Tesla is at local dips. Time to buy?

Tesla is at local dips. Time to buy?

Kseniya Medik Kseniya Medik 11.05.2021 13:09
This article describes how Tesla is positioned now on the stock market, what headwinds and tailwinds it has, and what analysts forecast.US-China tensionsJoe Biden has left 25% tariffs on imported Chinese electric vehicles imposed by Donald Trump. As a result, Elon Musk’s plans to expand its Shanghai plant and make it a global export hub have been ruined. It’s not beneficial for Tesla, that’s why the company now is likely to decrease the proportion of China's output in its global production. What happens in China, stays in China There were disputes over how Tesla handles consumer data and whether it can violate the national safety rules. As a result, Tesla agreed to build a data center in Shanghai by the end of June and store the data gathered by Tesla’s cars locally.Tesla’s sales in China growTesla's sales in China have been rising even despite the regulatory pressure from the Chinese government. The company has generated $3 billion in revenue in China in the first quarter of 2021, it’s three times more than a year ago and accounts for 30% of total Tesla’s revenue.Competition is getting hotterHowever, Tesla is not the only electric vehicle producer in China. It’s competing with Nio, which is quite popular in China. Besides, electric-vehicle competition is growing around the globe: Lucid Motors, Ford, and Volkswagen. Chip shortageThere is a chip shortage around the world, and it creates some significant problems for electric-vehicle producers and Tesla as well. However, it cannot be viewed as a negative factor only for Tesla, it’s a challenge for the whole EV industry and also other sectors dependent on chips. Besides, it will only be a temporary setback.Buy or not to buy?It’s a tricky question as some analysts believe that Tesla has more room to fall further, while at the same time others forecast Tesla to skyrocket. For example, Wedbush's Dan Ives expects Tesla to reach $1000! Isn’t it too optimistic, what do you think?As you may have noticed, there are more headwinds than tailwinds for now, but Tesla tends to rise no matter what. So when such a company as Tesla is at the local dips, it’s likely to attract buyers as it has many investors that believe in the company and it’s still the #1 electric vehicle producer. Let’s look at what the charts will tell us!Tech analysisTesla has dropped out of the ascending channel. It’s approaching the psychological mark of $600.00. Since the RSI indicator is not yet below the 30.00 level, the stock may drop to this support level. However, the falling should stop at that point as the stock is already below the lower line of Bollinger Bands and the 200-day moving average just below $600 will be a strong barrier. When it reverses up, it may meet resistance levels at the 50-day moving average of $680.00 and late-April highs of $750.00. Download the FBS Trader app to trade anytime anywhere! For personal computer or laptop, use MetaTrader 5!
The social value of Bitcoin

The social value of Bitcoin

Korbinian Koller Korbinian Koller 11.05.2021 10:14
Immediately you are an outcast from grocery store reward cards and retail loyalty programs. Add those 10-20% increased costs on your food and goods bills in addition to ramped inflation prices, and you are underwater quickly. We have outlived antiquary systems of antisocial payment systems. As such, we see Bitcoin prices further rising based on the apparent fundamental data and a world demanding a more social and more modern way of self-expression and doing business.BTC-USD, Monthly Chart, No bear claw yet:Bitcoin in US Dollar, monthly chart as of May 10th, 2021.It is not only crucial in fundamental data and the underlying story of a market to try to keep it simple but in technical analysis as well. Without clarity in the bigger picture, one shouldn’t attempt to trade smaller time frames. A look at the monthly chart of Bitcoin above reveals its strength within its uptrend.Breaking its range in October last year, a steep uptrend followed. In February this year, Bitcoin seemed running out of steam rejecting prices above US$58,000 only to see another run-up in March. The Doji candlestick formation in April finally gave the trend a pause. Classified as in indecision bar, it still showed some strength, with the lower wick part being, the longer one.The astounding aspect is that we have not seen yet in May the bears to seem to get a strong foot into the door. There has been only a brief dip so far. While the month is still young, for now the bullish indications outweigh a bearish consensus.BTC-USD, Weekly Chart, Another angle confirms:Bitcoin in US Dollar, weekly chart as of May 10th, 2021.Now zooming into the weekly time frame, the market shows no difference. With these extension levels, it is atypical that we see this length of a sideways breather in opposition to a stronger fade of prices and a more bearish dominance.Strong resistance zones are always ideal for some partial profit-taking (red box), and as such, we advocate our quad exit strategy. We wouldn’t take all chips off the table here, though. And we wouldn’t short a bull this strong either.Noteworthy here is the significant price level of US$55,510. Prices closing above or below this price level will determine if we are heading sideways or temporarily further down. BTC-USD, Weekly Chart, The social value of Bitcoin:Bitcoin in US Dollar, weekly chart as of May 10th, 2021. bAnother weekly view unearths more signals of strength:Swiftness and size of the recovery from the temporary dip (red and green line). The Bounce made it back above the 0.618 Fibonacci retracement levels and prices are still trading between 0.5 and o.618.Holding extended levels of the standard deviation of considerable time (dotted lines with the mean near US$31,900)Prices trading within a significant support of a supply zone based on volume transaction analysis (yellow box)We are not saying that a breakout to new all-time highs is imminent. Prices most likely decline from here. We are saying that Bitcoin’s typical normal trading behavior expected strong fade has not matured in its expected time frame. There is inherent strength within the Bitcoin market that make price declines attractive buying opportunities and a continuous sideways movement a warning signal for possible higher trading levels to come within the summer.The social value of Bitcoin:Money is a means to express yourself. Most like cash because it is anonymous, instant, and a practical way to fulfill our wishes and needs. Is it really? Or are we living in a more modern world of electric vehicles and renewable energies? It isn’t entirely untraceable due to its serial numbers, and it is expensive. Cash handling is cumbersome, and any larger business has massive backdoor operations that are a security threat and labor-intensive. It is impractical for long-distance and just old-fashioned, so the planet needs resource-oriented efficient operations in all forms.Bitcoin isn’t just of social value, but it fits its times. It expands the freedom of individual expression, and it is planet-friendly with a low imprint. It is the future.Feel free to join us in our free Telegram channel for daily real time data and a great community.If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can subscribe to our free newsletter.By Korbinian Koller|May 11th, 2021|Tags: Bitcoin, Bitcoin correction, Bitcoin mining, crypto analysis, crypto chartbook, crypto mining, low risk, quad exit, technical analysis, trading education|0 CommentsAbout the Author: Korbinian KollerOutstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.
Intraday Market Analysis – USD Sees Limited Upside

Intraday Market Analysis – USD Sees Limited Upside

John Benjamin John Benjamin 11.05.2021 07:58
USDCHF faces strong resistanceThe US dollar struggled to bounce back after the US labor market showed inconsistencies. Despite a week-long consolidation above 0.9075, the bearish momentum was a reminder that sellers are still in charge of the price action.The RSI’s double-dip into the oversold territory may prompt short-term traders to take some chips off the table triggering a limited rebound.0.9100 is a tough resistance where trend-followers could be on standby. A failure to break out would lead to renewed pressure towards 0.8940.AUDUSD rallies towards February’s highThe Australian dollar has found solid support from rallies in commodity prices. The pair saw strong momentum after it cleared the triple top at 0.7810.From the daily chart’s perspective, a bullish close above the supply zone around 0.7850 could confirm the bullish MA and resume the uptrend from March 2020.The previous high at 0.8010 would be the next target. 0.7835 near the 30-hour moving average struggles as a support, which means that 0.7760 is the second line of defense in case of a deeper correction.XAGUSD hovers under major resistanceBullions prices grind higher as the US dollar remains under pressure. The recovery accelerated after silver broke above the daily resistance at 26.60.28.30 is a major hurdle ahead and a bullish breakout could extend the rally towards 30. Though an overbought RSI would suggest a potential retreat to attract more buying interest.The resistance-turned-support 27.10 is the first level to monitor. Further down, the demand zone between 26.15 and 26.56 is key in keeping the upward bias intact
GDX, HUI: Will Paradise Turn into a Dystopia?

GDX, HUI: Will Paradise Turn into a Dystopia?

Finance Press Release Finance Press Release 10.05.2021 16:29
The GDX and HUI Index are enjoying a blissful moment. With HUI behaving civilly, will the GDX cling to the unrealistic and try to leap to cloud “ten”?With the GDX ETF punching a hole through its glass ceiling, the senior miners are now witnessing an environment that’s beyond their wildest dreams: sunshine, clear skies and a utopia that’s eluded them since the beginning of the New Year. However, while leaving paradise is often more difficult than arriving, the GDX ETF’s recent vacation is likely coming to an end. And with the senior miners about to resume the daily grind of real life, their optimism will likely fade with the tropical sun.To explain, while the GDX ETF remains on cloud nine, the HUI Index (a proxy for gold mining stocks ) has already left the resort. With the latter’s long-term outlook still intact and its broad head & shoulders pattern remaining on schedule, I wrote previously that the right shoulder would likely form after the HUI Index reaches 300. And after closing at 301.72 on May 7, the BUGS (after all, HUI is called the Gold Bugs Index) are currently living up to expectations.Please see below:Moreover, while corrective short-term upswings within a medium-term downtrend can feel discouraging, it’s important to remember that similar instances occurred in 2008 and 2012. Remember: Tom Petty & The Heartbreakers warned us that the waiting is the hardest part. However, in the end, the wait should be more than worth it.To explain, note that the 2007 – 2008 and the 2009 – 2012 head and shoulders patterns didn’t have the right shoulders all the way up to the line that was parallel to the line connecting the bottoms. I marked those lines with green in the above-mentioned formations. In the current case, I marked those lines with orange. Now, in both cases, the final top – the right shoulder – formed close to the price where the left shoulder topped. And in early 2020, the left shoulder topped at 303.02.That’s why I previously wrote that “it wouldn’t be surprising to see a move to about 300 in the HUI Index”. And that’s exactly what we saw. To clarify, one head-and-shoulders pattern – with a rising neckline – was already completed, and one head-and-shoulders pattern – with a horizontal neckline – is being completed, but we’ll have the confirmation once miners break to new yearly lows.For more context, I wrote previously:The recent rally is not a game-changer, but rather a part of a long-term pattern that’s not visible when one focuses on the short-term only.The thing is that the vast majority of individual investors and – sadly – quite many analysts focus on the trees while forgetting about the forest. During the walk, this might result in getting lost, and the implications are no different in the investment landscape.From the day-to-day perspective, a weekly – let alone monthly – rally seems like a huge deal. However, once one zooms out and looks at the situation from a broad perspective, it’s clear that:“What has been will be again, what has been done will be done again; there is nothing new under the sun.” (-Ecclesiastes 1:9)The rally is very likely the right shoulder of a broad head and shoulders formation. “Very likely” and not “certainly”, because the HUI Index needs to break to new yearly lows in order to complete the pattern – for now, it’s just potential. However, given the situation in the USD Index (i.a. the positions of futures traders as seen in the CoT report , and the technical situation in it), it seems very likely that this formation will indeed be completed. Especially when (not if) the general stock market tumbles.In addition, three of the biggest declines in the mining stocks (I’m using the HUI Index as a proxy here), all started with broad, multi-month head-and-shoulders patterns. And in all three cases, the size of the decline exceeded the size of the head of the pattern.Can we see gold stocks as low as we saw them last year? Yes.Can we see gold stocks even lower than at their 2020 lows? Again, yes.Of course, it’s far from being a sure bet, but the above chart shows that it’s not irrational to expect these kind of price levels before the final bottom is reached. This means that a $24 target on the GDX ETF is likely conservative.In addition, mining stocks are currently flirting with two bearish scenarios:If things develop as they did in 2000 and 2012-2013, gold stocks are likely to bottom close to their early 2020 high.If things develop like in 2008 (which might be the case, given the extremely high participation of the investment public in the stock market and other markets), gold stocks could re-test (or break slightly below) their 2016 low.I know, I know, this seems too unreal to be true… But wasn’t the same said about silver moving below its 2015 bottom in 2020? And yet, it happened.Keep in mind though: scenario #2 most likely requires equities to participate. In 2008 and 2020, the sharp drawdowns in the HUI Index coincided with significant drawdowns of the S&P 500 . However, with the words ‘all-time high’ becoming commonplace across U.S. equities, the likelihood of a three-peat remains relatively high.Circling back to the GDX ETF, on May 7, the senior miners inched closer to their May 2020 high. And while the development may seem bullish on the surface, the price action actually creates symmetry between the GDX ETF’s left and right shoulders. With May 2020’s peak occurring at nearly the same level, a move lower from here would only enhance the validity of the GDX ETFs H&S pattern.On top of that, this is the third time that the GDX ETF has poked its head above the upper trendline of its roughly one-and-a-half-month channel. An ominous sign, the GDX ETF’s swoon in late 2020/early 2021, occurred precisely after the senior miners delivered their third act. Furthermore, a small breakout without confirmation is akin to a promise from a friend that can’t keep his word. Thus, with the GDX ETF still underperforming gold on a relative basis, it’s important to analyze the recent price action within its proper context.Please see below:For more context, I wrote on May 5:The history might not repeat itself, but it does rhyme, and those who insist on ignoring it are doomed to repeat it. And there’s practically only one situation from more than the past four decades that is similar to what we see right now.It’s the early 2000s when the tech stock bubble burst. It’s practically the only time when the tech stocks were after a similarly huge rally. It’s also the only time when the weekly MACD soared to so high levels (we already saw the critical sell signal from it). It’s also the only comparable case with regard to the breakout above the rising blue trend channel. The previous move above it was immediately followed by a pullback to the 200-week moving average, and then the final – most volatile – part of the rally started. It ended on significant volume when the MACD flashed the sell signal. Again, we’re already after this point.The recent attempt to break to new highs that failed seems to have been the final cherry on the bearish cake.Why should I – the precious metals investor care?Because of what happened in the XAU Index (a proxy for gold stocks and silver stocks ) shortly after the tech stock bubble burst last time.What happened was that the mining stocks declined for about three months after the NASDAQ topped, and then they formed their final bottom that started the truly epic rally. And just like it was the case over 20 years ago, mining stocks topped several months before the tech stocks.Mistaking the current situation for the true bottom is something that is likely to make a huge difference in one’s bottom line. After all, the ability to buy something about twice as cheap is practically equal to selling the same thing at twice the price. Or it’s like making money on the same epic upswing twice instead of “just” once.And why am I writing about “half” and “twice”? Because… I’m being slightly conservative, and I assume that the history is about to rhyme once again as it very often does (despite seemingly different circumstances in the world). The XAU Index declined from its 1999 high of 92.72 to 41.61 – it erased 55.12% of its price.The most recent medium-term high in the GDX ETF (another proxy for mining stocks) was at about $45. Half of that is $22.5, so a move to this level would be quite in tune with what we saw recently.And the thing is that based on this week’s slide in the NASDAQ that followed the weekly reversal and the invalidation, it seems that this slide lower has already begun.“Wait, you said something about three months?”Yes, that’s approximately how long we had to wait for the final buying opportunity in the mining stocks to present itself based on the stock market top.The reason is that after the 1929 top, gold miners declined for about three months after the general stock market started to slide. We also saw some confirmations of this theory based on the analogy to 2008. Consequently, we might see the next major bottom – and the epic buying opportunity in the mining stocks – about three months after the general stock market tops. The NASDAQ might have already topped, so we’re waiting for the S&P 500 to confirm the change in the trend.The bottom line?New lows are likely to complete the GDX ETF’s bearish H&S pattern and set the stage for an even larger medium-term decline. And if the projection proves prescient, medium-term support (or perhaps even the long-term one) will likely emerge at roughly $21.But why ~$21?The target aligns perfectly with the signals from the GDX ETF’s 2020 rising wedge pattern. You can see it in the left part of the above chart. The size of the move that follows a breakout or breakdown from the pattern (breakdown in this case) is likely to be equal (or greater than) the height of the wedge. That’s what the red dashed line marks.The target is also confirmed when applying the Fibonacci extension technique. To explain, if we take the magnitude of the GDX ETF’s recent peak-to-trough decline and extrapolate it by multiplying it by the Fibonacci sequence, the output results in a target adjacent to $21. I used the Fibonacci retracement tool to show that in the above chart. Interestingly, the same technique was useful in 2020 in order to time the March bottom.The broad head-and-shoulders pattern with the horizontal neckline at about $31 points to the $21 level as the likely target.Likewise, when analyzing the situation through the lens of the GDXJ ETF, the junior miners are eliciting the same bearish signals. If you analyze the chart below, you can see that despite the recent strength, the GDXJ ETF is still trading below its medium-term rising support line (the thick black line below). More importantly, though, with the junior miners failing to reclaim this key level, their bearish H&S pattern remains intact.Even more ominous, the GDXJ ETF remains a significant underperformer of the GDX ETF. Despite sanguine sentiment and a strong stock market creating the perfect backdrop for the junior miners, the GDXJ ETF has failed to live up to the hype.To explain, I wrote previously:GDXJ is underperforming GDX just as I’ve been expecting it to. Once one realizes that GDXJ is more correlated with the general stock market than GDX is, GDXJ should be showing strength here, and it isn’t. If stocks don’t decline, GDXJ is likely to underperform by just a bit, but when (not if) stocks slide, GDXJ is likely to plunge visibly more than GDX.Expanding on that point, the GDXJ/GDX ratio has been declining since the beginning of the year, which is remarkable because the general stock market hasn’t plunged yet. However, once the general stock market suffers a material decline, the GDXJ ETF’s underperformance will likely be heard loud and clear.Please see below:So, how low could the GDXJ ETF go?Well, absent an equity rout, the juniors could form an interim bottom in the $34 to $36 range. Conversely, if stocks show strength, juniors could form the interim bottom higher, close to the $42.5 level. For context, the above-mentioned ranges coincide with the 50% and 61.8% Fibonacci retracement levels and the GDXJ ETF’s previous highs (including the late-March/early-April high in case of the lower target area). Thus, the S&P 500 will likely need to roll over for the weakness to persist beyond these levels.Moreover, the HUI Index/S&P 500 ratio has recorded a major, confirmed breakdown. And with the ratio nowhere near recapturing its former glory, it’s another sign that a storm is brewing. Moreover, after moving back and forth for the last few months, not only has the HUI Index/S&P 500 ratio broken below its rising support line (the upward sloping black line below), but the ratio has also broken below the neckline of its roughly 12-month H&S pattern (the dotted red line below). As a result, given the distance from the head to the neckline, the HUI Index/S&P 500 ratio is on a collision course back to (at least) 0.050.Please see below:When the ratio presented on the above chart above is rising, it means that the HUI Index is outperforming the S&P 500. When the line above is falling, it means that the S&P 500 is outperforming the HUI Index. If you analyze the right side of the chart, you can see that the ratio has broken below its rising support line. For context, the last time a breakdown of this magnitude occurred, the ratio plunged from late-2017 to late-2018. Thus, the development is profoundly bearish.Playing out as I expected, a sharp move lower was followed by a corrective upswing back to the now confirmed breakdown level (which is now resistance). Mirroring the behavior that we witnessed in early 2018, after breaking below its rising support line, the HUI Index/S&P 500 ratio rallied back to the initial breakdown level (which then became resistance) before suffering a sharp decline. And with two-thirds of the analogue already complete, the current move lower still has plenty of room to run. Likewise, the early-2018 top in the HUI Index/S&P 500 ratio is precisely when the USD Index began its massive upswing. Thus, with history likely to rhyme, the greenback could spoil the miners’ party once again.In addition, the HUI to S&P 500 ratio broke below the neck level (red, dashed line) of a broad head-and-shoulders pattern, and it verified this breakdown by moving temporarily back to it. The target for the ratio based on this formation is at about 0.05 (slightly above it). Consequently, if the S&P 500 doesn’t decline, the ratio at 0.05 would imply the HUI Index at about 196. However, if the S&P 500 declined to about 3,200 or so (its late-2020 lows) and the ratio moved to about 0.05, it would imply the HUI Index at about 160 – very close to its 2020 lows.All in all, the implications of mining stocks’ relative performance to gold and the general stock market are currently bearish.But if we’re headed for a GDX ETF cliff, how far could we fall?Well, there are three reasons why the GDX ETF might form an interim bottom at roughly ~$27.50 (assuming no big decline in the general stock market ):The GDX ETF previously bottomed at the 38.2% and 50.0% Fibonacci retracement levels. And with the 61.8% level next in line, the GDX ETF is likely to garner similar support.The GDX ETFs late-March 2020 high should also elicit buying pressure.If we copy the magnitude of the late-February/early-March decline and add it to the early-March bottom, it corresponds with the GDX ETF bottoming at roughly $27.50.Keep in mind though: if the stock market plunges, all bets are off. Why so? Well, because when the S&P 500 plunged in March 2020, the GDX ETF moved from $29.67 to below $17 in less than two weeks. As a result, U.S. equities have the potential to make the miners’ forthcoming swoon all the more painful.In conclusion, with gold, silver and mining stocks staying at the same springtime resort, their departure from reality implies plenty of jet lag at the end of their trip. And with the clock ticking, passengers boarding and their flight nearing takeoff, a return to real life is just around the corner. Moreover, with the USD Index long overdue for some R & R, a reversal of fortunes could leave the precious metals suffering severe envy. Thus, while gold, silver and mining stocks have enjoyed nothing but sun, sand and surf over the last few weeks, the pile of work that awaits them will likely keep them swamped over the medium term.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
What‘s Not To Love About These Great Bull Runs?

What‘s Not To Love About These Great Bull Runs?

Monica Kingsley Monica Kingsley 10.05.2021 14:39
A bit of selling at the open, and off to new highs – the S&P 500 bulls are taking no prisoners. The long recent consolidation has been broken, and it was again to the upside. Option traders are still having a hard time agreeing with the declining VIX, which is pointing to them serving as still some more cannon fodder next in the bullish advance. In fairness though, it can‘t be denied that the average put/call ratio has been rising over the last 3 months.Still, that doesn‘t change the reality that my reasonably and justifiably aggressive long positions in both S&P 500 and gold, are going even more profitable. No problem that the Russell 2000 didn‘t climb as much – emerging markets stepped into the void on account of predictably cratering USD. Friday didn‘t bring any changes to the narratives – the very weak non-farm payrolls weren‘t a selling catalyst in the least. All eyes remain on reopening trades to the effect that value stocks are rising effortlessly whatever the nominal rates direction. In spite of inflation and inflation expectations not being negligible, we‘re in still in the reflationary period where economic growth is higher than either of these two.Not only is the S&P 500 advance a very broad one as evidenced by the number of stocks trading above their 50-day moving average (with tech playing a positive role once again), commodities continue being on fire. Especially the base metals such as copper welcomed the uptick in inflation expectations. With the recent two trial baloons (Kaplan and Yellen), the Fed might be exploring market reactions if it had moved to counter inflation at least to some degree. Hold not your breath though, that would tank the risk-on assets – they won‘t do that any time soon.Gold is making its run, unhampered by nominal yields rising on the day. Miners have continued their advance, and the precious metals upleg offers a sight of health. Note also that the silver miners have been doing overall better than the gold ones throughout the long soft patch starting in Aug 2020, just as silver did. That‘s precisely what to expect in an environment of inflation running hot:(…) Gold and silver fireworks arrived, and more is to come! What a better proof than a broad based advance across the sector, starting with both metals, and extending to gold and silver miners left and right. Not to mention the copper fires burning brightly – if you were listening to my incessant red metal bullish calls, you‘re very happy now. And just as in the precious metals, there is more to come here too.And as the Fed continues playing ostrich when it comes action, commodities including oil continue doing great. While black gold consolidated over the last few sessions, it remains primed to go higher.Bitcoin is also enjoying upside momentum as it aims to clear the 50-day moving average vicinity. Its uptrend is gradually reasserting itself – patience required still. But it‘s the steep gains in other cryptos such as Ethereum making new highs practically on a daily basis, that is catching much attention. ETH/USD looks short-term extended though, and I would prefer waiting for a pullback, especially given the last two candles‘ shape (both having significant knots – today is shaping up to be a day of more upside rejection).Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookWe‘re again at the upper border of the Bollinger Bands, and the daily indicators are constructive with more room to grow. We‘re staring at a positive week ahead.Credit MarketsThe corporate credit markets did waver a little on the day, investment grade bonds more so than the high yield ones, which is understandable given the long-dated Treasuries setback.Technology and ValueTechnology rebound continues, and should so aided by the recent earnings announced. I am not looking for a meaningful dip in $NDX or whichever part of the tech sector over the nearest days as $NYFANG did its job quite well on Friday. Yet again, value stocks continued their steep ascent come hell or high water.Inflation ExpectationsA rare sight indeed – Treasury yields have run behind inflation expectations on Friday.Gold, Silver and MinersGold and miners continue running higher together, and neither gold‘s upper knot nor miners reaching visually escape velocity compared to the yellow metal, is an issue, because copper had a great day.Silver consolidated daily gains, lagging behind both gold and copper. No issues, the white metal has great days ahead still, and Friday‘s session proves that the precious metals upswing is nowhere near overheated.Crude OilCrude oil bulls defended Thursday‘s lows, and the bullish consolidation continues. Look for an upside breakout next as this isn‘t a double top. I‘m standing by my calls for at least $80 West Texas Intermediate before 2022 is over. Seasonality is still good for black gold, so enjoy the ride!SummaryS&P 500 is at new highs, and its ascent is far from over – no signs of a major or even local top to be made. The index will have an easier time now that the short term tech / Nasdaq outlook has flipped bullish as well. Gold, silver and miners continue to be well positioned to reap further gains as the well balanced rally continues. The copper and nominal yields combo balances each other out, so the factors speak for a bullish consolidation in the short term as a minimum.Crude oil is getting ready to resume its upswing in a modest fashion, and I look for its early Mar top to be challenged this or next week.Bitcoin upswing is very gradually reasserting itself, and the bulls would be well advised to pay attention as the 50-day moving average is likely to start sloping upwards perhaps as early as this Friday, thus supporting the prices above the late Apr base.Thank you for having read today‘s free analysis, which is available in full here at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the four publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals and Bitcoin Trading Signals.Thank you,Monica KingsleyStock Trading SignalsGold Trading SignalsOil Trading SignalsBitcoin Trading Signalswww.monicakingsley.comk@monicakingsley.co* * * * *All essays, research and information represent analyses and opinions of Monica Kingsley that are based on available and latest data. Despite careful research and best efforts, it may prove wrong and be subject to change with or without notice. Monica Kingsley does not guarantee the accuracy or thoroughness of the data or information reported. Her content serves educational purposes and should not be relied upon as advice or construed as providing recommendations of any kind. Futures, stocks and options are financial instruments not suitable for every investor. Please be advised that you invest at your own risk. Monica Kingsley is not a Registered Securities Advisor. By reading her writings, you agree that she will not be held responsible or liable for any decisions you make. Investing, trading and speculating in financial markets may involve high risk of loss. Monica Kingsley may have a short or long position in any securities, including those mentioned in her writings, and may make additional purchases and/or sales of those securities without notice.
Intraday Market Analysis – DAX Aims For New Record High

Intraday Market Analysis – DAX Aims For New Record High

John Benjamin John Benjamin 10.05.2021 08:06
GER 30 tests previous record highThe DAX has recouped recent losses as risk sentiment made its way back in the market. By clearing the previous crash point at 15270 the price action has confirmed the bullish MA cross.The index then established support at 15100. As it climbs back towards the peak at 15520, an overbought RSI could be the rally’s Achilles’ heel.Profit-taking near the resistance level may trigger a brief retracement.On the upside, a breakout could extend the rally to a new record high.USDCAD tumbles towards 2017’s lowThe US dollar fell as the unemployment rate rose to 6.1% in April from a previous 5.8%.The February 2018 low at 1.2250 has failed to contain the bearish mood. The market remains unidirectional to the south.The RSI has dipped into the oversold territory and could trigger some short-covering from intraday players. Though selling into strength is likely to be the motto if the price climbs back towards 1.2280.September 2017’s low at 1.2060 would be the next target when the sell-side doubles down.EURGBP looks to break out of rangeThe euro rose after ECB official Martin Kazaks said the ECB could reduce emergency bond purchases (PEPP).The pair has found strong buying interest in the demand zone above 0.8600. An RSI divergence on this major support was a foresign that the selling pressure had lost steam.The current rebound is still within a consolidation range between 0.8610 and 0.8720.A bullish breakout may open the path towards 0.8780. A failure to do so would lead to a pullback to test bids at 0.8655.
Inflation Knock-knock-knockin’ On Golden Door

Inflation Knock-knock-knockin’ On Golden Door

Finance Press Release Finance Press Release 07.05.2021 16:43
Inflation is not coming. It is already here! Gold should benefit, given that it could be higher and more lasting than the pundits believe.“Knock, knock, knockin’ on heaven’s door”, so sing Bob Dylan and Guns N’ Roses. Now, inflation is knocking on the golden door. According to the BLS , the U.S. CPI inflation rate recorded a monthly jump of 0.6% in March, while soaring 2.6% on an annual basis. And the core inflation has also accelerated. So, inflation has significantly surpassed the Fed’s target of 2% , as one can see in the chart below.And remember that this is what the official data shows, which rather underestimates the true inflation. This is because of several issues, including hedonic quality adjustments, shifts in the composition of the consumer baskets and methodological changes. It is enough to say that the rate of inflation calculated by the John Williams’ Shadow Government Statistics that uses methodology from the 1980s is over 10% right now.There are some controversies about this alternate data, but I would like to focus on something else. The CPI doesn’t include houses (or other assets) into the consumer baskets, as they are treated as investments. The index only takes rents into account. But homeowners don’t pay rents, so for them, the cost of shelter, which accounts for about one-fourth of the overall CPI, is the implicit rent that owner-occupants would have to pay if they were renting their homes. And this component rose just 2 percent in March, while the Case-Shiller Home Price Index, which measures the actual house prices, soared more than 11% in January (the latest available data). According to Wolf Street , if we had replaced the owners’ equivalent rent of primary residence with the Case-Shiller Index, the CPI would have jumped 5.1 instead of 2.6%. The chart below shows the difference between these two measures.Hence, inflation has come, and even the official data – which can underestimate the level of inflation that ordinary people deal with in their daily lives – confirms this. If you’ve been buying food lately, you know what I mean. Now, the question is whether this inflation will be temporary or more lasting.Powell , his colleagues and the pundits claim that higher inflation will only be a temporary phenomenon caused by the base effect. The story goes like this: the CPI plunged in March 2020, which created a lower base for today’s annual inflation rate. There is, of course, a grain of truth here. But let’s take a look at the chart below. It shows the CPI, with both March 2020 (red line) and February 2020 (green line) as a base. As you can see, in the latter case the index jumped 2.3%. Yes, lower, but not significantly lower than 2.6% when compared to March 2020. So, the Fed shouldn’t blame the base effects for accelerating inflation (and funny thing: have you heard the pundits talking about the base effect when they were talking about vigorous GDP recovery?).Instead, central bankers should blame themselves and their insane monetary policy . After all, as the chart below shows, the Fed’s balance sheet has soared $3.4 trillion (or 81%), while the broad money supply (measured by M2) has increased more than $4 trillion (or 26%) from February to date.They could also blame reckless fiscal policy . Growing government spending, enabled by a rising pile of debts monetized indirectly by the Fed, has headed for Main Street. This, combined with a jump in the broad money supply, is the key change compared to the Great Recession when almost all stimuli flowed into Wall Street and big corporations. Sure, some people use the received money to increase savings and repay debts. But with the reopening economy, some of the pent-up demand will be realized. Actually, many Americans have already started spending free time traveling like crazy after being locked in homes for so long.And this is very important: consumers are therefore more eager to accept higher prices. It shouldn’t be surprising given all the checks they got and how hungry for normal life they are. As I reported last month , companies are reporting rising prices of commodities and inputs (partially because of the supply disruptions too), but so far their power to pass the producer price inflation to consumers has been limited. However, this is changing . The April report IHS Markit U.S. Services PMI observes thatRates of input cost and output charge inflation reached fresh record peaks, as firms sought to pass on steep rises in input prices to clients (…) A number of companies also stated that stronger client demand allowed a greater proportion of the hike in costs to be passed through. The resulting rate of charge inflation was the quickest on record.All these reasons suggest that higher inflation could be more lasting than most of the so-called experts believe (although the officially reported inflation doesn’t have to show it). This is good news for the yellow metal . Higher inflation implies lower real interest rates and stronger demand for gold as an inflation hedge . What is important here is that we have more inflationary pressure in the pipeline exactly at the time when the Fed has become more tolerant of inflation. So, the combination of higher inflation with a passive central bank position sounds bullish for gold . The key issue here is whether the markets believe that the Fed will allow for higher inflation. So far, they have been skeptical, so the expectations of interest rates hikes accumulated and the bond yields rallied. But it seems that the Fed has managed to convince the markets that it’s even more incompetent than it is widely believed. If the distrust in the Fed strengthens, gold should return to its upward trajectory from the last year.Thank you for reading today’s free analysis. We hope you enjoyed it. If so, we would like to invite you to sign up for our free gold newsletter . Once you sign up, you’ll also get 7-day no-obligation trial of all our premium gold services, including our Gold & Silver Trading Alerts. Sign up today!Arkadiusz Sieron, PhD Sunshine Profits: Effective Investment through Diligence & Care.
Ready for More Hot Gold and Stocks Profits

Ready for More Hot Gold and Stocks Profits

Monica Kingsley Monica Kingsley 07.05.2021 16:22
One final attempt to go down before reversing to strong gains all the way to the closing bell – the S&P 500 returned to trading back at the upper border of its prolonged consolidation range. Again at 4,200, new ATHs are back in sight – that‘s at least what the impression from declining VIX says, and the option traders might disagree here all they want, they‘re likely to be the next cannon fodder in the bullish advance.Needless to say that my reasonably and justifiably aggressive long positions in both S&P 500 and gold, are innundated with rising profits. Initiated in the vicinity of Tuesday‘s lows, I look for more gains in stocks (we‘ll get to the metals shortly) in spite of smallcaps still lagging behind (don‘t worry, they‘ll catch up over time, and I will cover that), and precisely because emerging markets are rejoicing over further dollar woes. Yes, the glitzy and fake tightening show is officially over since I first vocally called for it in Monday‘s analysis.Keep an eye on the big picture presented yesterday:(…) no change in the reflationary positive dynamics for stocks, let alone the red hot commodities. These (copper, agrifoods, base metals, lumber, oil) continue appreciating in spite of nominal yields pulling back a little these days. Make no mistake though, deflation isn‘t about to break out. Lower yields finally coincided with (supported) the defensive sectors the way it ideally should – technology bottom searching is over, Dow Jones Industrial Average is spurting higher, utilities recovered, and consumer staples continued upwards as if nothing happened at all. Maybe is this heavy on P&G sector placing faith in the market leader‘s pricing power to result in a success once September arrives with the rest of crowd following? That‘s the part of the cost-push inflation I discussed on Monday. I truly hope that people are paying attention, and don‘t put all their eggs into e.g. the dollar basket when it comes to commodities:(…) the USD Index … anticipated downside move ... would help lift international markets, and is also part of the explanation behind the strong commodity performance these days. This CRB Index move is key, and shows how far have real assets progressed in shaking off the dollar link – if you compare the dollar‘s value in early Feb and now, you are looking at very meaningfully higher commodity prices over that same time period.Gold and silver fireworks arrived, and more is to come! What a better proof than a broad based advance across the sector, starting with both metals, and extending to gold and silver miners left and right. Not to mention the copper fires burning brightly – if you were listening to my incessant red metal bullish calls, you‘re very happy now. And just as in the precious metals, there is more to come here too. So happy for all you who had the patience to wait out a couple of adverse sessions, because:(…) The key metrics such as nominal or real yields support the precious metals rebound increasingly more – don‘t be fooled, gold would break above the $1,800 resistance, whether you look at it as a purely psychological one, or as a neckline of an inverse head and shoulders on the daily chart. The advance across the real assets, the precious metals and commodities super bull, would be more well rounded then. As for Bitcoin, such was my yesterday‘s (still valid) assessment in a series of updates of the leading, but currently lagging crypto when compared to Ethereum or Dogecoin, the latter being a true middle finger to the financial system. GameStop, silver squeeze, Doge...Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookYesterday‘s rebound happened on rising volume, lending it credibility for the sessions to come. The bears weren‘t obviously convinced enough to sell as yesterday‘s volume lagged behind Tuesday‘s one.Credit MarketsThe corporate credit markets kept yesterday and still keep today signalling higher stock prices next. Notably, both HYG and LQD rose again in spite of long-dated Treasuries turning up as well.Technology and ValueTechnology did indeed bottom, and the heavyweights contributed reasonably enough to its advance. Semiconductors could have fared a little better, but that‘s not a major issue. At the same time, value stocks continued their steep ascent, as reliably as ever.S&P 500 Market BreadthThe S&P 500 advance wasn‘t accompanied by either new highs new lows or the advance-decline line turning up noticeably. Might be disappointing at first sight, but the overall impression is still of a healthy and quite broad advance.Gold and Miners Short-TermMiners and gold are in tune with each other, jointly pulling the cart of the precious metals advance. No further words are necessary here, I believe.Gold, Silver and Miners Long-TermJust as strongly when I doubted the miners to gold plunge on Monday, the ratio swiftly recovered starting Tuesday and extending gains yesterday. Please note silver springing to leadership position again – gradually first, more obviously throughout this week on the silver squeeze heels, which would be a volatile ride, but once again, silver is the best of both worlds – the monetary and industrial applications ones.Crude OilCrude oil pulled back a little yesterday, but the series of higher highs and higher lows since April hasn‘t been violated. The table remains set for further gains, and the only question is how fast these come – I‘m standing by my calls for at least $80 West Texas Intermediate before 2022 is over. Seasonality is still good for black gold, so enjoy the ride!SummaryS&P 500 is readying another reach for the highs, finally supported (a ka not being hampered by) technology. Risk on is returning and high beta stock markets pockets are expected to keep doing well. Gold, silver and miners have firmly positioned themselves to extend yesterday‘s much awaited and well deserved gains. The upleg is just getting started, now that the few weeks‘ consolidation is over.

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