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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
Leading US Stocks outperform IndicesThe stock market wavered on Tuesday as the post-Fed rally ran out of steam, although small caps and leading stocks performed better than most major indices. A mix of consumer, energy and health care leaders helped the index rise more than 1%, driven by a handful of outsize gains. Pockets of strength in software, chip, biotech, solar and internet stocks helped the Nasdaq limit its loss to 0.2%. The S&P technology sector was down 0.7% overall. The Dow Jones Industrial Average lagged with a 1.2% drop. Earnings and Fed News Influence Stock Market Tuesday's stock market wrestled with earnings reports, economic data, remarks from Fed officials and political strife. The stock market also dealt with geopolitical risk, this time in the Far East. House Speaker Nancy Pelosi's diplomatic visit to Taiwan angered Chinese leaders. Beijing, which had warned of consequences if Pelosi went ahead with her trip, sent warplanes over the Taiwan Strait and launched live-fire naval exercises. WHAT NOW? The overall market environment for breakout traders remains bullish, although we are not yet out of the woods. Bottoming after a bear market is a process which can take significant time. Breakout / swing-traders should be invested by ca. 50% by now but continue to remain highly cautious. Only increase your exposure on the back of gains in your own portfolio and always stick to your stop losses. Here is the link to our updated watchlist: www.tradingview.com
AMEX:SPYLong
by JS_TechTrading
BITCOIN OUTLOOK, 2022-2023 - Rain, before the rainbowGreetings community As the crypto giant sets the tone and leads the pack, it is evident to see examples of 'impulse-correction-impulse', or 'drop-rally-drop'. Whilst down significantly, it is still up significantly to early adopters. It is sometimes good to remember that even with this plummet, BTC still is, and will always have the highest growth factor and ROI across any asset. This correction was inevitable and should bring smiles to faces of all - as this is not a tragedy, but rather an opportunity of a lifetime, to what is, and will continue to expand as one of, if not, THE primary currency of the world. It is a digital world, and as consumers we need to understand Bitcoin will be to us, what Gold and Silver were to our forefathers. It is actually the primary digital commodity of the 21st century, that every being will require, to 'barter' across platforms and exchanges for other necessary tokens, in order to transact daily, as with every tomorrow, fiat currencies all over the world, evidently loses more trust, and more value due to being unable to keep up with inflation. I have illustrated my outlook on Bitcoin for the next few months. We are clearly in corrective state despite mandatory manipulation here and there. There is no two ways about it. Avoid FOMO, perhaps, rather watch the BTC chart as you'd binge watch a Netflix series, every night. Well, at least until Q4 2022, leading into Q1 2023. Anticipate long positions between 10-13k. Notes: -Inflation & Interest -Recession rumors -Bear market continuation -US/Global economy -Safe haven of the future -Crypto in the Metaverse Ever heard the saying, "Fall down seven, stand up eight." That sums it up pretty well.
BITSTAMP:BTCUSDShort
by unacknowledged
1
NASDAQ OUTLOOK 2022-2023, possible reset to Wall St?Greetings community Nasdaq, like with any asset, has two potential scenarios: long or short, however, it is crucial to identify the vast price movement, rather than to bicker about insignificant price jumps. I have illustrated my view, clearly indicating what matters, well to me. Below is text of the two scenarios that have most relative: 1) The price point of 12900-12950, which is a key level, a prior support and current resistance level, is either going to hold and allow for price to decline within its confined channel yielding more favorable long positions from the downside. In addition, Apple earnings are at low's matching 2015, Microsoft nears bottom, Google share split as well as formation of a potential double top should price close beneath above stated resistance 12950-12900. 2) The price pierces through and closes above the 12900-12950 level, defying equal high's or lower high's, thus yielding invalidation to set up - hence bringing a long opportunity, turning a resistance, back into support. Live time price action and fundamentals will confirm either scenario, both, with minimal drawdown at given prices and high R:R. Notes: -High potential of bear market continuation through October. -Correlation to BTC -Inflation & Interest -Recession rumors If you've benefitted, enjoyed or would like more of this content, advise by liking and commenting below. Be it smaller timeframes, long or short calls. I see that analysis posted on this asset as of current is an absolute joke. Sorry, not sorry.
FX:NAS100Short
by unacknowledged
6
The FED rising rates, why DXY falling?Market participants are currently starting to get priced in with the potential for a 75 bps hike in the Fed's interest rate. This can be seen from the yield on 10-year government bonds which fell to 7.35% yesterday. Previously, the yield had perched above 7.4%. The 10-year US Treasury yield also fell to 2.76%. The yield of US debt securities has fallen quite a lot from last week's position, which had touched 3%. At the FOMC last night, the fed said that a rate hike was a move to fight inflation. Higher interest rates work to slow down inflation by cooling off demand. Another discussion is about "recession fears" are an exaggeration. The Fed reassures investors that don't worry about media coverage of a recession, they are really working to avoid a recession in America. Instantly investors holding confidently put their money into US assets. Circulation of money is slightly reduced, but the value of the currency tends to strengthen. We can see investors' confidence as seen in the wall street chart recorded a significant bullish in 2 hours, while the USD tends to weaken in the short-term. But this optimism will definitely strengthening of the USD in the long-term. We can monitor the strengthening of the USD in early August from the labor data through the release of ISM Manufacturing PMI, ADP Employment Change, and Non Farm Employment Change/NFP.
TVC:DXY
by DNP-FX
2
Further upside expected on US Wall St 30 US30USD - Intraday - We look to Buy at 31620 (stop at 31219) Our outlook is bullish. Previous resistance at 31600 now becomes support. There is scope for mild selling at the open but losses should be limited. Support could prove difficult to breakdown. Further upside is expected although we prefer to buy into dips close to the 31600 level. Our profit targets will be 32781 and 33000 Resistance: 32800 / 34400 / 35600 Support: 31600 / 30400 / 29000 Risk Disclaimer The trade ideas beyond this page are for informational purposes only and do not constitute investment advice or a solicitation to trade. This information is provided by Signal Centre, a third-party unaffiliated with OANDA, and is intended for general circulation only. OANDA does not guarantee the accuracy of this information and assumes no responsibilities for the information provided by the third party. The information does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. You accept that you assume all risks in independently viewing the contents and selecting a chosen strategy. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, Oanda Asia Pacific Pte Ltd (“OAP“) accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore customers should contact OAP at 6579 8289 for matters arising from, or in connection with, the information/research distributed.'
OANDA:US30USDLong
by OANDA
1
US30 l DAILY l OUTLOOKMy perspective we are still in a bear market and have yet to form a bottom. On average bear market last up to a year with different levels of pullbacks. What I see from the 4 hourly chart: 1. "MULTIPLE BOS POSITION" @ 31530 In between major S&D zone 31275 - 31735 - Touch / Breakthrough 1 - May 24, 2022 (downtrend channel broken into a retest of BOS into uptrend) - Touch / Breakthrough 2 - June 10, 2022 ( BOS broken back into downtrend) - Touch / RETEST 3 - June 27, 2022 ( BOS was retest and rejected to the downside) - Touch / Retest 4 - July 8, 2022 (BOS was retest and rejected to the downside) - Touch / Breakthrough 5 - July 19, 2022 ( BOS was broken to the upside and retested on July 2022) 2. Testing key major zone of 32100 - 32480 which has played as support and resistance in the past 3. Next major BOS area is at 32650 Don't get played by the pullback...
OANDA:US30USD
by CORNINO