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Uncertainty or controlled Chaos?Everyone witnessed the new lows across the market with exception of a few stocks. TSLA was one of those stocks that even after experiencing a sharp drop it managed to still hold its ground and maintain its previous bullish structure. My expectations for the day are simple... Expect to see some chop between 298-300 This is important since if TSLA is to remain bullish you would need to see a bounce at this level that is being retested. A bounce at this level might encourage buyers to retest the stronghold sellers have set up around 310-312. But another test of this level will weaken sellers sentiment for the time being. If TSLA is unable to hold above 298 then your next levels to look for are 295 and 290 with and eye to the 280 level.
NASDAQ:TSLA
by JP_Tru
1
$SPX downhill without brakesFear inside Wall Street The CNN Business Fear & Greed Index, which measures seven gauges of market sentiment, is once again showing signs of Fear on Tuesday as the broader market plunged. The VIX, a volatility index that is one of the seven components of the Fear & Greed Index, shot up nearly 8%. The Fear & Greed index was in Fear mode a week ago as well but it had recently moved back into Neutral territory following a 4-day winning streak for stocks. That streak is coming to a spectacular end thanks to the hotter than hoped for consumer price index report, as investors worry that the Federal Reserve is going to raise rates even more aggressively next week to fight persistent inflationary trends. Wall Street's mood has largely tracked the rapidly changing expectations regarding inflation and rate hikes. Just a month ago, before Fed chair Jerome Powell gave a speech that suggested more big rate increases were coming, the Fear & Greed Index was indicating levels of Greed, a sign of complacency.
SP:SPX
by icheeetah
Bitcoin inverted....This is a inverted chart on bitcoin, this looks very good if you are bullish or bearish... As you can see the trend line support is holding well very well which is good for bears. The good thing though for bulls is this trendline touched support so many times and eventually would have to break down correct? Break down or up but the thing is there is not much low i think bitcoin will go if we go to 9-14k.... That is a IF. Not saying it will happen but taking into count that there are so many loss coins , big investors and retail investors who is holding bitcoin for the longterm buying it and sending it off exchanges to cold storages wallets. Only those who are paper handed (which was most) that left and got liquidated... It is normal. Happens every market cycle. This market cycle though we seen stuff we have not seen last bear markets and bull markets. This is a very interesting market and i am here for it. I believe Crypto will succeed and bitcoin will be correlated to stock market soon. This whole crypto space i manifest and know will be over a 8 trillion+ market cap. Yes i am taking in the global conflicts and macro view of the world. It will get better.
Long
by NewMAan
2
TSLA Bulls holding their groundWe have witnessed the battle that has left this stock range bound. Well the rest of the market has been the same. Yet TSLA investors showed no extra bias after the TSLA stock split. Bulls piled up at the $290 mark and managed to hold price from falling further, creating yet another Higher Low $314 and $324 might be in the Horizon for this stock, yet due to market conditions I would not venture further than that considering it will be pushing up against a dynamic Bearish trend line if it manages to cross the $328 mark. Just stay sharp. If TSLA loses that $290 mark then I guess you know.
NASDAQ:TSLALong
by JP_Tru
4
The Great Wall Street RepricingEquity Indexes: CME Micro S&P 500 ( CME_MINI:MES1! ), Micro Russell 2000 ( CME_MINI:M2K1! ) On August 26th, Fed Chairman Jerome Powell declared to forcefully fight the worst inflation in 40 years. He warned that the Fed would continue raising interest rates, even if it would cause "some pain" to the U.S. economy. In an eight-minute speech at the Jackson Hole Economic Symposium, Chairman Powell said that higher rates could persist "for some time." "While higher interest rates, slower growth and weak labor market conditions will lower inflation, they will also cause some pain to households and businesses," he said. "These are the unfortunate costs of reducing inflation. But failure to restore price stability will mean even greater suffering.” "Price stability is the responsibility of the Fed and the cornerstone of our economy," he said. "Without price stability, the economy doesn't work for anyone." Stock market fell immediately in response to the Fed’s hawkish tone. By the end of the day, the Dow plunged over 1000 points, or 3.03%. S&P 500 and Nasdaq 100 tumbled 4% and 4.4%, respectively. Russell 2000 closed below the 1900 mark, down by 3.3%. A New Game in Town In the past decade, US capital market operated under the assumptions of low interest rate and low inflation rate. They have been effectively overturned. In addition, we also face heightened geopolitical risks in Europe and supply chain bottleneck in the aftermath of a global pandemic. In a new investment regime, all financial assets would go through market repricing. To navigate this new paradigm with rising interest rates and high inflation, we will launch a series on the repricing across major asset classes in this new regime. This week, we deep dive into the repricing of US equity index. Upcoming stories will follow up on interest rates, foreign exchange, energy, metal, agricultural commodities among others. We will also re-visit our previous trade ideas whenever appropriate in this series. Equity Indexes Will Decline Due to Higher Cost of Capital The discounted cash flow (DCF) pricing theory states that stock price is the present value (PV) of expected future cash flows discounted by the weighted average cost of capital (WACC). Let me illustrate this concept using a $1 million payment, to be received in five years. • For a company with excellent credit score, we could use Moody's Aaa Corporate Bond Yield as our WACC. • Moody’s Aaa bond yield is quoted at 4.18% today, up from 2.52% a year ago. • PV discounted by a 2.52% WACC is $883K. PV with a 4.18% WACC is $815K. • When the cost of capital goes up, present value drops by 7.7%. Fed rate hikes would raise borrowing cost for all US corporations. Therefore, stock prices across the market should decline due to a higher cost of capital, other things equal. Last Thursday, in an interview with CNBC, St. Louis Fed President James Bullard claimed that his year-end target Fed Funds rate is 3.75%-4.00%. After Powell’s hawkish statement, I have good reasons to believe that Fed Funds rate would reach 4.50%-5.00% by the end of 2023 and stay at that level for at least a year. Triple-A corporate bond yield is usually 200 basis points higher than the risk-free Fed Funds rate. Going back to our $1 million example, A 7% WACC would yield a PV of $713K. This represents a 12.5% discount from the current PV of $815K. Of the 500 companies in the S&P index, only two have Triple-A rating. Nineteen are rated from AA- to AA+. And 119 are rated from A- to A+. This indicates that the borrowing costs for S&P component companies are higher than the Aaa bond yield. They could face a bigger hit in a stock market repricing. Based on this logic, I expressed my view by shorting US stock index futures on June 22nd, as in my story titled Bear Market is Far from Over . What about smaller companies, such as those in the Russell 2000? They usually have lower credit ratings and higher borrowing costs. Moody’s Baa Corporate Bond Yield is 5.13%, nearly 100 basis points higher than the Aaa yield. One year ago, it was 3.31%. If we assume an 8% WACC for Russell 2000 and go through the same exercise, the $1 million future cash flow will have a PV of $681K, down 13% from current level. Up to this point, we focus on just one factor, a higher borrowing cost. In an economic downturn, companies would incur lower revenue and lower cash flow. Smaller companies could be impacted more significantly. Let’s further assume that our $1 million in five years will be down by 10%, to $900K. With an 8% WACC, the PV is now $613K, down 25% from current level. With double hit from higher borrowing cost and lower expected cash flow, Russell 2000 is more vulnerable to a repricing risk compared to S&P 500. In addition, Russell 2000 is overpriced with a trailing price earnings ratio (P/E) of 66.78, compared to a 22.84 P/E for S&P 500. I further expressed this view by shorting CME Micro Russell 2000 (M2KZ2), as in my story “A Tale of Two Americas” on August 7th. Friday, Russell fell 65 points (-3.3%) and closed below 1900 points. With three more possible rate hikes before the December contract expires, there might be some room for the Small-Cap index to fall. My view on shorting Russell stands. Financial market is extremely volatile this year. Getting an information edge increases your odds of success in managing risk. I suggest leveraging real-time market data for a better gauge of market situation. Tradingview users already have access to delayed data. A Pro user could upgrade to real-time CME market data for only $4 a month, a huge discount at the time of high inflation. 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.
CME_MINI:M2K1!Short
by JimHuangChicago
34
Dont be greedy on IXICAs I posted IXIC price movement speculation a year ago or so, now I want to warn you this is only one of the possibilities. As we kno the price movement can choose only between two dirrefent directions. Either up or down. But now it looks too good to be true to me. But this time is different. With all the world situation and economic war between US and most of the worlds countries, media propaganda about big bear in front of our economy, europe automobile industry "cold". This is all the signt, that tells us be cautious. Be prepared to go at least "half-in" if the price starts to form higher lows on weekly chart. I Will give you updates about my movements and taught, what I think about this crap. See you down here eventually, Wish you luck, DonLobster
NASDAQ:IXIC
by donlobster
3
SHORTING WALL STREETUS indices are reaching the top of their respective channels and nearing resistance lines too. Given the recent bull run on stocks I'd say that we're due at least a corrective pullback. We are currently sitting at the top of the bearish channel and I will watch the smaller timeframes waiting to see if the dow jones will pop up to the resistance line last touched on May 5th, this would be the ideal entry point with a conservative profit take at around 32300 - I think it's possible it may drop further. Happy trading.
UShort
by luckyKing5760
3
SPY to the downsideSPY looks to be developing a reverse head and shoulders to take on the wall. I don't see the volume justifying us getting over this current wall so I assume we will develop support at about 390-395 so we can take on the 420 walls if we even get past the 415 walls. A lot of market maker activity, very obvious shorts that are pumping in premarket which makes me assume we're in for a drop. I also assume based on the price levels of bitcoin, BTC will go test 21k and then 19k if that fails. Ideally, BTC catches at that support, and both BTC and SPY rally and I get into Microstrategy 2024 leaps and plan my retirement. I'll probably buy one when BTC hits 21 and average down at 19. They are about 10k per option for 300c leaps and if BTC rips with MicroStrategy holding then each option will go for at least 70-90k if BTC goes back to even 60k based on Microstrategy hoarding BTC during this bear market.
AMEX:SPYShort
by kibakilla33