous upside trend ABC 0,82 to 1,60 has been follow by a consolidation in ABC towards 1,02 (or a construction of the long-term downside swing within a huge triangle) 2/ For now the ABC downside pattern within the bearish channel seems to be finished with the test of the 1,02 support - Then we are evolving within a range/triangle dynamic (Blue Frame) ---> That the graphical situation illustrating the context above. 3/ If the ABC downside pattern is not finished we gonna see a downside breakout from the triangle/range structure on going (inside the blue frame) to open further downside risk ----> Risk = Irregular running Range (Test of the 1,0075/0,9750) ----> Risk = poursuit of the bearish channel within a complex ABC X ABC pattern towards 0,8450 4/ RSI indicators is approaching support but didn't reached the previous oversold area where bullish reaction started = It is more likely to see more bearish momentum to be developed. 5/ Moving averages are now capping the market at 1,1530 Analysis Regarding the key elements and giving more weight to the Waves structures and the recurrence of Fibonacci levels, we can still giving more credit to see a development of a further trading range (blue frame) than a free fall of the Euro within the bearish channel towards 0,8450. Where it is more tricky to to have conviction is between a range in irregular with the test of parity before swinging up or triangle pattern with 1,0750 as key support before developing a new upside swing The key resistance is for now clearly set at 1,1530 and only a break out of this resitance can lower the downside risk significantly. Trading => Intraday/multi days traders will use 1,0750 as stop loss level to catch the dip and play agressive recovery with for now the Moving Average as Target to watch => Mid-term Institutional trader seems already in restructuration of the strategy by activating action to hedge the commodities upside risk and the pressure on Europe, so i would say that the hedge in place is between 1,0750/0,97 for the downside risk and 1,1530 (Neutrality area protection to adjust option)
Education
by JeanJean1983
M for (M)aybe invading a sovereign nation wasnt such a good ideaJust made kind of a prediction yesterday since some friends were interested in the RUB hitting the floor Original prediction made yesterday (3:42AM pacific time 28th) And then looked at today (also the idea has this anyway). Seemed pretty easy and I'm not sure where it will go from here or how far down it will go. It just depends on the war and any further sanctions, I guess. If it goes down like the Crimea timeframe, it should hit 0. Did you know monopoly money has a value? Since there are a number of them in each box, and they cost paper to produce, they are worth some fraction of a USD. Possibly, it could be worth more than the ruble soon!! Hope everyone stops this madness and people don't have to die.
Short
by sofie4
3