#SP500 Update #SPYThe outlook remains unchanged supported (biased) by similar patterns that I see in precious metals that chose to correlate with US markets thus far.
DJI
Hellena | DJI (4H): Short to diagonal lineDear colleagues, I believe that wave 3 has completed and the price is undergoing a correction to at least the 35000 area.
Manage your capital correctly and competently! Only enter trades based on reliable patterns!
NDX - Rising Trend Channel [MID -TERM]🔹Index shows NEGATIVE signal from double top formation, broke support at 15426.
🔹Signals further decline to 15057 or lower.
🔹Supports 13600 and resistance at 15800
🔹Technically NEUTRAL for medium long-term.
Chart Pattern;
🔹DT - Double Top | BEARISH | 🔴
🔹DB - Double Bottom | BULLISH | 🟢
🔹HNS - Head & Shoulder | BEARISH | 🔴
🔹REC - Rectangle | 🔵
🔹iHNS - inverse head & Shoulder | BULLISH | 🟢
Verify it first and believe later.
WavePoint ❤️
✅ Daily Market Analysis - FRIDAY AUGUST 04, 2023Key News:
USA - Average Hourly Earnings (MoM) (Jul)
USA - Nonfarm Payrolls (Jul)
USA - Unemployment Rate (Jul)
Canada - Employment Change (Jul)
Canada - Unemployment Rate (Jul)
European markets faced a challenging day yesterday, witnessing a continuation of losses. The DAX marked its fourth consecutive day of decline, while the FTSE100 closed lower for the third straight session. Despite the persistent downward trend, there was a glimmer of hope as both indices managed to recover slightly from their day's lows, suggesting a hint of resilience in the market.
DAX indices H4 chart
FTSE100 indices daily chart
In the US, the trend of market declines continued for the third consecutive day. Despite the US dollar reaching a fresh four-week high, it ended the day unchanged. The Dow also closed lower on Thursday, influenced by rising Treasury yields reaching multi-month highs. This increase in yields dampened investor sentiment as they awaited the upcoming jobs report scheduled for release on Friday.
Dow Jones Industrial Average Index daily chart
Despite positive earnings reports from tech giants Apple and Amazon after the market's close, market sentiment hasn't seen a notable surge as we approach the weekend.
One potential factor contributing to this week's market weakness is the recent Fitch downgrade of the US AAA rating to AA+. While the downgrade itself didn't provide any new information, it might have impacted investor confidence. Nevertheless, the overall state of the US economy appears to be robust, with the services sector showing resilience, even amidst concerns about the manufacturing sector.
The July ISM survey further demonstrated the economy's strength, with a solid performance. Prices paid increased, indicating ongoing inflation concerns, which may result in sustained elevated interest rates for an extended period. The employment component of the survey, however, ticked lower, suggesting potential cautiousness in hiring practices.
Despite these factors, the market sentiment remains cautious as the weekend approaches. Investors are likely to keep a close eye on any developments that could impact the overall market outlook going forward.
US nonfarm payrolls
The focus of the day lies on the release of the July jobs report in the US, which comes after the recent 25 basis points rate hike by the Federal Reserve, possibly the final hike of the current cycle. Market expectations are for the report to highlight the continued strength and resilience of the US economy.
Analysts anticipate the addition of approximately 200,000 jobs to the US economy, with the unemployment rate remaining steady at 3.6%. However, there might be a slight dip in average hourly earnings, dropping from 4.4% to 4.2%.
Meanwhile, Canada's jobs report is also expected to show robust numbers, following the addition of 59,000 jobs in June.
The pound experienced a volatile trading day yesterday, touching a one-month low before staging a strong rebound to finish unchanged.
The Bank of England's recent decision to raise interest rates by 25 basis points, bringing them to a new 15-year high, has raised some questions. There are indications that rates might stay at their current levels for an extended period. Comments from Deputy Governor Ben Broadbent have suggested that the UK's rate policy is already restrictive and that interest rates might now be above the neutral rate. Future rate hike decisions will likely depend on the upcoming CPI inflation reports, with the first one due in under two weeks.
In the forex market, the GBP/USD pair is showing a positive outlook, breaking a four-day losing streak during the early Asian session on Friday.
GBP/USD daily chart
Today, gold prices saw a modest rise as traders exercised caution in anticipation of the release of crucial labor data that could have an impact on US monetary policy decisions. The market remains watchful, and the outcome of the labor data is likely to influence investor sentiment and the direction of gold prices in the near term.
XAU/USD daily chart
Earlier this week, the price of gold experienced a notable decline, primarily driven by concerns surrounding a potentially hawkish stance from the Federal Reserve, which in turn strengthened the US dollar. As the market perceived the US economy to exhibit resilience, expectations of further interest rate hikes by the Federal Reserve increased, with the belief that there is ample room for additional economic adjustments. These factors have played a significant role in shaping the recent movements of gold prices in the market.
✅ Daily Market Analysis - MONDAY JULY 31, 2023Key News:
China - Manufacturing PMI (Jul)
Eurozone - CPI (YoY) (Jul)
The Dow Jones Industrial Average celebrated a third straight weekly gain, rising 0.5% or 176 points. The surge was driven by investors' interest in leading tech and chip stocks. The market rally was fueled by declining Treasury yields and signs of inflation deceleration, leading to optimism that the Federal Reserve had concluded its interest rate hike. Nasdaq soared 1.9%, and the S&P 500 climbed 1% in response to the positive news. Despite short-term gains, investors remain cautious of potential challenges like geopolitical uncertainties and supply chain disruptions.
DJI indices daily chart
Nasdaq indices daily chart
S&P500indices daily chart
The Dow Jones Industrial Average continued its winning streak, largely propelled by significant gains in big tech companies, including Apple Inc (NASDAQ: AAPL), Meta Platforms Inc (NASDAQ: META), Alphabet Inc Class A (NASDAQ: GOOGL), and Microsoft Corporation (NASDAQ: MSFT). These tech giants showcased a positive performance, backed by a decline in Treasury yields, triggered by a notable slowdown in a key Fed inflation measure.
The personal consumption expenditures, a crucial inflation indicator, displayed a considerable deceleration, growing at a 0.2% pace in June, compared to 0.1% in the previous month. Moreover, the annual pace for the same period stood at 3%, significantly lower than the 3.8% recorded in the prior month. This data served to reinforce the market's belief that the Federal Reserve might pause its monetary policy tightening.
As investor confidence in a potential Fed pause grew, both the 2-year and 10-year Treasury yields slipped. Investors adjusted their expectations, reducing the likelihood of further rate hikes in the near future.
The positive performance of tech giants and the decline in Treasury yields contributed to the Dow Jones' third consecutive weekly win. This market rally signifies growing optimism among investors, but potential challenges, such as geopolitical uncertainties and supply chain disruptions, warrant cautious consideration. Staying informed and employing prudent investment strategies will remain essential as the market continues to evolve.
US02Y Treasury yields
US10Y Treasury yields
In a week marked by volatility and month-end trading, the US Dollar experienced a noteworthy surge of 1.6% against the Japanese Yen, reaching 141.15, up from 139.50. However, the Dollar's performance against other major and emerging market currencies presented a more mixed picture.
The Dollar's substantial gain against the Japanese Yen was likely influenced by various factors, including shifts in market sentiment, economic data releases, and geopolitical developments. The Yen is often considered a safe-haven currency, sought by investors during times of uncertainty. Therefore, any fluctuations in global sentiment may have prompted investors to move funds into or out of the Yen, influencing its exchange rate against the Dollar.
On the other hand, the Dollar's performance against other currencies was less uniform. This could be attributed to varying economic conditions and policy outlooks in different countries, as well as diverging interest rate expectations. Central banks' monetary policies, economic indicators, and geopolitical events all play a role in shaping currency valuations and exchange rate movements.
USD/JPY daily chart
The Bank of Japan (BOJ) caught the markets off guard during its recent meeting by making an unexpected adjustment to its Yield Curve Control policy. The BOJ announced its intention to purchase 10-year Japanese Government Bonds (JGBs) at a yield of 1.0% every day. This move led to market turbulence as investors reacted to the surprising tweak in the central bank's bond-buying program.
Despite this adjustment, Japan's Policy Rate remained unchanged at -0.10%. The Policy Rate represents the interest rate at which financial institutions can borrow from the central bank, and the BOJ's decision to keep it steady indicates its commitment to maintaining an accommodative monetary policy stance.
BOJ Governor Ueda sought to clarify the central bank's intentions during a subsequent press conference. He emphasized that the recent adjustment in the Yield Curve Control policy should not be interpreted as a step towards rate normalization. In fact, Governor Ueda assured that the BOJ has no immediate plans to raise interest rates and, instead, aims to weaken the Yen.
The BOJ's actions are driven by a desire to support Japan's economy and achieve its inflation target. By purchasing JGBs at a fixed yield, the central bank aims to influence borrowing costs and stimulate economic activity.
Meanwhile, in Australia, unexpected declines in both June Retail Sales and Producer Prices had a negative impact on the Australian Dollar (AUD). The AUD dropped from its Friday opening level of 0.6710 to close at 0.6650, reflecting investors' concerns about the country's economic performance.
The decline in Retail Sales indicates weaker consumer spending, which is a crucial component of economic growth. Additionally, lower Producer Prices may signal reduced business profitability and potential downward pressure on inflation. Both factors combined to create uncertainty about Australia's economic outlook, leading to the AUD's depreciation.
Currency markets are highly sensitive to economic data releases, central bank decisions, and global events. As demonstrated by the recent developments in Japan and Australia, unexpected news and policy changes can result in significant currency fluctuations.
AUD/USD daily chart
he Australian Dollar (AUD) experienced turbulence in response to unexpected economic data releases in Australia. June Retail Sales recorded a significant decline of -0.8%, falling short of the anticipated 0% growth. Moreover, the Producer Price Index (PPI) on a year-on-year basis dropped to 2.0%, considerably lower than the previous figure of 5.2% and below estimates of 2.9%. These surprises in economic indicators raised concerns about the country's economic performance and resulted in fluctuations and uncertainties in currency markets during the week and month-end trading.
As a result of the AUD's depreciation, it dropped from its Friday opening level of 0.6710 to close at 0.6650 against other major currencies, reflecting investors' cautious stance.
In the midst of economic uncertainties, gold prices remained relatively stable, trading within a narrow range on Monday. Investors adopted a wait-and-see approach, anticipating further significant indicators regarding the state of the US economy for the week ahead. The previous week had seen gold prices close relatively unchanged after the Federal Reserve's expected interest rate hike and its reaffirmation of plans for at least one more rate increase later in the year.
Gold, often seen as a safe-haven asset, tends to respond to changes in interest rates and economic uncertainties. The Federal Reserve's decision to raise rates as part of its monetary policy tightening can impact the opportunity cost of holding gold, as higher interest rates may make other interest-bearing assets more attractive to investors.
XAU/USD daily chart
Inflation Eases, Nonfarm Payrolls Awaited: Impact on Rates and Gold Prices
Last week, a report revealed that inflation, particularly measured by the Fed's preferred gauge, eased further in June. This development may lead to a less aggressive approach from the central bank in terms of rate hikes.
Investors are now focused on the release of key US nonfarm payrolls data this week, as it is expected to provide insights into the strength of the labor market. Despite the Fed's intention to cool down the labor market with rate increases, US employment has remained robust throughout the year, possibly prompting the central bank to adopt a more hawkish stance.
Minneapolis Fed President Neel Kashkari's comments suggested a data-driven approach to future rate hikes, indicating that decisions would depend on incoming economic data. He expressed positive sentiments on inflation but also anticipated some cooling in the labor market this year.
For gold, any potential pauses in the Fed's rate hike cycle could have a positive impact, as rising interest rates tend to increase the opportunity cost of holding the precious metal. However, strong US economic readings from last week put downward pressure on gold prices, as concerns arose that the strength in the US economy might allow the Federal Reserve to continue hiking rates.
As the markets eagerly await the nonfarm payrolls data and closely monitor inflation trends, the US Federal Reserve's future actions will likely heavily influence both currency and commodity markets. Investors should closely follow economic indicators, central bank communications, and geopolitical events to make informed decisions amidst the evolving economic landscape.
$DJI $NDX $SPX $RUT closesHow #indices closed last week.
TVC:DJI
After a BEARISH ENGULFING it then closed Friday with a doji = battle for the bulls and bears which is unresolved
NASDAQ:NDX
Fighting back but it is still showing Negative RSI Divergence.
SP:SPX
Suffering from Negative Divergence. We''ll how #SPX trades over the next few days, weeks. AMEX:RSP (Equal weight) was weaker. This means that the usual big boys pulled more weight.
TVC:RUT needs big move soon, lower highs.
Lots of earnings this week! Have a great trading week!
✅ Daily Market Analysis - FRIDAY JULY 28, 2023Key News:
Japan - BoJ Press Conference
USA - Core PCE Price Index (MoM) (Jun)
USA - Core PCE Price Index (YoY) (Jun)
The Dow Jones Industrial Average is on the verge of breaking its longest winning streak in 36 years, fueled by Wall Street's tech-driven rally. The index achieved an impressive 13 consecutive sessions of closing higher until a slight 0.5% decline on Thursday afternoon, following earlier gains. Despite the dip, the rally's expansion across various sectors promises exciting prospects for investors.
Dow Jones Industrial Average Index daily chart
While investment professionals may lean towards the S&P 500 due to its broader representation of the market with over 500 stocks, the Dow Jones remains a prominent fixture in news media and enjoys widespread recognition among many Americans.
The recent impressive surge in the Dow Jones is closely linked to traders' prevailing belief that the US Federal Reserve's decision to raise interest rates by 25 basis points on Wednesday signifies the conclusion of its efforts to combat inflation. This move has instilled confidence in investors, who are now optimistic about the US economy's resilience and its potential to steer clear of a recession.
S&P 500 daily chart
According to S&P Dow Jones Indices, the Dow Jones' longest winning streak on record dates back to 1897, lasting an impressive 14 sessions.
In spite of its recent gains, the Dow Jones has not performed as strongly as other major indices on Wall Street in 2023. Year to date, it has risen by 7%, while the S&P 500 and Nasdaq have experienced more significant gains of 18% and 35%, respectively.
During extended trading, Intel Corporation (NASDAQ: INTC) witnessed a substantial increase of 8.4% following its Q2 earnings report. The company exceeded expectations with earnings per share (EPS) of $0.13, outperforming analyst predictions of losses amounting to $0.04 per share. Furthermore, Intel reported a revenue of $12.9 billion for the quarter, surpassing the anticipated revenue of $12.09 billion.
Intel Corporation stock daily chart
Last night, the European Central Bank (ECB) made a noteworthy move by raising its main policy interest rates by 25 basis points, resulting in a deposit interest rate of 3.75%. The accompanying policy statement caught attention as it kept the possibility of further rate hikes open, but without adopting a more cautious stance.
In response to the Federal Reserve's modest boost, the US markets received a slight uplift, while the European indices experienced significant gains this afternoon. The surprise came from ECB President Christine Lagarde's remarks, hinting that the rate hike campaign might conclude with a more dovish tone than initially anticipated. Consequently, the DAX, CAC, and other European indices surged, displaying robust bullish sentiment unaffected by strong US economic data.
Although the FTSE's surge has slowed down this week, the overall market sentiment remains resolutely bullish. A few afternoon declines, primarily in Shell and Barclays shares, caused some drag, but the index still shows signs of further upside potential. Looking ahead, expectations point towards the Bank of England (BoE) following the lead of the Fed and ECB on rates. A dovish tone in the upcoming week should support UK stocks in reclaiming some lost ground.
FTSE index daily chart
During the early hours of Friday's Asian trading session, the EUR/USD currency pair is fluctuating within the range of 1.0980-1.0970. The pair is on a recovery path after experiencing a significant decline, marking its largest drop in 4.5 months during the previous day's trading. The current state of the Euro pair reflects the cautious sentiment prevailing in the market, as investors eagerly await the release of top-tier data from both Germany and the United States. The overall market sentiment appears subdued, reaching its lowest level in three weeks ahead of these crucial economic indicators. Investors are closely monitoring the data releases for potential insights into the economic outlook, contributing to the prevailing cautious atmosphere in the foreign exchange market.
EUR/USD daily chart
During the highly anticipated July policy review meeting, the Bank of Japan (BoJ) board members unanimously agreed to maintain their existing monetary policy settings without making any changes. This includes leaving interest rates at -10 basis points and keeping the 10-year Japanese Government Bond (JGB) yield target at 0.00%.
The market's response to the BoJ's policy announcements was immediate, and the USD/JPY pair experienced a notable upward movement, gaining significant momentum. At present, the pair is trading at 140.06, representing a notable 0.45% increase for the day. In the aftermath of the BoJ's decision, there was a swift knee-jerk reaction, propelling the pair to test 141.08 before eventually settling at its current trading level. The BoJ's decision has had a considerable impact on the foreign exchange market, influencing the dynamics of the USD/JPY pair and prompting investors to closely monitor further developments.
USD/JPY daily chart
As Friday's trading approaches, investors are eagerly awaiting the release of crucial data on the PCE (Personal Consumption Expenditures) price index, a key indicator of inflation. This data will be closely monitored, as it can provide valuable insights into the current inflationary pressures in the economy.
Additionally, market participants will be keenly interested in the Michigan consumer sentiment and expectations data. This data, reflecting consumer confidence and economic expectations, holds significant importance as it sheds light on consumer behavior and sentiment, which are crucial drivers of economic growth.
On the earnings front, two major companies, Exxon Mobil Corp (NYSE: XOM) and Procter & Gamble Company (NYSE: PG), are scheduled to announce their quarterly results. These reports have the potential to significantly impact the stock prices of these companies and may also influence broader market sentiment. Investors will scrutinize these earnings reports to assess the financial health of these corporations and to gauge the overall health of their respective industries.
As these critical data releases and earnings reports unfold on Friday, the financial markets are likely to experience heightened volatility and uncertainty. Investors are advised to exercise caution and remain vigilant during this period, as the outcomes of these events can have substantial implications for investment decisions and market trends.
DOW JONES Sell signal at the top of the Channel Up.Dow Jones reached the top of the 4 month Channel Up today just after crossing above Resistance (1).
The MA50 (1d) is the first Support of this pattern and has been untouched since July 10th.
Trading Plan:
1. Sell on the current market price.
Targets:
1. 34450 (expected course of the MA50 1d).
Tips:
1. The RSI (1d) is has formed a top pattern, same as April 13th and June 15th.
Please like, follow and comment!!
Notes:
Past trading plan:
✅ Daily Market Analysis - THURSDAY JULY 27, 2023Key News:
Eurozone - Deposit Facility Rate (Jul)
Eurozone - ECB Interest Rate Decision (Jul)
USA - Core Durable Goods Orders (MoM) (Jun);
USA - GDP (QoQ) (Q2;
USA - Initial Jobless Claims;
Eurozone - ECB Press Conference
USA - Pending Home Sales (MoM) (Jun)
On Wednesday evening, US stock futures exhibited a mixed trend following the Federal Reserve's decision to raise interest rates by 25 basis points, a move that was in line with market expectations. The major averages saw diverse trading patterns as investors closely monitored earnings reports from significant companies.
At 6:55 pm ET, Dow Jones Futures declined by 0.2%, indicating a slightly negative sentiment for the Dow Jones Industrial Average. Meanwhile, S&P 500 Futures remained unchanged, suggesting a relatively stable outlook for the broader market represented by the S&P 500 index. On the other hand, Nasdaq 100 Futures rose by 0.2%, indicating a positive bias for the technology-heavy Nasdaq Composite index.
The mixed trends in the futures market reflect the uncertainty and cautiousness among investors as they digest the impact of the Federal Reserve's interest rate hike and closely analyze corporate earnings reports. The Federal Reserve's decision to raise rates was widely anticipated, but the nuances in their accompanying statements and the economic outlook can still influence market sentiment.
NASDAQ indices daily chart
SPX indices daily chart
DJI indices daily chart
During extended trading, Meta Platforms Inc (NASDAQ: META) experienced a significant 7% surge in its stock price following the release of its second-quarter earnings report. The company's Q2 earnings per share (EPS) came in at $2.98, surpassing market expectations, which had anticipated earnings of $2.91 per share. Furthermore, Meta Platforms reported total revenues of $32 billion for the quarter, exceeding the projected revenue figure of $31.08 billion.
Investors responded positively to the strong financial performance of the company, driving its stock price higher in after-hours trading. The better-than-expected earnings and revenues indicated a robust performance during the quarter and suggested that Meta Platforms was outperforming market forecasts.
In addition to the impressive Q2 results, Meta Platforms Inc also provided optimistic guidance for the upcoming third quarter of 2023. The company forecasted revenues in the range of $32 billion to $34.5 billion for Q3, which surpassed the market's expected revenue of $31.2 billion. This positive outlook for the next quarter further contributed to the stock's increase in after-hours trading.
Overall, Meta Platforms Inc's strong Q2 financial results and optimistic guidance for Q3 have buoyed investor confidence in the company's performance and future prospects, leading to a notable increase in its stock price during extended trading.
Meta Platforms daily chart
After reporting its second-quarter earnings, eBay (NASDAQ: EBAY) faced a decline of 4.8% in its stock value. The company's Q2 earnings per share (EPS) were reported at $1.03, slightly higher than the market's expectations of $0.99 per share. However, the company's Q2 revenues came in at $2.5 billion, slightly below the anticipated revenue figure of $2.51 billion.
The stock price decline indicates that despite beating earnings estimates, investors may have been disappointed with eBay's revenue performance for the quarter. The revenue miss could have raised concerns about the company's ability to drive top-line growth in a competitive market.
Looking ahead to the next quarter, eBay provided a positive outlook for its financials. The company projected EPS in the range of $0.96 to $1.01, surpassing the market's expected EPS of $0.92. Additionally, eBay forecasted revenues in the range of $2.46 billion to $2.52 billion, significantly higher than the market's expected revenue of $2.23 billion.
The optimistic guidance for the next quarter suggests that eBay management expects improved financial performance in the coming months. This outlook might have provided some reassurance to investors, preventing a steeper decline in the stock price.
Overall, the mixed reaction to eBay's earnings report reflects the complex interplay of various factors in the stock market. While beating EPS estimates and providing a positive outlook for the next quarter could be seen as positive signs, the slight revenue miss in Q2 may have tempered investor enthusiasm and led to the stock price decline. As with all earnings reports, market participants closely assess the financial metrics and guidance to form their investment decisions, which can result in varied reactions to the same set of results.
eBay daily chart
The Federal Reserve has implemented a 25 basis points increase in interest rates, bringing the range to 5.25% to 5.50%. This move marks the highest interest rate level observed in 22 years and aligns with the Fed's ongoing tightening campaign.
In their statement, the Fed expressed a positive outlook for economic growth, acknowledging that economic activity has been expanding at a moderate pace. This represents a slight improvement compared to their previous description of growth as "modest." The focus on consumer prices remains a top priority for the Fed, as they emphasized that inflation continues to be elevated. Policymakers will closely monitor the risks associated with inflation, just as they have been doing in the previous months.
The decision to raise interest rates was widely anticipated by the market, as the Federal Reserve has been communicating its intention to address the inflation surge and gradually normalize interest rates in response to the economic recovery. By increasing interest rates, the Fed aims to curb inflationary pressures and maintain a balanced economic environment.
As the Fed continues to monitor economic developments and inflation data, future interest rate adjustments will likely be influenced by the pace of economic growth and the trajectory of inflation. The central bank will take a data-dependent approach to ensure that its monetary policy remains aligned with the evolving economic conditions.
US Dollar Currency Index
After the Federal Reserve's decision to raise interest rates, the US dollar experienced a decline against various currencies. This weakening of the dollar resulted in a notable increase in gold prices. As a safe-haven asset, gold tends to perform well during periods of uncertainty and when the value of the US dollar is under pressure.
Investors are now closely monitoring key resistance levels for gold. The $1,973 level is seen as a minor resistance, and if gold surpasses this level, it could signal further upward momentum. Above that, the $1,978 level becomes significant, and a break above it might lead to additional gains for gold.
The central bank's indication of a data-driven approach to future rate hikes means that the pace of rate increases will depend on the economic data and developments. This stance has been interpreted positively for gold as it implies that the Fed may be cautious in its tightening measures, which can weaken the US dollar and boost gold prices.
Gold's strength in pushing further into the high-$1,900 an ounce territory indicates that investors are turning to the precious metal as a hedge against inflation and currency devaluation. The lingering uncertainty in the financial markets and the ongoing focus on inflation by the Federal Reserve have contributed to gold's attractiveness as a safe-haven asset.
As global economic conditions and central bank policies continue to evolve, gold prices may remain sensitive to changes in the US dollar and market sentiment. Investors will closely follow economic data releases, monetary policy statements, and geopolitical developments to gauge the outlook for gold and make informed investment decisions.
XAU/USD daily chart
Despite showing some strength, gold remained stuck in a tight trading range for the past two weeks and struggled to break above the critical $2,000 an-ounce mark, which is often considered a significant level that could trigger further upward movement in the metal's price.
One exception to the overall trend in the currency market was the Australian dollar. It defied expectations and weakened after the release of data that indicated a slowdown in domestic inflation during the second quarter. The decrease in inflation reduced the pressure on the Reserve Bank of Australia (RBA) to implement further policy-tightening measures.
The data revealed that Australia's consumer price index (CPI) rose by 6% during the second quarter. This represented a deceleration from the 7% recorded in the first quarter and fell below the market's expectations of 6.2%. As a result, the Australian dollar depreciated to approximately $0.676 against the US dollar.
The lower-than-expected inflation figures indicate that price pressures in Australia are not rising as quickly as anticipated, giving the RBA room to maintain a wait-and-see approach on monetary policy. A weaker inflation outlook reduces the likelihood of interest rate hikes in the near term, which can weigh on the currency's value.
Overall, the tight trading range for gold and the Australian dollar's depreciation following the inflation data release reflect the cautious and uncertain market sentiment amid ongoing economic and monetary policy developments.
AUD/USD daily chart
This week, the market's attention is not only on the Federal Reserve's interest rate decision but also on upcoming rate decisions from the European Central Bank (ECB) and the Bank of Japan (BOJ). The ECB is widely expected to raise interest rates by 25 basis points, while the BOJ is likely to maintain its ultra-low rates and continue with its dovish policies. However, traders are cautiously watching for a potential hawkish surprise from the BOJ, given inflation trending above its target.
The possibility of rising interest rates is generally considered negative for metal markets, and it is anticipated to limit significant gains in gold throughout the year.
In Thursday's trading session, several important economic indicators will be closely monitored, including fresh core durable goods orders, GDP data, pending home sales, and jobless claims. These data points can offer valuable insights into the health and performance of the US economy.
Furthermore, earnings reports from major companies such as Mastercard Inc, McDonald’s Corporation, Intel Corporation, and Nestle SA ADR will be in focus. These earnings releases can have a substantial impact on the respective company's stock prices and may also influence broader market sentiment.
Overall, this week's events are likely to play a crucial role in shaping market sentiment and direction, with investors closely analyzing central bank decisions, economic data releases, and corporate earnings reports to make informed investment decisions.
Hyperinflation Is Coming - + BRICS - CPI - UFL WAY-MAP
Similarities between Japan 1989 & Weimar Germany 1923 could not be more clear.
People waiting for the "recession" clueless to the break down of the USD dollar system.
--MISCONCEPTIONS--
But the 10Y - 2Y yield!, did you adjust that indicator for the QE / debasement? probably not like every single other economist that refuse to acknowledge Quantitative Easing is real why? simple it keeps their assets rising self fulfilling prophecy.
But inflation is coming down! Hyperinflation is solved!, did you know before the final vertical hyperinflation event inflation actually fell in Weimar Germany to zero?
But the world purchases US debt because the US always pays its debt!,
ok great
32.5 Trillion in US National Debt.
192.5 Trillion in US Unfunded Liabilities.
US CPI going vertical & FRED raising rates in panic as the base GDP growth cannot fund this debt how do you think they are going to afford it?.
That's right! they're going to be forced to print hundreds of trillions of dollars. Well done you have purchased debt of a currency on the brink of hyperinflation.
--REALITY--
CPI both Weimar Germany & USA are going up way way too fast
Government debt in both time periods are going vertical, what did Weimar Germany do to solve this? they debased their currency to pay the debt & interest.
BRICS + Will continue their move creating a multi polar world economy and majority of countries will go with China & Russia due to their near zero debt to gdp.
Japan owning the most US debt forced to raise rates to deal with local inflation and their own bonds have no option but to talk with Russia & China to save their country or they will go under with the USA its just math.
USA has one option
1.Print 100's of trillions to stop safety nets failing + explosion in unemployment & introduce a new currency like Germany did at a 1:10 ratio.
2. Federal Reserve now purchased all your assets, destroyed your currency, forced you to lose your value 1:10 1:100. Welcome to Socialism.
-- Final --
Between 1913 and December 1923, retail prices increased by about 1 trillion, with inflation accelerating in 1922-1923. After World War I, the Versailles Treaty of 1919 condemned defeated Germany to pay reparations of a disproportionate amount (equivalent to two years of its pre-war GDP). The State financed these payments by creating money, which led to a self-sustaining rise in prices: as prices rose faster and faster, people sought to buy right away for fear of having to pay more later. This flight from money led to hyperinflation: prices rose faster and faster, and increased by 1 trillion between 1913 and December 1923. Gradually, the Reichsmark lost its functions as money, as evidenced by women burning banknotes to keep warm since they were worth less than wood logs. On 15 November 1923, a monetary reform broke the inflationary spiral by replacing the Reichsmark by the Rentenmark, on the basis of 1 Rentenmark for 1 trillion Reichsmark. This hyperinflation crisis also saw the rise of mass unemployment and extremist movements, in particular the Nazi Party of Adolf Hitler, which failed its attempted coup on 8-9 November 1923 in Munich.
-- Final --
-This started with global emergency QE in 2008 now 2023 15 years period.
--USA abandoned the gold backing of its currency in 1971.
USA is out of time and out of options based on history.
-Weimar Germany Started printing in 1913 failed currency 1923 10 years period.
--Weimar Germany abandoned the gold backing of its currency in 1914.
How to counter trade this? just see where the smart money flocked to in Weimar Germany.
"Investors want a spot Blackrock ETF to manipulate retail traders, no people investors want a secure fast way out of the system collapsing before your eyes".
Indices roundup from post a lil over week agoiBarely more than a week we stated that RISK in #equities was INCREASING.
We also gave our thoughts on some #indices .
Let's see what has happened since that post:
NASDAQ:NDX has cooled off - check
TVC:DJI pumped since then - check
Likely topping out short term here though.
TVC:VIX has been trading sideways - check
Does seem like it's beginning to gain momentum.
TVC:RUT & AMEX:RSP (Equal weight #SPX) are both higher - check
Shows that the big boys aren't the only ones running.
#stocks
✅ Daily Market Analysis - WEDNESDAY JULY 26, 2023Key News:
USA - Building Permits
USA - New Home Sales (Jun)
USA - Crude Oil Inventories
USA - FOMC Statement
USA - Fed Interest Rate Decision
USA - FOMC Press Conference
Cautious Optimism in European Markets as FTSE 100 Reaches Two-Month High
European markets have started the week with a cautiously optimistic tone, fueled by hopes of additional stimulus measures from Chinese authorities in response to recent poor economic data. The sentiment has had a positive impact on the FTSE 100, which experienced a significant boost, reaching a two-month high on the previous day.
Investors in the region are closely monitoring developments in China, as concerns over its economic slowdown have weighed on global markets. The prospect of further stimulus measures from Chinese authorities is seen as a potential boost for both the Chinese economy and international markets, including Europe.
In response to the recent challenges in the Chinese economy, there are expectations that authorities may introduce measures to support growth and stability. Such actions could include monetary easing, fiscal support, or targeted measures to address specific economic sectors.
The positive market sentiment in Europe, particularly in the UK represented by the FTSE 100, is a reflection of investors' hopes for a potential economic rebound in China. As one of the world's major economies, any improvement in China's economic outlook could have significant ripple effects on global trade and investment.
However, market participants remain cautious as uncertainties persist, and the situation in China remains fluid. The impact of any stimulus measures on the broader global economy is yet to be seen, and geopolitical factors continue to influence market sentiment.
As the week progresses, investors will closely watch for any official announcements from Chinese authorities regarding stimulus measures and assess their potential implications for the European and global markets. In the meantime, cautious optimism prevails, with the FTSE 100's recent performance reflecting the market's hopeful outlook for economic recovery.
FTSE 100 daily chart
Optimism Grows as Short-Term Yields Retreat, Earnings Reports Impress
The improved sentiment in the markets has been further bolstered by a retreat in short-term yields, as investors believe that central banks may not need to implement aggressive rate hikes as previously anticipated just a few weeks ago. This development has eased concerns and contributed to a more positive outlook in the financial landscape.
Both German and UK 2-year yields have experienced a sharp decline from their earlier highs this month, largely attributed to the indication that inflation is slowing down more rapidly than initially projected. This trend has provided reassurance to investors, alleviating some of the fears of abrupt rate hikes that could potentially hamper economic recovery.
In the United States, stocks are witnessing moderate gains on Tuesday, driven by several factors contributing to a favorable market environment. Firstly, the release of a better-than-expected Consumer Confidence survey has boosted investor confidence in the strength of the US economy. The survey's positive results signal that consumers are optimistic about economic prospects, which bodes well for future spending and business activity.
Additionally, a series of earnings reports has surpassed expectations, further uplifting market sentiment. Strong corporate performance is a key driver of market growth, and companies' ability to outperform forecasts indicates robust economic conditions and the potential for continued expansion.
The combination of upbeat economic data and encouraging earnings reports has reinforced the notion that the global recovery is on track, and the worst impacts of the pandemic are subsiding. These positive developments have contributed to the improved sentiment in the markets and the appetite for risk among investors.
As the financial landscape continues to evolve, market participants will closely monitor central bank actions and economic indicators for further clues on the trajectory of interest rates and inflation. In the meantime, the current positive market sentiment is supporting moderate gains in US stocks and providing a sense of optimism for investors in the midst of an ever-changing economic landscape.
NASDAQ indices daily chart
SPX indices daily chart
DJI indices daily chart
Wall Street Rally: Factors Fueling Optimism in the US Market
The current Wall Street rally has been fueled by a convergence of positive factors, creating a favorable environment for investors and driving market sentiment. Several key elements are contributing to this optimistic outlook.
Strong US Consumer Confidence: One of the driving forces behind the rally is the strong US consumer confidence. The recent surge in consumer confidence has instilled optimism in the economy's resilience and growth prospects. This positive sentiment is indicative of consumers' confidence in their financial well-being and their willingness to spend, which can have a significant impact on economic activity and corporate performance.
Growing Belief in an Economic 'Soft Landing': Investors are increasingly becoming more confident in the notion of an economic 'soft landing,' wherein the economy transitions from a period of rapid growth to a more sustainable and stable pace. This reassurance has been underpinned by various economic indicators and data, suggesting that the economy is gradually moderating, rather than facing a sharp contraction.
Optimism Surrounding Artificial Intelligence Initiatives: The growing focus on artificial intelligence (AI) initiatives is also contributing to the positive sentiment on Wall Street. Investors are recognizing the potential of AI technologies to drive innovation, efficiency, and productivity in various industries, creating exciting opportunities for companies at the forefront of AI adoption.
Better-than-Anticipated Earnings Results: The ongoing earnings season has seen better-than-anticipated results from major tech companies, further boosting investor confidence. These positive earnings reports signal strong corporate performance and underscore the robustness of the US economy.
Busy Earnings Season: This week marks the start of the two busiest weeks of the earnings season, with a significant number of US companies reporting their earnings. Investors are closely monitoring these reports for insights into corporate performance and future prospects. The initial reactions to earnings releases from companies like Microsoft and Alphabet have been positive, adding to the overall optimism in the market.
Resilient US Economy and Federal Reserve's Monetary Policy: The overall resilience of the US economy and indications that the Federal Reserve is nearing the end of its rate-hiking cycle have contributed to the positive sentiment. A stable monetary policy outlook provides confidence to investors, as it suggests that the central bank is striking the right balance between managing inflation and supporting economic growth.
In conclusion, the current Wall Street rally is the result of multiple factors aligning to create an environment of optimism and confidence. Strong consumer confidence, expectations of an economic 'soft landing,' enthusiasm for AI initiatives, and positive earnings results are all contributing to the positive sentiment. As the earnings season unfolds, investors will continue to closely monitor corporate performance and central bank actions, which will further shape market dynamics in the weeks to come.
GOOGL stock daily chart
MSFT stock daily chart
Fed's 25bps Rate Hike Likely to Be the Last in 2023 Amid Inflation Concerns
The much-anticipated 25 basis points rate hike by the Federal Reserve today is expected to mark the final increase for the year, despite any potential arguments by Fed policymakers for additional hikes. Last month's pause in rate increases seems to set the tone for a more cautious approach towards monetary tightening.
Recent trends surrounding US inflation, particularly the likelihood of the Producer Price Index (PPI) turning negative in July, may pose challenges for the Fed's case for further rate hikes. Inflation dynamics have been a key concern, and the prospect of PPI potentially going negative adds to the complexities of justifying additional tightening measures.
Federal Reserve Chairman Jerome Powell may voice support for more rate hikes, but prevailing market sentiment seems to favor a prolonged period of higher rates. The focus will be on the Fed's projections regarding when it expects to reach its 2% inflation target. Despite the headline Consumer Price Index (CPI) currently sitting at 3%, core prices remain elevated, capturing attention from both the Fed and the market.
Investors and analysts will closely monitor the Fed's communication on its outlook for inflation and its strategy to achieve its price stability mandate. Any indication that the Fed is reassessing its approach to monetary policy amid inflation concerns could impact market sentiment and influence future rate expectations.
As the Fed delivers its decision today, the financial community will scrutinize not only the rate hike itself but also the nuances in the accompanying statements and remarks made by Chairman Powell during the press conference. Clarity on the Fed's stance and commitment to addressing inflation will be crucial for shaping market expectations and guiding investor decisions in the coming months.
US inflation rate
Challenges Ahead for the Fed as Headline CPI Declines, Causing Uncertainty in Gold Prices
As headline Consumer Price Index (CPI) continues its downward trend, the Federal Reserve may encounter difficulties in convincing the markets to support further rate hikes under the current economic conditions. The declining CPI adds to the uncertainties surrounding the central bank's future monetary policy decisions.
Gold prices have been experiencing fluctuations this week as investors remain cautious ahead of the Federal Reserve's meeting later in the day. The widely anticipated 25 basis points rate hike during the meeting has already been factored into the market expectations. However, the focus lies on any indications or signals regarding the central bank's stance on future rate hikes for the remainder of the year.
The precious metal's prices have remained within a narrow range amid the uncertainty surrounding the Fed meeting. Investors are closely monitoring any clues from the Federal Reserve regarding their outlook on inflation and potential further tightening measures. Market participants are keen to understand the central bank's assessment of economic conditions and whether additional rate hikes are warranted amid the evolving inflation dynamics.
As the Federal Reserve makes its announcement, the markets will be carefully analyzing the statements and remarks by Fed officials, especially Chairman Jerome Powell, during the press conference. Any hints of a shift in the Fed's approach to monetary policy could trigger volatility in gold prices and influence investor sentiment.
In this climate of uncertainty, gold prices are likely to react to the nuances of the Fed's communication, as traders and investors gauge the central bank's intentions and how it plans to address inflationary pressures. The upcoming meeting will provide critical insights into the central bank's strategy, and any surprises or shifts in their messaging could have significant implications for gold prices and the broader financial markets.
XAU/USD daily chart
Gold's Recovery Stalls Amidst Uncertainties Ahead of Central Bank Meetings
Gold has experienced a robust recovery over the past month, primarily driven by weak US economic data, particularly concerning inflation figures. Speculations arose that the Federal Reserve's ability to continue raising interest rates would be limited, providing support for the precious metal's price surge. However, in recent sessions, this rebound has stalled as uncertainties loom in anticipation of the outcome of the Fed's meeting.
Investors are closely watching the Federal Reserve's meeting, as it will provide crucial insights into the central bank's monetary policy outlook and how it plans to address inflation concerns. The speculations surrounding the Fed's future rate hikes have added to the cautious sentiment in the gold market, leading to a pause in the metal's upward momentum.
Beyond the Fed meeting, investors are also keeping an eye on decisions from the European Central Bank (ECB) and the Bank of Japan (BOJ) later in the week. The ECB is expected to raise rates by 25 basis points on Thursday, signaling a shift in its monetary policy stance. On the other hand, the BOJ is likely to maintain its ultra-dovish approach on Friday, emphasizing its commitment to supporting the Japanese economy.
These upcoming central bank meetings have introduced further uncertainties into the market, causing investors to exercise caution and reassess their strategies. Gold, often sought as a safe-haven asset during times of economic uncertainty, is particularly sensitive to changes in interest rates and monetary policies, leading to the recent hesitation in its price movement.
As the central banks announce their decisions and provide guidance on their future policy trajectories, the gold market is expected to see increased volatility. The outcomes of these meetings will shape investor sentiment, potentially leading to new trends in the precious metal's price. In such a dynamic environment, traders and investors need to remain vigilant and closely monitor central bank communications to make informed decisions amid the evolving economic landscape.
EUR/USD daily chart
GBP/USD daily chart
Euro and Pound Weaken Against US Dollar Amidst Weak PMI Surveys from Europe
The euro and pound have been trading at moderately weaker levels against the US dollar, experiencing further declines following the release of weaker-than-expected PMI surveys from Europe. The data revealed a slowdown in economic activity, raising concerns about the region's recovery prospects.
Investors are closely monitoring the developments surrounding central bank meetings, particularly the Federal Reserve and the European Central Bank (ECB). The prevailing market sentiment suggests that the Fed is likely to implement a single rate hike and then pause, signaling a more cautious approach to addressing inflationary pressures. On the other hand, the ECB may have further rate adjustments to make as it grapples with economic uncertainties in the Eurozone.
These differing expectations for the two central banks could lead to significant fluctuations in the value of the euro in the currency markets. Investors are keeping a keen eye on any shifts in either or both of these views, as they can have a profound impact on the euro's trajectory.
The weakening of the euro and pound against the US dollar indicates growing concerns about the economic outlook for Europe. The region's PMI surveys have highlighted challenges in various sectors, and this has put pressure on the currencies.
In such a dynamic environment, currency traders need to remain vigilant and responsive to changing market sentiment and economic data. Any surprises or shifts in central bank policies can lead to rapid movements in currency pairs, presenting both opportunities and risks for traders.
As the central banks proceed with their monetary policy decisions, market participants will closely analyze their communications and guidance. Any indications of future rate adjustments or policy shifts could spark volatility in the currency markets, making it essential for traders to stay informed and adaptable in their strategies.
✅ Daily Market Analysis - TUESDAY JULY 25, 2023Key News:
Canada - Manufacturing Sales (MoM)
USA - S&P/CS HPI Composite - 20 n.s.a. (YoY) (May)
USA - CB Consumer Confidence (Jul)
On Monday, the Dow Jones Industrial Average extended its winning streak with an impressive eleventh-straight gain, primarily driven by a surge in energy stocks. Investor sentiment remained upbeat as they embraced the better-than-expected quarterly results from major technology companies. Additionally, market participants were eagerly awaiting the upcoming Federal Reserve's decision later in the week.
Similarly, the S&P 500 also experienced gains, propelled by strength in energy stocks. Investors continued to digest the positive quarterly reports from prominent tech firms, contributing to the positive market sentiment. The anticipation for the Federal Reserve's decision added to the overall optimism, with investors closely monitoring the central bank's next move.
Dow Jones Industrial Average indices daily chart
S&P 500 indices daily chart
Alphabet (NASDAQ: GOOGL) and Microsoft (NASDAQ: MSFT), two major tech giants, are set to announce their earnings after the market closes on Tuesday.
The tech sector faced some challenges last week, as bullish bets were affected by declines in Tesla (NASDAQ: TSLA) and Netflix (NASDAQ: NFLX) stocks. These slumps in prominent tech companies had an impact on investor sentiment towards the sector. As Alphabet and Microsoft prepare to release their earnings reports, investors will closely watch for any insights into the overall health and performance of the tech industry.
GOOGL stock daily chart
TSLA stock daily chart
Wedbush analysts hold a positive outlook for this week, presenting a different scenario compared to the previous one, particularly for the tech sector.
Their optimism is based on several contributing factors, including the strong performance of cloud services, monetization of artificial intelligence (AI), stabilization of digital advertising, and an overall environment of increased confidence in IT spending. With these factors in play, the analysts believe there is a compelling case for investing in tech stocks during the second quarter tech earnings season.
In the currency markets, the US dollar exhibited sustained strength during overnight trading, continuing a significant rebound observed in the previous session. This strength led to the USD/JPY pair rising above the 140.00 level once again, indicating a bullish trend for the dollar against the Japanese yen. Investors and traders will closely monitor the dollar's movements in response to various economic factors and events in the global market.
USD/JPY daily chart
The recent reversal of the US dollar's weakness can be attributed to an uptick in US yields. Over the past week, the 2-year US Treasury bond yield rose by slightly over 20 basis points (bps) as market participants adjusted their predictions concerning the magnitude of the Federal Reserve's rate cuts for the upcoming year. However, the forecast for one final rate hike this month saw little change, indicating that investors are still expecting some tightening by the central bank in the near term.
US Dollar Currency Index daily chart
This week holds significant central bank meetings, with the Federal Reserve's meeting on Wednesday being particularly noteworthy. Interest rates have either reached their peak levels or are very close to doing so, and there is a possibility that this week could witness the Fed and ECB announcing their final rate hike in their tightening cycles.
PMI data offers insights into the ongoing global economic cooling trend. Inflation is also on the decline, largely due to favorable base effects, falling energy prices, and slower growth in food costs.
Recent PMI data from the eurozone, the UK, and the US all convey a similar message. The manufacturing sectors continue to face challenges, with the US performing better than expected. However, expectations for growth in services are slowing. These surveys indicate clear signs of further economic cooling, reduced inflationary pressures, and weaker hiring trends.
While central banks may find some relief in the data, it's unlikely to be sufficient for them to claim victory or explicitly announce the end of their tightening cycles. Policymakers will proceed with extreme caution, although they will be encouraged by the positive data observed over the last month or two.
Gold, in the meantime, appears to be pausing momentarily in anticipation of the upcoming Fed meeting on Wednesday. The yellow metal recently received a significant boost from positive economic data, coming close to reaching the $2,000 mark at one point last week. Investors will closely monitor the Fed's decisions and statements for further clues about the future direction of gold prices.
XAU/USD daily chart
Indeed, there has been some profit-taking in the gold market following the recent surge, causing the price to pull back to around $1,960. These price fluctuations have made it challenging to definitively interpret the short-term direction of gold.
The future trajectory of gold will be heavily influenced by the decisions of the Federal Reserve. If the Fed provides a clear indication that the current rate hike will be the final one or surprises the market by not raising rates, it could trigger a bullish sentiment for gold. In such a scenario, the precious metal may have the potential to test the $2,000 level once again. A breakthrough above this psychological and technical barrier would serve as a strong bullish signal for gold, attracting further investor interest. Investors will closely monitor the Fed's actions and statements for any cues on how gold might behave in the coming days. The central bank's communication and stance on monetary policy will play a crucial role in shaping gold's price direction in the near term.
Daily Market Analysis - MONDAY JULY 24, 2023Key News:
UK - S&P Global/CIPS UK Manufacturing PMI
USA - S&P Global US Services PMI (Jul)
The Dow Jones Industrial Average celebrated a remarkable milestone on Friday, securing its 10th consecutive weekly gain and extending its longest winning streak since 2017. However, the market's positive performance was tempered by cautiousness among traders ahead of the upcoming quarterly results from major tech companies.
The Dow managed a marginal increase of 0.01%, equivalent to a mere 3 points, which might seem modest, but it's significant given the index's prolonged daily winning streak, last witnessed on August 7, 2017. The primary force behind the Dow's recent success lies in the gains made by defensive sectors, particularly utilities, which have helped bolster overall market sentiment.
In contrast, the Nasdaq experienced a slight decline of 0.2%, while the broader S&P 500 index edged up by 0.1%, showcasing a mixed performance across the board.
Traders remained watchful and exercised caution as they eagerly await the upcoming quarterly reports from major tech companies. These reports could have a considerable impact on market dynamics, influencing the direction of future trades and investor sentiment.
NASDAQ indices daily chart
DJI indices daily chart
S&P500 indices daily chart
As the new week kicked off, gold prices experienced a slight dip as investors exercised caution ahead of a highly anticipated Federal Reserve meeting. Meanwhile, copper prices faced significant losses, primarily driven by concerns surrounding weakening demand in China.
The metal market witnessed additional pressures with the dollar staging a recovery. The greenback strengthened, moving away from the 15-month lows it had reached earlier in July.
These developments have created a sense of uncertainty and wariness among investors, who are closely monitoring the upcoming Federal Reserve meeting for any signals that could impact the precious metals and copper markets. The performance of the dollar is also being closely scrutinized, as its strength or weakness can have substantial implications for metal prices and global trade dynamics.
In light of the prevailing economic uncertainties, market participants are treading carefully and making informed decisions as they navigate through this crucial week, where the outcomes of central bank policies and macroeconomic indicators are expected to shape market trends in the near term.
XAU/USD daily chart
The spotlight in recent market activity has been firmly fixed on the Federal Reserve's forthcoming decision on interest rates, set to be revealed at the conclusion of a two-day meeting on Wednesday. The prevailing consensus among investors is that the central bank will opt to raise interest rates by 25 basis points.
Nevertheless, there exists a strong belief among market participants that the Federal Reserve might also indicate a pause in future rate hikes. With the central bank nearing the conclusion of its nearly 16-month-long rate hike cycle, such a stance could signal a potential break from the previous trend of steady increases in interest rates.
This prospect of an extended pause in rate hikes has caught the attention of investors, particularly in relation to the impact on the precious metal market, notably gold. Historically, rising interest rates tend to elevate the opportunity cost of investing in gold, as higher rates make alternative assets more appealing for yield-seeking investors. Conversely, if the Federal Reserve hints at a pause or slower pace of future rate increases, it could potentially be favorable for gold, as it reduces the opportunity cost of holding the precious metal compared to other interest-bearing assets.
As the markets eagerly await the Fed's decision and the accompanying guidance, the implications for gold and other asset classes remain uncertain. The outcome of the meeting and the central bank's tone in their statements will undoubtedly have significant repercussions on investment strategies and market sentiment in the days to come.
EUR/USD daily chart
The dynamics in the EUR forward curve are undergoing a shift due to two essential factors. Firstly, foreign exchange traders are adjusting their pricing of lower US real rates in the long-term forwards after the recent Consumer Price Index (CPI) report. This indicates a realization that they may have been overly aggressive in their initial assessments. Secondly, the impact of ECB commentary on the Eurozone's economic data and inflation is likely to moderate, given the weaker economic indicators in the region.
The Bank of Japan's decision on maintaining its current interest rates is also a significant point of interest. With rates at 0% or in negative territory for an extended period, it is somewhat expected that they will continue with this stance.
China's 0% Consumer Price Index (CPI) rate is another crucial observation, as its potential spread could impact Japan first and have broader implications for global markets, particularly for stock markets and the future trajectory of the dollar. The actions and statements of these central banks will be closely watched by investors, as they could set the tone for market movements in the days to come.
On a different note, the US earnings season is entering a crucial phase this week, with major companies like Meta Platforms, Microsoft, and Alphabet preparing to release their reports. These earnings announcements are likely to have a significant impact on stock markets and investor sentiment.
As the week unfolds, investors will be navigating through these key developments in global monetary policies, inflation trends, and corporate earnings, which will undoubtedly shape market dynamics and future trading strategies.
MSFT stock daily chart
META stock daily chart
GOOG stock daily chart
Absolutely, the upcoming earnings results of major companies like Meta Platforms, Microsoft, and Alphabet are crucial in meeting market expectations and justifying the current valuation of the S&P 500. The current earnings multiple of 20 times and the substantial year-to-date gains of 19% in the index indicate high market optimism.
Investors will be closely scrutinizing these earnings reports to assess the health and potential direction of the market. Meeting or exceeding market expectations in these reports will likely be seen as a positive sign, reinforcing confidence in the ongoing market rally. On the other hand, any disappointments or weaker-than-expected results could raise concerns and potentially lead to market corrections.
Given the prevailing market conditions and the momentum in the S&P 500, investors are eager to ascertain the sustainability of the rally and whether the current valuations are justified by the underlying company fundamentals.
As the earnings season unfolds, the market sentiment will be heavily influenced by the performance of these major companies, as well as the guidance provided by their management teams.
Find The Swan!Nobody was prepared the time when the 2020 Black Swan came. But the location of the Swan is very interesting:
First, SPX:
Not very interesting of a spot... In the middle of nowhere really.
Now, DJI/M2SL
There has been an impenetrable ceiling for more than 10 years. We almost hit it a third time since 2008, and then the crash came.
Long-term Inflation (Gold*PPIACO) divided by money earned from bonds (modified-yields*M2SL)
Note that this chart above does not include equities.
DJI/(modified-yields)
This chart above measures the rate equities become worthy compared to the cost of money. In a sense, as the chart increases, equities take more of the form of "gold" compared to bonds.
More about this in the following idea.
These charts above show that the Swan occurred in a significant ceiling. A lockdown does not necessarily lead to massive wealth transfer to big companies, and an immediate crash.
This chart below shows that the Swan came as an LPSY phenomenon, in the short-term recession no-one remembers.
DJI*(modified-yields) vs DJI
So in a sense, long-term charts prove that there was not much room above when the Swan occured.
And the short-term chart proves that the event occurred at the absolute last moment , when there was no "supply" left (LPSY).
The crash was so fast because there was not much volume left in circulation. So the sell-off was quick. The recovery was immediate because the 2020 Swan by itself didn't create structural issues in the economy.
Tread lightly, for this is hallowed ground.
-Father Grigori
PS. I could get my account banned for spreading conspiracy and misinformation. I really don't care.
Return To BaseA "back to the basics" analysis. Let's leave behind the stock markets and look at the slow and deep fundamentals of the worldwide economy.
Today I will attempt to make a simple analysis using GDP. This is the net profit of one country.
The miracle of China caught the West in the sleep.
It outperformed the largest economy of the world. And by incredible speeds.
Many use the "stochastic" indicator, and rightfully so. The word stochastic may be coming from the Greek word "stochasmos" which means "thought process".
To get a new perspective on these charts we must let nature think for us objectively.
The mind of nature spoke. The miracle of China is fading.
And the same happens when compared to the "treasure" called Taiwan.
Many are willing to fight for it.
For experimentation, let's compare the US with the Eurozone.
For some unknown-to-me reason, GDP has embedded in it the relative strength of currencies between the two countries. Do note that all GDP is measured in USD.
In a sense, relative GDP growth is another way of comparing currency strength.
We have gone from comparing equities, to comparing GDP.
We concluded that comparing GDP is simply comparing purchasing power of two countries.
Currency strength comes from yield rates.
The power is given from those who make and define money. Supply + Yields.
Power = Money Supply * Money Strength
MV = PQ
Tread lightly, for this is hallowed ground.
-Father Grigori
P.S. You want to see an Easter Egg?
Consider the following equations:
MV = PQ
Q = GDP
M = M2SL
V = FRED:M2V
P = "price level"
1 / P = "currency strength"
Currency Strength = Q / MV
In the end, it is up to the FED to decide the future.
SPX | The Big OneThe Big One. The big question. Buy or sell?
A question is easy. An answer can be hard. Most of us here trade because we believe we have a grasp on the answers. And we have several methods on our toolkit to reach a conclusion.
One of these methods is belief . That's what we gamble upon. Belief on indices, stocks, ETFs, currencies is what makes us buy them and sell them.
Belief aka. Psychology/Humanity
Another one is instinct . You know, the thing that we follow when we are completely lost in a mountain path.
Instinct aka. Survival
A final one is persuasion . The well and tested kind of making an answer out of nothing. It's what politicians have to use, lawyers and figures like Elon. Our friend who, in two separate days in 2022, posted about both the next recession, and the next bubble.
Constructive Argument aka. Business
Perhaps we can add to these science. But in the end, science unfortunately tends to get mixed up with all of the above three. But science can be much more than that.
A scientist must admit that they cannot give definite answers to anything. So for me to come out and give you definite explanations would be business.
To answer where SPX can go, we must first orient ourselves.
Remember, we are gambling on a mountain with Musk.
So this is SPX, and I let an algorithm draw a channel around it.
And this is SPX again, but this time I let a monkey draw a line.
Humans tend to stop being humans, and let algorithms draw channels for them like the first one.
And if you look closely at the second chart, It resembles the main chart.
I basically took the SPX price, calculated its trend, and custom plotted the deviation from its trend. It is "safe" to assume that we are below one of the infinite trends.
And here comes the dilemma. So where are we? Above trend like the regression told us, or below trend like the mountain monkey said? Elon, being a gambler, told both.
So there must be a way out of this conundrum. Until Musks satellites can give us reception in the forest, no help can come. We must resolve this situation the hard way.
Even if SPX is going faster than the log-regression tells us, it loses against Bitcoin.
But what can that mean? More questions!
SPX is comprised of the largest 500 companies. And they are LARGE. The Big Questions are for the Big Companies. And these guys are high stakes poker players, they don't mess around. It is safe to assume that besides being participants, they are the masters of investing. And of course they follow current investing methods like the Modern Portfolio Theory (MPT).
So where am I going with all of this?
BlackRock is proposing making the first Bitcoin ETF. So for the first time since its creation, Bitcoin can be a tool of MPT. We can assume that if such a proposal comes to fruition, big players can enjoy the benefits of crypto for the future growth of their companies valuation.
In the end, the answer is a question by itself.
Which came first, the chicken or the egg?
Bitcoin is an instrument of Big Tech. Will the creation consume its creator?
Or will Bitcoin be sacrificed for the greater good?
Tread lightly, for this is hallowed ground.
-Father Grigori
DOW JONES is starting a 1 year Expansion phase.Dow Jones (DJI) has been on a bullish leg after it broke above the 1W MA50 (blue trend-line) and turned it into a Support. If we see the bigger picture on this 1W time-frame, we can relate to the 2015 - 2016 fractal, where the current sequence was the final bullish signal before a 1 year expansion phase. Even the 1W RSI patterns are identical and the Arc appears to be on its end.
As a result, investors should feel more comfortable buying stocks on a long-term horizon, especially as long as the 1W MA50 holds. After tested as Support on June 27 2016, it wasn't broken until October 22 2018, almost 2.5 years later!
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Daily Market Analysis - THURSDAY JULY 20, 2023Greetings, traders! Welcome back to our daily Market Analysis. Today, we have gathered the top news and interesting fundamental analysis for your consideration. Let's dive in and stay informed!
The market digests positive earnings reports and economic optimism, driving various assets higher. Among them, the Australian Dollar surges on the back of robust employment data. Investors are analyzing corporate earnings reports and economic indicators to gauge the health of the global economy.
The Australian Dollar has seen significant gains following the release of strong employment data, indicating positive economic momentum in the country.
Key News:
USA - Initial Jobless Claims
USA - Philadelphia Fed Manufacturing Index (Jul)
USA - Existing Home Sales (Jun)
On Wednesday evening, Dow futures experienced a decline, following the earlier surge in major benchmark averages, reaching new 15-month highs. Traders were closely analyzing the quarterly earnings results of significant companies reported during the session. The market was in the process of digesting this corporate financial data to assess its potential impact on future trends.
Dow Jones Industrial Average Index daily chart
Yesterday, US Treasury Secretary Janet Yellen delivered a positive outlook on the current economic conditions in the United States, which was well-received by the markets. The decreasing inflation has fostered optimism about the US economy's potential for a smooth landing. Yellen's confidence in the labor market cooling down without significant distress has further contributed to this positive sentiment.
If economic data continues to support this optimistic view, the market is likely to maintain confidence in a soft economic landing, leading to a gradual decline in the value of the US dollar. The S&P 500 index experienced a 0.7% increase yesterday, approaching levels last seen in early April when inflation concerns were more pronounced.
S&P 500 daily chart
The recent retail sales data from the US also supports the idea of a soft economic landing, with consumer spending showing growth, albeit at a slower pace. Despite this positive economic outlook, the yen is currently underperforming, as carry trades gain favor in the market. In Japan, the TOPIX index experienced a 1.0% increase, and the 10-year swap rate retreated after reaching highs earlier this month, surpassing 0.70% on Friday for the first time since March.
TOPIX daily chart
Governor Ueda's comments at the G20 summit in India have played a role in the recent rebound of USD/JPY and the decline in longer-term yields. His statement emphasized that achieving the 2% inflation goal is still a distant prospect, reaffirming the unchanged assumption reiterated in the overall narrative.
USD/JPY daily chart
The market's response to Governor Ueda's comments has tempered speculation about an immediate yield curve control (YCC) change in the upcoming week. However, the Bank of Japan (BoJ) might still make adjustments to YCC during the July meeting based on updated forecasts. Although yields currently show no upward pressure and are within the 0.50% band limit, the upcoming CPI data on Friday will be pivotal and could reignite speculation depending on the results.
On Thursday, the Australian dollar saw a substantial surge after the release of better-than-expected employment data in the country. Australia's net employment rose by 32,600 in June, exceeding market expectations for the second consecutive month of a 15,000 increase. As a result of this positive economic news, the Australian dollar surged more than 0.9% to reach an intraday high of $0.6834.
AUD/USD daily chart
On the other hand, the British pound suffered notable losses due to disappointing inflation data that fell short of market expectations. As a result, the market's anticipation of further aggressive interest rate hikes from the Bank of England (BoE) diminished. However, the pound managed to stage a slight recovery, gaining 0.15% to trade at $1.2958, after experiencing a decline of over 0.7% on the previous day.
GBP/USD daily chart
The euro, on the other hand, strengthened by 0.24% against the US dollar, reaching $1.1227. Investors are closely monitoring the upcoming European Central Bank (ECB) policy meeting for additional insights into the rate outlook. Recently, ECB policymakers have adopted a more dovish stance, with some indicating uncertainty about future rate increases beyond the likely 25 basis points increase expected in July.
The SPX/DJI ratio points to a multi-year Bull ahead.This is a very informative analysis using the SPX/DJI ratio. In recent decades this has helped at identifying recession and expansion cycles. As this chart shows on the 1M time-frame, after each crash since 2000 and the Dot Com crash (Housing crash, China slowdown, Brexit, Oil Crsis, Trade War crash and the more recent Inflation Crisis), the ratio started to rise, meaning that the S&P500 started to outperform the heavily industrialized Dow Jones Index, which led to a new Bull Cycle.
Since the bottom of the Dot Com Crash, the ration has been trading within a 20 year Channel Up, which is limited by a Lower Highs trend-line. If broken we can start talking above a new mega expansion phase.
The 1M MACD just completed a Bullish Cross last month, suggesting that the current Bull Cycle may only be at its very beginning. Regardless of all that, we believe this is a very interesting ratio to follow and that has offered useful conclusions to you. We hope you enjoyed it!
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DJI (Dow Jones Industrial Average) Index Analysis 05/01/2022Fundamental Analysis:
As we can see the Index has shown a very strong come back after the Covid-19 pandemic of March 2021 which caused the market to fall and create a panic to the world.
Since then there are lots of changes to the world and the way companies are operating, such as releasing of their premises and offices as they should have discharge lots of their employees and the work from home schemes was the main reason to cut the expenditure of these companies drastically down.
From the other hand, the market administration and governments including Banks has injected lots of funds and so called Rescue Packages and the market stimulant's packages to protect the Market from its Hard and Drastically fall to the lower levels and prevent a gigantic Global Markets Crises.
These funds and injection of the cash to these companies along side of cost deduction due to their risk measurement policies, forced these companies to invest the receiving funds in to the companies assets to protect themselves from the Pandemic Crises and hedged their exposed risks instead of investing these funds to the new Projects or renovations which could Couse their Share prices to appreciate intrinsically but instead these investments in the assets made an inflation to the prices of the assets and created a bobble in their share value and Prices without having any inheritance or intrinsic values.
so we can easily have a decision derived from the current situation that there has to be an other market fall and crises soon so the Price and its relevant intrinsic values get converged and market comes to its correct values.
we can observe the same situation in many different centralized markets such as US500 and even other Stock Exchanges around the world like London and rest European market places to be in the same inflated status.
there exist a huge chance of an other Global Market Crises coming soon which has the domino effect and Couse the entire markets to fall for some times .
This fall of the market shall remove off the liquidity from the equity and debt market and streamflow them to some green heaven Asset classes including Gold and silver or even newly invented Technologies such as decentralized markets and Cryptocurrencies and DeFi.
if we have a look at the Current crypto's Total Crypto Market Capitalization we can see it has a very good chances of Rally Continuation to some very high levels such as 5 to 6 Trillion dollars or even much higher.
Gold even can see higher Prices such as 2500 USD per ounce which is currently ranging at 1800 USD.
we even can some how speculate a 3 world War to be the initiator of this Market fall which is even not so far from the reality as the situation in middle east is not very stable due to the Iran and Israel disputes and new anti-covid's restriction social movements in Europe and America continent.
we can see the same situation in US500
we shall analyze few other markets and indices and ultimately Propose some Assets which are at their low Points Currently and can be counted as under values at present times.
Technical Analysis:
we have used the Fibonacci retracement and Expansion from the low to the Highest point before the Covid pandemic to have a better vision of the Higher expansion levels for the post retracement's rallies and identify the Potential Price levels and resistance zones. where the market can show some stagnation and starts its retracement and price correction to the lower levels.
There exist a Bearish Divergence of Price and MACD where Price has made higher high levels but MACD made lower Highs which is the most significant and strong Bullish Trend Reversal and start of Market fall and Price retracement and Value corrections.
there are total of 2 Targets defined which have a very strong Support tendencies which can be interpreted as the maximum retracements points.
there are two Resistance level are also defined to have a better vision incase of Current Rally Continuation which eventually can be counted as the Trend reversal points.
Dow Jones Possible Reversal & Recession in 2023looking for a strong rebound above 27.000
bullish target : 36.000+
possible deep recession in 2023.
trade with care.
Daily Market Analysis - WEDNESDAY JULY 19, 2023Greetings, traders! Welcome back to our daily Market Analysis. Today, we have gathered the top news and interesting fundamental analysis for your consideration. Let's dive in and stay informed!
Key News:
UK - CPI (YoY) (Jun)
Eurozone - CPI (YoY) (Jun)
USA - Building Permits (Jun)
USA - Crude Oil Inventories
Market Sentiment Boosted by Strong Earnings and Economic Data, Gold Prices Soar to Six-Week High
Tuesday's trading session brought a wave of optimism among investors, with the S&P 500 surging to new heights, thanks to impressive quarterly results from prominent Wall Street banks and other major corporations.
The S&P 500 index demonstrated significant strength, recording a notable 0.8% increase, while the Dow Jones Industrial Average saw an even more remarkable surge of 1%, adding a substantial 359 points to the index. The Nasdaq also showcased its resilience, posting a solid 0.9% upward movement.
Moreover, in response to the prevailing positive sentiment, gold prices experienced a surge, reaching a near six-week high. Investors appear to be reacting favorably to the combination of strong corporate earnings and encouraging economic data, fueling the upward momentum across various sectors in the market.
NASDAQ indices daily chart
Dow Jones indices daily chart
S&P500 indices daily chart
Bank of America Corp (BAC) emerged as a standout performer, driving a surge in banking stocks with an impressive rise of over 4%. The bank's second-quarter earnings exceeded analyst estimates, mainly attributed to the significant boost in loan income due to higher interest rates. This strong performance has solidified Bank of America's position as a key player in the financial sector and has garnered positive attention from investors.
Bank of America stock daily chart
Morgan Stanley (NYSE: MS) Shines with Impressive Q2 Results
Morgan Stanley (MS) proved to be another success story, witnessing a remarkable rally of 5% after reporting second-quarter results that surpassed estimates on both the top and bottom lines. The strong performance of its wealth management business effectively balanced out the trading business's weakness, which experienced a decline in equity and fixed-income revenue. This outstanding performance has garnered positive attention from investors and reinforces Morgan Stanley's position as a top-performing financial institution.
Morgan Stanley stock H4 chart
Tuesday's stock market session witnessed a slight downturn, influenced by US retail sales data that caused initial volatility but eventually settled. The June retail sales figures were notably weaker than expected, creating some concern, but the impact was partially offset by the revision of May's numbers, resulting in a mixed market sentiment. In response to a slowdown in consumer and producer price gains in June, the dollar experienced a significant decline. The market remains cautious as investors analyze the economic indicators to gauge the direction of future trends.
US Retail Sales
The recent developments in the US economy have led to increased expectations that the Federal Reserve will put a halt to its rate hikes after the anticipated 25 basis-point increase at the July 25-26 meeting.
Fed funds futures traders are projecting an additional 33 basis points of tightening later in the year, with the benchmark rate expected to peak at 5.40% in November.
On Tuesday, data revealed an unexpected drop in production at US factories in June. However, the second quarter showed a rebound, especially in motor vehicle output, which accelerated after two consecutive quarterly declines.
Traders are now closely monitoring inflation releases from various regions, including the eurozone, Britain, and Japan, to gain further insights into whether inflation is cooling globally. These indicators will play a crucial role in shaping market sentiment and monetary policy expectations moving forward.
US Dollar Currency Index daily chart
As a result of the recent economic developments, the dollar index showed some volatility, last up 0.04% on the day at 99.924. However, it had previously fallen to 99.549, marking the lowest level since April 2022. These fluctuations indicate the significant impact of the latest data on the dollar's performance in the foreign exchange market.
Against the Japanese yen, the dollar managed to gain 0.10%, reaching 138.83. This recovery came after the drop to 137.245 experienced on the previous Friday, which was the lowest level since May 17. The currency's rebound against the yen reflects the influence of the evolving economic landscape on currency pair movements.
As traders continue to assess economic indicators and central bank policies, the dollar's performance is likely to remain subject to fluctuations in the forex market. Investors are closely monitoring data releases and inflation figures from major economies to determine potential shifts in monetary policies and overall market sentiment.
USD/JPY daily chart
Euro Holds Steady Amid ECB's Caution on Inflation
On the flip side, the euro maintained its stability, trading at $1.1229, following an earlier climb to $1.1276, reaching its highest level since February 2022.
European Central Bank (ECB) governing council member Klaas Knot's comments on Tuesday revealed the bank's vigilant approach towards inflation. Knot emphasized that the ECB would closely observe any indications of inflation cooling down in the coming months, ensuring a cautious stance on implementing rate hikes. This cautious approach from the ECB contributed to the euro's steady performance in the foreign exchange market.
With investors closely monitoring central bank communication and economic indicators, the euro's movements are subject to shifts in market sentiment and policy expectations. As the global economic landscape continues to evolve, market participants will continue to assess data releases and central bank statements to gauge the euro's direction in the forex market.
EUR/USD daily chart
Market expectations are leaning towards the European Central Bank (ECB) implementing a 25 basis points interest rate increase in the upcoming week.
On the other hand, the British pound experienced a marginal decline of 0.22%, settling at $1.3046 after reaching $1.3144 on Thursday, which marked the currency's highest level since April 2022. This volatility in the pound's performance reflects the market's sensitivity to economic indicators and interest rate expectations.
These currency fluctuations underscore the significant impact of various factors on the global foreign exchange market. Traders and investors closely monitor inflation concerns and central bank communications, as these elements play a crucial role in shaping market sentiment and currency movements. As the economic landscape continues to evolve, market participants will continue to assess data releases and policy signals to navigate the currency market's changing dynamics.
GBP/USD daily chart
The Reserve Bank of Australia (RBA) is currently engaged in a balanced debate among policymakers, evaluating the effectiveness of existing restrictive measures and considering potential future actions. The central question revolves around the appropriateness of the current conditions and whether additional measures could yield positive or negative outcomes. Although the market is confident in the likelihood of another rate hike by the RBA this year, the exact timing remains uncertain. As demonstrated throughout this year, expectations can shift rapidly, making it challenging for investors to predict future developments with certainty.
In the realm of precious metals, gold prices are once again exhibiting a gradual upward trend after experiencing a brief pullback in recent sessions. Initially facing resistance near $1,960, the price underwent a minor retracement but found support around $1,940. The ongoing support from lower yields and a weakened dollar continues to significantly contribute to gold's positive performance, as evidenced by the market movements observed yesterday. Investors are closely monitoring these factors as they continue to impact the precious metal's trajectory in the market.
XAU/USD daily chart
In response to the recent developments, gold has surged past the significant $1,960 threshold, attaining a nearly six-week high. Yields and the dollar have displayed fluctuations subsequent to the retail sales data release, influencing gold's performance in turn. Nevertheless, the market has not yet exhibited a clear and definitive direction for the precious metal.
The crucial factor to observe now is whether gold can maintain its position above the critical $1,960 level, which it is currently approaching for testing. A successful hold above this mark could be interpreted as a bullish confirmation signal. In such a scenario, the next potential challenge for gold's price might be reaching the $1,980 level. Investors are closely monitoring these price movements and are poised to respond to any further signals indicating the precious metal's trajectory.
