chart

Summary:

  • Latest eurozone inflation reading could suggest a peak has been reached.
  • Eurozone inflation came in at 10% for October.
  • The ECB is expected to raise rates by 0.5 percentage points.

Eurozone inflation may have reached its peak

The European Central Bank (ECB) may be able to switch to smaller interest rate increases next month as a result of the eurozone's inflation declining for the first time in 17 months and suggesting that the largest price spike in a generation has peaked. According to data released by the EU's statistics agency on Wednesday, a slowdown in energy and services prices led inflation in the single currency bloc to fall more than predicted to 10% in November, down from a record 10.6% in October.

Recently, there has been increased optimism that inflation in the eurozone is falling due to a decline in wholesale energy prices in Europe and the alleviation of supply chain bottlenecks. Additionally, US inflation decreased in October, and worldwide data signs

Intraday Market Analysis – EUR Builds Up Bullish Reveal

Intraday Market Analysis – EUR Builds Up Bullish Reveal

John Benjamin John Benjamin 29.10.2021 08:55
EURUSD cuts through resistanceThe euro surges as the market prices in inflation pressure despite the ECB’s dovish message.Bullish candles have pushed the single currency above the triple top (1.1665) which sits on the 30-day moving average, paving the way for a reversal. Strong momentum is a sign of short-covering from those caught on the wrong side of the market.An overbought RSI could temporarily limit the range of the rally. However, renewed optimism may send the pair to the daily resistance at 1.1750. 1.1620 is the support in case of a pullback.USDJPY tests demand zoneThe Japanese yen recouped losses after the BOJ sees a weak yen as positive for Japan’s economy. And the US dollar has come under pressure near a four-year high.An overbought RSI on the daily chart points to an overextension. On the hourly level, the pair has found bids around 113.30 near a previous consolidation range.A bearish breakout would test the round number at 113.00, which lies on the 20-day moving average and is critical in safeguarding the uptrend. The bulls need to lift 114.30 before they may resume the rally.US 30 pulls backs for supportThe Dow Jones consolidates as investors digest earnings near the all-time high.A breakout above the August peak at 35600 and a bullish MA cross from the daily timeframe indicate an acceleration on the upside as the rally continues.Pullbacks could be an opportunity to buy low. An overbought RSI has triggered a minor sell-off below 35600, shaking out weaker hands in the process. A drop below 35450 would lead to the psychological level of 35000. 35830 is now a fresh resistance.
Wild Choppy Moves

Wild Choppy Moves

Monica Kingsley Monica Kingsley 29.10.2021 15:27
One-sided S&P 500 session, perhaps a bit too much – the bulls are likely to face issues extending gains when VIX is examined. The stock market sentiment remains mixed, and one could easily be pardoned for expecting larger gains on yesterday‘s magnitute of the dollar slump. And long-dated Treasuries barely moved – their daily candle approximates nicely the volatility one as both give the impression of wanting to move a bit higher while their Thursday‘s move was a countertrend one.Not even value was able to surge past its Wednesday‘s setback, which makes me think the bears can return easily. At the same time, tech stepped into the void, and had a positive day, balancing the dowwnside S&P 500 risks significantly. The very short-term outlook in stocks is unclear, and choppy trading between yesterday‘s highs and 4,550 shouldn‘t be surprising today.At the same time, precious metals could have had a much stronger day – but the sentiment was risk-off in spite of the tanking dollar and doubted yields as the rising tech and gold at the expense of silver illustrate. Miners recent outperformance was absent just as much as commodities vigor with the exception of copper. And it‘s more celebrations in the red metal following its steep and far reaching correction, that‘s the part of missing ingredients as much as fresh inflation fears (yes, adding to risk-off mood, inflation expectations declined yesterday).All in all, it looks like a case of abundance of caution prior to next week‘s Fed, compounded by sluggish incoming data, where just cryptos are ready to move first.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 decisively reversed upwards, but the daily indicators barely moved – the consolidation doesn‘t look to be over.Credit MarketsHYG entirely reversed Wednesday‘s plunge but the low volume flashes amber light at least – the bulls are likely to stop for a moment.Gold, Silver and MinersGold upper knot doesn‘t bode as well as it did the prior Friday, and the same goes for miners. The yellow metal‘s strength was sold into, making it short-term problematic for the bulls.Crude OilCrude oil held $81 on not too shabby volume but the bulls are still on the defensive until $84 is overcome. When XLE starts outperforming VTV again, the outlook for black oil would improve considerably. Natgas falling this steeply yesterday isn‘t inspiring confidence either.CopperCopper finally reversed, and the upswing is a promising sign even though I would like to have seen higher volume. Again, the red metal remains well positioned to join in the commodities upswing once the taper announcement is absorbed.Bitcoin and EthereumBitcoin bulls are pausing while Ethereum ones keep running – cryptos are providing an encouraging sign (to be taken up by real assets) going into the Fed next week.SummaryChoppy trading in stocks is likely to continue even though 4,610s are closer than a break below 4,550s at the moment. Much nervousness in the markets before the coming Wednesday – cash is being raised while the dollar suffered in spite of daily move up in yields. Risk-off hasn‘t clearly retreated as seen in sectoral performance and VIX – time to be cautious while waiting out this soft patch in commodities that are most likely to return to scoring gains, accompanied by the retreating dollar.Thank you for having read today‘s free analysis, which is available in full 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 five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Intraday Market Analysis – USD Grinds Key Resistance

Intraday Market Analysis – USD Grinds Key Resistance

John Benjamin John Benjamin 01.11.2021 09:31
USDCHF bounces off demand zoneThe US dollar inched higher after a solid core PCE reading in September. The pair is testing the major demand area from last August’s lows (0.9100).A bearish MA cross on the daily chart has dented buyers’ optimism. An oversold RSI may attract a ‘buying-the-dips’ crowd while short-term sellers take some chips off the table.However, 0.9190 could be a challenging hurdle to lift as the bears would be eager to fade the rebound. A new round of sell-off would send the greenback to the daily support at 0.9020.EURGBP attempts to reboundThe euro found support from better-than-expected growth and inflation data. A bullish RSI divergence suggests that the downtrend may have lost its momentum.A break above 0.8470 has prompted sellers to cover some of their bets. But the RSI’s overbought situation has so far tempered the optimism.The bulls will need to lift offers around 0.8485 which sits on the 30-day moving average before they could turn the tables. Failing that, a drop below the demand zone between 0.8400 and 0.8420 would deepen the correction.GER 40 finds supportThe Dax 40 bounces back thanks to upbeat European stock earnings.A bullish MA cross on the daily chart is a sign of recovery. Though the index has hit a speed bump at 15775 which is a major resistance from last September’s sell-off.The drop below 15630 has led intraday buyers to bail out, driving short-term price action downward. As the RSI ventured into the oversold zone, the pullback attracted dip-buying interest at the lower range of the previous consolidation (15400). This is a congestion area along the MA cross.
Profit-Taking After Earnings May Send Stock Prices Lower

Profit-Taking After Earnings May Send Stock Prices Lower

Paul Rejczak Paul Rejczak 29.10.2021 15:30
  Stocks retraced their short-term decline yesterday, but today we may see a lower opening following the earnings releases. Is this a topping pattern? The S&P 500 index gained 0.98% on Thursday, Oct. 28, as it retraced its whole Tuesday’s-Wednesday’s decline to the support level of 4,550. It got back to the Tuesday’s record high of 4,598.53 yesterday. The daily close was just 2 points below that level. The stock market is still reacting to quarterly corporate earnings releases. Yesterday we got the releases from AAPL and AMZN, among others. But the first reaction to their numbers was negative. The market seems overbought in the short-term it is most likely fluctuating within a topping pattern. The nearest important support level is at 4,550, and the next support level is at 4,520-4,525, marked by the previous Wednesday’s daily gap up of 4,520.40-4,524.40. On the other hand, the resistance level is at around 4,600, marked by the new record high. Despite reaching new record highs, the S&P 500 remained below a very steep week-long upward trend line, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Nasdaq Reached New Record! Let’s take a look at the Nasdaq 100 chart. The technology index was relatively weaker than the broad stock market recently, as it was still trading below the early September record high of around 15,700. But this week it rallied to the new record highs. The nearest important support level is now at 15,700, marked by the recent resistance level, as we can see on the daily chart: Dow Jones Is Relatively Weaker Again The Dow Jones Industrial Average reached the new record high of 35,892.92 on Tuesday and on Wednesday it sold off to around 35,500. Yesterday the blue-chip index didn’t retrace that decline. The support level remains at around 35,500-35,600, marked by the previous local highs, as we can see on the daily chart: Apple Rallied Before Earnings, and Microsoft Went Hyperbolic Let’s take a look at the two biggest stocks in the S&P 500 index, AAPL and MSFT. Apple released its earnings after yesterday’s close and the first reaction was negative. But the stock gained 2.50% at yesterday in regular trading hours. The resistance level remains at $154-156. It is still trading below the record highs, as we can see on the daily chart: Now let’s take a look at the MSFT. It rallied after Tuesday’s quarterly earnings release and on Wednesday it reached the record high price of $326.10. The market remained above its month-long upward trend line. Microsoft extends its long-term hyperbolic move higher. This week it got close to the $2.5 trillion dollar market cap! So the question is how much higher can it get? And it’s already not that cheap at all with its price to earnings ratio of around 40. Conclusion The S&P 500 index retraced its Tuesday’s-Wednesday’s decline yesterday and it got close to the Tuesday’s record high of 4,598.53. For now, it looks like a consolidation following an uptrend. However, the market is still overbought and we may see a bigger downward correction. There may be a profit-taking action following quarterly earnings releases. Today the main indices are expected to open 0.2-0.8% lower after yesterday’s earnings releases from AAPL and AMZN, and we will likely see an intraday correction. Here’s the breakdown: The S&P 500 got close to the record high yesterday but today it may retrace some of the advance. A speculative short position is justified from the risk/reward perspective. We are expecting a 3% or higher correction from the current levels. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his 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. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members 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.
Don‘t Fear Risk-Off

Don‘t Fear Risk-Off

Monica Kingsley Monica Kingsley 01.11.2021 13:50
Not confirmed by bonds, the S&P 500 advances regardless – the daily yields retreat is powering tech while value goes nowhere. Higher beta sectors such as financials are sputtering, revealing the defensive nature of the stock market advance – at least to this degree, stocks and bonds are in tune. Yes, risk-off is winning these days, and it would be only up to VIX to join the fray, but the key volatility measure is likely to keep complacently trading around the 17 level. In other words, not too far from the bottom of its recent range, and not indicating imminent change of the bull market character.While we have seen much better market breadth readings in the years gone by (the narrow leadership is reminiscent perhaps of the late 1990s), there‘s no chart proof of the behemoths being in kind of getting really serious trouble (with the possible exception of Facebook). True, smallcaps have largely gone sideways over the many months, but midcaps are already breaking higher, and that won‘t be unnoticed by the Russell 2000 (soon to follow).The bears haven‘t thus far made any serious appearance, and 4,550s held with ease in spite of the dollar reversing Thursday‘s losses. All the more encouraging is the relative strength of both gold and silver when faced with one more daily decline in inflation expectations – as if balancing before the Fed act changes anything.I ask, how serious can they be about delivering on taper promises when prices increase relentlessly (look at Europe too), these are being blamed on supply chain bottlenecks without acknowledging their persistent and not transitory nature, and the real economy is markedly slowing down (not in a recession territory, but still)?Looking at commodities, we‘re reliving the 1970s, and cryptos are still the key beneficiary of monetary largesse – precious metals aren‘t a dead asset class in the least, they just frontrunned it all and peaked in August 2020 as I alerted you to back then. Fresh upswing is in the making.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 once again decisively reversed upwards, and even though the daily indicators are weakening, the rally can easily go on. Dips are to be bought.Credit MarketsHYG keeps acting weak, but this is being overlooked by stocks as tech remains driven by NYFANG.Gold, Silver and MinersGold‘s lower knot indicates accumulation, and miners reversing higher would be a great confirmation. Regardless, such a result when dollar rose steeply and yields with inflation expectations retreated, is encouraging.Crude OilCrude oil again held $81, looks set to return above $84 again. XOI and XLE weakness has to be understood in terms of the challenged VTV, and isn‘t here to stay.CopperCopper is providing a buying opportunity, and looks likely to join other base metals (especially alluminum) and broader commodity index strength as agrifoods wake up too.Bitcoin and EthereumThe Bitcoin and Ethereum upswings can go on – it looks to be a question of a relatively short time when cryptos are done with the sideways correction.SummaryS&P 500 indeed got at 4,610s instead of suffering setbacks, and the same holds true for real assets next. Across the board, these have performed well in spite of the USD upswing and decreasing inflation expectations, which I chalk down to pre-Wednesday positioning. Therefore, I‘m taking the high beta weakness with a pinch of salt, and the same goes for precious metals or the economic cycle sensitive copper. As for oil, the U.S. economy can (and will have to) withstand prices higher than $90 as 2022 arrives.Thank you for having read today‘s free analysis, which is available in full 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 five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Intraday Market Analysis – USD Hits Resistance - 02.11.2021

Intraday Market Analysis – USD Hits Resistance - 02.11.2021

John Benjamin John Benjamin 02.11.2021 08:42
USDCAD consolidates at 4-month lowThe US dollar retreats ahead of this week’s FOMC as traders await further catalysts. Price action has stabilized above 1.2300, a major demand zone from last summer.1.2430 from the latest sell-off is a key resistance as it coincides with the 20-day moving average. The current consolidation suggests the market’s indecision, though overall sentiment remains bearish.A deeper correction would send the greenback to 1.2150. A bullish breakout on the other hand may challenge the supply area around 1.2550.EURJPY tests key supportThe euro struggles to bounce higher after Germany’s lackluster retail sales in September.The pair has come under pressure at 133.45 near June’s peak. The subsequent retracement has met some bids at 131.60 when the RSI dipped into the oversold territory.The triple test of the support level indicates solid buying interest. However, the bulls will need to push above 132.80 before the uptrend could resume.On the downside, a bearish breakout would extend the sideways action towards 130.80 which sits on the 30-day moving average.US 100 falls back for supportThe Nasdaq 100 surges to a new all-time high as investors expect the strong growth trend to continue. The break above the previous peak at 15700 has put the index back on an upward trajectory.A bullish MA cross on the daily chart is a confirmation of the market’s optimism. However, a brief pullback is necessary to let the bulls catch their breath.15620 is the immediate support. Further down, 15280 is key daily support on the 20-day moving average. The psychological level of 16000 would be the next target rebound.
What Does November Hold for the Miners?

What Does November Hold for the Miners?

Paul Rejczak Paul Rejczak 01.11.2021 16:20
  As a new month begins, the downtrend in the GDX and GDXJ should resume. When will a new buying opportunity finally present itself? Let’s compare the behavior of the GDX ETF and the GDXJ ETF. Regarding the former, the GDX ETF reversed sharply after reaching its 200-day moving average and a confluence of bearish indicators signaled a similar outcome. For context, I wrote on Oct. 25: Small breakout mirrors what we witnessed during the senior miners’ downtrend in late 2020/early 2021. Moreover, when the GDX ETF’s RSI (Relative Strength Index) approached 70 (overbought conditions) back then, the highs were in (or near) and sharp reversals followed. Furthermore, after a sharp intraday reversal materialized on Oct. 22, the about-face is similar to the major reversal that we witnessed in early August. On top of that, with the GDX ETF’s stochastic indicator also screaming overbought conditions, the senior miners are likely to move lower sooner rather than later. Also, please note that the GDX ETF reversed right after moving close to its 200-day moving average, which is exactly what stopped it in early August. Yes – that’s another link between now and early August. And after declining sharply on Oct. 28 and Oct. 29, the senior miners further cemented their underperformance of gold. Moreover, with relative underperformance often a precursor to much larger declines, the outlook for the GDX ETF remains quite bearish. Please see below: As further evidence, the GDX ETF’s four-hour chart offers some important insights. To explain, the senior miners failed to hold their early September highs and last week’s plunge removed any and all doubt. Likewise, the GLD ETF suffered a sharp drawdown and its recent breakout was also invalidated. Furthermore, my three-day rule for confirming breakouts/breakdowns proved prescient once again. Conversely, investors that piled into mining stocks are likely regretting their decision to act on unconfirmed signals. And as we look ahead, the technicals imply that caution is warranted and more downside is likely for the GDX ETF. As for the GDXJ ETF, the gold junior miners suffered a similar swoon last week. For context, I warned of the prospective reversal on Oct. 25. I wrote: The junior miners’ RSI also signals overbought conditions and history has been unkind when similar developments have occurred. Moreover, the GDXJ ETF’s recent rally follows the bearish patterns that we witnessed in late May and in early 2021. Likewise, the intraday reversal on Oct. 22 mirrors the bearish reversal from early August and a confluence of indicators support a continuation of the downtrend over the coming weeks. And as we begin a new month, the GDXJ ETF’s downtrend should resume and a retracement to the ~35 level will likely materialize in the coming months. Please see below: Finally, while I’ve been warning for months that the GDXJ/GDX ratio was destined for devaluation, the ratio has fallen precipitously in 2021. And after the recent short-term rally, the ratio’s RSI has reached extremely elevated levels (nearly 73) and similar periods of euphoria have preceded major drawdowns (marked with the black vertical dashed lines below). To that point, the ratio showcased a similar overbought reading in early 2020 – right before the S&P 500 plunged. On top of that, the ratio is still below its mid-to-late 2020 lows and its mid-2021 lows. As a result, the GDXJ ETF will likely underperform the GDX ETF over the next few months. It’s likely to underperform silver in the near term as well. The bottom line? If the ratio is likely to continue its decline, then on a short-term basis we can expect it to trade at 1.27 or so. If the general stock market plunges, the ratio could move much lower, but let’s assume that stocks decline moderately or that they do nothing or rally slightly. They’ve done all the above recently, so it’s natural to expect that this will be the case. Consequently, the trend in the GDXJ to GDX ratio would also be likely to continue, and thus expecting a move to about 1.26 - 1.27 seems rational. If the GDX is about to decline to approximately $28 before correcting, then we might expect the GDXJ to decline to about $28 x 1.27 = $35.56 or $28 x 1.26 = $35.28. In other words, ~$28 in the GDX is likely to correspond to about $35 in the GDXJ. Is there any technical support around $35 that would be likely to stop the decline? Yes. It’s provided by the late-Feb. 2020 low ($34.70) and the late-March high ($34.84). There’s also the late-April low at $35.63. Consequently, it seems that expecting the GDXJ to decline to about $35 is justified from the technical point of view as well. In conclusion, mining stocks reprised their role as ‘The Boy Who Cried Wolf.’ And after overzealous investors rushed to their defense last week, another false alarm led to another bout of disappointment. Moreover, with the technical and fundamental backdrops for gold, silver and mining stocks continuing to deteriorate, lower lows should materialize over the medium term. As a result, we may have to wait until 2022 before reliable buying opportunities emerge once again. 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, CFAFounder, 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.
Bitcoin’s trading psychology - 02.11.2021

Bitcoin’s trading psychology - 02.11.2021

Korbinian Koller Korbinian Koller 02.11.2021 09:49
BTC in US-Dollar, Daily Chart, leg analysis:Bitcoin in US-Dollar, Daily chart as of October 25th, 2021.From a pure price perception, it might seem that the consistency bitcoin holds in price bubbles might be of the same origin, but they are not. In 2009, the value of the coin was zero, and fans exchanged it more like reminding of a seedy Star Wars bar exchange of true fans for a new idea, technology, beliefs, and freedom. Even so, bubbles arose a year later, and the price was driven by extreme supply and demand imbalances due to ill-liquidity when news hit the media.Since these times, we have seen all sorts of traders, speculators, investors, banks, hedge funds, governments join the speculation in a profitable market. Each with their specific mindset, interests, and trading psychology. The latest shift is now the race of governments getting a hold on the worldwide dominance reign. They will be true hodlers. Before that last influx, the bitcoin market was dominated by pure speculators for the most part. In a sense, they were forced into this market to stay competitive. Wide swings were the result since there was little incentive to stay in this game for the long term or, in other words, taking the risk on the large downswings.One first step, identifying in which market and cycle one is competing, are comparing up-legs in size (percentage) and steepness (time).The daily chart above shows such measurements of the last two significant moves in bitcoin this year.It has taken bitcoin only three months to more than double in price.BTC in US-Dollar, Weekly Chart, Projections:Bitcoin in US-Dollar, weekly chart as of October 26th, 2021.With governments and the wider population now being the last to come to the party, we will see a shift in the trading behavior of bitcoin. This needs adjustment in one’s trading style to be part of this craze for the virtual, decentralized future.One such shift in the process may be a reduction of retracements depth within the second leg from a weekly perspective. We have drawn a projection of the second leg highly conservative in the chart above. Conservative, since second legs are typically longer, and we only assumed an identical extension to the first leg (1=2=3 in length and angle). BTC in US-Dollar, Monthly Chart, time accuracy:Bitcoin in US-Dollar, monthly chart as of October 26th, 2021.Bitcoins’ childhood days have long passed. Seedy bar purchases have changed for high liquidity and professional exchanges with advanced order execution functionality. The big guns sit on the table, and as such, trading has shaped up. The individual is now playing against the best in the world, like in any other asset class, and risk should be perceived as such.Nevertheless, a larger time frame play for wealth preservation and a hedge against inflation is controllable in risk. Market participation analysis allows for a better grip on what to expect and scales in on targets from a time perspective. The above monthly chart illustrates our view of a possible future. The logarithmic chart shows best what inherent strength bitcoin possesses.Bitcoin´s trading psychology:The largest group that is not invested in bitcoin yet is the more significant part of average citizens. Consequently, we will find ourselves in an extreme supply demand imbalance due to bitcoins fixed limit of 21 million coins. More importantly, we will discover new trading behavior with a new group participating, with new psychology. These purchases will be made by amateurs who are motivated by fear more than greed. This market participant will be a long-term speculator trying to hold on to his investment versus making a quick buck. We anticipate more moderate overall retracements percentagewise. As well, we expect steeper legs up. These will result in a different system needed to participate in a market with low-risk entry points.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.This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting.By Korbinian Koller|October 26th, 2021|Tags: Bitcoin, bitcoin consolidation, Bitcoin mining, crypto analysis, Crypto Bull, 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.
The US dollar retreats ahead of this week’s FOMC as traders await further catalysts

The US dollar retreats ahead of this week’s FOMC as traders await further catalysts

FXMAG Team FXMAG Team 02.11.2021 10:19
EURJPY tests key support. USDCAD consolidates at 4-month low 1.2430 from the latest sell-off is a key resistance as it coincides with the 20-day moving average. The current consolidation suggests the market’s indecision, though overall sentiment remains bearish. A deeper correction would send the greenback to 1.2150. A bullish breakout on the other hand may challenge the supply area around 1.2550. EURJPY tests key support The euro struggles to bounce higher after Germany’s lackluster retail sales in September. The pair has come under pressure at 133.45 near June’s peak. The subsequent retracement has met some bids at 131.60 when the RSI dipped into the oversold territory. The triple test of the support level indicates solid buying interest. However, the bulls will need to push above 132.80 before the uptrend could resume. On the downside, a bearish breakout would extend the sideways action towards 130.80 which sits on the 30-day moving average. US 100 falls back for support The Nasdaq 100 surges to a new all-time high as investors expect the strong growth trend to continue. The break above the previous peak at 15700 has put the index back on an upward trajectory. A bullish MA cross on the daily chart is a confirmation of the market’s optimism. However, a brief pullback is necessary to let the bulls catch their breath. 15620 is the immediate support. Further down, 15280 is key daily support on the 20-day moving average. The psychological level of 16000 would be the next target rebound.
Silver’s fuse is about to be lit

Silver’s fuse is about to be lit

Korbinian Koller Korbinian Koller 30.10.2021 16:45
The average investor is news-driven. As much as the Federals Reserve  (the Fed) might be criticized, this large investor group is not commonly doubting news. In other words, it has generally believed the Fed’s narrative that inflation is transitory. The bad news is rarely released shortly before Christmas. However, it would not surprise if tapering started in early 2022. And maybe not just begin but be more aggressive throughout the year as expected. With this, the narrative will change from a “we are not worried, it is transitory” to a “we need to deal with” regarding inflation. Therefore, this could easily be the fire to the fuse of the Silver rocket. We now see early signs of such a lift-off in price in recent silver price movements. Silver’s fuse is about to be lit. Silver in US-Dollar, daily chart, low-risk entry points: Silver in US-Dollar, daily chart as of October 30th, 2021. It isn’t only that the overall narrative on transitory inflation is starting to get holes. We like the silver play, for instance because gold is somewhat in the limelight in battle with bitcoin. Consequently, allowing for silver to shine while it is typically in the shadow. On top of it all, we find clear evidence that commodities with industrial use are likely in a long term bull market. This is a play where everything is coming together. A multi stream both in fundamental and technical edges stack upon each other. As of right now, we have identified four low-risk entry points on the daily silver chart, which are marked in bright green horizontal lines. We would take off 50% of the position near the US$26 mark to mitigate risk (see our quad exit strategy). Silver in US-Dollar, weekly chart, good risk reward ratio: Silver in US-Dollar, weekly chart as of October 30th, 2021. The weekly chart offers a low-risk opportunity as well. We illustrated above a play that assumes an entry point in the lower third quadrant of the yellow marked sideways zone. It would provide for a risk/reward-ratio between 1:1 and 1:2 towards the financing point. As well we assume an exit of half of the position at the top near US$28 of the yellow sideways channel (see our quad exit strategy). With two more exits of each 25% of total trade equity at targets US$34.83 and US$48.72, we find the weekly play to be conducive to our low-risk policy.  Silver in US-Dollar, monthly chart, favorable probabilities: Silver in US-Dollar, monthly chart as of October 30th, 2021. With its most considerable weight, the monthly chart provides the necessary overview. It shows how likely a success rate to a long-term play outcome is. We find three dominant aspects supporting our aim for a bullish long-term play. Trend: The linear regression channel is marked in diagonal lines (red, blue, green). It shows a clearly bullish trend with a high likelihood of continuation. Support: The Ichimoku cloud analysis provides solid evidence of support to the recently established bullish tone in silver. Probabilities: Price highs from 1980 to 2011 built a double top price formation. As a result, it prevented prices from getting higher than the price zone marked with a white box. The third attempt of price reaching this price zone nevertheless has a much higher statistical probability of penetrating this distribution zone and allowing the price to go higher. Silver’s fuse is about to be lit: We find ourselves in challenging times. Certainly, not only in market play. One of the essential pillars to come out ahead is bending in the wind and staying flexible. Should the FED indeed raise interest rates to a degree non-reflected in the anticipated market price of speculators and come as a surprise, we might see a stock market decline next year of a substantial percentage. Consequently, this would temporarily drag silver prices down as well. We share methods in our free Telegram channel to build low-risk positions within the market that reduce risk through partial profit-taking. Our quad exit strategy allows us to hedge physical acquisitions by trading around these positions on smaller time frames in the silver paper market. Our approach provides a way to maneuver through a delicate environment to hedge against inflation and preserve wealth. 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 also subscribe to our free newsletter. This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting.
Fed Game Plan

Fed Game Plan

Monica Kingsley Monica Kingsley 02.11.2021 14:54
S&P 500 hesitation against weakening bonds – what gives? The yield curve keeps flattening, but long-dated Treasury yields seem again on the verge of another upswing, which hasn‘t propped up the dollar yesterday much. The only fly in the ointment of a risk-off atmosphere, was value outperforming tech. Overall, stocks haven‘t made much progress, and are vulnerable to a quick downswing attempt, which probably though wouldn‘t come today as the VIX doesn‘t look to favor it. Wednesday, that could be another matter entirely. Still, there is no imminent change to the stock bull run on the horizon – the focus remains on ongoing Fed accomodations, which s why: (…) The bears haven‘t thus far made any serious appearance, and 4,550s held with ease in spite of the dollar reversing Thursday‘s losses. All the more encouraging is the relative strength of both gold and silver when faced with one more daily decline in inflation expectations – as if balancing before the Fed act changes anything. I ask, how serious can they be about delivering on taper promises when prices increase relentlessly (look at Europe too), these are being blamed on supply chain bottlenecks without acknowledging their persistent and not transitory nature, and the real economy is markedly slowing down (not in a recession territory, but still)? Tomorrow‘s Fed taper announcement wouldn‘t change a lot – so much can (and will) happen in the meantime, allowing them to backpedal on the projections, making rate hikes even more of a pipe dream. The Fed isn‘t taking inflation seriously, hiding behind the transitory sophistry, and that‘s one of the key drivers of rates marching up, rising commodities, and surging cryptos. Look for more oil and natgas appreciation while copper goes up again too. Precious metals are still waiting for a catalyst (think dollar weakening when even rising rates won‘t provide much support, and inflation expectations trending up faster than yields) – a paradigm shift in broader recognition of Fed obfuscation and monetary policy being behind the curve. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 is entering a brief consolidation, with 4,590s being first support, followed by the high 4,550s (if the bears can make it there). Given though yesterday‘s sectoral rotation, that‘s not likely happening today. Credit Markets HYG keeps acting really weak, volume is picking up, and buyers aren‘t able to force at least a lower knot. Rising yields aren‘t reflecting confidence in the economic recovery, but arrival of stagflation bets. Gold, Silver and Miners Gold indeed swung higher, but needs more follow through including volume, otherwise we‘re still waiting for the catalysts mentioned at the opening part of today‘s analysis, which would also help the silver to gold ratio move higher. Crude Oil Crude oil keeps going up again,and is likely to extend gains above $84 even as this level presents a short-term resistance. Copper Copper buying opportunity is still here, and the red metal is primed to play catch up to the CRB Index again. Probably not so vigorous as before, and taking more time to unfold, but still. Bitcoin and Ethereum The Bitcoin and Ethereum upswings can and do go on – as stated yesterday, it was a question of a relatively short time when cryptos are done with the sideways correction. Summary S&P 500 is likely to pause today, and the bond market performance would be illuminating. Ideally for the bulls, some semblance of stabilization would occur, tipping the (bullish) hand for tomorrow. That‘s the big picture view - the very initial reaction to taper announcement would likely be disappointing, and eventually reversed. Cryptos, commodities (first oil, then copper) would react best, with precious metals figuring it out only later. Thank you for having read today‘s free analysis, which is available in full 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 five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Lip Service to Inflation, Again

Lip Service to Inflation, Again

Monica Kingsley Monica Kingsley 03.11.2021 14:54
S&P 500 quick downswing attempt indeed didn‘t come – fresh highs were confirmed by bonds. Even if just on a daily basis, that‘s where the bias is – long stocks still, but with a wary eye as Treasuries and corporate bonds need to kick in on a more than daily basis. I‘m taking it as that the bullish expectations for today are really high – so much so that better than expected non-farm employment change resulted in a sell the news reaction. So, how does that line up with today‘s FOMC? Dovish undertones are obviously expected – at least in attempting to sweep the hot inflation under the rug, spinning it somehow else than with the tired transitory horse. Discredited one too. So, how would the taper message be delivered, and could it go as far as $15bn a month asset purchase reduction while avoiding rate hike mentions as much as possible? Even if $15bn is indeed the announced figure, I‘m looking for the Fed to soften it before it can run its course, i.e. before 2H 2022 arrives – the economy isn‘t in such a great shape to take it, and the fresh spending bill (whatever the price tag), needs central bank‘s support too. Let‘s recall my yesterday‘s words about how that‘s likely to translate into market moves: (…) Overall, stocks haven‘t made much progress, and are vulnerable to a quick downswing attempt, which probably though wouldn‘t come today as the VIX doesn‘t look to favor it. Wednesday, that could be another matter entirely. Still, there is no imminent change to the stock bull run on the horizon – the focus remains on ongoing Fed accomodations. Tomorrow‘s Fed taper announcement wouldn‘t change a lot – so much can (and will) happen in the meantime, allowing them to backpedal on the projections, making rate hikes even more of a pipe dream. The Fed isn‘t taking inflation seriously, hiding behind the transitory sophistry, and that‘s one of the key drivers of rates marching up, rising commodities, and surging cryptos. Look for more oil and natgas appreciation while copper goes up again too. Precious metals are still waiting for a catalyst (think dollar weakening when even rising rates won‘t provide much support, and inflation expectations trending up faster than yields) – a paradigm shift in broader recognition of Fed obfuscation and monetary policy being behind the curve. The Fed turning even more dovish than expected, would light the fireworks – they‘re likely to pay lip service to inflation similarly to Jun, but it won‘t pack the same punch. Inflation expectations haven‘t peaked, and the yield curve is about to steepen again as rates would mostly be moving higher. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 keeps rising, and is setting itself up for a brief disappointment. We aren‘t though making a top with capital t. Credit Markets Universal risk-on move in the credit market, on volume that didn‘t disappoint, which just confirms the bulls‘ overall technical advantage. Gold, Silver and Miners Gold downswing left a lot to be desired – we aren‘t likely staring at a true slide next. I actually look for silver (and the cyclically sensitive commodities such as copper, and also oil) to outperform gold in the wake of the Fed move. Crude Oil Crude oil didn‘t move much on a closing basis, but the bulls need more time to retake the reins. Copper Copper really doesn‘t want to decline, and remains slated to play catch up to the CRB Index again. The improving bullish outlook requires just time now – selling volume is drying up, tellingly... Bitcoin and Ethereum Bitcoin and Ethereum bulls haven‘t yielded, and keep the overall technical advantage. Should prices dip below $58K in BTC without solid buying materializing, now that would make me wary. But the Fed won‘t be hawkish., no. Summary Potential S&P 500 bear raid is approaching, and the more dovish the Fed would be, the shallower dip in stocks can be expected. Yes, the bulls keep having the upper hand – credit markets have behaved. As mentioned yesterday, that‘s the big picture view - the very initial reaction to taper announcement would likely be reversed higher. Cryptos, oil, copper would react best, with precious metals figuring it out only later – unless the Fed negatively surprises, in which case cryptos would be prone to wilder swings (but not downside reversal in earnest). Thank you for having read today‘s free analysis, which is available in full 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 five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Intraday Market Analysis – USD Struggles To Bounce Back

Intraday Market Analysis – USD Struggles To Bounce Back

John Benjamin John Benjamin 04.11.2021 08:38
EURUSD claws back lossesThe US dollar fell after the Federal Reserve called for patience on raising interest rates.The pair has met strong resistance at 1.1690, a previous demand zone on the daily chart that has turned into a supply one. The latest sell-off has been contained by 1.1535, near the base of the recent rebound as an oversold RSI attracted some bargain hunters.A surge above the intermediate resistance of 1.1620 would bring in more momentum traders. Then a break above 1.1690 could kickstart a bullish reversal in favor of the euro.XAUUSD tests resistanceGold recovers as the US dollar softens across the board following a neutral FOMC.Price action had previously struggled to clear the supply area around 1810, the origin of the September correction. The subsequent fall below the support at 1785 has prompted buyers to take profit.However, the RSI’s repeated oversold situation has caught buyers’ attention at the daily support at 1760. 1785 is the hurdle ahead and a bullish breakout would resume the recovery. Failing that, the bears may push towards 1740.USOIL falls back for supportWTI crude slipped after the EIA reported a larger increase in US inventories. The psychological level of 85.00 has been an effective hurdle so far.The previous fall below 81.00 has put the bulls on the defensive, especially after their failure to achieve a new high above 84.70. This is a confirmation that sentiment has grown cautious after the price’s recent vertical ascent.The RSI’s overbought situation on the daily chart could call for a pullback. 79.50 is the closest support. Its breach may send the price to 76.50.
S&P 500’s Advance Isn’t Broad-Based, a Topping Pattern?

S&P 500’s Advance Isn’t Broad-Based, a Topping Pattern?

Paul Rejczak Paul Rejczak 01.11.2021 13:36
  The S&P 500 extended its bull market on Friday as it reached the new record high above the 4,600 level. Is this still a topping pattern? The S&P 500 index gained 0.19% on Friday, Oct. 29, as it extended its recent advance following a lower opening of the trading session. It reached yet another new record high of 4,608.08. The stock market was reacting to worse-than-expected quarterly corporate earnings releases from the AAPL and AMZN. However, the MSFT and TSLA stocks drove the index higher again on Friday. The market seems overbought in the short-term most likely it’s still trading within a topping pattern. The nearest important support level is at 4,550-4,570, and the next support level is at 4,520-4,525, marked by the previous daily gap up of 4,520.40-4,524.40. On the other hand, the resistance level is now at around 4,650. The S&P 500 trades along a short-term upward trend line, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Apple Is Volatile While Microsoft Keeps Rallying Let’s take a look at the two biggest stocks in the S&P 500 index, AAPL and MSFT. Apple released its earnings after the Thursday’s close and the first reaction was negative. But on Friday the stock retraced some of its intraday decline. Nevertheless it lost 1.8%. The resistance level remains at $154-156. It is still trading well below the record highs, as we can see on the daily chart: Now let’s take a look at MSFT. It keeps rallying and reaching new record highs after its last week’s Tuesday’s quarterly earnings release. The market remains above a month-long upward trend line. We can see that in the short-term it’s getting more and more technically overbought. The stock may enter a consolidation or a correction just like in the middle of August when it rallied above $300 level. Conclusion The S&P 500 index reached the news record high on Friday, however it closed with a gain of just 0.2%. It still looks like a topping pattern and we may see a consolidation or a downward correction at some point. There may be a profit-taking action following quarterly earnings releases. Today the main indices are expected to open 0.4% higher, but we will likely see an intraday correction later in the day. Here’s the breakdown: The S&P 500 reached new record high on Friday, as it broke slightly above the 4,600 level. A speculative short position is still justified from the risk/reward perspective. We are expecting a 3% or higher correction from the new record highs. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his 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. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members 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.
Crude Eyeing OPEC+ Meeting – Where is Oil Headed?

Crude Eyeing OPEC+ Meeting – Where is Oil Headed?

Sebastian Bischeri Sebastian Bischeri 03.11.2021 15:32
With the OPEC+ meeting on Thursday, oil looks to be in a corrective phase, as pressure is on for more crude. Are we looking at bearish winds ahead? Crude oil prices have started their corrective wave, as we are approaching the monthly OPEC+ group meeting on Thursday, with some market participants now considering the eventuality of a larger-than-expected rise in production. U.S. API Weekly Crude Oil Stock: Inventory levels of US crude oil, gasoline and distillates stocks, American Petroleum Institute (API) via Investing.com Regarding the API figures published Tuesday, the increase in crude inventories (with 3.594 million barrels versus 1.567 million barrels expected) implies weaker demand and is normally bearish for crude prices. Meanwhile, in the United States, the average price of fuel stabilized on Tuesday after several weeks of increase, according to data from the American Automobile Association (AAA), however, that’s 60% higher than a year ago. Chart – WTI Crude Oil (CLZ21) Futures (December contract, 4H chart) In summary, we are now getting some context on how the oil market might develop in the forthcoming days, with some crucial events to monitor as they could have a strong impact on the energy markets, and particularly on the supply side. My entry levels for Natural Gas were triggered on Monday (Nov.1), and I’m updating my WTI Crude Oil projections. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Oil Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Sebastien BischeriOil & Gas Trading Strategist * * * * * The information above represents analyses and opinions of Sebastien Bischeri, & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Sebastien Bischeri and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Bischeri is not a Registered Securities Advisor. By reading Sebastien Bischeri’s 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. Sebastien Bischeri, Sunshine Profits' employees, affiliates as well as their family members 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.
Leading the Taper Run

Leading the Taper Run

Monica Kingsley Monica Kingsley 05.11.2021 15:02
No S&P 500 pause to speak of – bonds support the buying pressure. The broad turn to risk-on has value holding up relatively well while tech remains in the driver‘s seat. The daily weakness in financials looks misleading, and as a function of retreat in yields – I‘m looking for stabilization followed by higher prices. Real estate though is starting to smell a rat – I mean rates, rising rates. Slowly as the Fed didn‘t give the green light, but they would acommodate the unyielding inflation.There was something in the taper announcement for everyone – the hawks are grasping at the possibility to increase taper pace should the Fed start to deem inflation as unpleasantly hot. I wrote about the dovish side I take already on Wednesday when recapping my expectations into the meeting.Coupled with non-farm payrolls coming in above expectations, the table is set to reassure the stock bulls that further gains are possible while the lagging commodities move up. Precious metals would continue recovering from the pre-taper anxiety, and miners with copper kicking back in, would be the confirmation. The dollar should welcome the figure corresponding to yields increase, buying a little more time.One more note on oil – its downswing is positive for the stock bulls as its retreat works to increase disposable income, and in the zero rates environment, kind of acts as a shadow Fed funds rate. Regardless, I‘m standing by the call for triple digit oil prices in 2022.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 fireworks are continuing with improving participation, and the path of least resistance remains higher.Credit MarketsUniversal risk-on move in the credit market still continues, and the long HYG knot isn‘t a sign of a reversal – the bulls merely got ahead of themselves, that‘s all.Gold, Silver and MinersGold easily reversed the pre-taper weakness, and so did silver. I‘m now looking for the miners to catch up, and a good signal thereof would be a fresh commodities upswing. No, CRB Index hasn‘t peaked.Crude OilCrude oil hasn‘t peaked either, and appears attracting buying interest already. While $80 were breached, the commodity is getting ahead of itself on the downside – the oil sector doesn‘t confirm such weakness.CopperCopper has stabilized in the low 4.30s, and an upswing attempt is readying – its underperformance of CRB Index would get reversed.Bitcoin and EthereumBitcoin and Ethereum consolidation goes on, and nothing has changed since yesterday – stabilization followed by slow grind higher is what‘s most likely next.SummaryS&P 500 stands to benefit from real economy revival, earnings projections and taper being conducted in the least disruptive way, apparently. Credit markets have made up their mind, and aren‘t protesting the risk-on sentiment, which has come from a temporary commodities retreat (hello, China). Inflation worries should though still return to the fore as the rising rates aren‘t as much a result of improving economy and yield spreads, which the precious metals are sensing already.Thank you for having read today‘s free analysis, which is available in full 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 five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Target Hit! Another Successful Call on Natural Gas

Target Hit! Another Successful Call on Natural Gas

Sebastian Bischeri Sebastian Bischeri 05.11.2021 15:10
  Have you ever tracked your progress during your oil and gas trading journey and seen such trades? Read on… and come aboard! In the previous edition published last week and updated on Monday, I projected the likelihood of a sturdy support level on the gas market – Henry Hub Natural Gas (NGZ21) Futures – for going long around the $5.268-5.361 zone (yellow band), with a relatively tight stop just below $5.070 and targets at $5.750 and $5.890. So, the market indeed sank just below that band to trigger an entry on Monday, and then it was suddenly pushed back up by the bulls waiting to take over the price to the upward direction. This long trade was also supported by the fundamentals, as the heating needs for the month of November were gradually increasing. The weather forecasts appeared to orientate the demand upwards backed by an uninterrupted demand for Liquefied Natural gas (LNG) US exports. Then, Nat-Gas hit the first target at $5.750 on Wednesday, and stopped at the $5.876 mark – located just $0.014 below the second projected target at $5.890 – on Thursday! Regarding Crude Oil, a new entry, provided to our premium subscribers on Wednesday has just being triggered. The black gold is now attempting to rebound onto that support, which acts as a new floor. Trading Charts Chart – Henry Hub Natural Gas (NGZ21) Futures (December contract, daily chart) Now, let’s zoom into the 4H chart to observe the recent price action all around the abovementioned levels of our trade plan: Chart – Henry Hub Natural Gas (NGZ21) Futures (December contract, 4H chart) In conclusion, my trading approach has led me to suggest some long trades around potential key supports - natural gas recently offered multiple opportunities to take advantage of dips onto those projected levels. If you don’t want to miss any future trading alerts, make sure to look at our Premium Section. Have a nice weekend! Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Oil Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Sebastien BischeriOil & Gas Trading Strategist * * * * * The information above represents analyses and opinions of Sebastien Bischeri, & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Sebastien Bischeri and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Bischeri is not a Registered Securities Advisor. By reading Sebastien Bischeri’s 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. Sebastien Bischeri, Sunshine Profits' employees, affiliates as well as their family members 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.
Meaning Of The Bull Market - The Opposition To The Bear One

Where‘s the Beef?

Monica Kingsley Monica Kingsley 04.11.2021 15:18
S&P 500 embraced the dovish taper - $10bn a month pace gives the Fed quite a breathing room without having to revisit the decision unless markets force it to. The taper is as dovish as can be, with rate raising escaping attention. Talk of no rocking the boat, for the markets, economy and fiscal policy initiatives just can‘t do without. The more dovish scenario of my yesterday‘s presentation came true: (…) So, how would the taper message be delivered, and could it go as far as $15bn a month asset purchase reduction while avoiding rate hike mentions as much as possible? Even if $15bn is indeed the announced figure, I‘m looking for the Fed to soften it before it can run its course, i.e. before 2H 2022 arrives – the economy isn‘t in such a great shape to take it, and the fresh spending bill (whatever the price tag), needs central bank‘s support too. The initial reaction has been very positive in stocks, and overly weak in precious metals and commodities. The real assets downswings are though being reversed in line with my Tuesday‘s expectations – and in today‘s premarket tweets on the unfolding price moves. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 rose without any brief disappointment – the top with capital t clearly isn‘t in, so don‘t think about standing in the bulls‘ way much. Credit Markets Universal risk-on move in the credit market continues, and the sectoral reaction to rising Treassury yields is a very positive one. Bonds and stocks are obviously seeing through the taper fog. Gold, Silver and Miners Gold was afraid of the hawkish outcome, which had zero real chance of happening – and miners spurted higher decisively first. Let‘s see the initial and misleading weakness in real assets being reversed, one by one – and silver do great again. Crude Oil Crude oil has likewise flashed extraordinary weakness – one to be reversed with vengeance. The Fed can‘t print oil, and the energy crunch goes on as nothing has changed yesterday for black gold. Copper Copper gyrations don‘t change the fact the red metal is ready to swing higher next. Just wait for its reaction when broader strength returns to the CRB Index – we won‘t have to wait too long. Bitcoin and Ethereum Bitcoin and Ethereum haven‘t been jubilant about the dovish news, but haven‘t come down beforehand either. Stabilization followed by slow grind higher is what‘s most likely next. Summary S&P 500 benefited the most from the taper message delivery, and the bulls keep having the upper hand – with increasing confirmation from the credit markets. The very initial reaction to taper announcement – namely its bearish anticipation – is indeed being reversed higher within commodities and precious metals. No tantrum, no rocking the boat – and asset prices are going to love that. Get ready for rising yields that would gradually stop underpinning the dollar – patience with the latter. Thank you for having read today‘s free analysis, which is available in full 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 five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Silver, patience pays

Silver, patience pays

Korbinian Koller Korbinian Koller 08.11.2021 08:13
Here is what you should consider when asking why it isn’t trading even higher. First, after an initial up-leg like this, a trend is set in motion, but it is just the beginning of a trend. It needs time to develop. Most of the reasons debated this year when silver stepped into the limelight were the reasons the traders anticipated fueling the first leg. A big part is that it takes time until the public digests the market, which is ahead of reality, a speculative prognosis on how the future might look. There is a trickle-down effect until silver can build up its second leg. From an active market speculator perspective, inflation is real, but years can pass until the crowd realizes what is going on. Then gold needs to move, which in turn awakens silver with a delay. Gold in US-Dollar, monthly chart, bull as bull can be: Gold in US-Dollar, monthly chart as of November 5th, 2021. The monthly gold chart above shows the strong bullish trend in gold over the last twenty years. Telltales are a higher high in 2020 versus 2011, and the price strength since. Gold in US-Dollar, weekly chart, getting ready: Gold in US-Dollar, weekly chart as of November 5th, 2021. The weekly chart has just come alive to an exciting inflection point. A closer look reveals that price has successfully built a second leg from the US$1,680 double bottom price zone (yellow lines). The upcoming weeks should show if a double triangle formation (red lines) was severed now that the price is trading above POC support of a fractal volume study (white line). Silver in US-Dollar, weekly chart, looking good: Silver in US-Dollar, weekly chart as of November 5th, 2021. The weekly silver chart is bullish as well. Bulls have successfully defended the yearly range lows zone (slim white box). They mutually are attacking an overhead resistance with quite some might, and upcoming weeks might find price successful in that attempt. Silver in US-Dollar, monthly chart, history as a guide: Silver in US-Dollar, monthly chart as of November 5th, 2021. The above monthly chart shows an excellent example of how much patience is needed to earn significant profits from a silver investment. In this case, silver initiated a range break in 1973, where prices tripled within a year. Much like silver’s recent move from March last year to the current top in February this year. It showed a similar percentage move. This first leg of a bullish trend required more than three years of investor’s patience before the second leg was initiated. Those patient enough to hold on were rewarded with a near thousand percent price increase.   Silver, patience pays: “It never was my thinking that made the big money for me. It always was my sitting.”Nothing has changed in the last hundred years about the principle value of this quote by Edwin Lefèvre (Reminiscences of a Stock Operator, published in 1923). We are used to active participation in a process to earn one’s wages. In this aspect however, the market is counterintuitive. “The desire for constant action irrespective of underlying conditions is responsible for many losses in Wall Street even among the professionals, who feel that they must take home some money every day, as though they were working for regular wages.” Lefèvre again points towards patience and a state of inactivity being just right in market play. We find the last phase of silver in a sideways range if anything is encouraging to a substantial second leg up in the making, It will therefore reward the patient owner of his physical holdings. 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 also subscribe to our free newsletter. This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting.
Intraday Market Analysis – AUD Seeks Support

Intraday Market Analysis – AUD Seeks Support

John Benjamin John Benjamin 03.11.2021 08:48
AUDUSD breaks lower The Australian dollar softened after a dovish RBA stressed that inflation was still too low to hike soon. The pair has met stiff selling pressure near last July’s high of 0.7550. While sentiment has turned positive from the daily chart’s perspective, an overbought RSI has made buyers cautious. The drop below 0.7490 then 0.7450 has forced out leveraged positions, exacerbating the downward pressure. 0.7380 on the 30-day moving average would be the next support. An oversold RSI may attract bids in this congestion area. NZDUSD retreats from double top The New Zealand dollar bounced back after the Q3 unemployment rate fell to 3.4%. A double top at 0.7220 suggests exhaustion in the kiwi’s ascent after the RSI repeatedly pointed to an overbought situation. A break below 0.7130 indicates that the bears have gained the upper hand, pushing the opposing side to close their bets. The previous supply zone around 0.7070 has turned into a demand zone. This coincides with the 30-day moving average, and along with an oversold RSI, it may gain support from a buy-the-dips crowd. UK 100 tests demand zone The FTSE 100 consolidates gains as investors turn their attention to the US Federal Reserve meeting. The bulls are looking to get a foothold after a close above the August peak at 7240. The RSI’s double top in the overbought zone is a sign of overextension in the short term. Trend followers may look to stake in at the psychological level of 7200, a key demand zone on the 20-day moving average. A bearish breakout would deepen the pullback to 7140. On the upside, a rebound above 7310 would resume the rally.
Intraday Market Analysis – GBP Struggles For Support - 05.11.2021

Intraday Market Analysis – GBP Struggles For Support - 05.11.2021

John Benjamin John Benjamin 05.11.2021 08:51
GBPUSD tests key floor The pound plummeted after the Bank of England held interest rates against expectations. The plunge below the daily support at 1.3570 has caught buyers off guard. Those who bet on a rebound around 1.3600 have rushed to the exit, raising volatility in the process. The September low at 1.3430 would be the next target. An oversold RSI may attract some buying interest, though buyers might be cautious to avoid catching a falling knife. The supply zone between 1.3640 and 1.3700 could keep the sterling under pressure. USDJPY consolidates gains The US dollar consolidates recent gains as traders digest the start of the Fed’s taper. The pair is seeking support around the 20-day moving average after a parabolic rise sent it to a four-year high. An overbought RSI from the daily chart is a sign of exhaustion and traders may be reluctant to push higher. The greenback has found bids along the demand zone over 113.30. The bulls need to clear the fresh hurdle at 114.45 before they could resume the uptrend. A bearish breakout would trigger a sell-off towards 112.50. US 500 grinds to new highs The S&P 500 continues to climb as the Fed deliberately leaves rate hikes off the table. The rally has gained momentum after the index cleared the previous peak at 4550. Sentiment remains bullish, but an overbought RSI in the daily timeframe may call for a pause. Overextension is also on the hourly chart as the RSI repeatedly ventures above 70. The bulls are pushing towards the psychological level of 4700. 4620 on the 30-hour moving averages may attract trend followers’ bids in case of a pullback.
Here We Go Again - Gold Simply Can’t Stand $1,800!

Here We Go Again - Gold Simply Can’t Stand $1,800!

Arkadiusz Sieron Arkadiusz Sieron 02.11.2021 15:05
  The yellow metal couldn’t face the downward pressure and declined abruptly on Friday. What happened, and why did it fail? Friday was a brutal time for gold. The price of the yellow metal dropped sharply from around $1,795 to $1,775 in the early morning hours in the US. Am I surprised? Not at all. In Thursday’s edition of the Fundamental Gold Report, I wrote that “gold may struggle until the Fed’s tightening cycle starts. You have been warned!”, and, as if on cue, gold wasn’t able to maintain its position around $1,800 and declined. Actually, gold prices have been testing and failing to hold this key psychological level for the last three weeks. What exactly happened on Friday? Well, the Bureau of Economic Analysis published the report on personal income and outlays in September 2021. The publication shows that U.S. nominal consumer spending increased 0.6%, while the disposable personal income declined 1.3%, reflecting a decrease in government social benefits. Additionally, the annual rate of change in personal consumption expenditures price index accelerated from 4.2% in August to 4.4% in September (see the chart below), the highest pace since January 1991. Wait. Inflation rose, but gold prices declined? Exactly. Inflation is fundamentally positive for gold in the long run, but so far – as I explained last week – “inflationary worries have been counterweighted by the expectations of the Fed’s tightening cycle”. The relationship is simple: higher inflation translates into higher expectations of a more hawkish Fed. The odds of an interest rate hike in June 2022 increased from 23.1% - recorded at the end of September - to 61.6% on October 22 and 65.7% on October 29, 2021. As a result, the bond yields increased, while the greenback strengthened. There is also another possible driver of rising interest rates and an appreciating US dollar. CPI inflation in the euro area accelerated to 4.1% in October from 3.4% in September, reaching the highest value since July 2008. However, the ECB kept its monetary policy unchanged last week despite quickly rising prices. Moreover, it’s not signaling any tightening of its stance, maintaining that high inflation is transitory even though Christine Lagarde acknowledged that the decline in inflation would take longer than the central bank had initially expected. The point here is that the ECB remains an outlier among central banks, which either have already tightened or signaled tightening of their monetary policy. This means that the US dollar is likely to appreciate against the euro, which should be another headwind for gold. Having said that, this scenario will occur if the markets believe in a dovish stance of the EBC. The rising yields on German bonds indicate that the markets don’t entirely trust Lagarde’s rhetoric and expect a more hawkish stance of the ECB, which would be fortunate for gold.   Implications for Gold What does higher US inflation imply for the gold market? Well, not so much in the short run. Even though I’ve seen some signs of a bullish revival in the gold market, the bulls remain too weak to challenge the $1,800 level. That’s too much, man! Luckily, better times are coming for gold. Have you seen the advance estimates of the durable goods orders (0.4% decline in September) or of the GDP in the third quarter of this year? According to the BEA, real GDP increased at an annual rate of 2.0% (annualized quarterly growth), much below the 6.7% reported in Q2 and much below the expectations of 2.8% growth. When it comes to the annual percentage growth year-over-year, real GDP rose 4.9% compared to 12.2% in Q2, as the chart below shows. So, the pace of growth remains historically fast, but it’s decelerating quickly. Given that the economy has already reopened and energy and transportation crises are hurting growth (not to mention inflation wreaking havoc), we should expect a further slowdown on the way. And this brings us closer to… yes, you guessed it, stagflation. To be clear: we are still far from stagnation, but the economic slowdown after a spectacular post-pandemic recovery is already unfolding. When we add it to high inflation, we should get an environment supportive of gold prices. However, supportive factors won’t be able to fully operate until the Fed starts hiking interest rates and gold prices bottom out. Sometimes one needs to hit rock bottom to succeed later; perhaps that’s also the case with gold. Time will tell. If you enjoyed today’s free gold report, we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today. If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care
Article by Decrypt Media

Gold and Stocks Keep Rallying

Kseniya Medik Kseniya Medik 28.10.2021 14:10
Latest news US broad-market indexes such as S&P 500 and Nasdaq are still near all-time highs, supported by robust corporate earnings. Microsoft, Google, Coca-Cola, and McDonald’s have beat analysts’ estimates this week. Today, we expect earnings from Apple, Amazon, and MasterCard. Look at these amazing movements! The Bank of Japan left the policy unchanged. The bank also cut its economic growth forecast because of the weak consumption and supply disruptions caused by the COVID-19 pandemic. Crude Oil Inventories disappointed oil bulls with the hike in oil inventories. XBR/USD (Brent oil) and XTI/USD (WTI oil) dropped. Traders are awaiting the European Central Bank policy meeting today at 14:45 GMT+3. Besides, the US GDP will be out at 15:30 GMT+3. Technical analysis Gold keeps moving inside the ascending channel. It has surged above the psychological mark of $1800 and edged higher to the high of October 25 at $1810. If it manages to jump above this resistance level, the metal will rocket to the next round number of $1820. Support levels are the 200-day moving average of $1792 (which also lies at the lower line of the channel) and the 50-day moving average of $1780. AUD/USD has surged above the resistance level of 0.7500. It will struggle to break the next resistance level of 0.7535, but if it manages to break it, the way up to the four-month high of 0.7600 will be open. Support levels are 0.7500 and the low of October 22 at 0.7460. Download the FBS Trader app to trade anytime anywhere! For personal computer or laptop, use MetaTrader 5!
A New Profitable Call on Crude Oil: “The Yoyo-Trade”

A New Profitable Call on Crude Oil: “The Yoyo-Trade”

Sebastian Bischeri Sebastian Bischeri 08.11.2021 16:54
Was the adage "buy the rumor, sell the news" also verified with that new trading position? It was Thursday (Nov. 4) that the following rumor had flourished: a possible coordinated action which was supposed to consist of drawing on the strategic reserves of several countries, including the United States, which were leading the dance. Meanwhile, our subscribers were just getting ready to go long around the $76.57-79.65 support zone (yellow band), with a stop placed on lower $76.48 level (red dotted line) and targets at $81.80 and $83.40 (green dotted lines). As a result, oil prices had contracted in stride (trading just into our entry area), just before the rumor effect faded shortly on Friday (Nov. 5), to push them back up. In fact, with oil prices picking up momentum on Friday, once again settling firmly above $80 per barrel, and with a market still showing doubts on the possible use of strategic crude reserves, the proposed trade entry on the black gold, triggered on Thursday – following my last post – was thus profitable since it already turned into a partial profit-taking at the end of the week. Then, on Saturday, Joe Biden said that his administration had the means to cope with the rise in energy prices, in particular after the OPEC+'s decision not to raise their production to more than 400,000 barrels per day. in a context of global imbalance between supply and demand. In addition, Joe Biden also insinuated that the organization (and its allies) might actually not do its best to pump enough volume of crude oil. Trading Charts Chart – WTI Crude Oil (CLZ21) Futures (December contract, daily chart) Now, let’s zoom into the 4H chart to observe the recent price action all around the above-mentioned levels of our trade plan: Chart – WTI Crude Oil (CLZ21) Futures (December contract, 4H chart) In summary, my trading approach has led me to suggest some long trades around potential key supports, as this dip on crude oil offered a great opportunity for the bulls to enter long whilst aiming towards specific projected targets. If you don’t want to miss any future trading alerts, make sure to look at here. . Moreover, for those interested in Forex trading, please note that I am currently preparing some new series about the co-existing links and relationships between commodities and currencies. Stay tuned – happy trading! Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Oil Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Sebastien BischeriOil & Gas Trading Strategist * * * * * The information above represents analyses and opinions of Sebastien Bischeri, & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Sebastien Bischeri and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Bischeri is not a Registered Securities Advisor. By reading Sebastien Bischeri’s 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. Sebastien Bischeri, Sunshine Profits' employees, affiliates as well as their family members 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.
Getting Back To Risky Assets As A Result Of Russian Move?

Calling the Precious Metals Bull

Monica Kingsley Monica Kingsley 08.11.2021 16:54
S&P 500 paused to a degree, but bonds didn‘t – we‘re far from a peak. That though doesn‘t mean a brief correction (having a proper look at the chart, sideways consolidation not reaching more than a precious couple of percentage points down) won‘t arrive still this month. It‘s a question of time, and I think it would be driven by tech weakness as the sector has reached lofty levels. It‘ll go higher still, but this is the time for value and smallcaps. And when the dollar starts rolling over to the downside (I‘m looking at the early Dec debt ceiling drama to trigger it off), emerging markets would love that. And commodities with precious metals too, of course – sensing the upcoming greenback weakness has been part and parcel of the gold and silver resilience of late. Precious metals are only getting started, but the greatest fireworks would come early spring 2022 when the Fed‘s failure to act on inflation becomes broadly acknowledged. For now, they‘re still getting away with the transitory talking points, and chalking it down to supply chain issues. As if these could solve the balance sheet expansion or fresh (most probably again short-dated) Treasuries issuance (come Dec) – the Fed is also way behind other central banks in raising rates. Canada, Mexico and many others have already moved while UK and Australia are signalling readiness – the U.S. central bank is joined by ECB in hesitating. Don‘t look for the oil breather to last too long – black gold is well bid above $78, and hasn‘t made its peak in 2021, let alone 2022. As I wrote on Friday, its downswing that works to increase disposable income (serving as a shadow Fed funds rate in the zero rates environment), would prove short-lived. The real economy would have to come to terms with stubbornly high oil prices – and it will manage. The yield curve is starting to steepen modestly again, and fresh spending initiatives would breathe some life into the stalling GDP growth. Next year though, don‘t be surprised by a particularly weak (even negative) quarterly reading, but we aren‘t there by a long shot, I‘m telling you. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 looks getting ripe for taking a pause – the rising volume isn‘t able to push it much higher intraday. Credit Markets HYG strength indeed continues, and it‘s a good sign that quality debt instruments are joining – the reprieve won‘t last long though (think a few brief weeks before rates start rising again). Gold, Silver and Miners Gold and silver continue reversing the pre-taper weakness, and miners are indeed joining in. I‘m looking for more gains with every dip being bought. Crude Oil Crude oil hasn‘t peaked, and looks getting ready to consolidate with a bullish bias again. $85 hasn‘t been the top, and the energy sector remains primed to do well. Copper Copper is deceptively weak, and actually internally strong when other base metals are examined. As more money flows into commodities, look for the red metal to start doing better – commodities haven‘t topped yet. Bitcoin and Ethereum Bitcoin and Ethereum consolidation has come to an end, and the pre-positioned bulls have a reason to celebrate as my prior scenario– stabilization followed by slow grind higher is what‘s most likely next – came to fruition. Summary S&P 500 breather is a question of time, but shouldn‘t reach far on the downside – the credit markets don‘t support it. Commodities are catching up in the (dovish as assessed by the markets too) taper aftermath, and precious metals are sniffing the dollar‘s weakness a few short weeks ahead. With fresh money not needed to repair commercial banks‘ balance sheets, it flows into the financial markets, and the taper effects would be negated by the repo operations – yes, I‘m not looking for a liquidity crunch. Thank you for having read today‘s free analysis, which is available in full 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 five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
USD Index: Are New Milestones in the Cards?

USD Index: Are New Milestones in the Cards?

Przemysław Radomski Przemysław Radomski 08.11.2021 16:54
While the greenback's failed breakout on Nov. 4th may seem bearish, it faced a similar situation in August and October, only to recover and achieve new highs. After the USD Index’s negative response to the ECB’s monetary policy meeting on Oct. 28, I warned on Oct. 29 that dollar bears were unlikely to celebrate for much longer. I wrote: Based on the rather random comment during the conference, the traders panicked and bought the EUR/USD, which triggered declines in the USD Index (after all, the EUR/USD is the largest component of the USDX). Was the breakout to new 2021 lows invalidated? No. The true breakout was above the late-March highs (the August highs also served as a support level, but the March high is more important here) and it wasn’t invalidated. What was the follow-up action? At the moment of writing these words, the USDX is up and trading at about 93.52, which is just 0.07 below the August high in terms of the closing prices. Consequently, it could easily be the case that the USD Index ends today’s session (and the week) back above this level. You’ve probably heard the saying that time is more important than price. It’s the end of the month, so let’s check what happened in the case of previous turns of the month; that’s where we usually see major price turnarounds. I marked the short-term turnarounds close to the turns of the month with horizontal dashed blue lines, and it appears that, in the recent past, there was practically always some sort of a turnaround close to the end of the month. Consequently, seeing a turnaround (and a bottom) in the USD index now would be perfectly normal. And after the forecast turned into reality, the USD Index surged above 94 and remains poised to resume its uptrend over the medium term. To explain, if we zoom in on the four-hour chart, it highlights the importance of the price action on Nov. 5. During the session, the USD Index hit a new 2021 intraday high before a small reversal occurred. This might seem bearish at the first sight (it’s a failed breakout, after all)… However, similar developments were also present in August and October. After the dollar basket attempted to make new highs and failed, the greenback eventually regained its composure and achieved the milestones. As a result, another 2021 high should occur sooner rather than later. Please see below: The first failed attempt to break above the previous highs triggered sizable short-term declines. This happened in August (marked with red). The second – September – attempt triggered only a small correction (marked with green) that was then followed by a bigger rally. Similarly, the – marked with red – October invalidation was followed by a sizable decline, and the current one (marked with green), is relatively small. And it’s likely to be followed by a short-term rally, just like the September correction was. On top of that, as you can see on the below chart, the current setup for the USD Index and gold mirrors what we witnessed in early August. Following its sharp summertime rally, the USD Index moved close to its 50-day moving average without reaching it. And after buyers stepped in, the USD Index resumed its uptrend and made a new 2021 high. Moreover, with a similar pattern and a similar reading on the USD Index’s RSI (Relative Strength Index) present today, the greenback’s outlook remains robust. I marked both cases with red, vertical, dashed lines below. More importantly, though gold, silver, and mining stocks’ upswings concluded once the USD Index bottomed close to its 50-day moving average in August and sharp drawdowns followed. Moreover, while gold, silver, and mining stocks’ recent rallies were likely underwritten by expectations of a weaker USD Index (it did fail to move to new highs, right?) , technical (as described above and below) and fundamental realities contrast this thesis. As a result, the 2021 theme of ‘USD Index up, PMs down’ will likely resume over the medium term. Please see below: Equally bullish for the greenback, the Euro Index remains overvalued and should suffer a material drawdown over the medium term. For example, the index’s previous lows, its 50-day moving average, and its declining resistance line combined to create major resistance and the Euro Index is now retesting its 2021 lows. As a result, the next temporary stop could be ~1.1500 (the March 2020 highs, then likely lower). For context, the EUR/USD accounts for nearly 58% of the movement of the USD Index, and that’s why the euro’s behavior is so important. Please see below: Adding to our confidence (don’t get me wrong, there are no certainties in any market; it’s just that the bullish narrative for the USDX is even more bullish in my view), the USD Index often sizzles in the summer sun and major USDX rallies often start during the middle of the year. Summertime spikes have been mainstays on the USD Index’s historical record and in 2004, 2005, 2008, 2011, 2014 and 2018 a retest of the lows (or close to them) occurred before the USD Index began its upward flights (which is exactly what’s happened this time around). Furthermore, profound rallies (marked by the red vertical dashed lines below) followed in 2008, 2011 and 2014. With the current situation mirroring the latter, a small consolidation on the long-term chart is exactly what occurred before the USD Index surged in 2014. Likewise, the USD Index recently bottomed near its 50-week moving average; an identical development occurred in 2014. More importantly, though, with bottoms in the precious metals market often occurring when gold trades in unison with the USD Index (after ceasing to respond to the USD’s rallies with declines), we’re still far away from that milestone in terms of both price and duration. Moreover, as the journey unfolds, the bullish signals from 2014 have resurfaced once again. For example, the USD Index’s RSI is hovering near a similar level (marked with red ellipses), and back then, a corrective downswing also occurred at the previous highs. More importantly, though, the short-term weakness was followed by a profound rally in 2014, and many technical and fundamental indicators signal that another reenactment could be forthcoming. Please see below: Just as the USD Index took a breather before its massive rally in 2014, it seems that we saw the same recently. This means that predicting higher gold prices (or the ones of silver) here is likely not a good idea. Continuing the theme, the eye in the sky doesn’t lie. And with the USDX’s long-term breakout clearly visible, the wind still remains at the dollar’s back. Please see below: The bottom line? With my initial 2021 target of 94.5 already hit, the ~98 target is likely to be reached over the medium term, and the USDX will likely exceed 100 at some point over the medium or long term. Keep in mind though: we’re not bullish on the greenback because of the U.S.’ absolute outperformance. It’s because the region is fundamentally outperforming the Eurozone, the EUR/USD accounts for nearly 58% of the movement of the USD Index, and the relative performance is what really matters. In conclusion, the USD Index remains in the driver’s seat and new highs should materialize over the medium term. And while gold, silver and mining stocks have rode the S&P 500 higher recently, history has been unkind when the precious metals ignore technical and fundamental realities. Moreover, with gold, silver, and mining stocks’ strong negative correlations with the U.S. dollar standing the test of time, it’s likely only a matter of time before investors realize this as well. 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, CFAFounder, 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.
The uncertain certainty of bitcoin

The uncertain certainty of bitcoin

Korbinian Koller Korbinian Koller 09.11.2021 10:24
Some might argue that it is best to sit on one’s hands and wait for a time when bitcoin prices are suppressed, and they have a point with the possibility of a market crash. And then again, they might have said that already when bitcoin was still trading at US$3,000 (we do not find it likely that bitcoin will ever retrace to those levels again.). Where are the uncertainties in bitcoins certainty? When you dissect a complex mechanism, you will always find a problem. It is like going to the bakery. It would be foolish to expect to get anything else but bread. Maybe it is better to look at a glass half full, meaning why not look at why bitcoin could be a certainty? BTC in US-Dollar, Monthly Chart, every buyer is a winner if he didn’t sell: Bitcoin in US-Dollar, Monthly chart as of November 9th, 2021. The monthly chart above certainly shows that whoever bought in the past has made a profit by now. Yet, we know “hodling” isn’t an easy thing. Personal risk appetite determines the number of bitcoin that can be held throughout these boom and bust cycles. We solved this dilemma through our quad exit strategy. And we teach low-risk position size building in our free telegram channel. BTC in US-Dollar, Weekly Chart, new all-time highs: Bitcoin in US-Dollar, Weekly chart as of November 9th, 2021. Now, moving forward to real-time, we can make out a similar bullish picture on the weekly chart after our glimpse in the past. Recent events provide data that substantiates bitcoin’s long-term certainty. A look at the last two weeks of October (marked in white) reveals a very brief battle with a minimal retracement level at the double top of all-time highs. Bears barely get a foot in the door, where typically bitcoin experiences significant retracements. To us, a clear sign that the rush is on. Big player money is now rushing to accumulate the necessary size they aim to hold on their books for the long term. Consequently, reducing volatility, one of the most feared aspects of bitcoin, which in times to come will attract more market players to this trading vehicle.   BTC in US-Dollar, Monthly Chart, six figures in 2022: Bitcoin in US-Dollar, Monthly chart as of November 9th, 2021. A look into the future from a monthly chart perspective is confidence building as well. With new all-time high prices printing at the time of publication of this chart book, our bet is still on bitcoin with a 63% over 47% chance that prices will advance from here rather than retracing to a substantially lower price level. So far, bitcoin has done nothing else but eradicate the uncertainties placed in its way. The most stubborn doubter would likely be happy if they had picked up a few coins when they traded at a dollar. What provides confidence for our forecast is the confirmation that bitcoin price retracements are now more modest. This lets us assume that the number of professional traders participating in this market has increased. In the monthly chart above, you can make out that closing prices of the month’s May, June, and July this year closed above the 50% Fibonacci retracement levels. A conservative retracement for bitcoins historical standards. We project for the near term that bitcoin will reach six-figure prices in mid-February next year. The uncertain certainty of bitcoin: From the anticipatory perspective, it seems evident that holding bitcoin is a prudent move with a look into the future. A hedge is needed once the risk is apparent to all, and the house of cards will tumble.  From a real-time perspective, we also find bitcoin to be a “must-own.” The charts above showed the strength with which bitcoin is aching to claim its turf, and it is never good to wait till “fear of missing out” kicks in, and low-risk entry opportunities become scarce.  And from a reactionary perspective, a look in the past, it is evident that anybody would like a piece of the action where bitcoin has nothing but a stunning history of unheard percentage moves and made it from eight cents to US$ 67,000 in just a dozen years.  There are always uncertainties in speculative ventures, but bitcoin itself is a certainty, not to be rationalized away for the years to come. 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. This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting. By Korbinian Koller|November 9th, 2021|Tags: Bitcoin, bitcoin consolidation, Bitcoin mining, crypto analysis, Crypto Bull, crypto chartbook, crypto mining, low risk, quad exit, technical analysis, trading education|0 Comments About the Author: Korbinian Koller Outstanding 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.
Bitcoin is climbing undeterred higher

Bitcoin is climbing undeterred higher

Korbinian Koller Korbinian Koller 02.11.2021 11:02
Bitcoin is volatile and nosedives in some of these attacks. A historical look back illustrates how bitcoin each time is climbing higher right after: 2009 traded for free (zero value) between enthusiasts 2010 worth US$0.08 2011 from US$1 up to US$32 back down to US$2 2012 from US$4.80 up to US$13.20 2013 from US$13.40 up to US$1,156 and down to US$760 2014 – 2016 down to US$315 2017 up to US$20,089 2018 down to US$3,122 2019 up to US$13,880 2020 up to US$34,800 2021 up to US$67,016 And these last three years, bitcoin has been climbing higher, undeterred. BTC in US-Dollar, Monthly Chart, bitcoin, a true winner: Bitcoin in US-Dollar, Monthly chart as of November 2nd, 2021. The monthly chart above illustrates bitcoin’s winning characteristics. We can see harmonious swings. Retracements are substantial, but bitcoin shows a persistent tendency to outperform previous all-time highs. BTC in US-Dollar, Weekly Chart, explosive recent history: Bitcoin in US-Dollar, Weekly chart as of November 2nd, 2021. The weekly chart points towards more explosive moves recently. After a breakout of a multi-year range, we can see that bitcoin has started to move substantially due to more widespread adoption. Swing behavior is getting more harmonious. At the moment, we are in the midst of a battle between bears and bulls at a double top formation. Consequently, the following days to weeks will show who will come out ahead. The fact that bulls cling to their winnings for this long gives price in this pat situation a slight edge for the bullish corner.   BTC in US-Dollar, Daily Chart, stepping away from the noise: Bitcoin in US-Dollar, Daily chart as of November 2nd, 2021. The daily chart can be pretty volatile. These smaller time frames are advised only to be traded if you are a professional. This applies particularly to struggle zones like the one we are currently in, for instance. Intraday swings can get substantial. In addition, once these battles between bears and bulls resolve, daily percentage moves can be staggering. Luckily, one doesn’t need to fear such challenging trading environments. To clarify, step up to larger time frames and reduce trade frequency and position size. Accept the risk based on adequate position size to your individual psychology and risk appetite. Consequently, buying for the long term will become much easier. It is essential as such to be familiar with a trading object’s typical behavior and, in bitcoins case, not to forget its ability to shine after a major setback. Bitcoin is climbing undeterred higher: Overall, bitcoins’ technical personality makes it an easy choice for one’s wealth preservation portfolio. Especially when options for wealth preservation investments are limited! This year’s strength towards gold and silver price performance had us increase bitcoins percentage allocation within the long-term portfolio. It fulfills two valuable functions to firmly find its place under historically much longer established counterparts. Scarcity for stability, and a more considerable performance potential necessary to protect against inflation. 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. This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting.
Gold, Silver, and Miners Just Can’t Jump

Gold, Silver, and Miners Just Can’t Jump

Przemysław Radomski Przemysław Radomski 03.11.2021 15:17
Let’s face it, the metals are not having an easy time breaking out. Short-term rallies end up going nowhere and bearish signs are still in abundance. Yesterday’s session was once again quite informative, and so is today’s pre-market trading. In yesterday’s analysis, I emphasized the importance of the relative weakness that we just saw in mining stocks, so let’s start with taking a look at what mining stocks did yesterday. At first glance, yesterday’s performance might look like a bullish reversal, but zooming in clarifies that something else was actually in the works. Let’s take a look at the GDXJ 1-hour candlestick chart for details. Yesterday’s “reversal” was actually a breakdown below the previous (mid-October) intraday lows along with the verification thereof. The GDXJ moved below the above-mentioned lows and – while it moved back up – it ended the session below them. This is a bearish type of session. Also, if you were wondering about the high volume in the final hour of trading – that’s relatively normal as that’s when bigger trades tend to take place. And while mining stocks were busy verifying the breakdown, gold tried to break above its declining, red resistance line, and verify that breakout. While yesterday’s session didn’t bring much lower gold prices (and the invalidation), today’s pre-market trading makes it clear that the attempt to break higher failed. Just like I had indicated yesterday. This time the rising short-term support line is not there to prevent further declines as the breakdown below it was also confirmed. What does it mean? It means that gold is likely to fall, and quite likely it’s going to fall hard. Besides, silver price is after a major short-term breakdown, too. After a powerful short-term rally, silver had reversed, and now it broke below its rising support line. That’s yet another bearish indication. Please note that at first silver was reluctant to decline while mining stocks moved decisively lower, which was normal during the early part of a given decline. Silver did some catching-up action yesterday, but since miners are not showing strength, I’d say that we’re getting to the regular part of a short-term move, not close to its end. And the move lower is likely to continue, just as the move higher is likely to continue in case of the USD Index. The USDX is after a verification of the breakout to new 2021 highs and after an about monthly consolidation above them. This is a perfect starting point for a major upswing, and we’re likely to see one soon. All in all, while the outlook for the precious metals sector is very bullish for the following years, it’s very bearish for the following weeks. 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, CFAFounder, 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.
Great Profitable Runs

Great Profitable Runs

Monica Kingsley Monica Kingsley 09.11.2021 15:04
S&P 500 pause goes on, and bonds support more of it to come. Tech keeps thus far the high ground gained, but value is showing signs of very short-term weakness – and yields haven‘t retreated yesterday really. The correct view of the stock market action is one of microrotations unfolding in a weakening environment – one increasingly fraught with downside risks. To be clear, I‘m not looking for a sizable correction, but a very modest one both in time and price. It‘s a question of time, and I think it would be driven by tech weakness as the sector has reached lofty levels. It‘ll go higher over time still, but this is the time for value and smallcaps in the medium term.The dollar though isn‘t putting much pressure on stock, commodity or precious metals prices at the moment – such were my yesterday‘s words:(…) when the dollar starts rolling over to the downside (I‘m looking at the early Dec debt ceiling drama to trigger it off), emerging markets would love that. And commodities with precious metals too, of course – sensing the upcoming greenback weakness has been part and parcel of the gold and silver resilience of late. Precious metals are only getting started, but the greatest fireworks would come early spring 2022 when the Fed‘s failure to act on inflation becomes broadly acknowledged.For now, they‘re still getting away with the transitory talking points, and chalking it down to supply chain issues. As if these could solve the balance sheet expansion or fresh (most probably again short-dated) Treasuries issuance (come Dec) – the Fed is also way behind other central banks in raising rates. Canada, Mexico and many others have already moved while UK and Australia are signalling readiness – the U.S. central bank is joined by ECB in hesitating.And that‘s what precious metals would be increasingly sniffing out. Commodities are joining in the post-taper celebrations, and my prior Tuesday‘s market assessments are coming to fruition one by one. Oil is swinging higher and hasn‘t topped, copper is coming back to life, and cryptos aren‘t in a waiting mood either.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 pause is here, and all that‘s missing, is emboldened bears. They may or may not arrive given that VIX keeps looking lazy these days – either way, the risks to the downside are persisting for a couple of days at least still.Credit MarketsHYG strength evaporated, but it‘s on a short-term basis only. The broader credit market weakness would get reversed, but it‘s my view that quality debt instruments would be lagging.Gold, Silver and MinersGold and silver continue reversing the pre-taper weakness – the upswing goes on, but is likely to temporarily pause as the miners‘ daily weakness foretells. Still, I‘m looking for more gains with every dip being bought.Crude OilCrude oil bulls continue having the upper hand, no matter the relative momentary stumble in maintaining gains – the energy sector hasn‘t peaked by a long shot.CopperCopper is participating in the commodities upswing – not too hot, not too cold. Just right, and it‘s a question of time when the red metal would start visibly outperforming the CRB Index again.Bitcoin and EthereumBitcoin and Ethereum consolidation has indeed come to an end, and both leading (by volume traded) cryptos are primed for further gains. SummaryS&P 500 breather remains a question of time, but shouldn‘t reach far on the downside – the bears are having an opportunity to strike as credit markets have weakened, and there isn‘t enough short-term will in tech to go higher still. The very short-term picture in stocks is mixed, but downside risks are growing. The dollar is already weakening, much to the liking of commodities and precious metals – there is still enough liquidity in the markets as any taper can be easily offset by withdrawing repo money sitting on the Fed‘s balance sheet.Thank you for having read today‘s free analysis, which is available in full 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 five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Intraday Market Analysis – Euro Attempts To Bounce

Intraday Market Analysis – Euro Attempts To Bounce

John Benjamin John Benjamin 10.11.2021 08:58
EURUSD meets resistance The euro finds support from an upbeat economic sentiment from across the block. The pair has met buying interest in the demand zone around 1.1520. A bullish RSI divergence suggests that sellers may have taken their feet off the pedal. Subsequently, a break above 1.1560 prompted the short side to cover. 1.1615 is a key supply zone from last week’s sell-off, after which the bulls need to lift offers near 1.1690 before a reversal could gain traction. On the downside, a fall below 1.1550 may call the rebound into question. XAGUSD awaits breakout Bullions rise as the US dollar retreats ahead of the release of inflation data. A bullish MA cross on the daily chart is a sign that sentiment could be turning around. Silver is testing the September high of 24.80. A bullish breakout would trigger an extended rally towards 26.00. However, the RSI’s double top in the overbought area has held buyers back as the market awaits new catalysts. A combination of profit-taking and fresh selling could drive the price lower. The base of a previous breakout at 23.70 would be a support. US 500 seeks support The S&P 500 consolidates gains over strong corporate earnings and improved economic outlook. The divergence between the 20 and 30-day moving averages indicates an acceleration in the rally. Though there is a chance of a pullback after the RSI shot into the overbought area. The bullish bias means that buyers may be eager to jump in during a correction. The index is hovering above 4660. 4625 on the 20-day moving average would be the second line of defense. On the upside, a rebound would lead to 4750.
How Strange! Gold Rises on Strong Payrolls!

How Strange! Gold Rises on Strong Payrolls!

Arkadiusz Sieron Arkadiusz Sieron 09.11.2021 15:20
US economy added 531,000 jobs in October, surpassing expectations. Gold reacted… in a bullish way, and jumped above $1,800! The October nonfarm payrolls came surprisingly strong. As the chart below shows, the US labor market added 531,000 jobs last month, much above the expectations (MarketWatch’s analysts forecasted 450,000 added jobs). So, it’s a nice change from the last two disappointing reports. What’s more, the August and September numbers were significantly revised up – by 235,000 combined. Let’s keep in mind that we also have the additions of 1,091,000 in July and 366,000 in August (after an upward revision). Additionally, the unemployment rate declined from 4.8% to 4.6%, as the chart above shows. It’s a positive surprise, as economists expected a drop to 4.7%. In absolute terms, the number of unemployed people fell by 255,000 - to 7.4 million. It’s a much lower level compared to the recessionary peak (23.1 million), however, it’s still significantly higher than before the pandemic (5.7 million and the unemployment rate of 3.5%). Implications for Gold What does the recent employment report imply for the precious market? Well, gold surprised observers and rallied on Friday despite strong nonfarm payrolls. As the chart below shows, the London P.M. Fix surpassed the key level of $1,800. To show gold’s reaction more clearly, let’s take a look at the chart below, which shows that the price of gold futures initially declined after the October Employment Situation Report release. Only after a while, it rebounded and rallied to about $1,820. It’s a surprising behavior, as gold usually reacted negatively to strong economic data. Until now, gold liked weak employment reports as they increased the chances of a dovish Fed that would continue its easy monetary policy. Now, something has changed. But what? Well, some analysts would say that nothing has changed at all. Instead, they would tell us that the latest employment report is not as strong as it seems. In particular, the labor force participation rate was unmoved at 61.6% in October and has remained within a narrow range of 61.4% to 61.7% since June 2020, as the chart below shows. The lack of any improvement in the labor force participation rate could be interpreted as a lack of full employment and used by the Fed as an excuse to leave interest rates unchanged for a long time. I’m not convinced by this explanation. “Full employment” does not mean that all people are working, but all people who want to work are working. And, as the chart above shows, the fact that after the Great Recession the labor participation rate didn’t move back to the pre-crisis level didn’t prevent the Fed from hiking interest rates in 2015-2019. There is also another possibility. It might be the case that investors are now focusing on inflation. The employment report showed that the average hourly earnings have increased by 4.9% over the past twelve months, raising some concerns about wage inflation and general price pressure in the economy. Remember: context is crucial. If the new narrative is more about high inflation, good news may be positive for gold if they also indicate strong inflationary pressure. Although I like this explanation, it’s not free from shortcomings. You see, stronger inflation concerns should increase inflation premium and bond yields. However, the opposite is true: the real interest rates declined last week (see the chart below), enabling gold to catch its breath. After all, the markets are expecting a more dovish Fed than before the announcement of tapering. This is a fundamentally positive development for the gold market. Having said that, it’s too early to declare the start of the breakout. If inflation stays high, the US central bank could have no choice but to hike interest rates next year. Also, although the recent jump despite strong payrolls is encouraging, gold has yet to prove that it can stay above $1,800. If you enjoyed today’s free gold report, we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today. If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care
Profiting on Hot Inflation

Profiting on Hot Inflation

Monica Kingsley Monica Kingsley 10.11.2021 16:08
S&P 500 pause finally went from sideways to down, and might not be over yet. Credit markets aren‘t nearly totally weak – tech simply had to pause, so did semiconductors, and the Tesla downswing took its toll. Value though recovered the intraday downside, and VIX retreated from its daily highs – that may be all it can muster. I‘m looking primarily at bond markets for clues, and these reacted to the PPI figures with further decline in yields.At the same, inflation expectations are moving higher – the more you shorten the maturity, the higher they go, let alone RINF, their key ETF. Markets will be proven very wrong about the transitory inflation complacency – inflation rates aren‘t going to decline if you just leave them alone. And taper coupled with rate hikes hesitancy won‘t do the trick either.S&P 500 is still primed to go higher – the only question is the shape of the current consolidation. Liquidity is still ample, the banking sector is strong, and the Russell 2000 isn‘t really retreating. As stated yesterday:(…) The correct view of the stock market action is one of microrotations unfolding in a weakening environment – one increasingly fraught with downside risks. To be clear, I‘m not looking for a sizable correction, but a very modest one both in time and price. It‘s a question of time, and I think it would be driven by tech weakness as the sector has reached lofty levels. It‘ll go higher over time still, but this is the time for value and smallcaps in the medium term.Precious metals are consolidating – it‘s almost a pre-CPI ritual, but under the surface, the pressure to go higher keeps building. I‘m looking for a strong Dec in gold and silver, with unyielding oil and copper gradually waking up. Cryptos aren‘t taking prisoners either.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 finally declined, and the very short-term picture is unclear – is the dip about to continue, or more sideways trading before taking on prior highs? It‘s a coin toss.Credit MarketsHYG recouped some of the prior downside, but the LQD and TLT upswings give an impression of risk-off environment. Sharply declining yields aren‘t necessarily positive for stocks, and such is the case today.Gold, Silver and MinersGold and silver look like briefly pausing before the upswing continues – miners are pulling ahead, and the ever more negative real rates are powering it all.Crude OilCrude oil bulls continue having the upper hand, and oil sector is also pointing at higher black gold prices to come. Energy hasn‘t peaked by a long shot.CopperCopper went at odds with the CRB Index, but that‘s not a cause for concern. It‘ll take a while, but the red metal would swing upwards again.Bitcoin and EthereumBitcoin and Ethereum are briefly consolidating, and a fresh upswing is a question of shortening time. SummaryS&P 500 remains momentarily undecided, but the pullback shouldn‘t reach far on the downside – the bears are having an opportunity to strike on yet another hot inflation numbers. This isn‘t transitory really as I‘ve been telling you for almost 3 quarters already. Needless to say, the fire under real assets is being increasingly lit – more gains in commodities, precious metals and cryptos are ahead as inflations runs rampant on the Fed‘s watch.Thank you for having read today‘s free analysis, which is available in full 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 five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Intraday Market Analysis – USD Cuts Through Resistance

Intraday Market Analysis – USD Cuts Through Resistance

John Benjamin John Benjamin 11.11.2021 09:26
USDJPY attempts a bullish reversalThe US dollar broke higher after October’s CPI exceeded expectations.On the daily chart, the RSI has dropped back into the neutrality area. The greenback has secured bids around the 30-day moving average. An oversold RSI on the hourly chart attracted a ‘buying-the-dips’ crowd at 112.70.The latest surge above the psychological level of 114.00 has prompted sellers to cover their bets, paving the way for a bullish reversal above 114.25. Before that, an overbought RSI may lead to a pullback towards 113.05.XAUUSD breaks resistanceRising US CPI boosts the demand for gold as an inflation hedge.After being unable to clear the daily chart’s triple top at 1833 over the course of the summer, the precious metal has cut through the resistance like a hot knife through butter. High volatility suggests that sellers were quick to bail out.As momentum traders jump in, the bullish breakout would lead to an extended rally towards 1900. An overbought RSI may cause a limited pullback. In that case, 1823 at the base of the rally may see strong buying interest.USOIL retreats from resistanceWTI crude edged lower after the EIA reported a slight rise in US inventories. The price’s swift recovery above the sell-off point at 83.00 is an indication that sentiment remains overall optimistic.However, the previous peak and psychological level of 85.00 seems like a tough hurdle to overcome for now. An overbought RSI has triggered a temporary pullback with a break below 81.90. In turn, this is deepening the correction towards 79.30.Trend followers may see the limited retracement as an opportunity to stake in.
Netflix Stock (NFLX) Ahead Of Important Data, XAUUSD Chart's Reduced Amplitudes - Swissquote's MarketTalk

Inflation to the Moon - Gold Wears a Space Suit!

Arkadiusz Sieron Arkadiusz Sieron 11.11.2021 16:06
  Inflation rears its ugly head, surging at the fastest pace since 1990. The yellow metal has finally reacted as befits an inflation hedge: went up. Do you know what ambivalence is? It is a state of having two opposing feelings at the same time –this is exactly how I feel now. Why? Well, the latest BLS report on inflation shows that consumer inflation surged in October, which is something I hate because it lowers the purchasing power of money, deteriorating the financial situation of most people, especially the poorest and the least educated who don’t know how to protect against rising prices. On the other hand, I feel satisfaction, as it turned out that I was right in claiming that high inflation would be more persistent than the pundits claimed. After the September report on inflation, I wrote: “I’m afraid that consumer inflation could increase even further in the near future”. Sieron vs. Powell: 1:0! Indeed, the CPI rose 0.9% last month after rising 0.4% in September. The core CPI, which excludes food and energy prices, accelerated to 0.6% in October from 0.1% in the preceding month. And, as the chart below shows, the overall CPI annual rate accelerated from 5.4% in September to 6.2% in October, while the core CPI annual rate jumped from 4% to 4.6%. This surge (and a new peak) is a final blow to the Fed’s fairy tale about transitory inflation. As one can see in the chart above, the CPI rate has stayed above the Fed’s target since March 2021, and it won’t decline to 2% anytime soon. This contradicts all definitions of transitoriness I know. What’s more, the October surge in inflation was not only above the expectations – it was also the biggest jump since November 1990, as the chart below shows. Unfortunately for Americans, it might not be the last word of inflation. This is because over 80% of CPI subcomponents were above the Fed’s target of 2%, which clearly indicates that high inflation is not caused merely by the reopening of the economy but also by the broad-based factors such as the surge in the money supply.   Implications for Gold Ladies and gentlemen, gold finally reacted to surging inflation! As the chart below shows, the price of gold (Comex futures) spiked from below $1,830 to above $1,860 after the BLS report on CPI. Why did gold finally notice inflation and react as a true inflation hedge? Well, it seems that the narrative changed. Until recently, investors believed the Fed that inflation would be transitory. Reality, however, has disproved this story. Another factor I would like to mention is the FOMC’s recent announcement of tapering of its quantitative easing. That event removed some downward pressure from the gold market. By the way, this is something I also correctly predicted in the Fundamental Gold Report that commented on September inflation report: “it seems that until the Fed tapers its quantitative easing, gold will remain under downward pressure. Nonetheless, when it finally happens, better times may come for gold.” Indeed, yesterday’s rally suggests that gold recalled its function as a hedge against inflation. Until today, I was cautious in announcing the breakout in the gold market, as the yellow metal jumped above $1,800 only recently. However, the fact that gold managed not only to stay above $1,800 but also to continue its march upward (in tandem with the US dollar!) suggests that there is bullish momentum right now. Having said that, investors should remember about the threat of a more hawkish Fed. Higher inflation could support the monetary hawks within the FOMC and prompt the US central bank to raise interest rates sooner rather than later. The prospects of a tightening cycle could weigh on gold. However, as long as investors focus stronger on inflation than on tightening of monetary policy, and as long as the real interest rates decrease, or at do not increase, gold can go up. If you enjoyed today’s free gold report, we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today. If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care
HK Rallies and PBOC Cuts, US Stocks Stabilize

Focus on the Real Gains

Monica Kingsley Monica Kingsley 11.11.2021 15:51
S&P 500 declined, and not enough buyers arrived in my view. Still, we‘re likely to see a brief pause in selling, and that‘s giving the bulls a chance. Credit markets were a bit too beaten down by the troubled 30-year Treasury auction and Evergrande moving into the spotlight somewhat again. VIX managed another upswing, and doesn‘t point to the S&P 500 having gotten to an excessively bearish positioning just yet. I think some treading the water before stocks make up their mind, is most likely next. The downswing doesn‘t appear to be totally over, but we have arguably seen the greater part of it already. Tech isn‘t yet stabilized, but the increasing volume spells a pause in selling. I‘m still looking for clues to the bond markets. And it‘s clear that not even higher rates can sink the precious metals run – neither the late day rush to the dollar had that power. Miners continue behaving, and their daily black candle doesn‘t scare me – the realization of inflation not having peaked, and being as stubborn as I had been pounding the table since eternity, is working its magic: (…) inflation expectations are moving higher – the more you shorten the maturity, the higher they go, let alone RINF, their key ETF. Markets will be proven very wrong about the transitory inflation complacency – inflation rates aren‘t going to decline if you just leave them alone. And taper coupled with rate hikes hesitancy won‘t do the trick either. S&P 500 is still primed to go higher – the only question is the shape of the current consolidation. Liquidity is still ample, the banking sector is strong, and the Russell 2000 isn‘t really retreating. Precious metals are consolidating – it‘s almost a pre-CPI ritual, but under the surface, the pressure to go higher keeps building. I‘m looking for a strong Dec in gold and silver, with unyielding oil and copper gradually waking up. Cryptos aren‘t taking prisoners either. Crude oil is well bid in the $78 till $80 zone, and would overcome $85 – we aren‘t looking at a reversal, but at temporary upside rejection. Likewise copper would kick in with vengeance, and the shallow crypto consolidations are barely worth mentioning at all. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 decline continues, and the very short-term picture favors a little consolidation – the selling might not be over just yet. Credit Markets HYG, LQD and TLT – weakness anywhere you look, without tangible signs of stabilization, which makes any S&P 500 upswings a doubtful proposition. Gold, Silver and Miners Gold and silver look to be just getting started – the growing money flows aren‘t sufficient to push prices lower. Miners are pulling ahead, and the ever more negative real rates coupled with surging inflation fears (and Fed policy mistake recognition) are powering it all. Crude Oil Crude oil bulls would have to step in around the $80 level again, and it seems they wouldn‘t find it too hard to do. Yesterday‘s downswing looks like a daily setback only. Copper Copper downswing was again bought, and I‘m not looking for the bears to make much further progress as commodities appear ready to turn up again regardless of temporary dollar strength. Bitcoin and Ethereum Bitcoin and Ethereum are again briefly consolidating, and the bulls haven‘t really spoken their last word. It‘s a nice base building before another upleg. Summary S&P 500 is likely pausing for a moment here, and any further pullback isn‘t likely to reach far on the downside. The late day selloff in real assets was merely a brief, news-driven correction that would be reversed before too long, and precious metals are showing the way as inflation is moving back into the spotlight, and the talk about Fed‘s policy mistake is growing louder. Thank you for having read today‘s free analysis, which is available in full 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 five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Weekly Macro Themes - 12 November 2021

Weekly Macro Themes - 12 November 2021

Callum Thomas Callum Thomas 12.11.2021 15:36
Here's a brief overview of the topics and charts covered in the latest edition of the Weekly Macro Themes report. I send this report out late Friday NZ time and aim to cover a good mix of macro/ideas/risk topics, across a global macro/multi-asset universe. This week I covered the following topics/ideas:   1. US Credit Spreads: Continuing to monitor risk indicators for credit as valuations reach extreme expensive/complacent; focused on a specific set of macro indicators (which look good at the moment) as a trigger to shift bearish. 2. Gold Price Outlook: Slight change to the view given where technicals, sentiment, positioning, monetary signals and valuations sit. 3. Gold & USD: Conventional wisdom says a stronger dollar would be a headwind to gold, we dig into this conventional wisdom to see if it is actually wise and also review the outlook for the US dollar. 4. Gold Miners: Reviewing the outlook for gold miners given valuations, positioning, market breadth, technicals, and intermarkets. 5. Silver: We also review the suite of indicators for silver and lay out the near term outlook and parameters for the next steps.     Request a trial of our institutional research service for your firm, simply fill in the form here. (n.b. the full service is aimed at fund managers and institutional investors)       About the Weekly Macro Themes report The "Weekly Macro Themes" is part of our institutional offering aimed at multi-asset and macro-driven portfolio managers and strategists. The report takes a chart-driven macro, fundamental and multi-factor approach; a powerful combination of cross-asset idea generation for portfolio managers, charts on key global macro trends, analysis on portfolio risks, asset allocation research, and innovative indicators, in a format that delivers a balance of brevity and depth so that you can efficiently assimilate the insights. Also part of the service is the monthly market cycle guidebook, global cross asset market monitor, and quarterly strategy pack. (or just follow us for now): LinkedIn https://www.linkedin.com/company/topdown-charts Twitter http://www.twitter.com/topdowncharts
Red Hot and Running

Red Hot and Running

Monica Kingsley Monica Kingsley 12.11.2021 15:44
S&P 500 really went through the brief pause in selling, but credit markets haven‘t stopped really. Their weakness continues, but is hitting value a tad harder than tech. Together with VIX turning south, that‘s one more sign why the bulls are slowly becoming the increasingly more favored side. Hold your horses though, I‘m talking about a very short-term outlook – this correction doesn‘t appear to be over just yet (the second half of Nov is usually weakner seasonally): (…) some treading the water before stocks make up their mind, is most likely next. The downswing doesn‘t appear to be totally over, but we have arguably seen the greater part of it already. … I‘m still looking for clues to the bond markets. There, it had been a one-way ride. TLT though is having trouble declining further, and that means a brief upswing carrying over into stocks, is likely. Primarily tech would benefit, and the ever more negative real rates would put a floor beneath the feverish precious metals run. Make no mistake though, the tide in gold and silver has turned, and inflation expectations aren‘t as tame anymore. In this light, there‘s no point in sweating the commodities retracement of late. True, the rising dollar is taking some steam out of the CRB superbull, but that‘s only temporary – I‘m looking for the greenback to reverse to the downside once the debt ceiling drama reappears in the beginning of Dec. Then, the Treasury would also have to start issuing more (short-term) debt, which would put a damper on any upswing attempts. Meanwhile, inflation would keep at least as hot as it‘sx been recently, and the Fed policy mistake in letting the fire burn unattended, would be more broadly acknowledged. What a profitable constellation for precious metals, real and crypto assets! Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 is bidding its time – the shallow very short-term consolidation continues, with the bears slowly running out of time (for today). Credit Markets HYG, LQD and TLT – weakness anywhere you look continues, but LQD is hinting at a possible stabilization next. Unless that‘s more broadly followed in bonds, any S&P 500 upswing would remain a doubtful proposition. Gold, Silver and Miners Gold and silver were indeed just getting started – a relatively brief pause shouldn‘t be surprising. Any dips though remain to be bought. All in all, PMs are firing on all cylinders currently. Crude Oil Crude oil bulls keep defending the $80 level, with $78 serving as the next stop if need be. The consolidation starting late Oct would though resolve to the upside in my view – it‘s just a question of shortening time. Copper Copper participated in the commodities upswing – not too enthusiastically, not too weakly. The volume seems just right for base building before another red metal‘s move higher. Bitcoin and Ethereum Bitcoin and Ethereum are still consolidating, and the relatively tight price range keeps favoring the bulls. Summary S&P 500 is looking at a mildly positive day today, but the correction isn‘t probably over just yet. With most of the downside already in, I‘m looking for bullish spirits to very gradually return. Precious metals will be the star performers for the many days to come, followed by copper and then oil. Crypto better days are also lyiing ahead. All in all, inflation trades will keep doing better and better. Thank you for having read today‘s free analysis, which is available in full 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 five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Will Evergrande Make Gold Grand?

Will Evergrande Make Gold Grand?

Arkadiusz Sieron Arkadiusz Sieron 12.11.2021 18:57
  Evergrande’s debt issues are a symptom of China’s deep structural problems. If the crisis spills over wider, gold may benefit, but we are still far from such a scenario. Beijing, we have a problem! Evergrande, one of China’s largest real estate developers and biggest companies in the world, is struggling to meet the interest payments on its debts. As the company has more than $300 billion worth of liabilities, its recent liquidity problems have sparked fears in the financial markets. They also triggered a wave of questions: will Evergrande become a Chinese Lehman Brothers? Is the Chinese economy going to collapse or stagnate? Will Evergrande make gold grand? The answer to the first question is: no, the possible default of Evergrande likely won’t cause a global contagion in the same way as Lehman Brothers did. Why? First of all, Lehman Brothers collapsed because of the run in the repo market and the following liquidity crisis. As the company was exposed to subprime assets, investors lost confidence and the bank lost its access to cheap credit. Lehman Brothers tried to sell its assets, which plunged the prices of a wide range of financial assets, putting other institutions into trouble. Unlike Lehman Brothers, Evergrande is not an investment bank but a real estate developer. It doesn’t have so many financial assets, and it’s not a key player in the repo market. The exposure of important global financial institutions to Evergrande is much smaller. What’s more, we haven’t seen a credit freeze yet, nor an endless wave of selling across almost all asset classes, which took place during the global financial crisis of 2007-2009. Given that the Lehman Brothers’ bankruptcy was ultimately positive for gold (although the price of the yellow metal declined initially during the phase of wide sell-offs), the fact that Evergrande probably doesn’t pose similar risks to the global economy could be disappointing for gold bulls. However, gold bulls could warmly welcome my answer to the second question: the case of Evergrande reveals deep and structural problems of China’s economy, namely its heavy reliance on debt and the real estate sector. As the chart below shows, the debt of the private non-financial sector has increased from about 145% of GDP after the Great Recession to 220% in the first quarter of 2021. So, China has experienced a massive increase in debt since the global financial crisis, reaching levels much higher than in the case of other economies. The rise in indebtedness allowed China to continue its economic expansion, but questions arose about the quality and sustainability of that growth. As Daniel Lacalle points out, The problem with Evergrande is that it is not an anecdote, but a symptom of a model based on leveraged growth and seeking to inflate GDP at any cost with ghost cities, unused infrastructure, and wild construction. Indeed, the levels and rates of growth of China’s private debt are similar to the countries that have experienced spectacular financial crises, such as Japan, Thailand, or Spain. But the significance of China’s real estate sector is much higher. According to the paper by Rogoff and Yang, the real-estate sector accounts for nearly 30% of China’s GDP. On the other hand, China has a relatively high savings rate, while debt is mostly of domestic nature. China’s financial ties to the world are not very strong, which limits the contagion risks. What is more, the Chinese government has acknowledged the problem of excessive debts in the private sector and started a few years ago making some efforts to curb it. The problems of Evergrande can be actually seen as the results of these deleveraging attempts. Therefore, I’m not sure whether China’s economy will collapse anytime soon, but its pace of growth is likely to slow down further. The growth model based on debt and investments (mainly in real estate) has clearly reached its limit. In other words, the property boom must end. Rogoff and Yang estimate that “a 20% fall in real estate activity could lead to a 5-10% fall in GDP”. Such growth slowdown and inevitable adjustments in China’s economy will have significant repercussions on the global economy, as – according to some research – China’s construction sector is now the most important sector for the global economy in terms of its impact on global GDP. In particular, the prices of commodities used in the construction sector may decline and the countries that export to China may suffer. Given that China was the engine of global growth for years, it will also slow down, and, with lower production, it’s possible that inflation will be higher. Finally, what do the problems of China’s real estate sector imply for the gold market? Well, in the short term, not so much. Gold is likely to remain under downward pressure resulting from the prospects of the Fed’s tightening cycle. However, if Evergrande’s problems spill over, affecting China’s economy or (a bit later) even the global economy, the situation may change. Other Chinese developers (such as Fantasia or Sinic) also have problems with debt payments, as investors are not willing to finance new issues of bonds. In such a scenario, the demand for gold as a safe-haven asset might increase, although investors have to remember that the initial rush could be into cash (the US dollar) rather than gold. Unless China’s problems pose a serious threat to the American economy, the appreciation of the greenback will likely counterweigh the gains from safe-haven inflows into gold. So far, financial markets have remained relatively undisturbed by the Evergrande case. Nevertheless, I will closely monitor any upcoming developments in China’s economy and their possible effects on the gold market. 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, PhDSunshine Profits: Effective Investment through Diligence & Care.
Half a Dozen Things You Should Know about FX

Half a Dozen Things You Should Know about FX

Marc Chandler Marc Chandler 12.11.2021 13:11
1.  The market is still digesting the implications of Wednesday's CPI shock. The dollar has strengthened, yields have risen, the stock market wobbled after a long advancing streak, and in any event, stabilized in light trading during the US and Canadian holidays. However, given the low year-ago reading, there is a significant risk that inflation (including the core rate) will accelerate over the next few months. As a result, the Federal Reserve needs greater flexibility to raise rates sooner than it has envisioned.   The main restraint now is the pace of tapering.  The FOMC committed to reducing its bond-buying by $15 bln in November and December.  Its statement indicated that it anticipated maintaining the rate afterward, but the FOMC also reserved the right to adjust the pace if necessary. Thus, accelerating the tapering is the most likely course of action.  Bullard had suggested completing the tapering by the end of Q1.  If this is to become the majority view, there may be some effort to prepare the market.   Recently a rally in US bonds was attributed to talk that Governor Brainard could replace Powell as Fed chair.  The argument was that Brainard was more dovish.  Is this really relevant now?  Does it count as a strike against her?  With Yellen's apparent support, Powell is most likely to get re-appointed, and given that CPI is at 30-year highs, conventional thinking favors maintaining a stable hand at the helm. 2.    The dollar's gains accelerated since the higher than expected CPI report.  The euro was in a $1.15-$1.17 range last month and broke out on Wednesday.  Follow-through selling Thursday brought to about $1.1445.  We have suggested the next target is a little below $1.1300.   The jump in yields helped lift the greenback from below JPY112.80 above JPY114.00.  The five-year high set on October 20 was around JPY114.70, while we project the upper end of the likely range closer to JPY115.00. 3.  Disappointing economic data contributed to the losses of sterling and the Australian dollar.   Economists (Bloomberg survey) expected Australia to have created 50k jobs in October, but, instead, it lost 46.3k jobs for the third consecutive monthly decline.  The bulk of the loss (40.4k) were full-time positions, which reversed the 26.7k increase reported in September.  The unemployment rate jumped to 5.2% from 4.6%, the highest since April.  The Australian dollar peaked near $0.7550 in late October and fell below $0.7300 on Thursday, for the first time in a month.  The next target is around $0.7240-$0.7260.   The UK reported a significant slow down in Q3 GDP to 1.3% from 5.5% in Q2. Expectations for a 1.5% quarter-over-quarter expansion  (Bloomberg survey) seemed on the high side.  However, the September monthly GDP rose 0.6%, and the better than expected rise was offset but a reduction in the August GDP to 0.2% from 0.4%. The industrial output contracted in September. The trade deficit deteriorated after a dramatic revision in the August balance (to -GBP1.880 bln from -GBP3.716 bln, while services accelerated (0.7% from a revised 0.1% gain that had initially reported at 0.3%).  Sterling, which had been pushing near $1.36 before the Bank of England's meeting and slipped to a marginal new low for the year on Wednesday but still held above $1.34 (barely).  It fell to $1.3360 on Thursday. The next chart support area is seen around $1.3165-$1.3185. 4.  The joint US-China statement at COP-26 is promising.  It was the key to the Paris Agreement in 2015.  There was a commitment to boost efforts to cut emissions and illegal deforestation.  The gap between current policies and what is necessary was acknowledged, and there appeared to be an agreement in principle to reach an agreement on climate finances and rules for a carbon market.  The joint statement must have been in the works even as Biden criticized Xi for the lack of commitment for not attending COP-26.  There is still much speculation about a "virtual summit," which is supposed to signal something more than two phone calls the leaders have held this year.  The environment was also recognized where cooperation was possible.  Still, Beijing refused to join the US-EU commitment to cut methane admissions and opted for its own plan.   The geopolitical competition is unaffected by the joint statement. Meanwhile, the more pressing geopolitical threat is coming from the movement of Russian forces to the Ukraine border.  Reports suggest the US has briefed Europe on a possible Russian invasion of Ukraine.  Hostilities are said to have escalated recently.  Recall that Russia had amassed forces (~100k soldiers, tanks, and aircraft) in the Spring too.  It triggered a flurry of talks, and Moscow removed (redeployed) its forces.  Russia defended the troop movement within the country as an internal affair but has accused the US of provocation for sailing warships into the Black Sea, close to its territory last week.  Putin also reportedly was critical of Ukraine's alleged use of drones, which violated a previous agreement.  Meanwhile, tensions on the Polish-Belarus border remain tense.  Merkel sought Putin's help recently to defuse the situation, but he refused.   Belarus is thought to be instigating a migration crisis and has threatened to shut down a critical gas pipeline to the EU if Poland keeps its border closed.  These developments may have contributed to some pressure on the euro.   5.  The Mexican peso fell by around 0.5% after the central bank lifted the overnight rate to 5.00%. It is the third quarter-point move in the cycle that began in June.   The swaps market has nearly 90 bp of tightening discounted over the next three months and almost 220 bp in the next 12 months.  Banxico lifted its Q4 inflation forecast to 6.8% from 6.2%.  The one dissent (Esquivel, again) was to stand pat.  There was no vote for a 50 bp move, which contributed to the dovish read of the rate hike.  October CPI, reported earlier this week, is at 6.24% year-over-year,  6.   Friday's economic calendar is light.  Little new data from the large Asia Pacific and European countries.  The North American calendar is minimal.  The US JOLTS report on job openings and the University of Michigan's preliminary estimate of November sentiment and inflation expectations.   NY Fed's Williams is the lone speaker from the central bank and may not address monetary policy directly.  There are three sets of chunky options that expire tomorrow that may be relevant:  1.23 bln euros at $1.1460, $1.75 bln at JPY114.00, and GBP690 mln at $1.3320.   Disclaimer
Crude Oil Eyeing EIA Figures – “Yoyo-Trade” Exited After Hitting All Projected Targets!

Crude Oil Eyeing EIA Figures – “Yoyo-Trade” Exited After Hitting All Projected Targets!

Sebastian Bischeri Sebastian Bischeri 10.11.2021 17:11
  Is crude really set to break its highs again? Fundamental Analysis Crude oil prices reached their last highs on Wednesday before pulling back, initially supported by US crude stocks falling as shown by API figures, and afterwards cooled by contrary prospects from the U.S. Energy Information Administration (EIA). Meanwhile, our subscribers were exiting their last oil trade, after the black gold hit the second projected target at $83.40 (see technical chart). U.S. API Weekly Crude Oil Stock: Inventory levels of US crude oil, gasoline and distillates stocks, American Petroleum Institute (API) via Investing Regarding the API figures published Tuesday, the decline in crude inventories (with 2.485 million barrels versus 1.900 million barrels expected) implies greater demand and is normally bullish for crude prices (at least in theory). This was indeed the case yesterday, as those figures have supported crude prices in the first place. In the perspective of the figures to be published later today by the U.S. Energy Information Administration (EIA), and according to the median of analysts surveyed by Bloomberg, the market would expect an increase of 1.6 million barrels, so let’s see whether this figure will be confirmed. Chart – WTI Crude Oil (CLZ21) Futures (December contract, daily chart) In summary, with an oil market progressing (with some rallying limitations set by threats of the US administration to release some of its strategic crude reserves – to relieve the market by artificially increasing the supply) – there is currently no trade position justified from a risk-to-reward point of view. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Oil Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Sebastien BischeriOil & Gas Trading Strategist * * * * * The information above represents analyses and opinions of Sebastien Bischeri, & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Sebastien Bischeri and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Bischeri is not a Registered Securities Advisor. By reading Sebastien Bischeri’s 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. Sebastien Bischeri, Sunshine Profits' employees, affiliates as well as their family members 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.
Gold: Don’t Fret the Small Stuff

Gold: Don’t Fret the Small Stuff

Przemysław Radomski Przemysław Radomski 10.11.2021 14:38
  Do small upswings really matter if one has medium-term goals in mind? Have the bulls come home?  The medium-term back and forth movement in gold continues. If I could make the markets move in a certain direction sooner, and end the prolonged consolidation, I would. However, I can’t, and the only thing that I can do is to report to you what I see on the markets and describe what my course of action will be. During yesterday’s session we saw more of what we’ve been seeing in the previous days. Gold moved higher, and gold stocks moved higher (but in a weak manner), and even though gold moved to new monthly highs, the HUI Index is not even back to its late-October highs. It’s boring, discouraging, and demotivating. But the only thing that we can do is to react to what the market is willing to provide us with. What do yesterday’s and today’s pre-market price moves tell us? First of all, the market tells us that the breakout to new highs in the USD Index is not being invalidated. I know that I’ve written this tens of times, but this factor remains intact and it continues to have very important implications going forward. These are bullish for the USD Index and bearish for the precious metals sector. Second, as I had already written earlier today, gold stocks are not showing strength relative to gold. The gold price just made new monthly highs and is now visibly above its October highs, but the silver price and – most importantly - gold stocks are not. In fact, they are just a little above their mid-October highs. Consequently, the thing that one tends to see in the final parts of a short-term rally remains in place. So, when will the decline in PMs finally continue? Based on what I wrote on Monday – in particular about gold’s reversal points, it’s likely to start soon – perhaps as early as this week. As a quick reminder, you can see gold’s triangle-vertex-based reversal on the chart below: And you can see gold’s long-term cyclical turning point on the chart below: The fact that gold moved to its recent medium-term highs is also a factor here. Resistance provided by those highs is quite likely to trigger a reversal in gold, and based on today’s pre-market action, it’s what we might already be seeing right now. The move lower is small so far, but all bigger moves have small beginnings, and given the reversal points and the resistance that gold just encountered, this could be “it”. Also, speaking of resistance levels, on today’s second chart I placed a red resistance line based on the previous highs. It might be tempting to view the price action below it as an inverse head and shoulders pattern, which could have bullish implications. However, let’s keep in mind that without a breakout above the neck level (approximately the previous highs), the formation is not yet complete, and as such it has NO bullish implications whatsoever, as it simply doesn’t exist yet. All in all, the outlook for the precious metals market is not bullish, even though the last several days / weeks might make one feel otherwise. Before viewing the recent move higher as something significant and/or bullish, please consider how tiny this upswing is compared to the decline in gold stocks between May and October. No market moves in a straight line, and periodic corrections are inevitable. It doesn’t make them a start of a new powerful upswing in each case, though. And if the part of the precious metals market that is supposed to rally the most at the start of a major upswing is so weak right now, then why should one expect the current upswing to be anything more than a corrective upswing within a bigger downtrend? 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, CFAFounder, 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.
S&P 500: Inflation Fears May Push Stock Prices Lower

S&P 500: Inflation Fears May Push Stock Prices Lower

Paul Rejczak Paul Rejczak 10.11.2021 15:55
  Stocks’ short-term rally came to an end this week and the S&P 500 index entered a consolidation along the 4,700 level. Is this a topping pattern? The S&P 500 index lost 0.35% yesterday, as it fell below the 4,700 price mark following two-day-long consolidation along the Friday’s record high of 4,718.50. The recent rally was not broad-based and it was driven by a handful of tech stocks like MSFT, NVDA, TSLA. The market seems overbought in the short-term and most likely it’s trading within a topping pattern. Today we may see another consolidation or a profit taking action following worse than expected inflation data release (the CPI monthly number came at +0.9% vs. the expected +0.6%). The nearest important support level is at 4,650-4,675 and the next support level is at 4,600. On the other hand, the resistance level is at 4,700-4,720. The S&P 500 broke below its steep short-term upward trend line, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Nasdaq Lost 0.7% on Tuesday Let’s take a look at the Nasdaq 100 chart. The technology index broke above the 16,000 level recently and it was trading at the new record high. The market accelerated parabolically above its short-term upward trend line. But yesterday it lost 0.7% and closed below that trend line. The resistance level remains at 16,400, and the short-term support level is at 16,000, among others, as we can see on the daily chart: Apple’s Further Consolidation and Microsoft’s Potential Topping Pattern Let’s take a look at the two biggest stocks in the S&P 500 index, AAPL and MSFT. Apple continues to trade within a consolidation along the $150 level and it is still well below the record highs, and the Microsoft is close to breaking below its over month-long upward trend line. So the tech “megacaps” may be turning lower, as we can see on their daily charts: Conclusion The broad stock market went slightly lower on Tuesday and we may see a downward continuation this morning. The main indices are expected to open 0.2-0.5% lower following worse (higher) than expected consumer inflation number release. It looks like a topping pattern and we may see a downward correction at some point. There may be a profit-taking action following quarterly earnings releases. Here’s the breakdown: The S&P 500 extended its uptrend last week, but since Friday it is trading within a short-term downtrend. But still no positions are justified from the risk/reward point of view. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his 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. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members 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.
Intraday Market Analysis – USD Seeks Consolidation

Intraday Market Analysis – USD Seeks Consolidation

John Benjamin John Benjamin 15.11.2021 08:53
USDJPY hits temporary resistance The Japanese yen pulled back after a larger-than-expected GDP contraction in Q3. The US dollar is looking to hold onto its gains after a rally above 114.00. Sentiment has recovered and a surge above 114.45 around the October peak would resume the uptrend. However, the current rebound may lack the strength to clear the supply zone right away. An overbought RSI has held the bullish fever back. A breach below 113.70 would lead to a deeper correction towards 112.80, which is a key level to keep the rebound relevant. EURCHF struggles for support The euro bounced higher after the bloc’s industrial production beat expectations in September. The RSI’s oversold situation on the daily chart has attracted bargain hunters’ attention around 1.0530, a demand area from May 2020. Price action had three failed attempts to lift offers at 1.0600, a sign of strong selling pressure to keep the downtrend going. A bullish breakout may trigger a runaway rally as sellers seek to exit a crowded short bet. A bearish one would send the single currency to 1.0490. UK 100 tests support The FTSE 100 edged lower after active job postings in the UK hit a record high. The index came under pressure at the psychological level of 7400. A combination of an overbought RSI and its bearish divergence suggests that the rally was losing momentum. Sentiment remains upbeat and a pullback could be an opportunity to get filled at a better price. Trend followers may be waiting to buy the dip near the first support at 7315. A deeper correction would send the price to 7255 along the 30-day moving average.
Silver, the waiting game

Silver, the waiting game

Korbinian Koller Korbinian Koller 13.11.2021 19:25
Luckily, it is not necessary to time market entry and exit precisely. What is essential is calculating risk itself and that risk to expected returns. In addition, strict management of the trade itself is required. Gold versus Silver in US-Dollar, monthly chart, risk versus reward: Gold versus Silver in US-Dollar, monthly chart as of November 12th, 2021. That being said, instead of getting distracted by a narrative of policymakers who might prolong the inevitable even for years possibly, we focus on the technical aspects that cannot be “rationalized” away and will be unaffected by market influencers. One such fact is the market relationship between silver’s more giant brother gold. The chart above tries to illustrate that gold is trading 10% below its all-time high. On the other hand, silver is trading 50% below its all-time high. This discrepancy makes silver the more desirable play (better risk/reward-ratio). The difference will work like a loaded spring, and once released, silver will outperform gold by a multiple. Gold in US-Dollar, monthly chart, gold leading strongly: Gold in US-Dollar, monthly chart as of November 13th, 2021. Now that we have found the right vehicle for a wealth preservation insurance play, we are looking for additional factors. Physical acquisition is a clear prosperous choice. It protects against inflation and the risk possibilities inherent to fiat currency, with much historical evidence. That leaves us the question of entry timing. Especially since the physical purchase has a broader spread and a reactionary lag over spot price trading, which is pretty much instant. The chart above clarifies why we see there to be leeway regarding being “right.” It is less critical to pinpoint the absolute lows versus overall participation. Especially since a lack of physical silver availability, which is a possibility, would erase the whole play. The monthly gold chart above is a strong indication that precious metals might be breaking to the upside. With this month’s strength, price pushing against the upper resistance line (white line) of a bullish triangle, silver prices mutually trailing higher is likely. Silver in US-Dollar, monthly chart, closely following gold: Silver in US-Dollar, monthly chart as of November 13th, 2021. With these necessary positive edges in play, we can now look at silver itself and look for possible low-risk entry points.The monthly chart shows mutual strength over the previous gold chart. Silver has pushed successfully through the problematic distribution zone around the US$24 price level. It still faces POC (point of control), the highest volume node of our fractal analysis, looming above US$26.03. With this many edges in our favor, we find this an excellent spot to add to physical silver holdings from a long-term holding perspective. Silver in US-Dollar, weekly chart, spot price play: Silver in US-Dollar, weekly chart as of November 13th, 2021. For a spot price play in the midterm time horizon, we are instead waiting for a possible price bounce of POC. A low-risk entry would be granted once the price retraces back into the US$24 to US$24.50 zone. Reyna Silver encounters multiple high-grade sulphide zones within 54.9 metres of near-source style skarn at Guigui: Silver, the waiting game: In market movement, we see expansion and compression, much like an oscillator. At certain times though, may it be a natural or man-made disaster, we can find ourselves in a stretched or amplified move. These times of abnormality from a time perspective require being well-prepared. Swift, disciplined actions following a clear planned roadmap are advised. An anticipated roadmap strictly followed. It is first a waiting game followed by quick action, both psychologically challenging environments. With physical acquisitions of metals, perfectionism in timing is paralysis. Not necessary to come out ahead. We find silver accumulation at this time to be a prudent measure to protect your wealth. Like buying insurance against an anticipated market turn. 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 also subscribe to our free newsletter. This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting.
XAUUSD (Gold) And XAGUSD (Silver) - A Technical Look

Gold 'n Silver 'n CPI Oh My!

Mark Mead Baillie Mark Mead Baillie 15.11.2021 09:26
The Gold Update by Mark Mead Baillie --- 626th Edition --- Monte-Carlo --- 13 November 2021 (published each Saturday) --- www.deMeadville.com  Let's start with October's Consumer Price Index (CPI) as reported by the U.S. Bureau of Labor Statistics: its excitedly-disseminated reading was +0.9% (which annualized is a whopping +10.8%). "Oh, 'tis the worst in 30 years!", they say. "Oh, 'tis the worst in 40 years!", some say. We say: "C'est très exagéré." Why? Because Labor has established this level -- or higher -- three times prior during the 24 years of our maintaining the Economic Barometer: for September 2005 'twas +1.2%; for June 2008 'twas +1.1%; and recently for this past June 'twas (as is now) a like +0.9%. Here's that history: Such exaggerative reporting of this October's +0.9% CPI growth arguably does have merit, for 'tis a very concerning rate of inflation. However as Grandpa Hugh would encourage today's news desks : "Get it first, but FIRST, get it RIGHT!" as opposed to the current-day media mantra of "Fake it FIRST, but fake it as FACT!" 'Course there are other sources that find far greater inflation; however in sticking with Labor's "official" measure, glaringly missing from the subsequent reportage is that -- following those three prior inflationary pops -- came cooling over at least the few ensuing months. 'Tis per the rightmost column of "next" three-month CPI average growth in the below table: Again, ours is not to belittle the seriousness of October's +0.9% CPI rise; rather 'tis to simply show it in the context of historical fact. Please notify a media outlet near you. Seriousness, indeed. For of further practical import (on the assumption that neither do you eat, nor use petroleum-based products), October's Core-CPI growth of +0.6% has already been realized four times just in the prior 15 months. Critical concern there, and justifiably so given the price of Oil has risen from 39.82 at mid-year 2020 to 83.22 at October 2021's settle (+109%). For from the "That's Scary Dept." the cumulative rise in the full CPI across that same 16-month-to-date stint is only +7.3% ... solely by that metric, folks have been gettin' off easy despite higher petrol prices! Fortunately, Gold and Silver may be FINALLY gettin' off their respective butts via their inflation mitigative role. Which obviously points to their having so much farther up to go. Per our opening Gold Scoreboard, price settled out the week yesterday (Friday) at 1868, its second-best single-week performance thus far this year on both a points (+47.7) and percentage (+2.6%) basis. Thus comparatively, 'tis a fine leap forward for Gold. However as you ad nausea already know, even in accounting for its supply increase, Gold by StateSide M2 currency debasement "ought" today be 3986. As well is the ever-annoying fact of Gold first hitting the present 1868 level a decade ago on 19 August 2011 when the money supply was just 44% of what 'tis today, ($9.457 trillion vs. $21.343 trillion). "Got Gold?" And as for Sweet Sister Silver, 'twas her third best weekly performance year-to-date, albeit settling yesterday at 25.41 is a price first achieved 11 years ago on 04 November 2010. "Got Silver?" (Oh and from the "Gold Plays No Currency Favourites Dept." the Dollar recorded its fifth best up week of the year. "Got Bucks?" We'd rather Swiss Francs). Moreover, from our always revered "The Trend is Your Friend Dept." as we saw a week ago, Gold's weekly parabolic trend -- after an intolerably lengthy stint as Short with little net price decline -- did flip to Long. And as is the rule rather than the exception, price this past week continued higher. Which begs your question: "How much does price rise when this happens, mmb?" Bang on cue there, Squire. And the answer is: across the 43 prior Long weekly parabolic trends since 2001, the median increase in the price of Gold is +8.3%. Thus by that number, from Gold's trend flip price back at 1820, an +8.3% increase this time 'round would bring us to 1971. Modest perhaps by valuation expectations, but a start. Too, some of you may recall this sentence from our 02 October missive wherein we nixed our year's forecast high of 2401: "...The more likely scenario shall well be Gold just sloshing around into year-end, trading during Q4 between 1668-1849..." Fab to already be wrong there! For here are the weekly bars and parabolic trends from this time a year ago-to-date: Now in the midst of all this inflation trepidation came Dow Jones Newswires this past week with "The Economic Rebound From Covid-19 Was Easy. Now Comes the Hard Part." Makes sense given everything having been shutdown last year. But: how bona fide actually is "Rebound"? Let's look at corporate earnings, (now yer not gonna get this anywhere else, so pay attention): with but a week to run in Q3 Earnings Season, most of the S&P 500 constituents that report within this calendar timeframe have so done, and with fairly admirable results: 80% bettered their bottom lines, (or as we said a week ago "better have bettered" given the economic shutdown of last year). Yet here's the dirty little secret: many mid-tier and smaller companies have also reported, by our count 1,368 of 'em. And of that bunch, we found just 56% of them did better. That is a Big Red Flag given mid-to-small businesses drive the American economy. We doubt your money manager knows that number. In addition to the past week's inflation reports, lost in the shuffle were the Econ Baro metrics showing September's Wholesale Inventories as backing up, whilst November's University of Michigan Sentiment Survey fell to a 10-year low, the 66.8 level not seen since November 2011. 'Course the S&P loving bad news, its Index roared upward to finish the week at 4683, a mere 36 points below its all-time high. Together with the Baro, here's the year-over year picture: Now to some impressive precious metals' technicals via our two-panel graphic of Gold's daily bars from three months ago-to-date on the left and those for Silver on the right. "Impressive" as when the falling baby blue dots of trend consistency reverse course back up without having dropped to mid-chart, the buyers are clearly in charge: As for the 10-day Market Profiles for Gold (below left) and Silver (below right), life is good at the top: Good as well is Gold's buoyant positioning within its stack: The Gold StackGold's Value per Dollar Debasement, (from our opening "Scoreboard"): 3986Gold’s All-Time Intra-Day High: 2089 (07 August 2020)Gold’s All-Time Closing High: 2075 (06 August 2020)2021's High: 1963 (06 January)The Gateway to 2000: 1900+10-Session directional range: up to 1871 (from 1759) = +112 points or +6.4%Trading Resistance: none per the ProfileGold Currently: 1868, (expected daily trading range ["EDTR"]: 25 points)Trading Support: Profile notables are 1864 / 1827 / 1793The 300-Day Moving Average: 1822 and falling10-Session “volume-weighted” average price magnet: 1816The Final Frontier: 1800-1900The Northern Front: 1800-1750On Maneuvers: 1750-1579The Weekly Parabolic Price to flip Short: 16862021's Low: 1673 (08 March) The Floor: 1579-1466Le Sous-sol: Sub-1466The Support Shelf: 1454-1434Base Camp: 1377The 1360s Double-Top: 1369 in Apr '18 preceded by 1362 in Sep '17Neverland: The Whiny 1290sThe Box: 1280-1240 Next week brings 14 metrics into the Econ Baro; consensus expectations look for it to turn higher. To be sure, turning higher have been Gold and Silver as inflation their prices stir; and yet their levels now 10 years on are the same as they were; thus their doubling from here can well be a blur! Cheers! ...m... www.deMeadville.com www.TheGoldUpdate.com
CPI Shocker Lifted the Greenback, which now needs to Take a Breath

CPI Shocker Lifted the Greenback, which now needs to Take a Breath

Marc Chandler Marc Chandler 15.11.2021 10:14
The jump in US headline CPI above 6% crossed some Rubicon and injected dynamic into the process.  The dollar rallied, and new highs for the year were recorded against the euro and sterling.  The dovish tapering announcement by the Fed on November 3 was completely unwound as the December 2022 Fed funds futures returned to the high-yield mark of 66 bp ahead of the weekend.   The two-year yield rose from about 39 bp at the start of the last week to almost 55 bp.  The volatility of the bond market (the equivalent of the VIX for the S&P 500) surged back to the year's high (above 78%).   Ultimately, the idea that R-star, the real short-term interest rate when the US economy is at full capacity and inflation stable, has continued to trend lower will likely cap nominal rates.  Equities wobbled, and the S&P 500 snapped an eight-day advance, and the NASDAQ's 11-day rally stalled.  US equities stabilized and posted modest gains in the past two sessions.   The rise in price pressures requires the Federal Reserve to be more flexible to address a range of possible outcomes.  The pace of the tapering is the main constraint on policy.  The FOMC statement committed the Fed to reduce the bond-buying by $15 bln in November and December.  While it anticipated that the pace would continue, it reserved the right to adjust the rate.  This is likely to be the focus in the run-up to the mid-December meeting.  To finish QE in March, as St. Louis Fed's Bullard, a noted hawk, has argued, the Fed would need to double its pace of tapering to $30 bln a month starting in January.  What is at stake is when the Fed's rate hike cycle can begin, not the terminal rate, which is expected to be below 2%.   Dollar Index:  The CPI saw the Dollar Index surge to convincingly surpass the (38.2%) retracement target of the decline from the March 2020 high (~103) to the January 6 low (~89.20).  That retracement (~94.55) had been penetrated briefly before, but it did not stick.  This time, the Dollar Index rose to new highs for the year, slightly above 95.25.  The next retracement (50%) is found a little above 96.00, and the (61.8%) objective is almost 97.75.   The momentum indicators suggest a high is not yet in place, but the move since the mid-week CPI shocker, above the upper Bollinger Band (~95.00) warns against chasing it.  That said, initial support is likely in the 94.60-94.75 area.   Euro:  The euro was driven below $1.15 after the US CPI report and failed to resurface above this previous floor, which now acts as resistance.  A low near $1.1435 was recorded ahead of the weekend.  Neither the MACD nor Slow Stochastic is over-extended, but, as we saw with the Dollar Index, the exchange rate is outside the Bollinger Band (slightly below $1.1465) and settled below it for the third consecutive session ahead of the weekend. There is little chart support until the $1.1290-$1.1300 area is approached.  Moreover, if the euro has carved out some kind of topping pattern, the risk may extend toward $1.10.   Japanese Yen:  From around mid-September through mid-October, the dollar broke out of the old JPY109-JPY111 range to reach JPY114.70 on October 20.  It consolidated at lower levels and approached JPY112.70 on November 9.  The jump in the US CPI reported the following day lifted the greenback to JPY114.00, and it reached JPY114.30 before the weekend.  We often experience the dollar-yen exchange rate as a pair often rangebound.  We had anticipated a JPY113-JPY115 range and would allow about a half a yen range or so violation. The MACD has flatlined, while the Slow Stochastic has turned higher.  Although the fit is not perfect, we still look at US yields for directional cues.   British Pound:  Sterling had been turned lower on November 4 from $1.37 by the BOE, who caught the market leaning too far over its skis, arguably encouraged to do so by official rhetoric.  Its attempt to recover was stalled near $1.36, and the US inflation jump set it to new lows for the year.  The low ahead of the weekend was slightly below $1.3355.  The MACD is entering oversold territory, while the Slow Stochastic, which leveled off, seems to be slipping into over-extended territory as well.  After closing for two sessions below the lower Bollinger Band, it finished the week back above it (~$1.3355).  A close above $1.3400 would suggest a consolidative phase lies ahead.  Last December, sterling recorded lows $1.3135-$1.3185, and the risk is for this area to be tested.   Canadian Dollar:  Since the US CPI surprise, the Canadian dollar has been the weakest of the major currencies, falling around 0.75% against the greenback.  It was the third consecutive weekly decline for the Loonie, which was preceded by a five-week advance.  The US dollar posted an outside up day in the middle of last week on the back of the CPI news.  It rallied from slightly below CAD1.2390 to a little above CAD1.25.  On Thursday, when US and Canadian banks were closed for holidays, the dollar rose to almost CAD1.2600 and made a marginal new high ahead of the weekend.  This met the (50%) retracement of the US dollar's decline since the CAD1.29 level was approached a couple of days before the September 22 FOMC meeting.  The Slow Stochastic is over-extended, though the MACD has more scope to run.  Here too, the market moved quickly, and the greenback settled the past two sessions above the Bollinger Band (~CAD1.2555). The CAD1.2480 area may offer initial support.   Australian Dollar:  The Australian dollar recorded the low for the year on August 20, near $0.7100.  It recovered into early September (~$0.7480) before being turned back to $0.7170 by the end of the month. The Aussie launched another advance last month that carried to around $0.7555 and the 200-day moving average.  It has come under new pressure this month and fell to nearly $0.7275 ahead of the weekend, meeting the (61.8%) retracement target of the overall rally since August 20.  It closed on a firm note above $0.7300.  The Slow Stochastic is over-extended and could turn up next week.  The MACD is still pointing lower.  After settling out the Bollinger Band on Wednesday and Thursday, the Aussie moved back into it (~$0.7300) ahead of the weekend.  Initial resistance is seen in the $0.7335-$0.7355 band.   Mexican Peso:  The US CPI boosted the dollar by nearly 1.6% against the peso, the most in five months.  It was the only advance of the week, but it was sufficient for the greenback to close around 0.6% stronger.  The high for the week (~MXN20.7225) was recorded in the hours after the central bank delivered its fourth quarter-point rate hike.  Banxico showed no appetite to increase the pace, unlike other regional central banks, even though CPI is still accelerating.  Still, the greenback slightly exceeded the (61.8%) retracement target (~MXN20.70) of its decline from the November 3 high (~MXN20.98) to the November 9 low (~MXN20.2515) before retreating ahead of the weekend.  Support is seen around the 20-day moving average (~MXN20.42).  Among emerging market currencies, the Brazilian real (~2.3%) and the Chilean peso (1.6%) fared best.  The Hungarian forint (~-2.9%) and the Turkish lira (-2.75) saw the largest losses.  The JP Morgan Emerging Market Currency Index fell by about 0.40% last week, the eighth weekly decline in the past ten.   Chinese Yuan:  One would not know it by reading much of the free financial press, but the Chinese yuan is the strongest currency in the world this year.  Its 2.3% advance eclipses the Canadian dollar, the only major currency stronger against the US dollar on the year (~1.3%).  The tensions in Europe and the pullback in oil prices saw the Russian rouble tumble almost 2.3% last week.  It was knocked from its perch as the top performer, allowing the yuan to pull ahead.  The dollar settled last week, slightly under CNY6.38, its lowest close since May 31, when it recorded a three-year low (~CNY6.3570).  The trend line connecting the 2014 dollar-low and 2018 low is frayed in May and June but essentially held.  It is now being violated more convincingly.   Sentiment toward investment in China has become in fashion again.  The NASDAQ Golden Dragon Index that tracks Chinese companies that trade in the US rallied nearly 7% last week.  China's 10-year yield of 2.80% may not sound particularly exciting, but it is the only benchmark that has not sold off this year.  The yield has fallen 20 bp.    Disclaimer
MSFT, Johnson&Johnson and More Companies With Reports to be Released shortly

Weekly S&P500 ChartStorm - 14 November 2021

Marc Chandler Marc Chandler 15.11.2021 11:20
The S&P500 ChartStorm is a selection of 10 charts which I hand pick from around the web and post on Twitter. The purpose of this post is to add extra color and commentary around the charts. The charts focus on the S&P500 (US equities); and the various forces and factors that influence the outlook - with the aim of bringing insight and perspective. Hope you enjoy! p.s. if you haven’t already, subscribe (free) to receive the ChartStorm direct to your inbox, so you don’t miss out on any charts (you never know which one could change the whole perspective!) Subscribe Now 1. Vacciversary: Can you believe, an entire year has passed since the Pfizer vaccine announcement. Markets had a strong immediate reaction, and since then have chalked up some 34% in gains. Of course a bunch of other factors are also at play, and we also had delta along the way, but you have to think at some level if there were no vaccine that the ride in markets might have been a little rougher. Source: @LarryAdamRJ 2. Investor Movement Index: The IMX moved down slightly in October - this continues the pattern of movement downwards from the peak in optimism of a few months ago. This is typically not a healthy sign for sentiment indicators i.e. reaching an extreme and then leveling off. Source: TD Ameritrade 3. Investment Manager Index: On the other hand, the Markit IMI rebounded further in November with risk appetite surging to multi-month highs and expected returns reaching a new (albeit short history - newish survey) high. Source: @IHSMarkitPMI 4. Euphoriameter: Even my own Euphoriameter composite sentiment indicator has ticked higher so far in November as valuations and bullish surveyed sentiment remain high and volatility lulls back towards complacency. Source: @topdowncharts 5. Investor Sentiment vs Consumer Sentiment: But not all sentiment indicators are at the highs: consumer sentiment has been decidedly less optimistic. I mentioned in a recent video that the UoM consumer sentiment indicator was perhaps overstating the extent of the decline, but the other 2 consumer confidence indicators I track for the USA have also started to drop off recently. This has left quite the divergence between consumer sentiment and investor sentiment. A large part of this is probably down to the inflationary shock that is currently facing the global economy due to pandemic disruption to the global supply chain *and* unprecedented monetary + fiscal stimulus (remember: supply shortages/backlogs and the associated inflation surge don’t exist if there is no demand —> demand has been boosted by stimulus —> and stimulus helps stocks ——> gap explained). Source: @takis2910 6. Real Earnings Yield: Another effect of the surge in inflation has been a plunge in the real earnings yield: again this can be squared up by noting that stimulus has been a key driver of the inflation shock and a key driver of the surge in asset prices —> surging asset prices (stock prices) leads to a lower nominal earnings yield (again: gap explained). So is this a problem? Perhaps, but one way or the other it will probably be transitory (if you can read between the lines a little there!!). Source: @LizAnnSonders 7. Valuations: Valuations rising = risks rising... but then again it's a bull market, so POLR is higher (for now). n.b. “POLR” = path of least resistance: basic notion that in markets and life when a force is set in motion an object will not change its motion/trajectory unless another force acts on it... That means a bull market will carry on until something changes e.g. a crisis, monetary policy tightening, recession, regulations/politics, (or a combination of all of those!). Source: @mark_ungewitter 8. Household Financial Asset Allocations: We all know by now that equity allocations by households is at/near record highs. But one surprise: cash holdings have jumped and are apparently on par with debt (bonds etc) ...even as cash rates suck (and are even suckier when you consider the real interest rate). Probably an element of booking gains, stimulus payments, and precautionary savings. Recall though: the job of cash is preservation of capital (and optionality) vs generating returns, as such. Source: @MikeZaccardi 9. S&P500 Constituents Return Distribution: I thought this was interesting - especially the tails of the distribution - a lot of heavy lifting being done at the tails. But also that ”s” — tails (i.e. big dispersion between left and right tails). Source: @spglobal via @bernardiniv68 10. The Five Biggest Stocks: The bigness of the biggest stocks in the index is biggening more bigly. Serious though: the market is increasingly lop-sided, this means diversification may be diminishing as systematic risk will be increasingly driven by specific risk. Source: @biancoresearch Thanks for following, I appreciate your interest! !! BONUS CHART: Leveraged ETF trading indicator >> Click through to the ChartStorm Substack to see the bonus chart section https://chartstorm.substack.com/p/weekly-s-and-p500-chartstorm-14-november Follow us on: Substack https://topdowncharts.substack.com/ LinkedIn https://www.linkedin.com/company/topdown-charts Twitter http://www.twitter.com/topdowncharts
The Long and Short of Commodities

The Long and Short of Commodities

Topdown Charts Topdown Charts 03.11.2021 09:45
Commodities are up sharply this year, but several short-term indicators flash caution The medium-longer term bull case remains compelling The chart of commodities ex-gold versus gold offers clues to near-term price action Commodities are on pace for their best annual performance of the century. 2021 has not been a straight line higher, however. There was a period of consolidation during late Q2 through much of Q3. August through mid-October featured another explosive move higher, bringing the GSCI Light Energy index to its highest level in more than seven years. While we are long-term positive on the commodities space, there are mixed signals in the near-term. Breadth has deteriorated while the chart of commodities ex-gold versus gold has gotten extended after dropping to extremely cheap readings last year. It might be time for a pause. Featured Chart: Commodities Ex-Gold vs. Gold Comes Full Circle Sentiment & Positioning Have Soured Another feature that takes away from a positive near-term stance is a drop in bullish sentiment and traders’ positioning. The GSCI Light Energy Index’s consensus bulls reading was nearly two standard deviations above the long-term average at its Q2 peak. Today, the market is less frothy with consensus bulls sporting a Z-score under one. So, while prices have gone up, there is a negative sentiment divergence. Futures positioning shows a similar decoupling. There are fewer speculative net longs in commodities today versus the middle of the year. Excitement has dropped. Perhaps traders are losing interest in commodities as the supply disruption narrative (short-term spike) overshadows the supercycle narrative (longer term bull market). Long-term Upside Remains Likely So, while the near-term picture has turned less encouraging, we are still bullish long-term. Technically, the big breakout that took place a year ago remains alive. A similar breakout occurred in the early 2000s which led to a massive bull run, eventually taking the GSCI Light Energy Index from under 200 to 650. For perspective, the index finished October at 520 as it ventures back into the range from 2010 to mid-2014. Valuations remain compelling, too. Our Commodities Composite Valuation Indicator dropped nearly two standard deviations below its long-term average last year and has now recovered back to neutral. That suggests no barrier to higher prices based on a valuation argument despite the 46% year-on-year rally. The Supercycle May Be Just Beginning We assert the supercycle thesis is intact. The 10-year moving average of year-on-year returns (using the Refinitiv Equal-Weight Commodities Index) dipped negative in 2020—a dismal feat rarely seen in the EW commodities index’s 120-year history. While the 10-year moving average has crept higher in 2021, projections based on our Capital Market Assumptions dataset suggest further upside in the coming decade. Fundamental Factors Finally, a significant macro theme we’ve detailed this year is the dearth in commodities capex which endured a double-dip recession in 2020. While there are one-off supply disruptions in play, the bigger picture theme of extended underinvestment in commodity supply persists. A capex boom—driven by energy firms themselves, the green & EV movements, and increased public infrastructure investment—is likely, which is a source of demand for commodities. Bottom line: We took a bullish stance on commodities in March 2020 with a timeframe of 3-5 years. Our latest Weekly Macro Themes report reiterates the stance but reduces the conviction level based on some near-term mixed signals. The long-run bullish drivers are still there: underinvestment in supply, a robust capex outlook, and continued improvement in global demand for commodities. Follow us on: Substack https://topdowncharts.substack.com/ LinkedIn https://www.linkedin.com/company/topdown-charts Twitter http://www.twitter.com/topdowncharts
S&P 500: More Short-Term Uncertainty As Trading Range Narrows

S&P 500: More Short-Term Uncertainty As Trading Range Narrows

Paul Rejczak Paul Rejczak 12.11.2021 17:18
The S&P 500 index went sideways on Thursday following a decline from its last week’s high. Is the downward correction over? For in-depth technical analysis of various stocks and a recap of today's Stock Trading Alert we encourage you to watch   The S&P 500 index gained 0.06% on Thursday, as it fluctuated along the 4,650 level. On Wednesday it fell to the local low of 4,630.86 and it was almost 88 points or 1.86% below the last week’s Friday’s record high of 4,718.50. The recent rally was not broad-based and it was driven by a handful of tech stocks like MSFT, NVDA, TSLA. The market seemed overbought in the short-term and traded within a topping pattern. Today the index may extend a short-term consolidation. The nearest important support level remains at 4,630-4,650 and the next support level is at 4,600. On the other hand, the resistance level is at 4,700-4,720. The S&P 500 broke below its steep short-term upward trend line, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Nasdaq’s Downward Correction Let’s take a look at the Nasdaq 100 chart. The technology index broke above the 16,000 level last week and on Friday it was trading at the new record high. The market accelerated higher above its short-term upward trend line. But since then it has been retracing the rally. The resistance level remains at 16,400, and the short-term support level is at 16,000, among others, as we can see on the daily chart: Apple Remains Relatively Weak, Microsoft Breaks Below the Trend Line Let’s take a look at the two biggest stocks in the S&P 500 index, AAPL and MSFT. Apple came back below the $150 price level. It is still well below the early September record high. Microsoft stock was reaching new record highs recently but on Wednesday it broke below its upward trend line. So the megacaps tech stocks turned lower, as we can see on their daily charts: Conclusion The S&P 500 index was little changed on Thursday and today it is expected to retrace some of its recent declines. So is the downward correction over? For now, there has been no confirmed short-term upward reversal and we may see some more consolidation below the 4,700 mark. The market may go sideways today, as investors keep taking short-term profits off the table following the recent economic and quarterly corporate earnings releases. Here’s the breakdown: The S&P 500 retraced some of its record-breaking rally in the last few trading sessions – for now it looks like a downward correction. Still no positions are justified from the risk/reward point of view. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak, Stock Trading Strategist Sunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his 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. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members 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.
Will You Allow Gold to Break Your Heart?

Will You Allow Gold to Break Your Heart?

Finance Press Release Finance Press Release 15.11.2021 15:46
Infatuated with gold? Many people are, but love affairs with commodities (or stocks) are dangerous. They’ll steal your heart, then dump you.Our critics often forget that we’re focusing on the medium-term outlook in precious metals, not intraday price moves. They’ll say “Look, gold moved up today. You were wrong Radomski.” That’s nice, but where will it be one or two months from now?While gold, silver, and mining stocks’ optimism resurfaced with a vengeance last week, the trio have broken plenty of hearts since peaking in August 2020. Thus, will the current rallies end in marriage or be another mirage?To begin, while the HUI Index/gold ratio invalidated the breakdown below its rising support line, a similar development occurred in 2013 and the downtrend still resumed.On top of that, I marked (with the shaded red boxes below) just how similar the current price action is to 2013. And back then, after a sharp decline was followed by a small corrective upswing before the plunge, the ratio’s current behavior mirrors its historical counterpart. Furthermore, the end of the corrective upswing in 2013 occurred right before the gold price sunk to its previous lows (marked with red vertical dashed lines in the middle of the chart below). Thus, the ratio is already sending ominous warnings about the PMs’ future path.Even more revealing, the ratio is dangerously close to its 200-day moving average. And when a similar development occurred in 2013 – with the ratio rising slightly above its 200-day moving average (marked with the red vertical dashed line below) – a sharp reversal occurred, mining stocks materially underperformed, and the ratio plunged.Please see below:Likewise, while the GDX ETF rallied again last week, I warned previously that a corrective upswing to $35 was a possibility (the senior miners reached this level intraday on Nov. 12). However, with the GDX ETF’s RSI (Relative Strength Index) signaling overbought conditions, the air should come out of the balloon sooner rather than later.Please see below:To explain, the GDX ETF rallied on huge volume on Nov. 11 and there were only 4 cases in the recent past when we saw something like that after a visible short-term rally.In EACH of those 4 cases, GDX was after a sharp daily rally.In EACH of those 4 cases, GDX-based RSI indicator (upper part of the chart above) was trading close to 70.The rallies that immediately preceded these 4 cases:The July 27, 2020 session was immediately preceded by a 29-trading-day rally that took the GDX about 42% higher. It was 7 trading days before the final top (about 24% of time).The November 5, 2020 session was immediately preceded by a 5- trading -day rally that took the GDX about 14%-15% higher (the high-volume day / the top). It was 1 trading day before the final top (20% of time).The January 4, 2021 session was immediately preceded by a 26-trading-day rally that took the GDX about 17%-18% higher (the high-volume day / the top). It was 1 trading day before the final top (about 4% of time).The May 17, 2021 session was immediately preceded by a 52-trading-day rally that took the GDX about 30% higher. It was 7 trading days before the final top (about 13% of time).So, as you can see, these sessions have even more in common than it seemed at first sight. The sessions formed soon before the final tops (4% - 24% of time of the preceding rally before the final top), but the prices didn’t move much higher compared to how much they had already rallied before the high-volume sessions.Consequently, since the history tends to rhyme, we can expect the GDX ETF to move a bit higher here, but not significantly so, and we can expect this extra move higher to take between an additional 0 and 7 trading days (based on the Nov. 12 session, so as of Nov. 15 it’s between 0 and 6 trading days).Why 0 – 6 trading days (as of today – Nov. 15)? Because with the 4% timeline now in the rearview, the latter represents the updated 24% timeline based on the preceding rally (that took 30 trading days).Since it’s unlikely to take the mining stocks much higher, and the reversal could take place as soon as today (also in gold and silver price), I don’t think that making adjustments to the current short positions in the mining stocks is justified from the risk to reward point of view.Is there a meaningful resistance level that would be likely to trigger a decline in mining stocks? Yes! The GDX ETF is just below its 38.2% Fibonacci retracement level based on the August 2020 – September 2021 decline. The resistance is slightly above $35, so that’s when the final top could form.As for the GDXJ ETF, the gold junior miners have already hit their 38.2% Fibonacci retracement level (potential resistance) and the top may be upon us. Moreover, when the GDXJ ETF’s RSI increased above (or near) 70 in mid-2020 and in mid-2021, sharp drawdowns followed.As a result, those historical readings provided us with great shorting opportunities.In conclusion, investors have fallen in love with gold, silver, and mining stocks once again. However, when it comes time for matrimony, the precious metals often leave investors at the altar. As a result, while we remain bullish on gold, silver, and mining stocks’ long-term prospects, timing is important. And while the recent upswings may seem like the beginning of a new bull market, several reliable indicators beg to differ. Thus, caution is warranted, and new lows will likely materialize 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, CFAFounder, 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.
Getting Real on PMs and Inflation

Getting Real on PMs and Inflation

Monica Kingsley Monica Kingsley 15.11.2021 15:47
S&P 500 indeed rose but bond markets couldn‘t keep the encouraging opening gains. Can stocks still continue rallying? They look to be setting up for one more downleg of maximum the immediately predecing magnitude, which means not a huge setback. The medium-term path of least resistance remains up – the Fed is still printing a huge amount of money on a monthly basis, and it remains questionable how far in tapering plans execution they would actually get – I see the risks to the real economy coupled with persistently high inflation as rising since the 2Q 2022 (if not since Mar already, but most pronounced in 2H 2022).Stocks are still set for a good Dec and beyond performance – just look at VIX calming down again. It‘s that the debt ceiling drama resolution would allow the Treasury to start issuing fresh debt, and that would weigh heavily on the dollar. That‘s a good part of what gold and silver are sniffing out, and if you look at the great white metal‘s performance, it‘s the result of inflation coming back to the fore as the Fed itself is now admitting to high inflation rates through the mid-2022, putting blame on supply chain bottlenecks. Oh, sure. The real trouble is that inflation expectations are starting to get anchored – people are expecting these rates to be not going away any time soon.Precious metals are going to do great, and keep scoring excellent gains. Surpassing $1,950 isn‘t out of the realm of possibilities, but I prefer to be possitioned aggressively while having more conservative expectations. Not missing a dime this way. Copper is awakening too, and commodities including oil would be doing marvels. If in doubt, look at cryptos, how shallow the corrections there are.A few more words on yields – as more fresh Treasury issued debt enters the markets, look for yields to rise. Coming full circle to stocks and my Friday‘s expectations:(…) TLT though is having trouble declining further, and that means a brief upswing carrying over into stocks, is likely.TLT downswings would be less and less conducive to growth, so if you‘re still heavily in tech, I would start eyeing more value.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 bulls are on the move, and let‘s see how far they make it before running into another (mild, again I say) setback.Credit MarketsCredit markets opening strength fizzled out, but the weakness is getting long in the tooth kind of. I view it as a short-term non-confirmation of the S&P 500 upswing only.Gold, Silver and MinersGold and silver are on a tear, and rightfully so – I am looking for further gains as both gold and silver miners confirm, and the macroeconomic environment is superb for PMs.Crude OilCrude oil bulls keep defending the $80 level, with $78 serving as the next stop if need be – after Friday, its test is looking as an increasingly remote possibility – the two lower knots in a series say. Anyway, black gold will overcome $85 before too long.CopperCopper ran while commodities paused – that‘s a very bullish sign, for both base and precious metals. The lower volume isn‘t necessarily a warning sign.Bitcoin and EthereumBitcoin and Ethereum are still consolidating, and the relatively tight price range keeps favoring the bulls – and they‘re peeking higher already.SummaryS&P 500 bulls are holding the short-term upper hand, but the rally may run into headwinds shortly. Still, we‘re looking at a trading range followed by fresh highs as a worst case scenario. Yes, I remain a stock market bull, not expecting a serious setback till probably the third month of 2022. Precious metals are my top pick, followed by copper – and I am definitely not writing off oil, let alone cryptos. Inflation trades are simply back!Thank you for having read today‘s free analysis, which is available in full 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 five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Intraday Market Analysis – Gold Approaches Supply Zone

Intraday Market Analysis – Gold Approaches Supply Zone

John Benjamin John Benjamin 16.11.2021 09:28
XAUUSD tests trendlineGold continues on its way up as investors seek to hedge against inflationary pressures. The rally picked up steam after a break above the triple top at 1833. Price action is grinding up along a rising trendline.The bulls are pushing towards 1884, a major resistance where last June’s sell-off started. Strong selling pressure is possible in that supply zone as short-term buyers may take profit and reassess the directional bias.1855 on the trendline is the first support. A bearish breakout may trigger a correction to 1823.AUDUSD breaks above bearish channelThe Australian dollar softened after the RBA minutes reiterated that there will be no rate hike until 2024.The pair has found buying interest at the base of October’s bullish breakout (0.7280). A break above the falling channel indicates that sentiment could be turning around.0.7390 is a key resistance and its breach could prompt sellers to bail out. In turn, this would raise volatility in the process. Traders may then switch sides in anticipation of a reversal. An overbought RSI has so far limited the upside impetus.GER 40 rally gains tractionThe Dax 40 climbed after upbeat retail sales and industrial production in China lifted market sentiment.The index is seeking to consolidate its recent gains after it cleared the previous peak at 15990 which has now turned into support. Sentiment remains optimistic and 16300 would be the next step.An overbought RSI on the daily chart may temporarily put the brakes on the bullish fever. But a pullback may once again attract a ‘buying-the-dips’ crowd above 15990. A deeper correction may send the price towards 15770.
Technical Analysis - Support And Resistance - Terms You Should Know

Key event risk and front of mind this week...

Chris Weston Chris Weston 16.11.2021 12:15
UK jobless claims (Tuesday 18:00 AEDT) and Oct CPI (Wed 18:00 AEDT) New home prices (today at 12:30 AEDT), Retail sales, industrial production, fixed-asset investment, property investment (all today 13:00 aedt) Aussie Q3 wage data (Wed 11:30 AEDT) RBA gov Lowe speaks (Tues 13:30 AEDT) US retail sales (Wed 00:30 AEDT), Fed speeches all week with the highlight vice-chair Clarida (Sat 04:15 AEDT) The inflation debate is still the hottest ticket in town – it is promoting higher volatility (vol) in rates markets and bonds, with a small pick-up seen in FX volatility (vol). Equity markets are still, however, calm, with the VIX at 16.3% with falling demand to hedge potential drawdown. This divergence in implied vol across asset class remains a key talking point, but there is no doubt that the boat is not yet tipping with correlations among stocks almost at zero, and cyclical sectors (of the S&P500) still holding up well vs defensives. If the US high yield credit spread accelerated above 273bp above the US 10yr Treasury (currently 267bp), then again, I think equities would be a better sell.  Now this dynamic may change, especially if the debt ceiling comes into play in mid-Dec…but what are the signs to look for over a medium-term?  A higher vol regime will make conditions far more prosperous for equity short-sellers and change the dynamics in FX markets, with renewed downside demand for high beta FX (AUD, NZD, CAD, and MXN). The USD will turn from one being driven by pro-cyclical forces – i.e. relative economics and rate settings - to one sought for safe-haven demand, with the JPY also benefiting.  (Implied volatility benchmarks across asset class) Firstly, I would start with the rates markets – we can see a bit over 2 hikes priced into US fed funds future by the end-2022, with rates ‘lift off’ starting in July. I think if we priced in over 3 hikes in 2022 it could become more problematic for risk assets. Looking out the Eurodollar rates curve, we see a reasonably aggressive pace of hikes in 2022 and 2023, but then the pace markedly declines with barely anything priced for 2024 and 2025. In essence, the market sees hikes as front-loaded suggesting the Fed are in fact not dramatically behind the curve – a factor that is one of the core debates in macro.  We see an 89bp differential between the Eurodollar Dec 2025 and Dec 2022 futures contracts – if this moves back to say 140bp then this could be the market feeling that inflation is going to be a far greater problem and rate hikes are being more aggressively priced throughout the next four years. (Orange – US 5y5y forward rate, white – Fed’s long-term dot plot projection) Also, if the US 5y5y forward rate (the markets view on the ‘terminal’ fed funds rate – now 1.94%) pushed above 2.50% (the Fed’s long-term dot plot projection), again, I think this would be a trigger for far higher volatility and risk aversion.  A move to 2.50% won't play out overnight, if at all, and we’ll need to see real evidence that the US labour force participation rate is not going above 62%, while unit labour costs stay elevated and supply chains heal at a glacial pace. However, if the forward rate was eyeing 2.5% I think this could be a factor many strategists will point to for the VIX to sustain a move above 20%. The gold market is perhaps one of the more classic signs of inflationary concerns – this is a play on US ‘real’ (adjusted for inflation expectations) rates though, where the combination of a better economy in Q4, record negative US real rates and rising inflation is one the gold bulls will seek out precious metals. The Fed may need to promote a move higher in real rates, but the knock-on effect is they risk the stock market finding sellers – notably in growth stocks. A downside break of -2% in 5yr US real Treasury’s could be the trigger for gold to push into and above $1900.  Many debate the linkage between inflation expectations and the real economy. I’m not sure it matters when people are feeling the effects for themselves, and much has been made of the recent NFIB small business survey and Friday’s University of Michigan consumer sentiment survey, which hit the lowest levels since August 2011.  Clearly inflation is not popular and is increasingly the key political issue – I’d argue if real rates break to new lows this could accelerate inflation hedges, while a move through 2.7% in US 5y5y inflation swaps (currently 2.55%) would also play into the idea that perhaps the Fed, at the very least, need to radically reduce the pace of QE in the December FOMC meeting.  Clearly, the US Nov CPI (released 11 Dec) is going to be a big event for markets to digest and the signs are price pressures will continue to build from the current 6.2% YoY pace.  Crude and gasoline also play a key role in shaping sentiment – Senate Majority Leader Schumer has called on President Biden to release an element of the US’s Strategic Petroleum Reserves (SPR). This is a factor that has been talked up since OPEC rejected the US’s calls to increase output by more than 400k barrels. However, the introduction of Schumer into the mix just adds fuel to the fire and this may weigh on crude. So, a few indictors I am watching that could spur the market into a belief the Fed are genuinely behind the curve – I’d argue the market isn’t there yet, but if the factors I mention don’t show evidence of dissipating then we could see forward rates move to levels that could highlight the Fed need to act far more intently – that is where risk dynamics could markedly change.
Stocks to Open Higher but Another Profit-taking Action is Likely

Stocks to Open Higher but Another Profit-taking Action is Likely

Paul Rejczak Paul Rejczak 15.11.2021 15:51
  Stocks retraced some of their recent declines on Friday and the S&P 500 index is expected to open higher this morning. So is the downward correction over? The S&P 500 index gained 0.72% on Friday, Nov. 12, as investor sentiment turned bullish and the market bounced from the support level of around 4,650. On Wednesday it fell to the local low of 4,630.86 and it was almost 88 points or 1.86% below the previous week’s Friday’s record high of 4,718.50. The recent rally was not broad-based and it was driven by a handful of tech stocks like MSFT, NVDA, TSLA. The market seemed overbought in the short-term and traded within a topping pattern. But today the index may get back to the 4,700 level. The nearest important support level remains at 4,630-4,650 and the next support level is at 4,600. On the other hand, the resistance level is at 4,700-4,720. The S&P 500 broke below its steep short-term upward trend line recently, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Nasdaq Bounced From the 16,000 Level Let’s take a look at the Nasdaq 100 chart. In the previous week the technology index broke above the 16,000 level and it was trading at the new record high. The market accelerated higher above its short-term upward trend line. But since then it has been retracing the rally. On Friday the index retraced some of the recent declines, however it remained below its short-term local lows, as we can see on the daily chart: Apple Is Still Close to $150, Microsoft Remains Relatively Strong Let’s take a look at the two biggest stocks in the S&P 500 index, AAPL and MSFT. Apple continues to fluctuate along the $150 price level. It is still well below the early September record high. Microsoft stock was reaching new record highs recently but last week it broke below its upward trend line. So those two big cap tech stocks remain mixed, as we can see on their daily charts: Conclusion The S&P 500 index retraced some of its recent declines on Friday and today it is expected to open 0.4% higher. So it looks like a downward correction is over and the market may reach new highs or at least extend a short-term consolidation along the 4,700 level. Investors will wait for tomorrow’s Retail Sales number release and some Fed-talk later in the week. Here’s the breakdown: The S&P 500 is expected to extend its Friday’s advance this morning and it may get to the 4,700 level. Still no positions are justified from the risk/reward point of view. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his 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. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members 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.
Biden Signs a Bill to Revive Infrastructure… and Gold!

Biden Signs a Bill to Revive Infrastructure… and Gold!

Arkadiusz Sieron Arkadiusz Sieron 16.11.2021 14:13
Gold rallied thanks to the changed narrative on inflation, and Biden’s infrastructure plan can only add to the inflationary pressure. Huge price moves ahead? I have a short quiz for you! What the government should do to decrease inflation that reached the highest level in 30 years? A) Decrease its expenditure to make room for the Fed to hike the federal funds rate. B) Press the US central bank to tighten its monetary policy. C) Deregulate the markets and lower taxes to boost the supply side of the economy. D) Introduce a huge infrastructure plan that will multiply spending on energy, raw materials, and inputs in general. Please guess which option the US government chose. Yes, the worst possible. Exam failed! At the beginning of November, Congress passed a bipartisan infrastructure bill. And President Biden signed it on Monday (November 15, 2021). To be clear, I’m not claiming that America doesn’t need any investment in infrastructure. Perhaps it needs it, and perhaps it’s a better idea than social spending on unemployment benefits that discourage work. I don’t want to argue about the adequacy of large government infrastructure projects, although government spending generally fails to stimulate genuine economic growth and governments rarely outperform the private sector in effectiveness. My point is that $1.2 trillion infrastructure spending is coming at the worst possible moment. The US economy is facing supply shortages and high inflation caused by surging demand, which choked the ports and factories. In short, too much money is chasing too few goods, and policymakers decided to add additional money into the already blocked supply chains! I have no words of admiration for the intellectual abilities of the members of Congress and the White House! Indeed, the spending plan does not have to be inflationary if financed purely by taxes and borrowing. However, the Fed will likely monetize at least part of the newly issued federal debt, and you know, to build or repair infrastructure, workers are needed, and steel, and concrete, and energy. The infrastructure spending, thus, will add pressure to the ongoing energy crisis and high producer price inflation, not to mention the shortage of workers. Implications for Gold What does the passing of the infrastructure bill imply for the gold market? Well, it should be supportive of the yellow metal. First, it will increase the fiscal deficits by additional billions of dollars (the Congressional Budget Office estimates that the bill will enlarge the deficits by $256 billion). Second, government spending will add to the inflationary pressure, which gold should also welcome. After all, gold recalled last week that it is a hedge against high and accelerating inflation. As the chart below shows, gold not only jumped above the key level of $1,800, but it even managed to cross $1,850 on renewed inflation worries. The infrastructure bill was probably discounted by the traders, so its impact on the precious metals market should be limited. However, generally, all news that could intensify inflationary fears should be supportive of the yellow metal. You see, the narrative has changed. So far, the thinking was that higher inflation implies faster tapering and interest rates hikes and, thus, lower gold prices. This is why gold was waiting on the sidelines for the past several months despite high inflation. Investors also believed that inflation would be transitory. However, the recent CPI report forced the markets to embrace the fact that inflation could be more persistent. What’s more, tapering of quantitative easing started, which erased some downward pressure on gold. Moreover, despite the slowdown in the pace of asset purchases, the Fed will maintain its accommodative stance and stay behind the curve. So, at the moment, the reasoning is that high inflation implies elevated fears, which is good for gold. I have always believed that gold’s more bullish reaction to accelerating inflation was a matter of time. It’s possible that this time has just come. Having said that, investors should remember that market narratives can change quickly. At some point, the Fed will probably step in and send some hawkish signals, which could calm investors and pull some of them out of the gold market. My second concern is that gold could have reacted not to accelerating inflation, but rather to the plunge in the real interest rates. As the chart below shows, the yields on 10-year TIPS have dropped to -1.17, a level very close to the August bottom. When something reaches the bottom, it should rebound later. And if real interest rates start to rally, then gold could struggle again. However, I’ll stop complaining now and allow the bulls to celebrate the long-awaited breakout. It’s an interesting development compared to the last months, that’s for sure! If you enjoyed today’s free gold report, we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today. If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care
The Elephant in the Room

The Elephant in the Room

Monica Kingsley Monica Kingsley 16.11.2021 15:42
S&P 500 is starting to run into a setback even if VIX doesn‘t reveal that fully. Credit markets going from weakness to weakness spells more short-term woes for stocks – a shallow downswing that feels (and is) a trading range before the surge to new ATHs continues, is likely to materialize in the second half of Nov. We may be in its opening stages – as written yesterday: (…) Can stocks still continue rallying? They look to be setting up for one more downleg of the immediately predecing magnitude, which means not a huge setback. The medium-term path of least resistance remains up – the Fed is still printing a huge amount of money on a monthly basis, and it remains questionable how far in tapering plans execution they would actually get – I see the risks to the real economy coupled with persistently high inflation as rising since the 2Q 2022 (if not since Mar already, but most pronounced in 2H 2022). Stocks are still set for a good Dec and beyond performance. The elephant in the room is (the absence of) fresh debt issuance lifting up the dollar, making it like rising yields more. Not only that these are failing to push value higher, but the tech resilience highlights the defensive nature of S&P 500 performance. Crucially though, precious metals are seeing through the (misleading dollar strength) fog, and are sharply rising regardless. Make no mistake, with the taper reaction, we have seen what I had been expecting (or even better given that I prefer reasonably conservative stance without drumming up expectations either way) – I had been telling you that the hardest times for the metals are before taper. And the magnitude and pace of their upswing casts a verdict on the Fed‘s (likely in)ability to follow through with the taper execution, let alone initiate the rate raising cycle without being laughed off the stage as markets force these regardless of the central planners. The galloping inflation expectations are sending a very clear message: (…) if you look at the great white metal‘s performance, it‘s the result of inflation coming back to the fore as the Fed itself is now admitting to high inflation rates through the mid-2022, putting blame on supply chain bottlenecks. Oh, sure. The real trouble is that inflation expectations are starting to get anchored – people are expecting these rates to be not going away any time soon. Precious metals are going to do great… Copper is awakening too, and commodities including oil would be doing marvels. TLT downswings would be less and less conducive to growth, so if you‘re still heavily in tech, I would start eyeing more value. Let me add the Russell 2000 and emerging markets to the well performing medium-term mix. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 bulls didn‘t make it too far before running into another (mild, again I say) setback – so far, a sideways one. Credit Markets Credit markets renewed their march lower, and unless they turn, the S&P 500 upswings would remain on shaky ground (if and when they materialize). Gold, Silver and Miners Gold and silver remain on a tear, and even for the breather to unfold, it takes quite an effort. The bears clearly can‘t hope for a trend change. Crude Oil Crude oil bulls keep defending the $80 level, with $78 serving as the next stop if need be – these consecutive lower knots keep favoring the bulls, just when the right catalyst arrives. Whether that takes one or two days or more, is irrelevant – it will happen. Copper Copper ran into an unexpected setback, which however doesn‘t change the outlook thanks to its relatively low volume. I‘m still looking for much higher red metal‘s prices. Bitcoin and Ethereum Bitcoin and Ethereum are seeing an emerging crack in the dam that doesn‘t tie too well to developments elsewhere. The bulls should step in, otherwise this yellow flag risks turning into a red one. Summary S&P 500 bulls are now holding only the medium-term upper hand as the rally is entering a consolidation phase. Anyway, this trading range would be followed by fresh ATHs, which would power stocks even higher in early 2022. Precious metals have quite some catching up to do, and the long post Aug 2020 consolidation is over. Copper, base metals, oil and agrifoods are likely to keep doing great as inflation expectations show that inflation truly hasn‘t been tamed in the least. Thank you for having read today‘s free analysis, which is available in full 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 five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Bitcoin, a battle for freedom

Bitcoin, a battle for freedom

Korbinian Koller Korbinian Koller 17.11.2021 08:01
We find ourselves ensued in various battles. Environmentally, economically, and from a human perspective. As much as it is questionable if coal and oil, centralized money, and wars (attacks on ourselves) hold a prosperous future, change is typically avoided. There have been moments in history where rapid change happened. Most often introduced by a charismatic human being with a compelling principle at a defining moment when a change was needed. S&P 500 Index versus BTC in US-Dollar, Monthly Chart, bitcoin an answer to crisis? S&P 500 Index versus Bitcoin in US-Dollar, Monthly chart as of November 16th, 2021. The bitcoin idea was born as a response to the crash of 2008. In its principles, diametrical to fiat currencies. Bitcoin is decentralized, limited, deflationary and digital. There is no historical event where increased money printing has resolved economic turmoil. And yet, we have not come up with a better solution, or at least we have not implemented it yet. The chart above shows how shortly after the crash of 2008, the first transaction ever sent on the bitcoin blockchain was completed in January 2009.Coincidence? It took some time until the cryptocurrency’s pseudonymous creator Satoshi Nakamoto found traction with his idea reflected in bitcoin’s price rise. Still, it has not just caught up but outperformed the market by a stunning margin. BTC in US-Dollar, Monthly Chart, don’t underestimate powerful ideas: Bitcoin versus gold and silver in US-Dollar, Monthly chart as of November 16th, 2021. Covid provided like a steroid a means to illustrate many shortcomings in a magnified way. The chart above shows that bitcoin speculation was an answer to where many find a more prosperous future compared to precious metals. In addition to fundamentals and technical, the underlying idea and hope for a transitory future got traction when people were most afraid.   BTC in US-Dollar, Monthly Chart, sitting through turmoil with ease: Bitcoin in US-Dollar, Monthly chart as of November 16th, 2021. Dissecting markets like this in all their shades and facets is necessary for discovering underlying currents, motivation, and sustainability of trends. In bitcoins case, the found strength of application, beliefs, and principles inherent in bitcoin itself and its traders allows for sitting more easily through its volatility swings. Once the mind grasps reason, it tolerates easier, otherwise hardships to trade a volatile vehicle like bitcoin. With a battle ensured on this magnitude and for an expected long duration, one can accept deep retracements in a more tranquil fashion. The monthly chart above shows that bitcoin might face one of those quick dips that hodlers accept, knowing that the battle isn’t over yet. Bitcoin, a battle for freedom: Mills are grinding slowly. Change typically takes time, and those holding the reign over financial power will certainly not surrender such summoned energies lightly. While this world certainly needs a more adaptive behavior of humanity both for its wellbeing and the planet itself, it is unlikely that a shift, if at all, will be swift. This means that bitcoin is a continued struggle to establish itself. And this will result in continued high volatility for the years to come. As such, it will remain an excellent opportunity for the individual investor. 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. This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting.
Finally Shining: Gold & Silver Rally Amid USD Strength

Finally Shining: Gold & Silver Rally Amid USD Strength

Topdown Charts Topdown Charts 17.11.2021 08:39
We are upgrading our view on gold given a positive turn in several technical indicators A bearish macro backdrop persists, however, and gold’s long-term valuation is still not very compelling Our Weekly Macro Themes report investigates interesting moves such as a rising US Dollar as precious metals rally Investors were ready to write off precious metals in September and October. After all, what should have been the perfect environment for a rally in gold and silver (immense monetary and fiscal stimulus, rising inflation fears, and negative real interest rates) turned out to be a period of significant losses. Moreover, the opportunity cost of owning precious metals (and related mining stocks) was extreme from Q3 2020 through much of 2021. Prices Turn Higher Things changed at the end of last quarter. The silver ETF and gold miners staged impressive rallies while the S&P 500 surged in October. And now gold is perking up. These bullish moves went under the radar given the massive equity market climb. The Weekly Macro Themes report dives into the many intriguing moves taking place in gold, silver, gold miners, and the US Dollar. We Turn Neutral from Bearish For a variety of reasons, we have turned neutral on gold from a bearish view. There has been significant improvement in gold’s technical picture, and sentiment & positioning trends lean bullish. The major headwind is, of course, a tightening cycle from the Federal Reserve. Other central banks are charging ahead with rate hikes. Investors Remain Underweight Relative to History It’s possible that the bearish macro/policy backdrop was discounted into the price of gold. Investors were also lightly positioned to the yellow metal. Our featured chart illustrates just how bearish market participants were (and still are) to gold. Implied ETF allocations peaked a decade ago near 8%, but then collapsed to the 1-2.5% range for the better part of the past seven years. Featured Chart: Implied ETF Allocations to Gold Are Skidding on All-Time Lows Better Flows and Momentum Gold’s recent jump is buttressed by a higher low in our ETF flow indicator. Moreover, the FX breadth indicator (which tracks the performance of gold versus a basket of currencies) says there is some momentum behind this past several weeks’ price action. Gold’s chart appears more bullish when priced in currencies other than the Greenback. Still, we await a more decided breakout before turning outright bullish. Long-Term Valuations Still Lean Expensive Another piece of evidence that makes us cautious is our gold valuation indicator which still reads as “expensive” despite a significant reset from 2020’s extreme level; gold’s composite long-term valuation Z-score is about 0.5 to the expensive side. Higher Gold with A Higher Dollar? What’s fascinating about the recent jump in precious metal prices is that it has transpired with a rising US Dollar Index. The DXY made an initial breakout last week. Conventional wisdom says a higher dollar is a negative for precious metals, but we find many examples where both gold and the USD have rallied in the past. The move often catches traders off-guard. Gold Miners and Silver Also in Focus Concerning gold miners, the Weekly Macro Themes report details an updated stance on the seemingly left-for-dead group of stocks. We also dig into what has been developing in the silver market. Bottom line: Our view on gold has shifted from bearish to neutral given a plethora of macro factors, but mixed monetary signals and somewhat elevated gold valuations still suggest caution. At the same time, our bullish stance on gold miners initiated two months ago is reiterated. Follow us on: Substack https://topdowncharts.substack.com/ LinkedIn https://www.linkedin.com/company/topdown-charts Twitter http://www.twitter.com/topdowncharts
Intraday Market Analysis – USD Pushes Higher

Intraday Market Analysis – USD Pushes Higher

John Benjamin John Benjamin 17.11.2021 09:08
EURUSD lacks support The US dollar inched higher after October’s retail sales beat expectations. There has been a lack of interest in the single currency following its fall below the daily support at 1.1530. The divergence between the 20 and 30-hour moving averages indicates an acceleration in the sell-off. The bears are targeting the demand zone around 1.1200 from last July. The RSI’s oversold situation may prompt momentum traders to cover. Though a rebound is likely to be capped by 1.1370 and sellers would be eager to sell into strength. GBPJPY attempts to rebound The sterling recouped losses after Britain’s unemployment rate dropped to 4.3%. On the daily chart, the pair saw support near the 61.8% (152.60) Fibonacci retracement of the October rally. A bullish RSI divergence was a sign that the bearish pressure was fading. A break above 153.60 could be an attempt to turn the mood around. The initial surge may need more support after the RSI shot into the overbought area. Should the pound stay above 152.35-152.60, a rebound would lift it towards 155.20. NAS 100 tests peak The Nasdaq 100 bounces back supported by robust tech earnings. The index showed exhaustion after a four-week-long bull run. A combination of an overbought RSI and its bearish divergence made traders cautious in buying into high valuations. A break below the psychological level of 16000 has triggered a wave of profit-taking. A deeper retreat below 16020 would send the index to the previous peak at 15700 which coincides with the 30-day moving average. On the upside, A rally above 16400 would resume the uptrend.
Gold – USD Relationship Status: It’s Complicated

Gold – USD Relationship Status: It’s Complicated

Przemysław Radomski Przemysław Radomski 17.11.2021 13:27
  If the dollar goes through a corrective downswing, it’s more bullish for gold? Not if a decline in the euro caused gold to rise in the first place. Another day, another new yearly high for the USD Index. The U.S. currency soars just like it has since the beginning of the year, in tune with what I said at that time, (and against what almost everyone else said about its outlook). The rally accelerated recently, with the USD Index soaring by 0.78 this week – and it’s only Wednesday today. So, surely that’s bullish for the USD Index? - one might ask. No. “Bullish” or “bearish” relates to the future, not to the past. In fact, the rally in the USD Index might need a breather as all markets – no matter how bullish or bearish the situation is in them – can’t rally or decline in a straight line, without periodic corrections. The USD Index, gold, silver, mining stocks, and practically all the other markets are no exception from this rule. Even the real estate prices don’t increase over the long run without periodic downturns. As you can see on the above chart, the U.S currency index soared to almost 96 yesterday and it’s after an almost straight-up rally. This rally caused the RSI indicator to move above 70, and this has been a quite precise short-term sell signal this year. In fact, in all cases when we saw it, some kind of short-term correction followed. Based on the size of the current rally, it seems that the current situation is most similar to what we saw in early March and in late June. That’s when we saw short-term declines that took the USDX approximately a full index point lower. In the current case, it could mean a decline back to 95. This would be a perfectly natural thing for the USD Index to do right now, given that the previous resistance (which now serves as support) is located slightly below 95. The support is provided by the late-2020 high and the March 2020 low (not visible on the above chart). So, surely this corrective downswing in the USD Index would cause an even bigger rally in the precious metals sector, right? That’s where things get complicated. You see, the biggest (over 50%) part of the USD Index (which is a weighted average) is the EUR/USD currency pair. Let’s take a look at it. The Euro Index moved sharply lower last week and just like the RSI based on the USD Index flashed a sell signal, the RSI based on the Euro Index flashed a buy signal. Also, the Euro Index just moved to the lower border of its declining trade channel, which is likely to indicate some kind of rebound. Why am I discussing the euro here? Because that’s what’s complicated about the current USD-gold link. The euro recently declined and the prices of silver and gold recently rallied shortly after dovish comments from the eurozone. Namely, while the expansionary nature of fiscal and monetary decisions in the U.S. might be after its peak (with the infrastructure bill signed even despite high inflation numbers), the eurozone is far from limiting its expansionary (i.e., inflationary) policies, and it was just made clear recently. That was bearish for the euro and bullish for the gold price – as more money (euros in this case) would be chasing the same amount of physical gold bars. The point here is that it might have been the decline in the value of the European currency that caused gold to rally, and it had little to do with what happened in the USD Index. Don’t get me wrong, most of the time, the gold-USD link is stable and negative. In some cases, gold shows strength or weakness by refusing to move in tune (and precisely: again) with the U.S. dollar’s movement. But in this case, it seems that it’s not about the U.S. dollar at all (or mostly), but rather about what happened in the Eurozone and euro recently. I marked the recent decline in the euro and the rally in gold with a golden rectangle. The usual link between gold-USD would have one assume that lower USD Index values (due to higher EUR/USD values) would trigger a rally in gold. However, given how things worked and the fact that we saw/heard the news coming from the Eurozone, it seems like this “temporary” and “bearish for the PMs” interpretation would actually prevail. It could also be the case that we see some kind of mixed reply from the precious metals sector when the USD Index and the Euro Index correct. The PMs could for example fall only after the situation regarding the gold-USD link gets back to normal – that is perhaps after both currencies correct. 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, CFAFounder, 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.
2 Tools Every Trader Needs: FBS Trader app & MetaTrader

2 Tools Every Trader Needs: FBS Trader app & MetaTrader

Finance Press Release Finance Press Release 18.11.2021 10:37
MetaTrader & FBS Trader app are two essential tools that every trader should use. Don’t rely only on one, use the power of both as they suit different trader needs. In short, MetaTrader is for trading on a laptop/PC, while the FBS Trader app is perfect for mobile trading. Let’s look at how you can use them! MetaTrader When you want to use a personal computer or laptop for trading, you can choose MetaTrader 4 or 5. They are the two versions of one software program that traders use for opening orders and making an advanced technical analysis. MetaTrader offers different technical tools and allows using trading robots (expert advisors). Besides, you can use the FBS Forex broker app to manage your MetaTrader accounts and control finances. FBS Trader app If you want to trade with your mobile phone or just don’t have an opportunity to trade with a PC at the moment, the FBS Trader app is the best choice. Indeed, we can’t sit in front of our personal computers and monitor trades all day long. What to do? The solution is to have the FBS Trader app on your mobile phone and be able to open/close a trade in just one click wherever you are. It’s handy that all your active orders are gathered in a separate section. Besides, imagine that some economic news comes out that can impact your opened trades but you are not nearby your PC. It wouldn’t be a problem if you have the FBS Trader app on your phone. In addition, this app has a built-in economic calendar that allows traders to follow impactful news and analyze the charts without leaving the app. For example, the Bank of England left the rates unchanged during its meeting on November 4, while it was expected to raise them. As a result, the British pound weakened, and GBP/USD dropped. As you may notice in the chart below, you can add technical indicators in the FBS Trader app. In that case, Bollinger Bands could help a trader to confirm the bearish momentum as bands were moving in a narrow range and the price broke through the lower band. Finally, the FBS Trader app allows you to manage your funds freely without leaving the app. You can deposit and withdraw them easily in a few clicks. All in all, MetaTrader and the FBS Trader app are the perfect combination for trading. Enjoy using them!
Intraday Market Analysis – GBP To Test Resistance

Intraday Market Analysis – GBP To Test Resistance

John Benjamin John Benjamin 18.11.2021 10:37
GBPUSD bounces higher The pound inched higher after the UK’s inflation soared to 4.2% in October. Sentiment remains pessimistic after a botched rebound from the demand zone at 1.3420. However, an oversold RSI has attracted some buying interest. Its bullish divergence suggests a slowdown in the sell-off, prompting momentum traders to take profit and look for the next breakout. The sterling may bounce back if the bulls succeed in keeping it above 1.3380. 1.3530 would be the first hurdle. Otherwise, a bearish breakout would send the pair to 1.3200. USDCAD reaches new high The Canadian dollar fell back after the annual inflation rate matched the consensus. Following the greenback’s rally from the demand zone at 1.2300, a bullish MA cross on the daily chart suggests that the current rebound is picking up steam. As a sign of strong commitment, buyers were eager to keep price action above 1.2480 when the RSI flirted with the oversold area. A break above 1.2600 may trigger an extended rally towards the daily resistance at 1.2760. 1.2540 is fresh support in case of a pullback. USOIL falls through key support WTI crude tumbled after OPEC warned of supply surplus. The rally has stalled after the bulls struggled to lift offers at 85.00. On the daily timeframe, the RSI’s double top in the overbought area indicates an overextension. A break below 79.00 has led to profit-taking and put the long side under pressure. 81.60 is now a fresh resistance from the latest sell-off. The buy-side will need to achieve new highs before they could bring in momentum interest. Failing that, 75.00 is a key floor to keep price action afloat.
The Top 5 Companies Added to Our Stock Market Watchlist this Quarter

The Top 5 Companies Added to Our Stock Market Watchlist this Quarter

Invest Macro Invest Macro 18.11.2021 10:56
By InvestMacro The fourth quarter of 2021 is approximately halfway over and we wanted to highlight some of the top companies that have been analyzed by our QuantStock system so far. The QuantStock system is an algorithm that examines each company’s fundamental metrics, earnings trends and overall strength trends to pinpoint quality companies. We use it as a stock market ideas generator and to update our stock watchlist every quarter. However, be aware the QuantStock system does not take into consideration the stock price so one must compare each idea with their current stock prices. Many studies are consistently showing overvalued markets and that has to be taken into consideration with any stock market idea. As with all investment ideas, past performance does not guarantee future results. Here we go with 5 of our Top Stocks halfway through Quarter 4 of 2021: Gilead Sciences Inc. Health Care, Large Cap, 4.29% Dividend, Our Grade = A Gilead Sciences Inc. (NASDAQ: GILD) is first up and is a company engaged in developing innovative therapies for life-threatening diseases. Its medicine portfolio includes treatment for conditions ranging from HIV and hepatitis to coronavirus and cardiovascular disorders. If we talk about its financial performance, the bio-pharmaceutical company recently crushed expectations for the third quarter. It posted adjusted earnings of $2.65 per share on revenue of $7.42 billion for the quarter ended September 30. The results easily beat the consensus forecast of $1.76 per share for earnings and $6.29 billion for revenue. If we look at its key financial metrics, Gilead stock is currently trading around $67.48 against its 52-week range of $56.56 – $73.34. Moreover, its P/E value is 11.55, while the company’s total market value is just over $84 billion. US Steel Materials, Small Cap, 0.77% Dividend, Our Grade = A- Free Reports: Get Our Free Metatrader 4 Indicators - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter Get our Weekly Commitment of Traders Reports - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis. United States Steel Corporation (NYSE: X), founded in 1901, is one of the leading steel producers in the U.S. The strong demand for steel helped the company post better-than-expected financial results for the third quarter. United States Steel reported adjusted earnings of $5.36 per share for the three months ended September 30, beating expectations of $4.85 per share. Quarterly revenue of $5.96 billion also surpassed the consensus forecast of $5.79 billion. If we look at the recent price movement, United States Steel stock has gained more than 50 percent value so far in 2021. The 52-week range of the stock is $10.72 – $30.57, while the total market value of the company is approx. $7 billion. Seagate Technology Information Technology, Medium Cap, 3.18% Dividend, Our Grade = A- Seagate Technology Holdings plc (NASDAQ: STX) is one of the world’s biggest hard disk drives (HDDs) makers. It still generates a large portion of its revenue by selling traditional HDDs. The company last month announced better-than-expected financial results for its fiscal first quarter, driven by solid demand from cloud data center clients. Seagate reported adjusted earnings of $2.35 per share on revenue of $3.12 billion for the three months ended October 1, while analysts were looking for earnings of $2.21 per share on revenue of $3.11 billion. The impressive financial performance drove Seagate stock higher in recent weeks. Seagate stock is now up nearly 80 percent on a year-to-date basis. Synchrony Financial Financials, Medium Cap, 1.68% Dividend, Our Grade = A- Synchrony Financial (NYSE: SYF) has vast experience in the financial sector. It is one of the biggest credit card issuers in the U.S., working with hundreds of retailers to support their credit card plans. The company last month announced a solid profit for the third quarter. Synchrony reported earnings of $2 per share, significantly higher than 52 cents per share in the comparable period of 2020 and better than the consensus forecast of $1.52 per share. If we see its recent price trend, Synchrony has grown its value at a decent pace so far in 2021. The company’s share price has increased about 47 percent on a year-to-date basis. The 52-week range of the stock is $29.32 – $52.49, while its P/E ratio stands at 7.10. Lazard Ltd Financials, Small Cap, 3.98% Dividend, Our Grade = A- Lazard Ltd (NYSE: LAZ) specializes in financial advisory and asset management services. It mainly advises clients on mergers and acquisitions (M&A), capital structure, and restructuring plans. It has advised on some of the biggest and most complicated M&A deals of the last century. If we look at its financial performance, Lazard posted mixed results for the third quarter. Its earnings of 98 cents per share exceeded the expectations of 95 cents per share. However, the quarterly revenue of $702 million missed analysts’ average estimate of $715 million. Lazard stock traded mostly lower following the results. Nevertheless, the company’s share price is still up nearly 15 percent on a year-to-date basis. By InvestMacro – Be sure to join our stock market newsletter to get our updates and to see more top companies. All information, stock ideas and opinions on this website are for general informational purposes only and do not constitute investment advice.
PRIMEXBT: A REVIEW

PRIMEXBT: A REVIEW

Prime XBT Prime XBT 18.11.2021 14:45
Cryptocurrency traders are always seeking to top the trading list despite the competition. Most of these crypto traders have features that place them above others. One of such is PrimeXBT. The goal of the cryptocurrency marketers is to maximize sales, assets, and profits. Some exclusive features make PrimeXBT outstanding among other cryptocurrency platforms. These features also set the trading platform as an unequaled competition. The purpose of this article is to clarify, review, and educate readers on some of the significant characteristics of PrimeXBT that are distinct to others. After reading this article, you will be able to decide whether or not to sign up on PrimeXBT. WHY PRIMEXBT PrimeXBT is a bitcoin-based trading platform. It is also an award-winning platform for excellent service and creating the best crypto trading margin. The platform offers exchanges in stock indices, commodities, forex, and cryptocurrencies with up to 1000 times leverage. 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Investors Expect High Inflation. Golden Inquisition Ahead?

Investors Expect High Inflation. Golden Inquisition Ahead?

Arkadiusz Sieron Arkadiusz Sieron 18.11.2021 15:33
  Inflation expectations reached a record high. Is gold preparing a counterattack to punish gold bears? In a , nobody expects the Spanish inquisition. In the current marketplace, everyone expects high inflation. As the chart below shows, the inflation expectations embedded in US Treasury yields have recently risen to the highest level since the series began in 2003. Houston, we have a problem, an unidentified object is flying to the moon! The 5-year breakeven inflation rate, which is the difference between the yields on ordinary Treasury bonds and inflation-protected Treasuries with the same maturity, soared to 2.76% on Monday. Meanwhile, the 10-year breakeven inflation rate surged to 3.17%. The numbers show the Treasury market’s measure of average CPI annual inflation rates over five and ten years, respectively. The chart is devastating for the Fed’s reputation if there’s anything left. You probably remember how the US central bank calmed investors, saying that we shouldn’t worry about inflation because inflation expectations are well-anchored. No, they don’t! Of course, the current inflation expectations oscillate around 3%, so they indicate that the bond market is anticipating a pullback in the inflation rate from its current level. Nevertheless, the average of 3% over ten or even just five years would be much above the Fed’s target of 2% and would be detrimental for savers in particular, and the US economy in general. I’ve already shown you market-based inflation expectations, which are relatively relaxed, but please take a look at the chart below, which displays the consumer expectations measured by the New York Fed’s surveys. As one can see, the median inflation expectations at the one-year horizon jumped 0.4 percentage point in October, to 5.7%. So much for the inflation expectations remaining under control!   Implications for Gold Surging inflation expectations are positive for the gold market. They should lower real interest rates and strengthen inflationary worries. This is because the destabilized inflation expectations may erode the confidence in the US dollar and boost inflation in the future. So, gold could gain as both an inflation hedge and a safe haven. And, importantly, the enlightened Fed is likely to remain well behind the curve in setting its monetary policy. This is even more probable if President Biden appoints Lael Brainard as the new Fed Chair. She is considered a dove, even more dovish than Powell, so if Brainard replaces him, investors should expect to see interest rates staying lower for longer. So, inflation expectations and actual inflation could go even higher. Hence, the dovish Fed combined with high inflation (and a slowdown in GDP growth) creates an excellent environment for gold to continue its rally. After all, the yellow metal has broken out after several months of consolidation (as the chart below shows), so the near future seems to be brighter. There are, of course, some threats for gold, as risks are always present. If the US dollar continues to strengthen and the real interests rebound, gold may struggle. But, after the recent change, the sentiment seems to remain positive. Anyway, I would like to return to the market-based inflation expectations and the famous Monty Python sketch. With an inflation rate of 3%, which is the number indicated by the bond market, the capital will halve in value in just 24 years! So, maybe it would be a too-far-reaching analogy, but Monty Python inquisitors wanted to use a rack to torture heretics by slowly increasing the strain on their limbs and causing excruciating physical pain (luckily, they were not the most effective inquisitors!). Meanwhile, inflation hits savers by slowly decreasing the purchasing power of money and causing significant financial pain. With the inflation rate at about 6%, hedging against inflation is a no-brainer. It’s a matter of financial self-defense! You don’t have to use gold for this purpose – but you definitely can. After several disappointing months, and the lack of gold’s reaction to inflation, something changed, and gold has managed to break out above $1,800. We will see how it goes on. I will feel more confident about the strength of the recent rally when gold rises above $1,900. If you enjoyed today’s free gold report, we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today. If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care
Like Clockwork

Like Clockwork

Monica Kingsley Monica Kingsley 18.11.2021 15:44
S&P 500 took a little breather, and sideways trading with a bullish slant goes on unchecked. Credit markets have partially turned, and I‘m looking for some risk appetite returning to HYG and VTV. Any modest improvement in market breadth would thus underpin stocks, and not even my narrow overnight downswing target of yesterday may be triggered. The banking sector is internally strong and resilient, which makes the bulls the more favored party than if judged by looking at the index price action only. Consumer discretionaries outperformance of staples confirms that too. When it comes to gold and silver: (…) Faced with the dog and pony debt ceiling show, precious metals dips are being bought – and relatively swiftly. What I‘m still looking for to kick in to a greater degree than resilience to selling attempts, is the commodities upswing that would help base metals and energy higher. These bull runs are far from over – it ain‘t frothy at the moment as the comparison of several oil stocks reveals. Precious metals dip has been swiftly reversed, and it‘s just oil and copper that can cause short-term wrinkles. Both downswings look as seriously overdone, and more of a reaction to resilient dollar than anything else. In this light, gold and silver surge is presaging renewed commodities run, which is waiting for the greenback to roll over (first). And that looks tied to fresh debt issuance and debt ceiling resolution – Dec is almost knocking on the door while inflation expectations are about to remain very elevated. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 bulls continue holding the upper hand, and yesterday‘s rising volume isn‘t a problem in the least. Dips remain to be bought, and it‘s all a question of entry point and holding period. Credit Markets Credit markets stabilization is approaching, and yields don‘t look to be holding S&P 500, Russell 2000 or emerging markets down for too long. Especially the EEM performance highlights upcoming dollar woes. Gold, Silver and Miners Gold and silver decline was promptly reversed, and the lower volume isn‘t an immediate problem – it merely warns of a little more, mostly sideways consolidation before another push higher. PMs bull run is on! Crude Oil Crude oil bulls could very well be capitulating here – yesterday‘s downswing was exaggerated any way examined. Better days in oil are closer than generally appreciated. Copper The copper setback got likewise extended, and the underperformance of both CRB Index and other base metals is a warning sign. One that I‘m not taking as seriously – the red metal is likely to reverse higher, and start performing along the lines of other commodities. Bitcoin and Ethereum Bitcoin and Ethereum bears may be slowing down here, but I wouldn‘t be surprised if the selling wasn‘t yet over. We‘re pausing at the moment, and in no way topping out. Summary S&P 500 bulls keep banishing the shallow correction risks, leveling the very short-term playing field. The credit markets non-confirmation is probably in its latter stages, and stock market internals favor the slow grind higher to continue. Precious metals remain my top pick over the coming weeks, and these would be followed by commodities once the dollar truly stalls. Thank you for having read today‘s free analysis, which is available in full 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 five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Intraday Market Analysis – USD In Pullback Mode

Intraday Market Analysis – USD In Pullback Mode

John Benjamin John Benjamin 19.11.2021 09:15
USDCHF seeks support The US dollar stalled after weekly jobless claims came in higher than expected. The pair’s attempt above the daily resistance at 0.9310 suggests that the bulls may have gained the upper hand. Intraday buyers’ profit-taking led by the RSI’s overbought situation has caused a limited pullback. Buyers may see dips as an opportunity to get in at a discount. Bids could be around the resistance-turned-support at 0.9235. 0.9330 is a fresh resistance. And its breach may trigger an extended rally towards last April’s peak at 0.9450. NZDUSD bounces off demand area The New Zealand dollar inches higher as traders are positioning for an RBNZ rate hike next week. From the daily chart’s perspective, the pair has bounced off the demand zone near the psychological level of 0.7000. A bullish RSI divergence indicates a slowdown in the bearish momentum, a sign that sentiment could be turning around. An oversold RSI has attracted buying interest. A rally above 0.7060 would prompt sellers to cover, paving the way for a recovery towards 0.7175. A break below 0.6980 may drive the kiwi to 0.6900. US30 struggles to rally back The Dow Jones is under pressure as investors fear that inflation could choke off economic recovery. The index has been struggling to reclaim the landmark 36000, which coincides with the 20-day moving average. The faded rebound suggests exhaustion after a month-long breakneck rally. The RSI’s double-dip into the oversold area has attracted buying interest. Though buyers may stay cautious unless the first resistance at 36180 is lifted. On the downside, the previous peak at 35500 has turned into the next support.
Covid Wave Knocks Euro Down and to new 6-year Lows Against the Swiss Franc

Covid Wave Knocks Euro Down and to new 6-year Lows Against the Swiss Franc

Marc Chandler Marc Chandler 19.11.2021 13:58
Overview:  Concerns about the virus surge in Europe cut short the euro's bounce and sent it back below $1.1300 and are also weighing on central European currencies, including the Hungarian forint, despite yesterday's aggressive hike of the one-week deposit rate.  Austria has reintroduced a hard 20-day lockdown.  Germany's health minister warned that the situation deteriorated and vaccines were not enough to break the wave.  He was explicit that a lockdown cannot be ruled out.  The US dollar is trading broadly higher.  Only the yen is resilient on the day, but sterling is the only major currency that has edged higher this week.  The Scandis and euro are off more than 1%.  Speculation that Turkey may announce measures over the weekend to stabilize the lira may be helping to deter new sales today after yesterday's rout.  In the nine-day drop through today, it is depreciated by almost 15%.  The JP Morgan Emerging Market Currency Index is off for the fourth consecutive session to bring this week's loss to more than 2%, the most in five months.  Equities do not know of the consternation in the foreign exchange market.  Disappointing Alibaba results weighed on the Hang Seng (~-1%), while most other large regional bourses but Taiwan and India closed the week on an up note.   Europe's Stoxx 600 snapped a six-day advance yesterday. It was only the second loss since October.  It began firmer today but has reversed lower, putting at risk the six-week rally.   US futures are mixed, with the NASDAQ outperforming.  Bond markets are in rally mode as well.   The US 10-year yield is off three basis points to approach the week's low near 1.53%.  European bonds are off mostly 3-5 basis points, even in the UK, where retail sales surprised on the upside.  Gold is steady, finding support near $1850.  Oil initially extended yesterday's recovery but is reversing lower, leaving the January WTI contract set to test yesterday's low near $76.45.  This is the fourth consecutive weekly fall in crude oil.  European natural gas (Netherlands benchmark) is off 4.4% today, the third drop in a row, and pares the week's gain to almost 19%.  In Singapore, iron ore prices jumped 5.7% to break a five-week slide that saw prices tumble by about 28%.   Copper is firmer and paring this week's loss to around 2%.   Asia Pacific There were two developments in Japan to note.  First, October CPI was largely in line with expectations.  Surging gasoline prices (seven-year highs) helped keep the headline rate positive for the second month (0.1% year-over-year).  Excluding fresh food, the core rate was steady at 0.1%.  However, the deflationary forces are evident when fresh food and energy are removed.  The measure deteriorated to -0.7% from -0.5%, the most since June (-0.9%).    Second, Prime Minister Kishida unveiled an overall package of JPY78.9 trillion (~$690 bln). It is larger than the previous two pandemic packages. "Fiscal measures" refer to spending, investment, and loans, and this is seen worth about JPY55.7 trillion.  It is not clear yet, how much represents new spending as opposed to the reallocation of funds from earlier budgets that were not used. However, it appears to be about JPY32 trillion of new spending.   The Chinese yuan, up a modest 2.1% for the year, is the strongest currency.   Against a trade-weighted basket (CFETS), the yuan is pulling back from a six-year high set earlier this week as the euro recovers a cent.  Consider that the yuan has appreciated by more than 9% against the euro and 11.5% against the yen this year.  That means that investment in China has the same tailwind as the dollar and is compensated a bit for the relative lack of transparency and liquidity.  The Financial Times estimates that foreign holdings of Chinese bonds and stocks rose to around $1.1 trillion at the end of September, about a 13% increase this year.  China's stock market has underperformed this year, and the CSI 300 is off around 7% this year.  On the other hand, China's bonds have fared well.  It is the only 10-year bond that has not weakened this year.  China's figures show foreign direct investment has risen by almost 18% this year through October to nearly $142 bln.   The dollar is posting an outside down day against the Japanese yen by first rising above yesterday's high before reversing and taking out yesterday's low. It is approaching the week's low near JPY113.75 in the European morning.  Below there, support is seen around JPY113.60.  A break would warn of a return to JPY113.00.  The Australian dollar has been sold to its lowest level since October 6, when it recorded a low of almost $0.7225.   It has broken the trendline that connected the August and September lows (~$0.7250).  The September low was around $0.7170 and maybe the next important technical target.  The dollar is trading with a firmer bias against the Chinese yuan, but the greenback remains in the range set on Tuesday (~CNY6.3670-CNY6.3965).  The dollar gained on the yuan four sessions this week, the most since July, but the net gain of less than 0.2% still shows an extraordinarily steady exchange rate.   With the yuan near six-year highs against its trade-weighted basket (CFETS), the PBOC warned against one-way moves and encouraged financial institutions to bolster fx risk management.  It set the dollar's reference rate at CNY6.3825, slightly above expectations (Bloomberg survey) for CNY6.3822.   Europe The stronger than expected October retail sales capped the week's data that points to a rebounding economy and boosts the chances of a rate hike next month.  A strong jobs report was followed by a larger than expected rise in CPI and PPI.  Retail sales jumped 0.8% in October, and the September series was revised to flat from -0.2%. It was the first increase since April.  Pre-Xmas sales were reported.  Separately, the UK government reported that the cost of servicing the national debt has risen more than three-fold over the past year, leaving the budget deficit higher than anticipated.  It appears that the swaps market is pricing in a 15 bp hike at the December 16 BOE meeting, though some are talking about a bigger move.    Several ECB officials, including President Lagarde, have successfully pushed back against expectations of a 20 bp rate hike next year that had appeared discounted by the swaps market earlier this month. The market has pushed it into early 2023.  The implied yield of the December 2022 Euribor futures contract has fallen 20 bp this month.  The December 2022 Eurodollar futures contract is moving in the opposite direction.  The implied yield has risen by about 4.5 bp this month.  The net result is the US premium has increased to over 125 bp, the highest since last March.  In late 2019, the premium was around 180 bp.  This is recognized as a factor helping lift the dollar against the euro, and it appears to have become more salient recently.   The euro's bounce yesterday, its first gain in seven sessions (since the US CPI shocker), stalled near $1.1375, where a 780 mln euro option expires today.   The euro traded quietly in Asia before being sold aggressively as news of the virus hit the wires.  The euro traded through $1.1285 before catching a bid.  Resistance now will likely be encountered around $1.1320.  The euro is posting its first back-to-back weekly of more than 1% since March 2020.  Sterling is also sliding back toward the week's lows, just above $1.3400.  A break could signal a test on the $1.3350 area, but it appears stretched on an intraday basis.  While the euro-sterling cross is practically flat, the euro has punched below CHF1.05 for the first time in six years.  It would not be surprising to learn that the SNB has been intervening.  There appears to be little chart support until closer to CHF1.0250. America The nonpartisan Congressional Budget Office offered its evaluation of the Biden administration's Build Back Better initiative.  It sees $1.636 trillion in spending over the next decade and almost $1.27 trillion in revenue.  That leaves a deficit of $367 bln.  A notable difference between it and the administration is how much more revenue will be generated by increasing the number of IRS agents.  Even if it passes the House of Representatives, it will likely be marked up in the Senate.  The jockeying for position and spin around it will likely dominate the session, which sees no US economic reports outside of the rig count later today.  The Fed's Clarida and Waller speaker today.  It seems that most market participants still see the Fed behind the curve and disagree with our idea that to secure the ability to respond to a wide range of possible outcomes, the Federal Reserve may accelerate its tapering starting in January.   It is not clear exactly when the debt ceiling will be reached, but it is being played.  The Democrats do not want to lift it through the reconciliation process, though they have forced the Republicans to do so in the past.  The Republicans appear to have the discipline and will to oppose.  No one seems to think the US will really default, and getting even this close seems undignified.  Yet, the desire to avoid being caught out encouraged investors to demand a high yield on the four-week bill sold.  Yesterday's auction saw the yield more than double to 11 bp (annualized).  It is the highest yield since July 2020.  In contrast, the eight-week bill, which is thought to be beyond the shenanigans, yield slipped to 4.5 bp from six previously and a higher bid-cover ratio.   Canada reports September retail sales figures today.  After a 2.1% rise in August, some weakness is expected.  Ahead of it, the Canadian dollar is trading at new lows for the week, though it is faring better than the other dollar-bloc currencies.  The US dollar is approaching the (61.8%) retracement objective of the decline since the CAD1.29 level was tested on September 20.  The retracement level is near CAD1.2665, and a break would target CAD1.2700-CAD1.2750.  The upper  Bollinger Band is found near CAD1.2655 today.   The Mexican peso is also under pressure.  It, too, has fallen to a new low for the week today.  The greenback looks set to test the eight-month high set earlier this month near MXN20.98.  Note that the central bank's Deputy Governor warned that inflation was accelerating, and it could rise to 7% this month and 7.1%-7.3% next month.  In October, the CPI stood at 6.24% year-over-year.  Banxico meets next on December 16, the day after the FOMC meeting.  Lastly, we note that the Brazilian real is off for four consecutive sessions coming into today.  The dollar closed above its 20-day moving average against it yesterday and looks poised to probe above BRL5.60 today. The high for the month was closer to BRL5.70.   Disclaimer
The Wild Card Is Back

The Wild Card Is Back

Monica Kingsley Monica Kingsley 19.11.2021 15:58
S&P 500 rose, once again driven by tech and not value. That‘s still defensive, mirroring the weak credit markets posture. While waiting for bonds to turn – not that there wouldn‘t be an optimistic HYG open yesterday – the Austria lockdown news sent markets into a tailspin, the fear being good part of Europe would follow suit rather sooner than later. Oil has taken the crown of panicked selling, stocks held up better, and precious metals weren‘t changed much. Sure, any crippling of European economic activity would take a toll at the most sensitive commodities, but in light of energy policies across much of the Western world, it‘s my view that oil prices would be affected only in the short-term. This isn‘t a repeat of the Apr 2020 liquidation sending black gold negative. Rest of the world would be happy to step in, U.S. included, as we‘re entering winter with comparatively very low stockpiles from oil to copper – and don‘t get me started on silver. If you want green economy, these metals are essential, and oil is still in huge demand in the interim. Fed money printing hasn‘t vanished, debt ceiling awaits, and dollar is so far still solidly underpinned. Banking sector and emerging markets performance isn‘t panicky, but some time for stocks to come back at ATHs, is needed. Precious metals resilience is encouraging for commodities, which need the most time to recover (eyes on energy). Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 bulls have the upper hand, but short-term volatility and uncertainty is creeping in. Still, there is no sinking the bull right here, right now. Credit Markets Tentative signs of credit markets stabilization are here, and HYG turnaround to last, is the missing sign. I‘m though not looking for risk-off slant to disappear, which would slow down the coming rise in yields. Gold, Silver and Miners Gold and silver are still consolidating, and the more time passes at current levels, the less opportunity the bears have. The chart remains very bullish as precious metals are anticipating inflation to come. Crude Oil Crude oil bulls are facing spanner in the works today, and it‘s my view the sellers wouldn‘t get too far. I‘m looking at oil sector to presage that. Copper The copper setback was soundly bought, and commodities hardly sold off, the same for other base metals. I still like the chart posture – favors the bulls. Bitcoin and Ethereum Bitcoin and Ethereum bears took the gauntlet, and another opportunity to pause might be here. I‘m not yet optimistic prices would hold out before the upleg resumes. Summary S&P 500 bulls keep hanging in there, as if waiting for bonds to come to their senses. The credit markets non-confirmation being probably in its latter stages, was my yesterday‘s point – but with corona panic returning, all short-term bets are off. Looking at the big picture, energy hasn‘t been fixed, precious metals are set to rise sharply, and inflation hasn‘t yet knocked off stocks or the real economy. Look for VIX to keep rising from the current 17.50 level. Thank you for having read today‘s free analysis, which is available in full 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 five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Market Quick Take - November 19, 2021

Market Quick Take - November 19, 2021

Saxo Bank Saxo Bank 19.11.2021 10:43
Summary:  Equity markets charged higher in the US session to close at new record highs, and the upside extended further in the futures market overnight. In FX, the recent USD strength eased slightly, while oil prices are creeping back higher despite the recent fears of strategic reserve releases. Markets are nervously awaiting the announcement of who US President Biden will nominate to head the Fed after the current Powell term ends in February. What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) - US equities pushed to new all-time highs yesterday led by technology stocks and strong macro figures across manufacturing surveys and job market data such as jobless claims. Nasdaq 100 futures are trading around the 16,560 level in early European trading with the 16,500 being the intraday day support level. A recent survey among institutional investors shows that a majority is believing in the transitory inflation narrative which can help explain why investors in equities are looking through the latest inflation pressures. EURUSD and EURGBP – the beleaguered euro finally bounced back a bit after its recent remarkable slide, although it is tough to see what could engineer a reversal of the move below the 1.1500 level, which is the key chart resistance now, although Biden announcing Brainard as his pick to head the Fed next February could drive considerable short-term volatility. To stop the euro from a persistent slide, we would need a very different tone from the ECB than it has delivered recently, with no real opportunity to do so until the December 16 ECB meeting. With power prices and a new Covid wave weighing on the outlook, the ECB will very likely be happy to stay firmly dovish. USDJPY – the highs for the cycle near the psychologically important 115.00 look safe as long as US treasury yields at the longer end of the curve remain rangebound, but trading above that level could get volatile if it is broken, as some options structures may be linked to its breaking or not breaking. The next test for the price action is clearly the Fed Chair nomination that appears imminent – possibly today or over the weekend (more below in What are we watching next?). Gold (XAUUSD) has spent the week trading within a relatively narrow range between $1850 and $1870 as it awaits a fresh catalyst following last week’s breakout. The impressive rally that occurred despite headwind from a stronger dollar has stalled with bond yields picking up and the market wondering how the US Federal Reserve will manage the current inflation spike. Silver and especially platinum have both struggled to keep up with gold while ETF investors have yet to show any interest in accumulating exposure. All developments raising the risk of a retracement towards the $1830-35 key area of support. Crude oil (OILUKJAN22 & OILUSDEC21) managed to recover yesterday after the market brushed aside the potential negative price impact of a US SPR release. US attempts to attract wider support from other major importing countries seems to have fallen flat, except for China who is “working” on a release. Having dropped more than five dollars since speculation began, the market has concluded for now that the price impact of a release could be limited. The market, however, may still have to deal with the recent updates from EIA and IEA, in which they both forecast current tight market conditions could start to ease early next year as well as renewed Covid-related reductions in mobility. US Treasuries (IEF, TLT). Yesterday’s 10-year US TIPS auction stopped through, pricing at a record low yield at -1.145%. It is a signal that investors are ever more concerned about inflation risk.  The Treasury also sold 4-week and 8-week T-Bills. While the latter was priced in line with the Reverse Repurchase facility, 4-week T-Bills priced with a yield of 0.11%, more than double the RRP rate. As we approach the day in which the Treasury will run out of cash, we expect volatility in the money market to increase, while long-term yields will remain compressed as they will serve as a safe haven. In the meantime, the move index continues to rise indicating that the bond market remains on the hedge. What is going on? Central Bank of Turkey cut another 100 basis points from the policy rate, lira plunge extends. The Turkish lira has lost more than 10% versus the US dollar this week and trades well over 11.00 after Turkish President Erdogan earlier this week declared himself once again against high interest rates, which he believes cause inflation. Central bank chief Kavcioglu, who is seen as doing Erdogan’s bidding, cut rates for a third time by 1.0% to take the policy rate to 15%, but with the Turkish lira losing over 10% this week alone and more than 30% since Erdogan fired the prior more hawkish central bank head in favour of Kavcioglu, inflation will run far beyond the rate. Not even some guidance that the easing cycle may conclude in December was enough to halt the lira’s slide. US Nov. Philly Fed survey hits 39.0, a very hot reading and fourth highest ever - with Prices Paid at 80 and just missing the 42-year high of 80.7 in June, although the Prices Received was at 62.9, the highest since 1974. Special survey questions in the Novemer  survey included one on inflation expectations, with firms expecting a median 5.3% increase in their own prices, and an increase in wages of 4.8%. The median forecast for 10-year inflation was 3.5%, up from the 3.0% the last time the question was asked in August. The Bloomberg Agriculture Index hit a fresh five-year high this week with food prices likely to stay high in 2022 with labor shortages, La Ninã weather impacts, surging cost of fertilizers being the common denominator across the sector. Recent gains being led by coffee, which we highlighted earlier in the week as a commodity currently seeing multiple price supportive developments. Wheat is heading for a nine-year high in Chicago while hitting record highs in Europe with inventories tumbling amid strong demand from importers and now also a rain threat to the soon-to-be harvested Australian crop. Soybeans have seen a strong bounce after the latest WASDE report showed a tighter than expected outlook for the coming year, and following a recent rush of Chinese buying from the US and South America. Apple doubles down on self-driving cars. The company is aiming to develop fully autonomous driving capabilities for cars by 2025 under the project name Titan. Apple has developed its own chip and is aiming to soon have a car on the roads for testing. However, delivering self-driving cars is a difficult endeavor with Uber Technologies having sold its unit and Waymo (Google’s unit) has been struck by fatigue and key people leaving the project. Tesla is also still struggling to deliver self-driving cars. What are we watching next? Who will US President Biden nominate to head the Fed next February? Powell is still seen as more likely to get the nod that Brainard by roughly two to one, and this Fed Chair nomination issue is hanging over the markets, as the current Fed chair term ends in early February and from comments made earlier this week, an announcement could be made any day now. One uncertainty that would come with a Brainard nomination is the potential difficulty of having her nomination approved by the Senate. The nomination news could generate significant short-term volatility on the choice of the nominally more dovish Lael Brainard over current Fed Chair Powell, though we see little difference in the medium-longer term implications for monetary policy, and the Fed is likely to get a prominent new regulatory role either way (under Brainard or someone else if she is nominated to replace Powell). Vote on $1.7 trillion US fiscal bill today in the House of Representatives after the Congressional Budget office said the bill, which focuses on social spending and climate initiatives, would add some $367 billion to the US Federal deficit (around 1.5% of current US nominal GDP) over the next 10 years. Earnings Watch – there are no important earnings today and this earnings week has been good in the US and Europe, while a bit more mixed among Chinese companies. The list below shows earnings releases next week. Monday: Sino Pharmaceutical, Prosus, Zoom Video, Agilent TechnologiesTuesday: Xiaomi, Kuaishou Technology, Compass Group, Medtronic, Analog Devices, Autodesk, VMWare, Dell Technologies, XPeng, HP, Best Buy, Dollar TreeWednesday: DeereThursday: AdevintaFriday: Meituan, Pinduoduo Economic calendar highlights for today (times GMT) 0830 – ECB President Lagarde to speak1200 – UK Bank of England Chief Economist Huw Pill to speak1330 – Canada Sep. Retail Sales1715 – US Fed Vice Chair Clarida to speak on global monetary policy coordination Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple Spotify Soundcloud Sticher
Weekly S&P500 ChartStorm - 21 November 2021

Weekly S&P500 ChartStorm - 21 November 2021

Callum Thomas Callum Thomas 22.11.2021 09:40
The S&P500 ChartStorm is a selection of 10 charts which I hand pick from around the web and post on Twitter. The purpose of this post is to add extra color and commentary around the charts. The charts focus on the S&P500 (US equities); and the various forces and factors that influence the outlook - with the aim of bringing insight and perspective. Hope you enjoy! p.s. if you haven’t already, subscribe (free) to receive the ChartStorm direct to your inbox, so you don’t miss out on any charts (you never know which one could change the whole perspective!) Subscribe Now 1. S&P 500 Seasonality Chart: It’s everyone’s favorite chart updated again (maybe for the last time this year?). The S&P500 has been sticking to the seasonality script through most of this year… makes me think about Murphy’s Law tho - maybe the market will start to improvise and go off-script? Either way, the next few weeks seasonally look like sideways action. Source: @topdowncharts 2. Volatility Seasonality: A twist on the previous chart — same concept, but this time with implied volatility. I find it interesting to note that the VIX has actually been a bit lower than usual for this time of the year (and trending up short-term…). One last VIX spike before year-end? Source: @topdowncharts 3. Stockmarket Statistics: What happens after the market goes up a “crazy overheated” 20%+ over the course of a year? More Gains. Historically most of the time if the market closed up 20%+ for the year, the next year was also positive (84% of the time). As of writing, the market is up some 27% YTD (albeit, this year ain't over yet!). Source: @RyanDetrick 4. Bad Breadth? Fully 1/3rd of stocks are in a downtrend. (defined as trading below their respective 200dma) Will this bearish divergence be a problem? Source: Index Indicators 5. GAARP vs GAAAP: On this metric, growth stocks are the most expensive ever vs value stocks. So it begs the question… Growth at a reasonable price? or Growth at *any* price? (but then again, who defines what "reasonable" is in a market like this!) Source: @TheOneDave 6. Low Energy: Energy stocks are attempting to turn the corner vs the rest of the market, but face high hurdles from the raging tech bull market, rise of ESG investing and regulatory/political hurdles, not to mention commodity market volatility. What comes down must go up? (or something else?) Source: @dissectmarkets 7. Buybacks Back: New all-time high for buybacks in Q3 (with 95% reported). Always makes me wonder these trends — you see the majority of buybacks occurring near market peaks… i.e. when valuations are extreme expensive. The opposite of value investing: buy more when its expensive, buy less when it’s cheap — seems like upside-down logic to me, but then again I am a simple man. Source: @hsilverb 8. Payout Ratio: As an interesting follow-on to the ATH in buybacks/dividends, it’s interesting to note that the dividend payout ratio is actually below average... Scope to return more cash to investors? Source: @ChrisDagnes 9. Buffett Indicator: Looks like this indicator has reached a permanently higher plateau! (kidding of course - echoing the famous last words of Irving Fisher back in 1929) Interesting stat to note: to make this indicator as cheap as where it got to during the financial crisis lows the market would need to fall over 70%. Definitely not a prediction, but interesting nonetheless. I would say I have multiple quibbles with this indicator, I think CAPE and ERP are better valuation metrics, but that’s a topic for another day. Source: @KailashConcepts 10. Buffett the Compounder: Speaking of Buffett, a lesson in compounding. Source: @DividendGrowth Thanks for following, I appreciate your interest! !! BONUS CHART: total stockmarket leverage >> Click through to the ChartStorm Substack to see the bonus chart section https://chartstorm.substack.com/p/weekly-s-and-p500-chartstorm-21-november                   Follow us on: Substack https://topdowncharts.substack.com/ LinkedIn https://www.linkedin.com/company/topdown-charts Twitter http://www.twitter.com/topdowncharts
Global Markets In Times Of Affection Of Situation In Eastern Europe

On the radar this week...

Chris Weston Chris Weston 22.11.2021 08:18
Powell vs Brainard Fed chair nomination  Covid trends and restrictions in Europe US core PCE inflation (Thursday at 2 am AEDT) RBNZ and Riksbank central bank meeting US cash markets shut Thursday for Thanksgiving (Pepperstone US equity indices still open)  Eurozone PMI (Tuesday 20:00aedt) – ECB speakers in play BoE speakers to drive the GBP – will they cast doubt on a December hike? With Covid risks on the rise in Europe and ultimately restrictions being implemented we’ve seen renewed selling interest in the EUR, and the oil-exporting currencies (NOK, CAD, MXN). Certainly, the NOK was the weakest G10 currency last week, and GBPNOK has been a great long position – a pair to trade this week, but consider it is up for 9 straight days and has appreciated 5.2% since late October.  I questioned last week if the divergence in EURCHF plays out, and the break of 1.05 negates that, suggesting staying short this cross for now as the CHF is still a preferred safe-haven.  EURUSD has been in free-fall EURUSD has been in free-fall and will likely get the lion’s share of attention from clients looking for a play on growing restrictions and tensions across Europe. The pair has lost 3.5% since rejecting the 50-day MA on 28 Oct and has consistently been printing lower lows since May – predominantly driven by central bank divergence and a growing premium of 2-year US Treasuries over German 2yr - with the spread blowing out from 78bp to 128bp, in favour of USD. For momentum, trend followers and tactical traders, short EUR remains attractive here.  It will be interesting to see if we see any pickup in shorting activity in EU equities – notably the GER40, with the German govt warning of lockdowns ahead. A market at all-time highs (like the GER40) is a tough one to short, but if this starts to roll over then I’d go along for a day trade. There is a raft of ECB speakers also to focus on, notably with President Lagarde due to speak on Friday.  Playing restrictions through crude While we can play crude moves in the FX, equity and ETF space, outright shorts in crude have been looking compelling. Although we see SpotCrude now sitting on huge horizontal support and a break here brings in the 50-day MA. Of course, as oil and gasoline fall, the prospect of a release of the SPR (Strategic Petroleum Reserves) diminishes, however, the Biden administration could use this move lower move to their advantage and capitalize to keep the pressure on.  (SpotCrude daily) A rise in restrictions also means market neutral strategies (long/short) should continue to work, and long tech/short energy has been popular. We can express this in our ETF complex, with the XOP ETF (oil and gas explorers) -8.1% last week and that works as a high beta short leg. Long IUSG (growth) or the QQQ ETF against this would be a good proxy on the opposing leg. In fact, looking at the moves in Apple, Nvidia, Alphabet and Amazon, and we can see these ‘safe haven’ stocks are working well again, as is Tesla although for different reasons.  Stocks for the trend-followers For the ‘buy strong’ crowd, I have scanned our equity universe for names above both their 5- and 20-day MA AND at 52-week highs. Pull up a daily chart of any of these names - they should nearly always start at the bottom left, and end top right. Playing the RBNZ meeting tactically By way of event risks, the RBNZ meeting (Wed 12:00 AEDT) is one of the more interesting events to focus on. Will the RBNZ raise by 25bp or 50bp? That is the question, and of 19 calls from economists (surveyed by Bloomberg) we see 17 calling for a 25bp hike – yet the markets are fully pricing not just a 25bp hike but a 43% chance of 50bp – from a very simplistic perceptive if the RBNZ hike by ‘just’ 25bp, choosing a path of least regret, then we could see a quick 25- to 30-pip move lower in the NZD. The focus then turns to the outlook and whether the 8 further hikes priced over the coming 12 months seems to be one shared by the RBNZ.  Traders have been keen to play NZD strength via AUD, as it is more a relative play and doesn’t carry the risk on/off vibe, which you get with the USD and JPY. I’d be using strength in AUDNZD as an opportunity to initiate shorts, especially with views that RBNZ Gov Orr could talk up the possibility of inter-meeting rate hikes.  GBP to be guided by the BoE Chief The GBP is always a play clients gravitate to, with GBPUSD and EURGBP always two of the most actively traded instruments in our universe. A 15bp hike is priced for the 16 Dec BoE meeting after last week’s UK employment and inflation data, but consider we also get UK PMI data (Tuesday 20:30 AEDT), and arguably, more importantly, speeches from BoE Governor Bailey and chief economist Huw Pill – perhaps this time around expectations of hikes can be better guided – although, a bit of uncertainty into central bank meetings is very pre-2008 and makes things a little spicy/interesting.  (BoE speakers this week) GBPUSD 1-week implied volatility is hardly screaming movement, and at 6.5% sits at the 10th percentile of its 12-month range. The implied move is close to 130pips, so the range at this juncture (with a 68.2% level of confidence), although I multiple this by 0.8 to get closer to the options breakeven rate. So at this stage, 100 pips (higher or lower) is the sort of move the street is looking for over the coming five days, putting a range of 1.3557 to 1.3349 in play – one for the mean reversion players. Personally, I would let it run a bit as that volatility seems a little low, and a break of 1.3400 could see volatility pick up. I’d certainly be looking for downside if that gave way.  Happy trading.
We Might Say Next FED Moves Are Not Obvious As Some Factors Differentiate Circumstances

Silver, shrugging off attacks

Korbinian Koller Korbinian Koller 20.11.2021 13:32
Weekly chart, Silver in US-Dollar, strong along gold: Silver in US-Dollar, weekly chart as of November 20th, 2021. The weekly chart illustrates price behavior over the last 15 months. Silver prices are trading near the center of the sideways range. Gold in US-Dollar, weekly chart, rumors shrugged off: Gold in US-Dollar, weekly chart as of November 20th, 2021. The weekly chart of gold isn’t much different from where prices stand. In short, there is no evidence that gold has lost its luster. Otherwise, we would see silver trading in a relationship much lower. Rumors are just that – rumors! Silver is shrugging them off. Silver in US-Dollar, quarterly chart, room to go: Silver in US-Dollar, quarterly chart as of November 20th, 2021. A historical review with a quarterly chart over the last eighteen years reveals that silver prices can sustain extreme extensions from the mean (yellow line) for extended periods. Using the extreme of the second quarter in 2011 as a projective measurement (orange vertical line) for an upcoming target would provide for a price target more than 10% above all-time highs at US$56. In addition, the chart shows that we find ourselves in a strong quarter so far, which is in alignment with cyclical probabilities. Silver in US-Dollar, weekly chart, prepping the play: Silver in US-Dollar, weekly chart as of November 20th, 2021. Trade setup Let us return to the weekly time frame for a possible low-risk entry scenario with this target in mind.We find a supply zone based on fractal transactional volume analysis near the price of US$24.11 and US$22.65. Both attractive entry zones for excellent risk/reward-ratio plays.   Phase 1 drilling program at Guigui discovered not only the largest intrusive ever found in the district, but it’s the first mineralized skarn ever seen in Guigui! Silver, shrugging off attacks: It will not be rumors, doubts, and speculations that will be the catalyst for silvers’ success or failure. It isn’t a question of “if,” but just a question of “when” we will see the next massive price advance in this precious metal. The odds are stacked too much in favor of a continued price movement up that the long-term investor should let doubts allow for diverging from a splendid opportunity to partake in wealth preservation and a very profitable way to participate in a chance rarely presented this prominent. 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 also subscribe to our free newsletter. This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting. By Korbinian Koller|November 20th, 2021|Tags: Crack-Up-Boom, Gold, Gold bullish, Gold/Silver-Ratio, inflation, low risk, Silver, silver bull, Silver Chartbook, silversqueeze, technical analysis, time frame, trading principles|0 Comments About the Author: Korbinian Koller Outstanding 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.
COT Speculators drop British pound sterling bets to lowest level in 76-weeks

COT Speculators drop British pound sterling bets to lowest level in 76-weeks

Invest Macro Invest Macro 22.11.2021 11:46
November 20, 2021 By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday November 16th 2021 and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. All currency positions are in direct relation to the US dollar where, for example, a bet for the euro is a bet that the euro will rise versus the dollar while a bet against the euro will be a bet that the euro will decline versus the dollar. Highlighting the COT Currency data this week is the second straight decline in British pound sterling speculative positions. The pound sterling speculator contracts dropped sharply for the second consecutive week this week and have now fallen by a total of -46,646 contracts over just this two-week time period. These declines have pushed the overall speculative position into a bearish sentiment level of -31,599 contracts which marks the lowest standing of the past seventy-six weeks, dating back to June 2nd of 2020. The GBPUSD currency pair has been under pressure since the middle of October and fallen from around 1.3800 exchange rate to just above the 1.3435 level currently, a drop of almost 400 pips. Data Snapshot of Forex Market Traders | Columns Legend Nov-16-2021 OI OI-Index Spec-Net Spec-Index Com-Net COM-Index Smalls-Net Smalls-Index EUR 705,698 86 -3,826 34 -26,985 68 30,811 25 JPY 252,897 91 -93,126 10 115,758 94 -22,632 1 GBP 207,099 43 -31,599 51 41,182 54 -9,583 36 MXN 170,102 33 -47,655 2 46,127 99 1,528 50 AUD 166,688 57 -61,153 27 69,858 71 -8,705 31 CAD 148,955 30 8,709 62 -26,717 35 18,008 74 USD Index 59,387 88 34,908 86 -40,455 7 5,547 77 RUB 52,624 58 22,625 67 -23,936 31 1,311 70 CHF 49,320 27 -8,889 54 18,767 52 -9,878 34 NZD 42,945 30 13,965 95 -15,521 6 1,556 70 BRL 31,767 32 -15,698 48 15,743 54 -45 66 Bitcoin 13,648 78 -1,478 69 357 0 1,121 23   US Dollar Index Futures: The US Dollar Index large speculator standing this week was a net position of 34,908 contracts in the data reported through Tuesday. This was a weekly lowering of -540 contracts from the previous week which had a total of 35,448 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 86.0 percent. The commercials are Bearish-Extreme with a score of 7.4 percent and the small traders (not shown in chart) are Bullish with a score of 77.2 percent. Free Reports: Top 5 Companies Added to Our Stock Watch List this Quarter - Here are the Stock Symbols that stood out so far in the fourth quarter of 2021. Get our Weekly Commitment of Traders Reports - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.   US DOLLAR INDEX Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 80.8 3.4 12.8 – Percent of Open Interest Shorts: 22.0 71.5 3.5 – Net Position: 34,908 -40,455 5,547 – Gross Longs: 47,959 2,000 7,621 – Gross Shorts: 13,051 42,455 2,074 – Long to Short Ratio: 3.7 to 1 0.0 to 1 3.7 to 1 NET POSITION TREND:       – COT Index Score (3 Year Range Pct): 86.0 7.4 77.2 – COT Index Reading (3 Year Range): Bullish-Extreme Bearish-Extreme Bullish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 5.0 -2.7 -13.6   Euro Currency Futures: The Euro Currency large speculator standing this week was a net position of -3,826 contracts in the data reported through Tuesday. This was a weekly reduction of -7,599 contracts from the previous week which had a total of 3,773 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 33.8 percent. The commercials are Bullish with a score of 68.1 percent and the small traders (not shown in chart) are Bearish with a score of 25.4 percent. EURO Currency Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 28.1 57.3 12.8 – Percent of Open Interest Shorts: 28.6 61.1 8.4 – Net Position: -3,826 -26,985 30,811 – Gross Longs: 198,181 404,266 90,261 – Gross Shorts: 202,007 431,251 59,450 – Long to Short Ratio: 1.0 to 1 0.9 to 1 1.5 to 1 NET POSITION TREND:       – COT Index Score (3 Year Range Pct): 33.8 68.1 25.4 – COT Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 5.7 -5.2 -0.0   British Pound Sterling Futures: The British Pound Sterling large speculator standing this week was a net position of -31,599 contracts in the data reported through Tuesday. This was a weekly lowering of -19,506 contracts from the previous week which had a total of -12,093 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 51.2 percent. The commercials are Bullish with a score of 54.0 percent and the small traders (not shown in chart) are Bearish with a score of 35.8 percent. BRITISH POUND Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 24.4 61.4 11.3 – Percent of Open Interest Shorts: 39.6 41.5 15.9 – Net Position: -31,599 41,182 -9,583 – Gross Longs: 50,443 127,197 23,322 – Gross Shorts: 82,042 86,015 32,905 – Long to Short Ratio: 0.6 to 1 1.5 to 1 0.7 to 1 NET POSITION TREND:       – COT Index Score (3 Year Range Pct): 51.2 54.0 35.8 – COT Index Reading (3 Year Range): Bullish Bullish Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -8.3 9.2 -8.1   Japanese Yen Futures: The Japanese Yen large speculator standing this week was a net position of -93,126 contracts in the data reported through Tuesday. This was a weekly increase of 12,225 contracts from the previous week which had a total of -105,351 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 10.4 percent. The commercials are Bullish-Extreme with a score of 93.7 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 0.8 percent. JAPANESE YEN Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 9.7 80.5 8.6 – Percent of Open Interest Shorts: 46.6 34.7 17.6 – Net Position: -93,126 115,758 -22,632 – Gross Longs: 24,635 203,468 21,790 – Gross Shorts: 117,761 87,710 44,422 – Long to Short Ratio: 0.2 to 1 2.3 to 1 0.5 to 1 NET POSITION TREND:       – COT Index Score (3 Year Range Pct): 10.4 93.7 0.8 – COT Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish-Extreme NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -18.4 15.5 -4.1   Swiss Franc Futures: The Swiss Franc large speculator standing this week was a net position of -8,889 contracts in the data reported through Tuesday. This was a weekly rise of 8,154 contracts from the previous week which had a total of -17,043 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 54.4 percent. The commercials are Bullish with a score of 52.0 percent and the small traders (not shown in chart) are Bearish with a score of 34.3 percent. SWISS FRANC Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 11.2 64.2 24.4 – Percent of Open Interest Shorts: 29.2 26.1 44.5 – Net Position: -8,889 18,767 -9,878 – Gross Longs: 5,502 31,663 12,048 – Gross Shorts: 14,391 12,896 21,926 – Long to Short Ratio: 0.4 to 1 2.5 to 1 0.5 to 1 NET POSITION TREND:       – COT Index Score (3 Year Range Pct): 54.4 52.0 34.3 – COT Index Reading (3 Year Range): Bullish Bullish Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 11.9 -12.2 11.8   Canadian Dollar Futures: The Canadian Dollar large speculator standing this week was a net position of 8,709 contracts in the data reported through Tuesday. This was a weekly rise of 3,605 contracts from the previous week which had a total of 5,104 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 62.3 percent. The commercials are Bearish with a score of 34.9 percent and the small traders (not shown in chart) are Bullish with a score of 74.0 percent. CANADIAN DOLLAR Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 29.6 42.1 27.1 – Percent of Open Interest Shorts: 23.8 60.0 15.0 – Net Position: 8,709 -26,717 18,008 – Gross Longs: 44,147 62,689 40,389 – Gross Shorts: 35,438 89,406 22,381 – Long to Short Ratio: 1.2 to 1 0.7 to 1 1.8 to 1 NET POSITION TREND:       – COT Index Score (3 Year Range Pct): 62.3 34.9 74.0 – COT Index Reading (3 Year Range): Bullish Bearish Bullish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 29.6 -26.4 10.0   Australian Dollar Futures: The Australian Dollar large speculator standing this week was a net position of -61,153 contracts in the data reported through Tuesday. This was a weekly gain of 2,271 contracts from the previous week which had a total of -63,424 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 27.1 percent. The commercials are Bullish with a score of 71.0 percent and the small traders (not shown in chart) are Bearish with a score of 31.2 percent. AUSTRALIAN DOLLAR Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 18.5 67.2 11.8 – Percent of Open Interest Shorts: 55.1 25.3 17.1 – Net Position: -61,153 69,858 -8,705 – Gross Longs: 30,760 112,044 19,744 – Gross Shorts: 91,913 42,186 28,449 – Long to Short Ratio: 0.3 to 1 2.7 to 1 0.7 to 1 NET POSITION TREND:       – COT Index Score (3 Year Range Pct): 27.1 71.0 31.2 – COT Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 27.1 -29.0 24.4   New Zealand Dollar Futures: The New Zealand Dollar large speculator standing this week was a net position of 13,965 contracts in the data reported through Tuesday. This was a weekly boost of 1,083 contracts from the previous week which had a total of 12,882 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 94.7 percent. The commercials are Bearish-Extreme with a score of 6.5 percent and the small traders (not shown in chart) are Bullish with a score of 69.7 percent. NEW ZEALAND DOLLAR Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 61.4 24.1 11.5 – Percent of Open Interest Shorts: 28.9 60.2 7.8 – Net Position: 13,965 -15,521 1,556 – Gross Longs: 26,388 10,349 4,923 – Gross Shorts: 12,423 25,870 3,367 – Long to Short Ratio: 2.1 to 1 0.4 to 1 1.5 to 1 NET POSITION TREND:       – COT Index Score (3 Year Range Pct): 94.7 6.5 69.7 – COT Index Reading (3 Year Range): Bullish-Extreme Bearish-Extreme Bullish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 9.9 -11.8 19.8   Mexican Peso Futures: The Mexican Peso large speculator standing this week was a net position of -47,655 contracts in the data reported through Tuesday. This was a weekly gain of 752 contracts from the previous week which had a total of -48,407 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 1.5 percent. The commercials are Bullish-Extreme with a score of 98.8 percent and the small traders (not shown in chart) are Bearish with a score of 49.5 percent. MEXICAN PESO Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 41.1 55.3 3.1 – Percent of Open Interest Shorts: 69.2 28.2 2.2 – Net Position: -47,655 46,127 1,528 – Gross Longs: 69,984 94,074 5,245 – Gross Shorts: 117,639 47,947 3,717 – Long to Short Ratio: 0.6 to 1 2.0 to 1 1.4 to 1 NET POSITION TREND:       – COT Index Score (3 Year Range Pct): 1.5 98.8 49.5 – COT Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -5.5 5.6 -1.5   Brazilian Real Futures: The Brazilian Real large speculator standing this week was a net position of -15,698 contracts in the data reported through Tuesday. This was a weekly decrease of -240 contracts from the previous week which had a total of -15,458 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 47.6 percent. The commercials are Bullish with a score of 54.4 percent and the small traders (not shown in chart) are Bullish with a score of 66.3 percent. BRAZIL REAL Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 26.7 64.6 8.0 – Percent of Open Interest Shorts: 76.1 15.0 8.2 – Net Position: -15,698 15,743 -45 – Gross Longs: 8,468 20,507 2,545 – Gross Shorts: 24,166 4,764 2,590 – Long to Short Ratio: 0.4 to 1 4.3 to 1 1.0 to 1 NET POSITION TREND:       – COT Index Score (3 Year Range Pct): 47.6 54.4 66.3 – COT Index Reading (3 Year Range): Bearish Bullish Bullish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -17.9 19.3 -12.9   Russian Ruble Futures: The Russian Ruble large speculator standing this week was a net position of 22,625 contracts in the data reported through Tuesday. This was a weekly advance of 1,922 contracts from the previous week which had a total of 20,703 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 66.9 percent. The commercials are Bearish with a score of 30.7 percent and the small traders (not shown in chart) are Bullish with a score of 70.2 percent. RUSSIAN RUBLE Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 57.7 37.7 4.6 – Percent of Open Interest Shorts: 14.7 83.2 2.1 – Net Position: 22,625 -23,936 1,311 – Gross Longs: 30,357 19,849 2,418 – Gross Shorts: 7,732 43,785 1,107 – Long to Short Ratio: 3.9 to 1 0.5 to 1 2.2 to 1 NET POSITION TREND:       – COT Index Score (3 Year Range Pct): 66.9 30.7 70.2 – COT Index Reading (3 Year Range): Bullish Bearish Bullish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 5.2 -3.3 -20.9   Bitcoin Futures: The Bitcoin large speculator standing this week was a net position of -1,478 contracts in the data reported through Tuesday. This was a weekly reduction of -11 contracts from the previous week which had a total of -1,467 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 68.7 percent. The commercials are Bullish with a score of 71.4 percent and the small traders (not shown in chart) are Bearish with a score of 22.9 percent. BITCOIN Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 63.4 5.0 14.7 – Percent of Open Interest Shorts: 74.2 2.4 6.5 – Net Position: -1,478 357 1,121 – Gross Longs: 8,649 678 2,008 – Gross Shorts: 10,127 321 887 – Long to Short Ratio: 0.9 to 1 2.1 to 1 2.3 to 1 NET POSITION TREND:       – COT Index Score (3 Year Range Pct): 68.7 71.4 22.9 – COT Index Reading (3 Year Range): Bullish Bullish Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 0.9 -20.8 4.5 Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.
The Telegraph Publishes Misleading Story about Omicron

Covid Surge Compounds Monetary Divergence to give the Euro its Biggest Weekly Loss in Five Months

Marc Chandler Marc Chandler 22.11.2021 09:39
Strong US consumption and production figures kept the greenback well supported last week on the heels of the jump in CPI to 6.2%.  Meanwhile, the surge of Covid cases in Europe underscores the divergences with the US, sending the euro to new lows for the year.   At the same time, oil prices headed south for the fourth consecutive week, matching the longest decline in more than two years.  It did not favor the Norwegian krone, the weakest of the majors, with a 2.15% drop.  It brought this year's loss to almost 3.5%, despite it being the first G10 central bank to hike rate, with another likely next month.   The prospects of a Bank of England rate hike next month were lifted by the strong inflation and retail sales figures.  Sterling was the best performing major currency, rising a little more than 0.25% against the dollar.  It also traded at its best level against the euro since March 2020.  At the end of the week, the euro also broke down against the Swiss franc, trading below CHF1.05 for the first time since July 2015.   Japan's October CPI showed that excluding fresh food and energy, the world's third-largest economy has still not broken free of deflation's grip (-0.7% year-over-year).  A weaker yen is not a problem for Japanese policymakers or corporates.  Japan has averaged a monthly trade surplus this year through October of about JPY7.8 bln a month, hardly the stuff that should excite protectionists.  The BIS estimates that eurozone inflation would be closer to 1.5% than the 4.1% reported in October without the supply chain disruptions. The weakness of the euro does not appear problematic for the ECB either.  With the Fed already slowing the pace of its monetary accommodation, a stronger dollar reinforces the policy thrust. Even though net exports shaved Q3 growth by about 1.1 percentage points, it has yet to spur criticism, and September was a record shortfall.   Dollar Index:  The Dollar Index rose for the fourth consecutive week.  It met the (50%) retracement objective of its slide from March 2020 (~103.00) to the January 6 low (~89.20), which is found near 96.10.  DXY stalled ahead of the weekend, just shy of the high set in the middle of the week near 96.25. A move above there targets the next retracement (61.8%), which is close to 97.75.    The MACD is over-extended but still headed higher, while the Slow Stochastic appears to be turning lower.  Support is seen around 95.50.  The market seems to have discounted much of the good news for the dollar and Fed policy.  We note that the US 2-year yield fell almost six basis points last week.  That leaves it off about 4.5 bp this month, despite the strong CPI reading, robust retail sales, and industrial output figures. Euro: The divergence of monetary policy has been the critical weight on the euro, but at the end of last week, it seemed that surge in Covid cases in Europe helped drive the single currency to new lows. It fell to $1.1250 ahead of the weekend to take out the mid-week low near $1.1265.  The weekly loss of about 1.3% is the biggest in five months.  Recall that the $1.1290 area represented the (61.8%) retracement of the rally that began in March 2020.  The momentum indicators are stretched, but a possible bullish divergence is appearing in the Slow Stochastic. A cap seems to be forming around $1.1375.  After repeated tests, and much to the chagrin of the Swiss National Bank, the euro was sold through CHF1.05 ahead of the weekend for the first time since July 2015.  Given its modus operandi, the SNB is likely resisting.  There is little on the charts ahead of CHF1.0250.  In the second half of last week, the euro found support near GBP0.8385, its lowest level since March 2020.  Support is seen close to GBP0.8275-GBP0.8300.  Lastly,  the euro found support near JPY128.00, which has more or less withstood several tests since moving above there in February.   Japanese Yen:  The greenback recorded a new four-year high against the yen, less than a handful of pipis from JPY115 in the middle of last week.  It reversed lower and settled ever so slightly below the previous session's low to leave a key reversal in its wake.  It recorded the week's low ahead of the weekend near JPY113.60.  Since the dollar pushed above JPY112 early last month, we have suggested a JPY113-JPY115 trading range.  It did trade to about JPY112.75 on November 10 and 11 but snapped back into the range.  The US 10-year note futures (December contract) posted a key reversal in the middle of last week, too, and also ended the week at eight-session highs, which, of course, means lower yields.  The dollar-yen exchange rate still seems to be a range-bound creature, more the most part, and heavily influenced by external factors, like US 10-year yield and broader risk appetites.  British Pound:  Sterling outperformed the other major currencies last week, but the 0.3% gain is nothing to write home about.  It remained within the previous week's range. It was unable to sustain the upside momentum after approaching the (50%) retracement objective of the decline since the month's high and outside down day on November 4 (BOE meeting).  That retracement stands at $1.3525.  The strong CPI report on November 17 helped lift sterling to the week's high near $1.3515.  However, the underlying strength of the dollar proved too much, and ahead of the weekend, sterling traded a little below $1.3410.  The momentum indicators have turned higher, and as long as $1.3400 holds, sterling looks attractive.  However, the market appears to have a 15 bp hike at next month's meeting fully discounted.  While it remains a distinct possibility, if not a likelihood, but 100% confidence may leave sterling vulnerable to a reassessment.  Canadian Dollar:  The US dollar rose for the fourth consecutive week against the Canadian dollar, matching the longest advance since early last year.  With the pre-weekend gain, the greenback met the  (61.8%) retracement objective of decline since CAD1.29 was approached on September 20, found near CAD1.2665. The US dollar's broad strength, coupled with the stock market wobble (a proxy for risk), and the drop in crude prices by around 4.25%, the fourth consecutive weekly decline shaved about 0.75% off the Canadian dollar.  The implied yield of the June 2022 Banker Acceptances fell last week and is now about 10 bp lower than at the end of last month.  The MACD is headed up though over-extended, while the Slow Stochastic has flatlined at extreme levels and has not yet confirmed the new highs.  The US dollar continues to hug the upper Bollinger Band, which will begin the new week near CAD1.2650. Australian Dollar:   The Aussie fell for the third straight week, and ahead of the weekend, approached $0.7225, last seen in early October.  As seen with some of the other currency pairs, the MACD is still warning of currency weakness, while the Slow Stochastic is flatlining but over-extended.  The trendline connecting the August and September lows initially held last week. It (~$0.7240) yielded ahead of the weekend, but the Aussie managed to close back above it.   It needs to resurface above $0.7300 to be anything meaningful.  Softer than expected, wage growth may have reinforced the RBA's message to the markets, and the yield of the June 2022 T-bill futures fell seven basis points last week and is now down 31 bp on the month.   Mexican Peso:  Emerging markets currencies remain out of favor in a strong dollar environment.  The JP Morgan Emerging Market Currency Index slumped by more than 2% last week, the most since June.  The Turkish lira collapsed by nearly 11%.  The Indian rupee rose by 0.3%, the strongest in the EM space.  The greenback made a new marginal high in two-and-a-half weeks before the weekend, slightly below MXN20.89.  The momentum indicators are constructive for the dollar, but it is at the upper end of its recent range (~MXN20.12-MXN21.00).  The high for the year was set in March near MXN21.64, and it will come into view when the greenback rises above MXN21.15.   Chinese Yuan:   By shadowing the dollar so tightly, the yuan is dragged higher on a trade-weighted basis in the stronger greenback environment. The yuan is at six-year highs on the basket the PBOC tracks (CFETS).  The PBOC reportedly stressed the importance of exchange risk management ahead of the weekend, and it may be a warning that its willingness to tolerate a stronger yuan is limited.  The yuan slipped an inconsequential 0.12% against the dollar last week.  For nearly the past five weeks, the exchange rate has been mostly confined to a CNY6.38-CNY6.40 range.  It is a fuzzy range and allows for around a big figure in both directions. The index of Chinese companies listed in the US (NASDAQ Golden Dragon Index) fell about 5.7% last week.  The major benchmarks in China, including the CSI 300, posted small gains.  The Hang Seng fell 1.1% last week, and most of that was before the weekend on disappointing earnings from Alibaba (-10.3% in HK).     Disclaimer
Like the Latest Bond Flick, the US Dollar Has No Time to Die

Like the Latest Bond Flick, the US Dollar Has No Time to Die

Przemysław Radomski Przemysław Radomski 22.11.2021 15:11
While the dollar is on a tear, precious metal stocks have gotten away with it lately. But how long will their resistance last? The USD Index (USDX) After the USD Index’s negative response to the ECB’s monetary policy meeting on Oct. 28, I warned on Oct. 29 that dollar bears were unlikely to celebrate for much longer. I wrote: Based on the rather random comment during the conference, the traders panicked and bought the EUR/USD, which triggered declines in the USD Index (after all, the EUR/USD is the largest component of the USDX). Was the breakout to new 2021 lows invalidated? No. The true breakout was above the late-March highs (the August highs also served as a support level, but the March high is more important here) and it wasn’t invalidated. What was the follow-up action? At the moment of writing these words, the USDX is up and trading at about 93.52, which is just 0.07 below the August high in terms of the closing prices. Consequently, it could easily be the case that the USD Index ends today’s session (and the week) back above this level. You’ve probably heard the saying that time is more important than price. It’s the end of the month, so let’s check what happened in the case of previous turns of the month; that’s where we usually see major price turnarounds. I marked the short-term turnarounds close to the turns of the month with horizontal dashed blue lines, and it appears that, in the recent past, there was practically always some sort of a turnaround close to the end of the month. Consequently, seeing a turnaround (and a bottom) in the USD index now would be perfectly normal. And with the USD Index making quick work of 94, 95, and now 96, the greenback’s rally continues to gain steam. What’s more, the USD Index also surged above its late 2020 resistance and 98 should be the next bullish milestone. More importantly, however, gold, silver, and mining stocks are sensing that something is amiss. For example, while they largely ignored the USD Index’s recent ascent, their negative correlations resurfaced last week (on a very short-term basis, so far, but still). Moreover, while the precious metals’ recent rallies were likely euro-weakness-driven and not USD Index-strength-driven, the dollar basket’s uprising should elicit more pain for gold, silver, and mining stocks over the medium term. To explain, I wrote on Nov. 17: The euro recently declined and the prices of silver and gold recently rallied shortly after dovish comments from the eurozone. Namely, while the expansionary nature of fiscal and monetary decisions in the U.S. might be after its peak (with the infrastructure bill signed even despite high inflation numbers), the eurozone is far from limiting its expansionary (i.e., inflationary) policies, and it was just made clear recently. That was bearish for the euro and bullish for the gold price – as more money (euros in this case) would be chasing the same amount of physical gold. The point here is that it might have been the decline in the value of the European currency that caused gold to rally, and it had little to do with what happened in the USD Index. Don’t get me wrong, most of the time, the gold-USD link is stable and negative. In some cases, gold shows strength or weakness by refusing to move in tune (and precisely: again) with U.S. dollar’s movement. But in this case, it seems that it’s not about the U.S. dollar at all (or mostly), but rather about what happened in the Eurozone and euro recently. As a result, with the USD Index likely to take the lead in the coming months, the precious metals should suffer along the way. For context, the USD Index is approaching overbought territory and a short-term decline to ~95 isn’t out of the question. However, it’s more of a possibility than a given. Moreover, the greenback’s medium-term outlook remains robust, and any short-term pullback is likely a corrective downswing within a medium-term uptrend. Circling back to the euro, I’ve been warning for months that the Euro Index was materially overvalued and that a sharp re-rating would likely unfold. I wrote previously: The next temporary stop could be ~1.1500 (the March 2020 highs, then likely lower). For context, the EUR/USD accounts for nearly 58% of the movement of the USD Index, and that’s why the euro’s behavior is so important. And after the Euro Index sunk to a new 2021 low last week, the European currency has officially fallen off a cliff. To that point, after breaking below the declining support line of its monthly channel, a drawdown to ~111 is likely next in line (which is signaled by the breakdown below its bearish head & shoulders pattern). The Euro Index is near oversold territory and a short-term bounce may ensue, but the bearish medium-term implications remain intact. Please see below: Adding to our confidence (don’t get me wrong, there are no certainties in any market; it’s just that the bullish narrative for the USDX is even more bullish in my view), the USD Index often sizzles in the summer sun and major USDX rallies often start during the middle of the year. Summertime spikes have been mainstays on the USD Index’s historical record and in 2004, 2005, 2008, 2011, 2014 and 2018 a retest of the lows (or close to them) occurred before the USD Index began its upward flights (which is exactly what’s happened this time around). Furthermore, profound rallies (marked by the red vertical dashed lines below) followed in 2008, 2011 and 2014. With the current situation mirroring the latter, a small consolidation on the long-term chart is exactly what occurred before the USD Index surged in 2014. Likewise, the USD Index recently bottomed near its 50-week moving average; an identical development occurred in 2014. More importantly, though, with bottoms in the precious metals market often occurring when gold trades in unison with the USD Index (after ceasing to respond to the USD’s rallies with declines), we’re still far away from that milestone in terms of both price and duration. Again, the recent move higher in the USD Index doesn’t necessarily apply in the case of the above rule, as it was not the strength of the USD but weakness in the euro that has driven it. Likewise, with the USD Index now approaching its long-term rising support line (which is now resistance), a rally above the upward sloping black line below would invalidate the prior breakdown and support a move back above 100. However, with the dollar basket’s weekly RSI (Relative Strength Index) now above 70, a short-term consolidation may ensue. Conversely, please note that the recent medium-term rally has been calmer than any major upswing witnessed over the last 20 years where the USD Index’s RSI has hit 70. I marked the recent rally in the RSI with an orange rectangle and I did the same with the second-least and third-least volatile of the medium-term upswings. The sharp rallies in 2008 and 2014 were of much larger magnitudes. And in those historical analogies, the USD Index continued its surge for some time without suffering any material corrections. As a result, the short-term outlook is more of a coin flip. However, the medium-term outlook remains profoundly bullish, and gold, silver, and mining stocks may resent the USD Index’s forthcoming uprising. Just as the USD Index took a breather before its massive rally in 2014, it seems that we saw the same recently. This means that predicting higher gold prices (or the ones of silver) here is likely not a good idea. Continuing the theme, the eye in the sky doesn’t lie. And with the USDX’s long-term breakout clearly visible, the wind still remains at the dollar’s back. Please see below: The bottom line? With my initial 2021 target of 94.5 already hit, the ~98 target is likely to be reached over the medium term, and the USDX will likely exceed 100 at some point over the medium or long term. Keep in mind, though: we’re not bullish on the greenback because of the U.S.’ absolute outperformance. It’s because the region is fundamentally outperforming the Eurozone, the EUR/USD accounts for nearly 58% of the movement of the USD Index, and the relative performance is what really matters. In conclusion, while the USD Index’s 2021 surge caught the consensus by surprise, I’ve been sounding the bullish alarm for many months. And with more strength likely to materialize over the medium term, the ‘death of the dollar’ narrative has been grossly over-exaggerated. Moreover, while gold, silver, and mining stocks recently ignored the greenback’s fervor, history implies that their relative strength won’t last. As a result, more downside will likely confront the precious metals over the next few months. 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, CFAFounder, 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.
Intraday Market Analysis – USD Bounces Back

Intraday Market Analysis – USD Bounces Back

John Benjamin John Benjamin 22.11.2021 08:40
GBPUSD hits resistance The pound pulled back after Britain’s retail sales registered a steeper drop to -1.3% in October. The pair has met stiff selling pressure in the supply zone around 1.3510, a support that has turned into resistance after a failed rebound. An oversold RSI may cause a limited rebound. However, a bearish MA cross on the daily chart suggests that sentiment is still pessimistic. 1.3380 is a key support to keep the sterling afloat. A bearish breakout may trigger an extended sell-off to last December’s lows around 1.3200. USDCAD breaks higher The Canadian dollar struggles after a contraction in September’s retail numbers. The US dollar bounced off the resistance-turned-support at 1.2580. This is a sign that the bulls are still in control. A bullish MA cross on the daily timeframe confirms the directional bias for the next few days. The daily resistance at 1.2770 would be the next target. Its break would lead to a test of the double top at 1.2900. In the meantime, the RSI’s overextension has temporarily held the bulls back. We can also expect buying interest during dips. GER 40 struggles for support The Dax 40 tumbles as lockdowns across Europe hurt sentiment. The RSI’s overbought situation on the daily chart has made buyers cautious in pursuing high valuations. On the hourly chart, a bearish RSI divergence suggests a deceleration in the upward momentum. Then a dip below 16200 confirms weakness in the rally, prompting leverage positions to liquidate. The psychological level of 16000 is a congestion area as it coincides with last August’s peak and the 20-day moving average. 16300 is now a fresh hurdle.
Electrification and urbanisation will drive growth in copper

Electrification and urbanisation will drive growth in copper

Peter Garnry Peter Garnry 22.11.2021 08:26
Summary:  Copper is an essential metal in our green transformation driven by electric vehicles and upgrades to our electric grid infrastructure. The ongoing urbanisation in the world is also driving construction which is one of the key demand drivers for copper. The demand outlook looks strong, but how can investors get exposure to copper. We explore the different options and highlights specifically six miners with high exposure to copper. The long-term growth drivers of copper The green transformation will electrify the global economy as cars go electric and more homes in colder areas will switch from natural gas as heating source to that of air to water heat pumps. In warmer parts of the world we will continue to see an acceleration in air conditioners to cool homes. The main usage of refined copper is for electrical applications, but it is also used in housing (pipes and fittings), cars, telecommunication and industrial machines. Copper has the second highest thermal conductivity at room temperature among pure metals and is thus the preferred metal used in electrical applications. As the world electrifies in the name of the green transformation and rapid urbanization continues in Asia, Africa, and South America, copper will continue to enjoy strong annual growth rates. How to get exposure to copper? Copper has been rebranded as a green metal because of its importance for the green transformation and investors are increasingly asking us how to invest in copper. The most direct way is of course to invest in high grade copper futures on COMEX (part of CME Group) with the current active contract being the Mar 2022 contract (Saxo ticker: HGH2), but the contract has a contract value of around $106,537 at current level making it inaccessible to most retail investors. One could also invest through CFD on futures (Saxo ticker on the Mar 2022 is COPPERUSMAR22) where the investor could buy 100 pounds of copper instead of 25,000 pounds in the futures reducing the contract size to $425. However, getting exposure through CFDs and futures the investor must regularly roll the contract to the next active contract, and the investor could also incur financing cost increasing the drag on performance. The chart below shows the continuous futures contract on high grade copper since 2002. Source: Saxo Group Few miners offer pure exposure to copper Another way to get exposure to copper that removes the difficulties of rolling futures or CFD contracts is to invest in mining companies that extract or refine copper. The table below shows 16 mining companies with exposure to copper with Codelco, the largest copper producer in the world, absent from the list as the Chilean miner is only listed in Chile and thus not investable for our clients. The copper mining industry has delivered a median total return in USD of 132.6% over the past five years beating the global equity up 105% in the same period. The rising copper prices the past year driven by investors positioning themselves in green metals (defined as metals that will play a key role in the green transformation) which in turn has pushed up revenue in the industry by almost 40%. Sell-side analysts are generally bullish on copper miners with a median upside of 16% from current levels. In our view investors should select one or two copper miners to get exposure and avoid the ETFs on the industry as they are too broad-based and lack the pure exposure profile needed to play the copper market. Name Market cap (USD mn) F12M EV/EBITDA Revenue growth (%) Price-to-target (%) 5Y return (USD) Revenue from copper (%) Antofagasta PLC 18,871 5.1 43.8 3.4 166.6 84.8 First Quantum Minerals Ltd 14,962 5.1 41.9 20.9 111.3 84.2 Southern Copper Corp 45,944 8.6 39.7 3.1 128.9 81.6 KGHM Polska Miedz SA 7,026 3.8 28.3 26.4 80.0 73.8 Jiangxi Copper Co Ltd 9,843 7.2 44.6 37.8 27.3 71.0 OZ Minerals Ltd 6,397 7.6 38.7 -6.1 288.4 60.0 Glencore PLC * 65,890 4.5 -7.5 13.9 78.2 39.0 Boliden AB 9,291 5.1 26.2 3.7 68.1 35.0 Freeport-McMoRan Inc 57,080 5.7 55.5 13.2 193.3 33.7 Teck Resources Ltd 14,468 3.9 28.7 19.9 22.0 27.0 BHP Group Ltd 131,046 4.0 41.7 18.6 136.4 26.0 Zijin Mining Group Co Ltd 39,925 8.8 27.4 52.1 396.4 22.7 Anglo American PLC 47,342 3.5 59.0 15.7 262.8 22.3 MMC Norilsk Nickel PJSC 47,479 5.1 27.1 13.5 191.1 20.6 Rio Tinto PLC 98,497 3.6 39.5 15.8 149.2 11.5 Vale SA 60,329 2.5 77.2 87.6 111.4 5.5 Aggregate / median 674,389 5.1 39.6 15.7 132.6 34.4 Source: Bloomberg and Saxo Group* EBITDA contribution as Glencore does not breakdown revenue split on metals As the table also show, there is no such thing as pure exposure to copper except for futures, options and CFDs on the underlying copper. The miner with the highest revenue exposure to copper is Antofagasta with 84.8% revenue share from copper extraction and refining. Most copper miners also extract gold and silver as part of their copper operations. Out of the 16 copper miners in our list, only 6 of these miners have more than 50% of revenue coming from copper extraction and refining. Outlook and risks High grade copper futures have been range trading for more than half a year as slowing demand out of China due to a slowdown in housing construction has weighed on the demand side. On the positive side inventories have been tight in copper which has helped support the copper price and the global pipeline of new copper mines, but also potential tax charges in Chile and Peru (roughly around 40% of global supply) could negative impact supply and keep copper prices high. The annualized growth rate in global refined copper demand has been around 3% in the period 2009-2020. China has for many years been the key driver of demand growth for copper, but going forward electrification (electric vehicles and air-to-water heat pumps and urbanization in India will begin to play a bigger marginal role on demand creating a more steady and diversified demand picture. In 2022, demand outside China will be driven by construction, grid infrastructure, and transport. Another risk to copper demand is significantly higher interest rates next year as that would curtail growth in construction which is interest rate sensitive.
Ever Thought About Biofuels to Diversify Your Portfolio?

Ever Thought About Biofuels to Diversify Your Portfolio?

Sebastian Bischeri Sebastian Bischeri 19.11.2021 16:49
How do you feel about adding a broader range of stocks to our energy investment portfolio watchlist? Let’s see what we can do! By the way, feel free to send us your questions or topics that you would like us to write about in the forthcoming editions, so we’ll try our best to answer them! Trading positions are available to our premium subscribers. First, let’s quickly define what biofuels are: A biofuel is a liquid or gaseous fuel derived from the transformation of non-fossil organic matter from biomass, for example, plant materials produced by agriculture (beets, wheat, corn, rapeseed, sunflowers, potatoes, etc.). So, it is considered a source of renewable energy. The combustion of biofuels produces only carbon dioxide (CO2) and steam (H2O) and little or no nitrogen and sulfur oxides. Therefore, biofuels – as being at the crossroads between energy and agricultural commodities – respond to economic drivers (crops/supply, demand, dollar strength, reserves, etc.) and geopolitics of both industrial sectors. Furthermore, they allow their producing countries to reduce their energy dependence on fossil fuels. Key reasons to invest in these alternative energy sources: Given the recent surge of oil and gas prices, biofuels have become somehow more attractive, and consequently one could witness a slight shift in demand from fossil to non-fossil fuels. This was also a central topic of talks during the recent United Nations Conference of the Parties (COP26), which recently took place in Glasgow (Scotland), and where world leaders finally agreed to preliminary rules for trading carbon emissions credits. In addition, as we all know, the combustion of fossil fuels contributes to greenhouse gas (GHG) emissions. Regarding biofuels - the carbon emitted to the atmosphere during their combustion has been previously fixed by plants during photosynthesis. Thus, the carbon footprint seems to be a priori neutral. Stock Watchlist (Continued) In the first article, we started a watchlist with some major energy stocks. In the second article, we added some more spicy assets (MLPs). Today, let’s update it with some biofuel-based stocks! As usual, our stock picks will be shared through that link to our dynamic watchlist which will be updated from time to time, as we progress through this portfolio construction process... Below is an example of some indicative metrics: Daily Technical Charts Figure 1 – Green Plains, Inc. (GPRE) Stock (daily chart) Figure 2 – Aemetis, Inc. (AMTX) Stock (daily chart) Figure 3 – Tantech Holdings Ltd. (TANH) Stock (daily chart) In summary, those biofuel-related stocks may present some benefits to diversifying your energy portfolio while covering some alternative fuels as well. As always, we’ll keep you, our subscribers well informed. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Oil Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Sebastien BischeriOil & Gas Trading Strategist * * * * * The information above represents analyses and opinions of Sebastien Bischeri, & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Sebastien Bischeri and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Bischeri is not a Registered Securities Advisor. By reading Sebastien Bischeri’s 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 a high risk of loss. Sebastien Bischeri, Sunshine Profits' employees, affiliates as well as their family members 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.
Inflation Risk: Milton Friedman Would Buy Gold Right Now

Inflation Risk: Milton Friedman Would Buy Gold Right Now

Arkadiusz Sieron Arkadiusz Sieron 19.11.2021 16:50
Powell maintains that inflation is transitory, but the monetary theory of inflation suggests otherwise. So, elevated inflation could stay with us!, Some economists downplay the risk stemming from elevated inflation, saying that comparisons to the 1970s style stagflation appear unfounded. They say that labor unions are weaker and economies are less dependent on energy than in the past, which makes inflationary risks less likely to materialize. Isabel Schnabel, Board Member of the European Central Bank, even compared the current inflationary spike to a sneeze, i.e., “the economy’s reaction to dust being kicked up in the wake of the pandemic and the ensuing recovery”. Are those analysts right? Well, in a sense, they are. The economy is not in stagnation with little or no growth and a rising unemployment rate. On the contrary, the US labor market is continuously improving. It’s also true that both the bargaining power of workers and energy’s share in overall expenditure have diminished over the last fifty years. However, general inflation is neither caused by wages nor energy prices. Higher wages simply mean lower profits, so although employees can consume more, employers can spend less. If wages are set above the potential market rates, then unemployment emerges - not inflation. Similarly, higher energy prices affect the composition of spending, but not the overall monetary demand spent on goods and services. It works as follows: when the price of oil increases, people have to spend more money on oil (assuming the amount of consumed oil remains unchanged), which leaves less money available for other goods and services. So, the overall money spent on goods won’t change. As a consequence, the structure of relative prices will change, but widespread prices increases won’t happen. In other words, Milton Friedman’s dictum remains valid: “Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output”. It’s quite a simple mechanism, even central bankers should be able to understand it: if the stock of goods remains unaltered while the stock of money increases, this, as Frank Shostak put it, “must lead to more money being spent on the unchanged stock of goods – an increase in the average price of goods” Let’s look at the chart below, which displays the annual growth rates in the broad money supply (M2, red line) and in the CPI (green line). We can notice two important things. First, in the 1970s, the pace of broad money supply growth was relatively high, as it reached double-digit values at some point. As a consequence, inflation accelerated, jumping above 10% for a while. In other words, stagflation was born. Since then, the rate of growth in the money supply never reached double-digit numbers on a prolonged basis, including the Great Recession, so high inflation never materialized. And then the pandemic came. In March 2020, the money supply growth rate crossed the 10% threshold and never came back. In February 2021, it reached its record height of 27.1%. The pace of growth in the M2 money aggregate has slowed down since then, dropping to a still relatively high rate of 13%. This is a rate that is almost double the pre-pandemic level (6.8% in February 2020) and the long-term average (7.1% for the 1960-2021 period ). So, actually, given the surge in the broad money supply and the monetary theory of inflation, rapidly rising prices shouldn’t be surprising at all. Second, there is a lag between the money supply growth and the increase in inflation rates. That’s why some analysts don’t believe in the quantity theory of money – there is no clear positive correlation between the two variables. This is indeed true – but only when you take both variables from the same periods. The correlation coefficient becomes significant and positive when you take inflation rates with a lag of 18-24 months behind the money supply. As John Greenwood and Steve Hanke explain in opinion for Wall Street Journal, According to monetarism, asset-price inflation should have occurred with a lag of one to nine months. Then, with a lag of six to 18 months, economic activity should have started to pick up. Lastly, after a lag of 12 to 24 months, generalized inflation should have set in. If this relationship is true, then inflation won’t go away anytime soon. After all, the money supply accelerated in March 2020 and peaked in February 2021, growing at more than four times the “optimal” rate that would keep inflation at the 2-percent target, according to Greenwood and Hanke. In line with the monetarist description, the CPI rates accelerated in March 2021, exactly one year after the surge in the money supply. So, if this lag is stable, the peak in inflation rates should happen in Q1 2022, and inflation should remain elevated until mid-2022 at least. What does it mean for the gold market? Well, if the theory of inflation outlined above is correct, elevated inflation will stay with us for several more months. Therefore, it’s not transitory, as the central bank tells us. Instead, inflation should remain high for a while, i.e., as long as the money supply growth won’t slow down and go back below 10% on a sustained basis. What’s more, the velocity of money, which plunged when the epidemic started, is likely to rise in the coming months, additionally boosting inflation. So, I would say that Milton Friedman would probably forecast more persistent inflation than Jerome Powell, allocating some of his funds into the yellow metal. Gold is, after all, considered to be an inflation hedge, and it should appreciate during the period of high and rising inflation. Although so far gold hasn’t benefited from higher inflation, this may change at some point. Actually, investors’ worries about inflation intensified in October, and gold started to show some reaction to the inflationary pressure. My bet is that the next year will be better for gold than 2021: the Fed’s tightening cycle will already be inaugurated, and thus traders will be able to focus on inflation, possibly shifting the allocation of some of their funds into gold as a safe-haven asset. 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, PhDSunshine Profits: Effective Investment through Diligence & Care.
With Gold and the Buck, as Told, You're in Luck

With Gold and the Buck, as Told, You're in Luck

Mark Mead Baillie Mark Mead Baillie 22.11.2021 08:17
The Gold Update by Mark Mead Baillie --- 627th Edition --- Monte-Carlo --- 20 November 2021 (published each Saturday) --- www.deMeadville.com As time is at a bit of a premium for penning this week's missive, (even as Gold is priced at a massive discount by valuation), let's jump right in. The macro question at large we oft receive is: â–  "How come Gold isn't much higher with all the money printing?" Macro indeed per the above Gold Scoreboard, price having settled yesterday (Friday) at $1847, just 46% of our valuation level of $3993. To be sure per the right-hand panel Gold is, on balance, in ascent toward chasing the unconscionable rise in the U.S. "M2" money supply; yet the gap from here to up there remains HUGE! The micro question of late we oft receive is: â–  "How come Gold is going up even if the Dollar is also going up?" Micro indeed as such phenomenon does on occasion occur given (for the ad nauseath time) Gold plays no currency favourites. To be sure, both Gold and the Buck have been on the rise per their percentage tracks for the 15 trading days thus far in November. Here as shown, Gold is +3.5% and the Dollar Index is +2.1%. Yes, Gomer, it really can happen: In fact "surprise, surprise, surprise" if measuring from mid-year 2014, (albeit their respective routes hardly are in linear harmony), Gold is +39.7% and yet the Dollar Index is +20.4%. So even more broadly there, no directional favoritism. And yet from that date some seven years ago, the supply of Gold is only +10.7% whereas the U.S. "M2" money supply is +88.4%. Further with specific respect (or lack thereof) to the Dollar, recall from Econ 101 class that more of something (in this case much more) makes it worth less, arguably in the Dollar's case worthless. And yet an inevitable -- some say forcibly imminent -- Federal Reserve interest rate increase (versus, for example, sovereign bank rates in Europe still seen as staying essentially negative for the foreseeable future), is therefore getting the Dollar a bid such as to push the Buck into the lead of the currencies' so-called Ugly Dog Contest. 'Course, attempting to explain irrationality is an exercise in same, in this case more Dollars nonetheless being worth more whatevers. And even irrespective of inflation, we read speculation this past week of the €uro ultimately collapsing ... and being replaced by the Dollar. "What?" But then, could such dual-continent currency still be deemed a "Federal Reserve Note"? Either way, we wouldn't recommend your losing sleep over this whimsy. For if you've Gold, you're fine. And looking .9999 fine is our chart of Gold's weekly bars with their parabolic long trend, now neatly in place these past three weeks. Yes, Gold put in an acceptable net loss for this recent week after having been up for five of the prior seven. However, the daily table therein of our BEGOS Markets "Breakout?" suggestions popped up last evening with "Sell" for both precious metals. So some further slipping may be seen into the ensuing week; yet on balance by the bars' structure in the chart, the 1800s not only appear safe, but the dashed regression trend line is now more perceptively rotating from negative toward positive. And that would tie in well (as historically noted last week) with Gold reaching 1971 during this new parabolic Long run: Thus having awakened the dip buyers, let's turn to the StateSide economy, by which our Economic Barometer had a sound week and sufficiently so as to put it on pace toward recording its second best month year-to-date. For the week's 14 incoming metrics, 12 were improvements over the prior period, the only two negatives being inflationary October Import Prices (even ex-Oil) and a slight slowing in that month's Housing Starts. But the latter was mitigated by growth in Building Permits, plus a firm increase in November's National Association of Home Builders Index. November also scored marked increases for both the New York State Empire and Philly Fed Indexes. Other positives included October's Retail Sales, Industrial Production, Capacity Utilization, and the Conference Board's lagging read of Leading Indicators. "'Tis all good, right?" Well, just bear in mind there, Bunky, that much of Q3's Gross Domestic Product "growth" was mitigated by a very high Chain Deflator, (i.e. inflationary rather than real growth): And as to Q3 Earnings Season, it just ended as follows: for the S&P 500, 80% of reporting constituents beat both estimates and prior period results. 'Tis rare when the latter keeps up with the former. However more broadly, 1,440 other mid-cap and smaller companies by our tabulation found just 56% having actually improved over 2020's Q3 shutdown period. That's an uh-oh... But in toto, great economics (arguably inflationarily but not really) + great earnings (by estimates but not always actual growth) = S&P 500 all-time highs. Moreover, money is pouring into the stock market per the website's S&P Moneyflow page: "Let's all buy high!" 'Tis quite extraordinary. "So then maybe this a blow-off top, mmb..." Squire, we long ago stopped counting the number of would-be S&P blow-off tops. Remember: as we've herein put forth for many-a-year, this is now the age of the stock market being the Great American Savings Account. "You have to be IN!" they say. "Gold's for the BIN!" they say. And then there's the ever-annoying individual blurter: "I bought X back at blah and am now making BLAH!" For whom we have this important reminder: the market capitalization of the S&P 500 as of Friday night is $41.4 trillion; yet the liquid M2 money supply of the U.S. is but half that at $21.4 trillion. So when it all goes wrong, good luck in getting out with something. Meanwhile amongst it all going good, we read that a record number of StateSide workers are quitting their jobs, the notion being they can do better doing something else. Watch for this great mania of "There's a better way!" and "My stocks are so up!" ultimately ending with "What was I thinking?" Then from the "We Knew This Was Coming Dept." it seems just mere weeks go by before yet again U.S. Treasury Secretary Janet "Old Yeller" Yellen has to chase down the Legislature 'cause she's run out of dough to make the country go. For sanity's sakes: "Got Gold?" Hopefully as the Fed Chair passes to Lael "The Brain" Brainard, she and the Treasury Secretary can sort it all out. (See too: "In Like Flint", 20th Century Fox, '67). From steely flint to a wee loss of glint describes at present our precious metals. Per the two-panel graphic below, we see on the left a bit of a topping pattern in the daily bars, but again with structural support still well within the 1800s. Then on the right in Gold's 10-day Market Profile, 1864 clearly is the dominant price traded across these past two weeks: Silver, too, shows similar toppiness per her daily bars (at left) with the low 24s/high 23s as supportive; then in her Profile (at right), 25.15 is where the bulk of Sister Silver's action has been: In sum, we see a bit of near-term pullback for Gold and Silver, but nothing really materially daunting, especially given the notion of 1971 during Gold's current parabolic up run; (you'll recall from a week ago, arriving at that level equates to the median gain of the 43 prior parabolic Long trends since the year 2001). And at some point -- you know, and we know, and everyone from Bangor, Maine to Honolulu and right 'round the word knows that -- the Buck ultimately shall run out of luck. Indeed to that end (and so much more), in having opened with a couple of questions, let's close with one that came in this past week from a highly-valued publisher of The Gold Update: "Do you think $1900 is nigh?" Our response in kind: "$4000 is nigh." Cheers! ...m... www.deMeadville.com www.deMeadville.com
Best Pick for Corona Woes

Best Pick for Corona Woes

Monica Kingsley Monica Kingsley 22.11.2021 15:49
S&P 500 stumbled as value plunged – corona fears are back as Austria lockdown might very well be followed soon by Germany. The mood on the continent is souring, and coupled with accelerating German inflation data, helping to underpin the dollar. Overall, the reaction reminds me of the corona market playbook of Feb-Mar 2020 when I aggresively took short positions, riding them all the way down to the Mar 23 bottom. So, why am I not beating the bearish drum today as well? We have a lot of incoming stimulus (both monetary and fiscal), the economy is slow but the yield curve hasn‘t inverted the way it did in 2019 – make no mistake, we‘re in a rate raising cycle (even if the Fed didn‘t move, the markets would force it down the road). I know, pretty ridiculous notion with 10-year yield at 1.54% and Oct YoY CPI at 6.2% - but the rates being even more negative elsewhere, help to explain the dollar 2021 resilience. That‘s the bullish side to last week‘s bearish argument. What gold and silver are sniffing out, is that the Fed would have to reverse course once the tapering effects start biting some more – not now, with still more than $100bn monthly addition. Cyclicals and commodities that had massively appreciated vs. year ago (oil doubled), are feeling the pinch of fresh economic activity curbs speculation in spite of the polar shift of U.S. strength in energy of 2019 and before. Begging the OPEC+ to increase production might not do the trick, and with so much inflation already in (and still to come), the key investment theme is of real assets strength. Precious metals have broken out, are no longer an underdog, and the inflation data will not decelerate for quite a few months still. And even as they would, it would come at a palpable cost to the real economy, and the resolute fresh stimulus action wouldn‘t be then far off. As I wrote in Apr 2020, it‘s about the continuous stimulus that‘s the go-to response anytime the horizon darkens, for whatever reason. Wash, rinse, repeat. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 bulls still have the upper hand, and value recovery accompanied by good tech defence of high ground gained, is the awaited mix. The market breadth is narrowing, and needs to be reversed to give the bulls more breathing room. Credit Markets Once corona returns to the spotlight, bets on „reversion to the mean“ in credit markets are off. Weakening data get more focus, and flight to safety is on, puncturing the trend of rising yields that would inevitably lead to yield curve control. Gold, Silver and Miners It‘s as if the gold and silver bulls don‘t trust the latest rally – I think that‘s a mistaken belief for we have turned the corner, and precious metals are about to shine – of course, invalidating the latest miners weakness in the process. Crude Oil Crude oil bulls didn‘t recover from Friday‘s spanner in the works, and while the dust hasn‘t settled, black gold is prone to an upside reversal at little notice. I‘m not overrating the oil index weakness. Copper Copper smartly recovered, moving at odds with the CRB Index, which I treat (especially given Friday‘s Austria news repercussions) as a vote of confidence that the economy isn‘t rolling over to a deflationarry hell (pun intended). Bitcoin and Ethereum Bitcoin and Ethereum are still going sideways in this correction, but today‘s lower knot is encouraging. The consolidation though still appears to have a bit further to go in time. Summary S&P 500 bulls keep hanging in there, and the waiting for bonds to come to their senses might take a while longer. Tech keeps cushioning the downside, and we haven‘t peaked in spite of the many warnings. Value and Russell 2000 upswings would be good confirmations of the stock bull market getting fresh fuel. Precious metals would have the easiest run in the weeks ahead – commodities in general not so much. Their breather is though of a temporary nature as all roads lead to real assets. Thank you for having read today‘s free analysis, which is available in full 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 five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
All alone with bitcoin

All alone with bitcoin

Korbinian Koller Korbinian Koller 23.11.2021 11:06
With this psychological burden, you want to stack your odds as good as possible to gain an edge for balance. Bitcoin provides such advantages. The inherent volatility allows for follow-through after an entry. In other words, one gets good risk/reward-ratios in midterm plays on bitcoin. Also, necessary for the long-term time frame player since hodling has another psychological hurdle that piled on top can be devastating. You won’t find many traders who bought a bundle of bitcoin when it traded at a dollar and are still holding it without ever having sold or rebought some. BTC in US-Dollar, Quarterly Chart, the Doji explosion: Bitcoin in US-Dollar, Quarterly chart as of November 23rd, 2021. The quarterly chart of bitcoin shows how explosive moves to the upside can be. If you look at the yellow lines, you will see that a small Doji builds after a retracement, and then prices explode within the next quarter like rockets. This trading behavior provides for sensational risk/reward-ratios. The quarterly chart shows a bullish quarter. Even though all-time highs have been rejected, we see the year ending on a bullish note. The great thing about this self-directed profession, on the other hand, is that you get all the credit. Work directly translates into money, without the typical step in between, selling a product or a service. If you are good at what you are doing in the trading/investing arena, rewards can be more than plentiful. No gift baskets need to be sent to a boss or coworker. True rewards for arduous work to yourself. A very self-fulfilling profession indeed. BTC in US-Dollar, Monthly Chart, most often trending: Bitcoin in US-Dollar, Monthly chart as of November 23rd, 2021. The monthly chart illustrates the steepness of the trend, and yellow lines provide a possible long reload opportunity, which will take all-time highs out next year. Another benefit for individual traders choosing to trade bitcoin is its unique personality of trending much more than most trading instruments. This unique feature adds a massive edge to a trader’s trading arsenal. BTC in US-Dollar, Weekly Chart, freeing investment capital fast: Bitcoin in US-Dollar, weekly chart as of November 23rd, 2021. But this isn’t all. From a trading perspective, bitcoin supports the unsupported individual in comparison to gold or silver as alternate wealth preservation tools due to its speed. Risk is the most defining aspect for a trader, and consequently, capital exposure time is the most crucial aspect. After all, the longer money is in the market, the more exposed it is, let’s say, to unexpected news and six sigma events. Market money parked cannot produce elsewhere and is also emotionally draining. No such thing in bitcoin.A look at the weekly time frame illustrates what we mean by this. It took less than eight weeks for bitcoin to gain staggering percentage moves within the first and second leg in this steep regression channel up. We also just entered a low-risk entry zone again for a third leg to mature. In short, you are all alone with bitcoin, but at least you picked the most ideal alliance with this trading vehicle to stack the odds in your favor. All alone with bitcoin: The business of market play is unique. You’re not learning this skill in school, mentors are hard to come by, and it isn’t a group sport. It is advisable to seek out a community of like-minded traders like our free telegram channel, since spouses rarely can comprehend the steepness of the learning curve and the challenges of constant self-reflection and pain until the consistency is mastered.  While one typically can team up and is supported within a group at the mastery level required, it’s a solo sport in trading.  Statistics support that the likeliest reason for failure in this business is underestimating the time required to acquire all the important skills necessary for success. New traders run either out of money or patience.  The press makes it look so easy, and the fact that all one needs to do is press a button doesn’t help towards a more respectful attitude. Yet, the mere truth is that it is one of the most demanding businesses to find oneself into. 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. This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting. By Korbinian Koller|November 23rd, 2021|Tags: Bitcoin, bitcoin consolidation, crypto analysis, Crypto Bull, crypto chartbook, DeFi, low risk, quad exit, technical analysis, trading education|0 Comments About the Author: Korbinian Koller Outstanding 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.
Betting on Hawkish Fed

Betting on Hawkish Fed

Monica Kingsley Monica Kingsley 23.11.2021 15:46
S&P 500 reversed from fresh ATHs as spiking yields sent tech packing. Value didn‘t soar, but held up considerably better – still, stock bulls are getting on the defensive. Markets have interpreted the Powell nomination as a hawkish choice. I‘ve written the prior Monday:(…) the Fed is still printing a huge amount of money on a monthly basis, and it remains questionable how far in tapering plans execution they would actually get – I see the risks to the real economy coupled with persistently high inflation as rising since the 2Q 2022 (if not since Mar already, but most pronounced in 2H 2022.Inflation hasn‘t moved to the Fed‘s sights, and yesterday‘s rection in yields and precious metals is a bit too harsh. While rates are on a rising path as I‘ve written yesterday, precious metals overreacted. True, the bullish argument for the dollar stepped to the fore as yields differential between the U.S. and the rest of the world got more positive, and at the same time, various yield spreads keep compressing. That‘s a reflection of less favorable incoming economic data. Just as much as Friday‘s reaction was about corona economic impact projections, yesterday‘s one was about monetary policy anticipation.Inflation expectations though barely budged – the decline doesn‘t count as trend reversal. CPI isn‘t done rising, and the more forward looking incoming data (e.g. producer prices) would confirm there is more to come. All in all, it looks like precious metals (and to a smaller degree commodities), are giving Powell benefit of the doubt, which I view to be leading to disappointment over the coming months. Should Powell heed the markets‘ will, the real economy would weaken dramatically, forcing him to make a sharp dovish turn – and he would, faster than he flipped since getting challenged in Dec 2018.We‘re experiencing an overreaction in real assets – as stated yesterday:(…) the Fed would have to reverse course once the tapering effects start biting some more – not now, with still more than $100bn monthly addition. Cyclicals and commodities that had massively appreciated vs. year ago (oil doubled), are feeling the pinch of fresh economic activity curbs speculation in spite of the polar shift of U.S. strength in energy of 2019 and before. Begging the OPEC+ to increase production might not do the trick, and with so much inflation already in (and still to come), the key investment theme is of real assets strength.Precious metals have broken out, are no longer an underdog, and the inflation data will not decelerate for quite a few months still. And even as they would, it would come at a palpable cost to the real economy, and the resolute fresh stimulus action wouldn‘t be then far off. As I wrote in Apr 2020, it‘s about the continuous stimulus that‘s the go-to response anytime the horizon darkens, for whatever reason. Wash, rinse, repeat.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 bulls lost the momentary upper hand, and value recovery isn‘t yet strong enough to carry it forward. A less heavy move in bonds – temporary yields stabilization – would be needed to calm down stock market nerves.Credit MarketsTreasuries held up best, and that‘s characteristic of a very risk-off sentiment. The low volume in HYG isn‘t a promise of much strength soon returning.Gold, Silver and MinersPrecious metals turned sharply lower, and haven‘t stabilized yet. Bond market pressures are keenly felt even though inflation expectations didn‘t follow with the same veracity. The next few days will be really telling.Crude OilCrude oil bulls have made a good move, and more strength needs to follow. The fact that it would be happening when the dollar is strengthening, and many countries are tapping their strategic reserves, bodes well for black gold‘s recovery.CopperCopper springboard bulding goes on, and the CRB Index isn‘t tellingly yielding – the hawkish Fed bets better be taken with a (at least short-term) pinch of salt.Bitcoin and EthereumBitcoin and Ethereum are still going sideways, and today‘s resilience is a good omen – across the board for risk assets.SummaryS&P 500 bulls need tech to come alive again, and odds are it would with a reprieve in spiking yields. While bond markets are getting it right, yesterday‘s fear in corporate bonds was a bit too much – the Fed isn‘t yet in a position to choke off the real economy through slamming on the breaks. Markets are prematurely speculating on that outcome, which would be a question of second or third quarter next year. Treasuries have though clearly topped, and stocks do top with quite a few months‘ lag – we aren‘t there yet. Enjoy the commodities ride, and confidence gradually returning to precious metals.Thank you for having read today‘s free analysis, which is available in full 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 five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
S&P 500: Rallying Tech Stocks vs. Plummeting Oil Stocks

S&P 500: Rallying Tech Stocks vs. Plummeting Oil Stocks

Paul Rejczak Paul Rejczak 22.11.2021 16:46
The S&P 500 index nearly topped its record high on Friday, but it closed lower following an intraday decline. Is this a topping pattern? For in-depth technical analysis of various stocks and a recap of today's Stock Trading Alert we encourage you to watch . The S&P 500 index lost 0.14% on Friday, Nov. 19, as it extended its short-term consolidation along the 4,700 level. The broad stock market went sideways despite record-breaking rallies in large tech stocks like AAPL, MSFT and NVDA. It still looks like a short-term topping pattern, as the S&P 500 index keeps bouncing from the Nov. 5 record high of 4,718.50. The nearest important support level remains at 4,630-4,650 and the next support level is at 4,600. On the other hand, the resistance level is at 4,700-4,720. The S&P 500 continues to trade along the 4,700 level, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Nasdaq Reached the New Record High Let’s take a look at the Nasdaq 100 chart. The technology index reached the new record high of 16,625.86 on Friday, led by megacap tech stock rallies. It accelerated above its short-term upward trend line after breaking above the resistance level of 16,400 on Thursday. There have been no confirmed negative signals so far. However, we can see some short-term overbought conditions. Apple and Microsoft at New Record Highs Let’s take a look at the two biggest stocks in the S&P 500 index, AAPL and MSFT. Apple accelerated its uptrend after breaking above the resistance level of around $152-154. It reached the new record high on Friday at $161.02. Microsoft slightly extended its recent advance, as it reached the new record high of $345.10. The two biggest megacap tech stocks reached new record highs, as we can see on their daily charts: Conclusion The S&P 500 index is expected to open 0.4% higher this morning. We will likely see some more short-term fluctuations along the record high level. For now, it looks like a short-term consolidation and a flat correction within an uptrend. Here’s the breakdown: The S&P 500 is fluctuating along the 4,700 level. For now, it looks like a short-term consolidation following the October-November rally. Still no positions are justified from the risk/reward point of view. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak, Stock Trading Strategist Sunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his 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. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members 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.
Article by Decrypt Media

More Public Debt Is Coming. Another Gold’s Rally Ahead?

Arkadiusz Sieron Arkadiusz Sieron 23.11.2021 15:13
  Democrats are not slowing down - the social spending bill follows the infrastructure package. Will gold benefit, or will it get into deep water? Will the American spending spree ever end? On Monday last week (November 15, 2021), President Biden signed a $1 trillion infrastructure package, and just a few days later, Biden’s social spending bill worth another $1.75 trillion passed the US House of Representatives. Apparently, $1 trillion was not enough! Apparently, we don’t already have too much money chasing too few goods. No, the economy needs even more money! Yes, I can almost hear the lament of American families: “we need more money, we already bought everything possible, we already own three cars and a lot of other useless crap, but we need more! Please, the almighty government, give us some bucks, let your funds revive our land”. Luckily, the gracious Uncle Sam listened to the prayers of its poor citizens. Given the above, one could think that the US economy is not already heavily indebted. Well, it’s the exact opposite. As the chart below shows, the American public debt is more than $27 trillion and 125% of GDP, but who cares except for a few boring economists? Of course, neither infrastructure nor spending bill will increase the fiscal deficits and overall indebtedness to a similar extent as the pandemic spending packages. These funds will be spread over years. Additionally, the fiscal deficit should narrow in FY 2022 as pandemic relief spending phases out (this is already happening, as the chart below shows), while the economic recovery combined with inflation tax bracket creep increases tax revenues. However, both of Biden’s bills will increase indebtedness, lowering the financial resilience of the US economy. What’s more, the overall debt is much larger than the public debt I focused on here. Other categories of debt are also rising. For instance, total household debt has jumped 6.2% in the third quarter of 2021 year-over-year, to a new record of $15.2 trillion.   Implications for Gold What does the fiscal offensive imply for the precious metal market? In the short run, not much. Fiscal hawks like me will complain, but gold is a tough metal that does not cry. Both of Biden’s pieces of legislation have been widely accepted, so their impact has already been incorporated into prices. Actually, the actual bills could be even seen as conservative – compared to Biden’s initial radical proposals. In the long run, fiscal exuberance should be supportive of gold prices. The ever-rising public debt should zombify the economy and erode the confidence in the US dollar, which could benefit the yellow metal. However, the empire collapses slowly, and there is still a long way before people cease to choose the greenback as their most beloved currency (there is simply no alternative!). So, it seems that, in the foreseeable future, gold’s path will still be dependent mainly on inflation worries and expectations of the Fed’s action. Most recently, gold prices have stabilized somewhat after the recent rally, as the chart below shows. Normal profit-taking took place, but gold found itself under pressure also because of the hawkish speech by Fed Governor Christopher Waller. He described inflation as a heavy snowfall that would stay on the ground for a while, rather than a one-inch dusting: Consider a snowfall, which we know will eventually melt. Snow is a transitory shock. If the snowfall is one inch and is expected to melt away the next day, it may be optimal to do nothing and wait for it to melt. But if the snowfall is 6 to 12 inches and expected to be on the ground for a week, you may want to act sooner and shovel the sidewalks and plow the streets. To me, the inflation data are starting to look a lot more like a big snowfall that will stay on the ground for a while, and that development is affecting my expectations of the level of monetary accommodation that is needed going forward. So, brace yourselves, a janitor is coming with a big shovel to clean the snow! Just imagine Powell with a long-eared cap, gloves, and galoshes giving a press conference! At least the central bankers would finally do something productive! Or… maybe shoveling is not coming! Although the Fed may turn a bit more hawkish if inflation stays with us for longer than expected previously, it should remain behind the curve, while the real interest rates should stay ultra-low. The December FOMC meeting will provide us with more clues, so stay tuned! If you enjoyed today’s free gold report, we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today. If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care
Dax 40 December hit the buying opportunity at 16080/060. Try longs with stops below 16040.

Dax 40 December hit the buying opportunity at 16080/060. Try longs with stops below 16040.

Jason Sen Jason Sen 23.11.2021 13:31
EuroStoxx 50 December just completed a head & shoulders reversal pattern for a sell signal initially targeting minor support at 4310/00. FTSE 100 December a high for the day exactly at first resistance at 7240/60. Update daily at 07:00 GMT Today's Analysis. Dax holding minor resistance at 16140/160 to retest strong support at 16090/060. Try longs with stops below 16040. A break lower however is a sell signal with 16060/090 working as resistance targeting 16000 & a buying opportunity at 15960/930. Try longs with stops below 15900. A break above 16180 keeps bulls in control for today targeting 16260/280. A break above 16290 should target 16350/390. EuroStoxx holding the head & shoulders neckline resistance at 4330/40 targets 4310/00 then 4270/60, perhaps as far as strong support at 4240/30. Resistance at 4330/40 but above here allows a recovery to 4375/80 before a retest of 4400/10. Anyone want to bet on a double top sell signal here? A break above 4410 however targets 4418/20 but eventually we can reach as far as 4450/55. FTSE we have a buying opportunity at 7170/50 with stops below 7135. A break lower targets 7100/7090, perhaps as far as 7040/30. Longs at 7170/50 target 7200 then first resistance at 7240/60 for some profit taking. If we continue higher look for 7300/10 this week. Emini S&P December new all time high exactly at the 4735/40 target in the bull trend, but severely overbought conditions finally kicked in with a sudden collapse to the 4670/68 target. This leaves a bearish engulfing candle, which is a very short term negative signal. We do have severely negative divergence on the daily chart so there is a risk of a further correction but I think there are too many retail traders betting on a crash for it to happen just yet. Nasdaq December hit the next target of 16640/660 next target then a new all time high at 16767. However prices then crashed leaving a huge bearish engulfing candle, which is a very short term negative signal. Emini Dow Jones December shorts at first resistance at 35850/950 worked perfectly with a high for the day here, followed by a retest of last week's low at 35490. Update daily at 07:00 GMT. Today's Analysis. Emini S&P first support at 4670/68 but a break below 4660 targets 4640 then the best support at 4630/20. Try longs with stops below 4610. Very minor resistance at 4700/10 but above here retargets 4720/23 & 4735/40 then 4750. Nasdaq December collapsed through first support at 16450/400 to target 16300/270 then best support for today at 16230/200. Try longs with stops below 16150. A break lower however sees 16200/230 working as resistance to target 16100 & 16030/010 before a buying opportunity at 15900/850. Try longs with stops below 15800. First resistance at 16400/450. Shorts need stops above 16500. A break higher targets 16550/600 before a retest of the all time high at 16630/767. Emini Dow Jones December strong support at 35450/350. A break lower however targets 35100/35000. Watch for a bounce from here on the first test. However a break lower meets a buying opportunity at 34800/750, with stops below 34650. First resistance at 35850/950. A break above 36000 should be a buy signal targeting 36230/250. To subscribe to this report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk No representation or warranty is made as to the accuracy or completeness of this information and opinions expressed may be subject to change without notice. Estimates and projections set forth herein are based on assumptions that may not be correct or otherwise realised. All reports and information are designed for information purposes only and neither the information contained herein nor any opinion expressed is deemed to constitute an offer or invitation to make an offer, to buy or sell any security or any option, futures or other related derivatives.
Tech Sell-Off Continues

Tech Sell-Off Continues

Marc Chandler Marc Chandler 23.11.2021 22:41
November 23, 2021  $USD, EMU, Federal Reserve, Oil, OPEC+, SPR, UK, US Overview:  The markets are unsettled.  Bond yields have jumped, tech stocks are leading an equity slump, and yesterday's crude oil bounce reversed.  Gold, which peaked last week near $1877, has been dumped to around $1793.  The tech sell-off in the US carried into the Asia Pacific session, and Hong Kong led most markets lower.  The local holiday let Japanese markets off unscathed, though the Nikkei futures are off about 0.4%.  Australia and India managed to post minor gains as the MSCI Asia Pacific Index fell for the fourth time in five sessions.  Europe's Stoxx 600 has slid around 1.5% today, its fourth consecutive decline, but has clawed back nearly half the gains.  It is the longest retreat in two months.  US futures are lower, with the NASDAQ leading the move.   Near 1.64%, the US 10-year yield is at the upper end of this month's range.  Last month it reached 1.70%.  European bond yields are mostly 4-6 bp higher, and peripheral spreads have widened a little.  The dollar is sitting in the middle of the major currencies.  The dollar bloc, sterling, and the Norwegian krone, which are the risk-on, levered to growth currencies, are weaker.  The euro, yen, and Swiss franc are little changed but firmer.  The dollar briefly traded above JPY115.00 in Asia, without Tokyo,  before being pushed back. The steady euro has taken some pressure off most of the regional currencies.  The Turkish lira has been in a virtual freefall following President Erdogan's spirited defense of his efforts to drive down rates.    There was around 10 lira to the dollar in the middle of November.  Today, at its peak, there is about 12.48 lira to the dollar.   Asia Pacific Over the weekend, Japan expressed willingness to cap its strategic reserves.  Press reports indicated yesterday that India is amenable to coordinating a release of some of its oil stocks.  South Korea may also participate.  It has been under consideration for a couple of weeks, at least, in the US, and China appears willing to repeat September's release of crude from its reserves.  However,  it seems naive to have expected OPEC+ to simply standby.  January WTI posted a bearish outside down day ahead of the weekend by trading on both sides of the previous day's range and settling below the previous session's low.  Follow-through selling yesterday took it down about $1.20 from the close, but when OPEC+ announced that a coordinated release of the oil could prompt it to reconsider its own plans.  It is to meet next week to review its strategy. Through yesterday's low, January WTI had retreated by nearly 11% from the October 25 higher near $83.85.   A band of resistance is seen between $78 and $80.   OPEC+ had previously agreed to boost output by 400k barrels a day per month to restore pre-pandemic output levels.  That said, not all the members can produce their quota, leading to a shortfall.  OPEC+, the IEA, and EIA all seem to agree that supply-demand considerations shift in next year, and the market will once again be in oversupply.  Moreover, OPEC+ argues that the real dislocation is not with oil as its with gas.   The US imports about 2.9 mln barrels a day, India, about 4.2 mln, and Japan, about 3.1 mln barrels a day.  South Korea imports around 2.5 mln barrels a day.  Together it is around 12.7 mln barrels a day of imports.   If together, 100 mln barrels are released, about eight days of imports would be covered.  This is a high estimate.  India, for example, has indicated it may release 5 mln barrels.   Australia's flash November PMI was better than expected.  Manufacturing edged up to 58.5 from 58.2, while services rose to 55.0 from 51.8.  This produced a 55.0 composite reading, a gain from 52.1 in October.  Recall, the pandemic and lockdown led to weakness in the economy in the May-August period.  The composite PMI bottomed in August at 43.3.  It has risen for three months but remains well off the peak in April of 58.9.  Separately, New Zealand real retail sales were hit in Q3 by the social restrictions, but the drop was not quite as bad as feared.  Reall retail sales fell 8.1% after a 3.3% increase in Q2.  Economists (Bloomberg median) had anticipated a 10.5% pullback.  The RBNZ meets the first thing tomorrow and is widely expected to hike 25 bp, to lift the cash rate to 0.75%. There is still a slight bias toward a larger move in the swaps market.   The dollar briefly traded above JPY115.00 for the first time since March 2017.  We note that Japanese dealers were on holiday and did not participate in the move.  As risk-off sentiment took over, the dollar was sold back to JPY114.50.  Resistance in Europe has been found near JPY114.80.  Note that there is an option for about $980 mln at JPY115.50 that expires tomorrow.  The Australian dollar initially edged lower to almost $0.7210, its lowest levels since October 1 before steadying. A break of $0.7200 signals a retest of the late September low near $0.7170.  Initial resistance is seen in the $0.7230-$0.7250 area.  The PBOC is sending plenty of verbal signals that it does not want to see strong yuan gains, and today's fixing underscores that point.  The dollar's reference rate was set at CNY6.3929, wider than usual above the market expectation (Bloomberg) for CNY6.3904.  The greenback is firm inside yesterday's range.  Caution is advised here as the PBOC could escalate its disapproval.   Europe The flash EMU November PMI was better than expected.  The aggregate manufacturing PMI rose to 58.6 from 58.3.  The market anticipated a decline.  The service PMI rose to 56.6 from 54.6, also defying expectations for a sequentially weaker report.  The composite snapped a three-month slide and rose to 55.8 from 54.2.   The cyclical peak was in July at 60.2.    A flash release is made for Germany and France.    German manufacturing slowed slightly (57.6 from 57.8) and held up better than expected (Bloomberg median 56.9).  Services actually improved (53.4 from 52.4).  The composite rose to 52.8 from 52.0 to end a three-month downdraft after peaking in July at 62.4.  French numbers were even better.  The manufacturing PMI rose to 54.6 from 53.6.  The service PMI rose to 58.2 from 56.6.   The composite improved to 56.3 from 54.7 to snap a four-month fall.  Recall that yesterday the Bundesbank warned that the German economy may practically stagnate this quarter and that inflation may approach 6% this month.   The UK's flash PMI was more mixed.  The manufacturing PMI had been expected to have slowed but instead improved for the second consecutive month (58.2 from 57.8).  Services were nearly as weak as anticipated slipping to 58.6 from 59.1.  The composite eased slightly to 57.7 from 57.8, ending a two-month recovery from the June-August soft patch.  Meanwhile, Prime Minister Johnson's rambling speech yesterday hurt people's ears, and in terms of substance,  the changes to social care funding that may result in lower-income people having to sell homes to pay for support did not go over well.  It is spurring talk of a possible cabinet reshuffle.  The euro has edged to a new low for the third session today, slipping to almost $1.1225 before catching a bid that lifted it back to $1.1275.  There is an option for around 765 mln euros at $1.1220 that expires today.  The nearby cap is seen in the $1.1290-$1.1310 area.   The euro may struggle to sustain upticks ahead of tomorrow's US PCE deflator report (inflation to accelerate).    Sterling met new sellers when it poked above $1.3400. It has ground lower in the European session, and sterling fell to almost $1.3355.  Note that the low for the year and month was set on November 12, slightly above $1.3350.  We see little chart support below there until closer to $1.3165.   America We suspect many pundits exaggerated the link between the renomination of Powell for a second term and the sell-off in US debt and technology shares.  First, it was not a surprise.  Second, it assumes a substantive difference in the conduct of monetary policy between Powell and Brainard.  There isn't.  The difference was on regulatory issues and on the role of climate change.  Third, the idea that the Fed may accelerate its bond purchases next month was sparked by the high CPI reading on November 10.  Yesterday, Bostic joined fellow Fed President Bullard.  Two governors (Clarida and Waller) also seem to be moving in that direction (Waller may be faster than Clarida). The fact or the matter, nearly all of the high-frequency data for October, including employment, auto sales,  retail sales, industrial production, and inflation, came in higher than expected.  The US sees the preliminary November PMI today.  It is expected to have risen for the second consecutive month after fall June-September.   The reception to yesterday's US two- and five-year note auctions was relatively poor.  The higher yields (compared with the previous auctions) did not produce better bid-cover ratios.  Today the Treasury comes back with $55 bln seven-year notes and re-opens the two-year floater.  Many observers see the debt ceiling constraint being likely an early 2022 problem rather than this year.  Still, tomorrow's sale of the four-week bill may be the test.  Recall that at last week's auction, the 4-week bill yield doubled to 11 bp.   Europe's virus surge and social restrictions became a market factor last week.  Many think that the US is a few weeks behind Europe.  The seven-day infliction rate in the US rose 18% week-over-week.  Several states, including Colorado, Minnesota, and Michigan, are being particularly hard hit.  Nationwide 59% of Americans are reportedly fully vaccinated. However, it leaves about 47 mln adults and 12 mln teens unvaccinated.  The risk-off mood and the drop in oil prices are helping the US dollar extend its gains against the Canadian dollar.  The greenback, which started the month below CAD1.24, is now pushing close to CAD1.2750 to take out last month's high.  A move above here would target CAD1.28 and then the September high near CAD1.2900.  Still, the market is getting stretched, and the upper Bollinger Band is slightly below CAD1.2730.  The risk-off mood does not sit right with the Mexican peso either.  The dollar settled above MXN21.00 yesterday, its highest close in eight months.  The same forces have lifted it to MXN21.1250 today. However, the anticipated gain in September retail sales (0.8% Bloomberg median after a flat report in August) may not give the peso much support if the risk-off continues. The high for the year was set on March 8 near MXN21.6360.   Disclaimer
Intraday Market Analysis – EUR Stays Under Pressure

Intraday Market Analysis – EUR Stays Under Pressure

John Benjamin John Benjamin 24.11.2021 09:15
EURUSD struggles to rebound The euro bounced back after PMI readings in the eurozone exceeded expectations. The pair is testing July 2020’s lows around 1.1200. The RSI’s oversold situation on the daily chart may limit the downward pressure for now. We can expect a ‘buying-the-dips’ crowd as price action stabilizes. Sentiment remains fragile though and sellers may fade the next rebound. The bulls will need to lift 1.1360 before a reversal could take shape. Failing that, a bearish breakout would trigger a new round of sell-off towards 1.1100. NZDUSD lacks support The New Zealand dollar softened after the RBNZ met market expectations and raised its cash rate by 25bps. The downward pressure has increased after 0.6980 failed to contain the sell-off. The pair has given up all gains from the October rally, suggesting a lack of interest in bidding up the kiwi. An oversold RSI caused a rebound as short-term traders took profit and the bears were swift in selling into strength. The directional bias remains bearish unless 0.7010 is cleared. The September low at 0.6860 is the next support. UKOIL bounces back Brent crude recovers on speculation that OPEC+ may lower production to counter a release of strategic reserves. A break below 79.30 has shaken out the weak hands. The price has met buying interest over the daily demand zone around 77.70, which coincides with last July’s peak. A surge above 82.00 puts the bears on the defensive. Short-covering would exacerbate short-term volatility. An overbought RSI may cause a brief pullback. Then 85.50 is a key hurdle before the uptrend could resume.
Altcoins are pulling away from boring Bitcoin

Altcoins are pulling away from boring Bitcoin

Alex Kuptsikevich Alex Kuptsikevich 24.11.2021 09:45
Bitcoin has lost 2.5% on Wednesday morning, returning to $56.3K. It seems that after a lull of a day-long, sellers’ pressure on the first cryptocurrency has continued. Meanwhile, the cryptocurrency market manages to remain positive, adding 0.3% in capitalisation over the past 24 hours. A little over a month ago, Bitcoin’s share of total crypto market capitalisation trended downwards. From a peak of 49.2% on October 19th, its share has fallen to 41.7%. Optimistic market participants point to impressive demand for altcoins, which is shaping the trend. On the other hand, pessimists point out that without the market’s flagship Bitcoin, cryptocurrencies are more likely to reverse sooner rather than later, recalling the situation in late 2017 and early 2018. Behind the pressure on bitcoin is a reduction in risk traction in traditional finance, while retail investors continue to look to cryptocurrencies for insurance against devaluation and speculative/investment potential. In addition, the way retail investors participate in cryptocurrencies has changed over the past five years since the previous cycle. Cryptocurrency ICO and trading have migrated to crypto exchanges, minimising some of the fraud risks of cryptocurrency creators. However, the investment risks have not gone anywhere. Of course, Bitcoin’s steady downward trend is eating away at crypto enthusiasts’ optimism. Still, a smooth pullback like this acts as an incentive for the market to look for new names, leaving Bitcoin to conservative finance. The latter has only begun to regularly allocate a share of their portfolio to crypto this year, filling it predominantly with Bitcoin. At the same time, the leading edge of investors already views the first cryptocurrency as too conservative and boring.
Market Quick Take - November 22, 2021

Market Quick Take - November 22, 2021

Saxo Bank Saxo Bank 22.11.2021 10:04
Summary:  Equity markets closed last week somewhat mixed, but the Asian session was mostly strong on indications that the Chinese PBOC is shifting its attitude on monetary policy toward easing. Elsewhere, the difficult wait for the Fed Chair nomination news continues this week ahead of the US Thanksgiving holiday on Thursday. Crude oil bounced after finding support overnight, but the risk of SPR release and Covid demand worries still linger. What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) - a new week following a new all-time high in US equities on the close on Friday, which is starting with Nasdaq 100 futures opening up higher trading around the 16,610 level in early European trading. Last week showed that investors and traders are utilizing the Covid-19 lockdown playbook selling off physical companies while buying online companies that are better equipped to navigate new lockdowns in Europe. With the US 10-year yield remaining in a range around the 1.55% there is nothing from preventing equities from extending recent gains. EURUSD and EURGBP – new Covid restrictions across Europe, which has become the center of the latest Covid wave, have crimped sentiment for the euro, as has the still very elevated power and natural gas prices. EURUSD has traded back down toward the lows of the cycle near 1.1265 overnight, with the next psychological magnet lower likely the 1.1000 area as long as the big 1.1500 break level continues to provide resistance. In EURGBP, last week saw the break of the prior major pivot low near 0.8400, with the next objective the post-Brexit vote low near 0.8275. USDJPY – threatened support on Friday on a spike lower in long US treasury, but a reversal of much of that action by this morning in late Asian trading is likewise seeing USDJPY trying to recover back into the higher range, with a focus on the recent top just short of 115.00. We likely need for long US treasury yields to sustain a move higher to support a major foray above this huge 114.5-115.00 chart area, which has topped the market action since early 2017. Meanwhile, if risk sentiment worsens further in EM and darkens the outlook for JPY carry trades there, while US treasuries remains rangebound or head lower, the JPY could squeeze higher as the speculative interest is tilted heavily short. Gold (XAUUSD) extended Friday’s drop below $1850 overnight, before bouncing ahead of key support in the $1830-35 area. The risk of a quicker withdrawal of Fed stimulus supporting real yields and the dollar has for now reduced gold's ability to build on the technical breakout. However, the price softness on Friday helped attract ETF buying with Bloomberg reporting a 10 tons increase, the biggest one-day jump since January 15. Gold’s biggest short-term threat remains the tripling of futures long held by funds during the past seven weeks to a 14-month. Most of that buying being technical driven with the risk of long liquidation now looming on a break below the mentioned support level.   Crude oil (OILUKJAN22 & OILUSDEC21) opened softer in Asia after Friday’s big drop but has so far managed to find support at $77.85, the previous top from July. The market focus has during the past few weeks shifted from the current tight supply to the risk of a coordinated reserve release, a renewed Covid-driven slowdown in demand and recent oil market reports from the EIA and IEA pointing to a balanced market in early 2022. Speculators who for the last six weeks have been net sellers of crude oil futures cut their combined WTI and Brent long to a three-month low in the week to November 16. Focus on SPR and Covid risks this week US treasuries (SHY, IEF, TLT). Government bond yields worldwide dropped as new lockdown measures were imposed in Austria on Friday. Ten-year yields tumbled to 1.55%, and they are likely to continue to trade range-bound as the debt ceiling issue will continue to compress long-term yields as volatility peaks in money markets. Investors will focus on this week’s PCE index, FOMC minutes and any news regarding a change of leadership of the Federal Reserve. If Brainard is appointed as Fed chair, the market will expect low rates for longer, thus inflation expectations will advance putting upward pressure on yields. Thus, it is unavoidable to continue to see the 5s30s continue to flatten. German Bunds (IS0L). We expect European sovereigns, in general, to continue to benefit from news related to a surge of Covid cases and lack of collateral as the year ends. Yet, the perception of inflation is changing among ECB members with Isabel Schnabel last week saying that the central bank will need to be ready to act if inflation proves more durable. Therefore, as we enter in the new year, and collateral shortages will be eased, we anticipate spreads to resume their widening. What is going on? Fed Vice Chair Clarida suggests faster Fed taper - in comments on Friday, suggesting that the December FOMC meeting could speed the pace at which the Fed will reduce its asset purchases. “I’ll be looking closely at the data that we get between now and the December meeting...It may well be appropriate at that meeting to have a discussion about increasing the pace at which we are reducing our asset purchases.” China’s central bank signals that it may ease policy. In a monetary policy report from Friday, the PBOC dropped language from prior reports, including phrase suggesting that the bank will maintain “normal monetary policy” and a promise not to “flood the economy with stimulus”. This comes in the wake of considerable disruption in the property sector as the government cracks down on an overleveraged property sector. Asian equities were mostly higher on the news, especially in Korea, although the Hang Seng index was slightly in the red as of this writing. Ericsson to acquire cloud provider Vonage in $6.2bn deal. This pushes the Swedish telecommunication company into the cloud communication industry seeking to add more growth to the overall business. Vonage has delivered 11% revenue growth in the past 12 months hitting $1.4bn with an operating margin of 10.4%. Global proceeds from IPOs hit $600bn in record year. This is the biggest amount since 2007 and almost 200% above the level in 2019 highlighting the excessive risk sentiment in equities. More confusing signals from Bank of England. Governor Bailey said in an interview for the Sunday Times that risks to the country are “two-sided” at the moment as growth slows and inflation rises, and that the cause of inflation problems is supply side constraints and that “monetary policy isn’t going to solve those directly.” Similarly, BoE Chief Economist Huw Pill said on Friday that the Bank of England said that the weight of evidence was shifting in favour of rate hikes but that he has not yet made a decision, encouraging observers to focus on the longer term rather than meeting-to-meeting decision. US shared intelligence with allies suggesting potential for Russia to invade Ukraine - according to Bloomberg sources. The intelligence noted up to 100,000 soldiers could be deployed in such a scenario, and that some half of that number are already in position.  Russian president Vladimir Putin denied Russia intends to invade, but seemed to pat himself on the back for “having gotten the attention of the US and is allies, which he accused of failing to take Russia’s ‘red lines’ over Ukraine seriously”, as the article puts it. What are we watching next? Who will US President Biden nominate to head the Fed next February? Powell is still seen as more likely to get the nod that Brainard by roughly two to one, and this Fed Chair nomination issue is hanging over the markets, as the current Fed chair term ends in early February and from comments made last week by President Biden, an announcement could come any day. One uncertainty that would come with a Brainard nomination is the potential difficulty of having her nomination approved by the Senate. The nomination news could generate significant short-term volatility on the choice of the nominally more dovish Lael Brainard over current Fed Chair Powell, though we see little difference in the medium-longer term implications for monetary policy, and the Fed is likely to get a prominent new regulatory role either way (under Brainard or someone else if she is nominated to replace Powell). Will Germany announce a Covid lockdown? - Friday saw some volatility on Austria’s announcement of a full Covid lockdown, with Germany’s health minister saying that a similar move in Germany could not be ruled out. Later that day, that was contradicted by comments from another minister. Meanwhile, resistance against Covid restrictions has turned violent in Netherlands. Earnings Watch – the number of important earnings is falling rapidly, but this week Tuesday is the most important day with key earnings from Xiaomi, XPeng and Kuaishou, both important Chinese technology companies. Also on Tuesday, US companies such as Medtronic, Autodesk and Dell Technologies are worth watching. Monday: Sino Pharmaceutical, Prosus, Zoom Video, Agilent Technologies Tuesday: Xiaomi, Kuaishou Technology, Compass Group, Medtronic, Analog Devices, Autodesk, VMWare, Dell Technologies, XPeng, HP, Best Buy, Dollar Tree Wednesday: Deere, Thursday: Adevinta Friday: Meituan, Pinduoduo Economic calendar highlights for today (times GMT) 0900 - Switzerland SNB weekly sight deposit data1330 – US Chicago Fed Oct. National Activity Index1500 – US Oct. Existing Home Sales1730 – ECB's Guindos to speak2145 – New Zealand Q3 Retail Sales2200 – Australia Nov. Flash Services & Manufacturing PMI0105 – Australia RBA’s Kohler to speak Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple Spotify Soundcloud Sticher
Waking Up the Giants

Waking Up the Giants

Monica Kingsley Monica Kingsley 24.11.2021 16:03
S&P 500 recovered from session lows, and is likely to keep chopping around in a tight range today. Tech found solid footing in spite of sharply rising yields, which value (finally) embraced with open arms. The riskier end of credit markets doesn‘t yet reflect the stabilization in stocks, which is a first swallow. Make no mistake though, the fresh Fed hawkish talking games are a formidable headwind, and animal spirits aren‘t there no matter how well financials or energy perform. These are though clearly positive signs, which I would like to see confirmed by quite an upswing in smallcaps. All in all, this is still the time to be cautiously optimistic, and not yet heading for the bunker – that time would probably come after the winter Olympics (isn‘t it nice how that rhymes with the post 2008 summer ones‘ price action too?). Market reaction to today‘s preliminary GDP data will likely be a non-event, and we‘ll still probably make fresh ATHs before stocks enter more turbulent times. In spite of the cheap Fed talk still packing quite some punch, let‘s keep focused on the big picture and my doubts as to the Fed‘s ability to carry out the taper, let alone (proactive? No, very much behind the curve) rate raising plans – as said the prior Monday or yesterday: (…) the Fed is still printing a huge amount of money on a monthly basis, and it remains questionable how far in tapering plans execution they would actually get – I see the risks to the real economy coupled with persistently high inflation as rising since the 2Q 2022 (if not since Mar already, but most pronounced in 2H 2022. (…) True, the bullish argument for the dollar stepped to the fore as yields differential between the U.S. and the rest of the world got more positive, and at the same time, various yield spreads keep compressing. That‘s a reflection of less favorable incoming economic data. Just as much as Friday‘s reaction was about corona economic impact projections, yesterday‘s one was about monetary policy anticipation. Inflation expectations though barely budged – the decline doesn‘t count as trend reversal. CPI isn‘t done rising, and the more forward looking incoming data (e.g. producer prices) would confirm there is more to come. All in all, it looks like precious metals (and to a smaller degree commodities), are giving Powell benefit of the doubt, which I view to be leading to disappointment over the coming months. Should Powell heed the markets‘ will, the real economy would weaken dramatically, forcing him to make a sharp dovish turn – and he would, faster than he flipped since getting challenged in Dec 2018. Inflation expectation indeed held up during the day, marking modest, lingering doubts about Fed‘s ability to execute. Its credibility isn‘t lost, but would be put to a fresh test over the nearest weeks and months. The real economy can still take it, and not roll over – we are in the very early tapering stage so far still. Commodities are pointing the way ahead, and it‘s time for precious metals to shake off the inordinately high levels of fear, which mark capitulation more than anything else. Just when I was writing that it‘s as if the PMs bulls didn‘t trust the latest rally... Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 bulls stepped in, the volume is semicredible. I like the lower knot, and would look for increasing market breadth to confirm the short-term reversal. It‘s my view we haven‘t made a major top on Monday. Credit Markets It‘s too early to call a budding reversal in credit markets – HYG needs to pull its weight better. Gold, Silver and Miners Precious metals haven‘t yet regained footing, but that moment is quickly approaching – in spite of the above bleak chart. Compare to the Jun period – Fed‘s talk was more powerful then. Crude Oil Crude oil bulls have made a good move, and more strength did indeed follow. The bottom is in, and many countries tapping their strategic reserves, proved an infallible signal. I look for consolidation followed by further strength next. Copper Copper springboard is getting almost complete, and I think the drying up volume would be resolved with an upswing. The daily indicators are positioned as favorably as the CRB Index is. Bitcoin and Ethereum Bitcoin and Ethereum are still correcting, and the upcoming Bitcoin move would decide the direction over the next few weeks. The takeaway from cryptos hesitation is that real assets can‘t expect overly smooth sailing yet. Summary S&P 500 bulls would ideally look to value outperforming tech on the upside, confirmed by HYG at least stopping plunging. A brief yields reprieve would come once the Fed steps away from the spotlight, which is another part of the bullish sentiment returning precondition set. Overall, the very modest S&P 500 moves keep favoring the bulls within the larger topping process. Keep in mind that the Fed isn‘t yet in a position to choke off the real economy through slamming on the breaks, it‘s just the forward guidance mind games for now. We are waiting for the bit more seriously than last time meant, but still a bluff, getting questioned again, as inflation expectations haven‘t broken down, and are facilitating the coming PMs and commodities runs. Thank you for having read today‘s free analysis, which is available in full 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 five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Danish equities are feeling the heat from interest rates

Danish equities are feeling the heat from interest rates

Peter Garnry Peter Garnry 24.11.2021 14:14
Equities 2021-11-24 13:00 6 minutes to read Summary:  The last two trading days US technology stocks have been impacted by rising interest rates and rising market expectations of Fed rate hikes next year. US technology stocks have interest rate sensitivity due to their high equity valuation, but several other key equity markets such as Netherlands, New Zealand, Singapore, Switzerland, and Denmark are also having high equity valuation and thus high duration. These equity markets would likely underperform next year if the interest rates move considerably higher. In yesterday’s equity note, we showed how Nasdaq 100 and STOXX 600 are the yin and yang of interest rate sensitivity based on equity market reaction this year with Nasdaq 100 underperforming significantly when the US 10-year yield has a large increase. But outside these two major equity indices, investors felt what higher interest rates can do to sentiment. Danish equities were down 3% in its worst day since March 2020 during the panic days of the pandemic and Dutch equities were down 3.1%. What do these two markets have in common? They both have equity valuations that are well above many other markets, which simplistically can be translated into higher duration which means that these equity markets are more sensitive to big changes in interest rates. Why is that? Because high equity valuation implies that a larger part of the present value comes from the terminal value on cash flows (meaning way into the future) and this value is more sensitive to the discount rate. Dutch equities are the most expensive of 26 equity markets in the developed and emerging markets with a 12-month forward EV/EBITDA of 23.3x with Denmark and Switzerland less frothy at 14.3x and 14.7x respectively. If we exclude Australia, India, New Zealand and Singapore from yesterday’s market reaction because of the time delay to the US session then we do observe that equity markets with high equity valuations were hit harder yesterday confirming that we did observe a repricing related to a larger move in interest rates. It is all related to the value vs growth trade which is essentially STOXX 600 vs Nasdaq 100, but which can also be expressed between individual equity indices such as Norway vs Denmark. The main point of yesterday’s equity note and today’s observations is that we have a group of equity markets such as Netherlands, New Zealand, Singapore, USA, Switzerland, and Denmark that are in the high equity valuation group. These markets have higher interest rate sensitivity and would likely underperform in a rising interest rate environment and exacerbated if flows also favour value over growth. In our view the equity market is telling investors that tail risks are rising for high duration equities and in order to mitigate this investors should begin balancing their portfolios better between high valued growth stocks and value stocks such as energy, financials, and mining companies. Appendix: 5-year charts of OMXC25 (Danish equities) and AEX (Dutch equities)
Turkey gets a Reprieve before US Thanksgiving, but Capital Strike may not be Over

Turkey gets a Reprieve before US Thanksgiving, but Capital Strike may not be Over

Marc Chandler Marc Chandler 24.11.2021 14:28
November 24, 2021  $USD, Currency Movement, Germany, Japan, Mexico, RBNZ, Turkey Overview:  The dramatic collapse of the Turkish lira was like an accident one could not help look at, but it was not an accident, but the result of a disregard for the exchange rate and compromised institutions.  The lira was off around 15% at its worst yesterday, before settling 11.2% lower.  After falling for 11 sessions, it has steadied today (~2.7%)  but the capital strike may not be over.  On the other hand, the Reserve Bank of New Zealand delivered the 25 bp rate hike and seemed to give hawkish guidance, and yet the New Zealand dollar was sold and the worst-performing of the major currencies, off 0.65% through the European morning.  The tech losses on Wall Street yesterday weighed on Asia Pacific equities today, where the large markets fell but in China.  Europe's Stoxx 600 is less tech sensitive and is trying to snap a four-day air pocket, but early gains have been reversed. The US futures point to around a 0.5% lower opening.  The greenback has a firmer bias ahead of the full economic calendar ahead of tomorrow's holiday.  The yen is the notable exception.  The greenback rose to a new multi-year high near JPY115.25 but has come back offered and is straddling the JPY115 level in late morning turnover in Europe.  Emerging market currencies are mixed, though the JP Morgan Emerging Market Currency Index is firmer after six consecutive down sessions.  Gold is steadying after a four-day drop that took it from around $1870 to about $1782. Oil extended yesterday's recovery after the concerted agreement to release strategic reserves from six countries but is struggling to sustain the upside momentum.  The market was unimpressed with the new supply and had it (and more?) discounted.  European (Dutch) gas rose 8% yesterday and remains firm today.  Iron ore prices are higher for the fourth session, during which time it has risen by around 20%.  Copper is also firmer for the second session.  It is up about 4.5% from the middle of last week's low.   Asia Pacific The Reserve Bank of New Zealand hiked its cash rate 25 bp to 0.75%.  It was widely expected, and many had leaned to a 50 bp move.  The forward guidance saw the cash rate at 2.0% at the end of next year.  The swaps market had this nearly priced in as well.  This might help explain the profit-taking on the New Zealand dollar.  The 2-year yield fell 14 bp, and the 10-year yield eased by 5.5 bp.  New Zealand stocks defied the regional pressure and rose by about 0.6%.   Japan's economy is recovering. The economy contracted by 0.8% in Q3, but after a slow start, the vaccination program has been successful.  It has allowed a re-opening of the economy.  This is evident in the flash PMI report.  The manufacturing PMI rose to 54.2 from 53.2, and the services PMI improved to 52.1 from 50.7.  The composite new stands at 52.5 (from 50.7) and represents a new cyclical high.  Recall that it bottomed in August at 45.5.  The fiscal support being offered by the supplemental budget is pro-cyclical; it will accelerate the recovery.   The break of JPY115.00 has seen limited follow-through dollar buying.  It peaked near JPY115.25 in Asia and fell to around JPY114.80, where it has found a bid in European dealing.  The nearly $950 mln option that expires today at JPY115 has likely been neutralized (hedged/offset), and the one at JPY115.50 for $1.2 bln may be too far away to be impactful.  Our idea of a JPY113.-JPY115 range is being tested, but recall that earlier this month, the dollar has slipped to almost JPY112.70.  The range is not carved in stone, and some fraying is inevitable.  Still, a move above JPY115.50 would suggest that this consolidation since mid-October is over, and a new and higher range is likely.  Next:  JPY118-JPY120, maybe.  The Australian dollar leaked lower and briefly dipped below $0.7200 for the first time since October 1.  There is an option that is expiring today there for about A$355 mln.  It steadied after early Asia Pacific trading and approached the nearby cap near $0.7230.  A move above here would help the technical tone.  Officials appear to have broken the one-way trading in the yuan.  It has been alternating between gains and losses this week, but the movement has been small, and the yuan is virtually unchanged this week.  The reference rate was set at CNY6.3903, slightly more than the market expected (Bloomberg) of CNY6.3898.   Lastly, we note that South Korea is widely expected to hike the seven-day repo by 25 bp tomorrow, following a similar hike in August.   Europe It has taken the better part of the two months, but the new German coalition appears to have been agreed upon.  However, what the soon-to-be Chancellor Scholz is inheriting is a mess.  The Bundesbank warned recently that the economy may be stagnating this quarter (though the flash PMI yesterday did not confirm this), and inflation may be approaching 6%.  Moreover, the covid infection rate has reportedly doubled in the past two days.  The US CDC put Germany (and Denmark) on a heightened travel advisory.   As one would expect, this is taking a toll on sentiment.  The IFO investor survey showed this.  The current assessment fell to 99.0 from 100.2.  The expectations component eased to 94.2 from 95.4.  The assessment of the overall business climate stands now at 96.5, down from 97.7. After falling for the fifth consecutive month,  it is at the lowest level since April.   The euro's losses were extended to almost $1.12.  The weakness seems most pronounced in Europe, which lends credence to ideas that European financial firms are key sellers, which some related to year-end adjustments.  However, the three-month cross-currency basis swap has steadied since Monday, and pressure on the euro remains.   We note that the two-year US-German interest rate differential rose for the fourth consecutive session yesterday to reach 135 bp, the most since last March, but is steadying today.  Since the convincing break of $1.13, we do not see strong chart support until closer to $1.10.  Sterling made a margin new low for the year yesterday near $1.3345.  It remains stuck near there in quiet turnover.  The $1.3400 area offers nearby resistance.  Here we see little technical support until around $1.3165.  America The US holiday tomorrow is forcing a heavy data release schedule today.  Not all the data is of equal importance.  Of the first set of reports, the weekly jobless claims will command attention.  They have fallen for the past seven weeks and are at their lowest level since the pandemic (268k).  The November national employment report is due at the end of next week, and another 500k jobs were thought to have been filled.  The October trade balance and durable goods orders are notable.  Nearly all the October data has been reported better than expected.  Growth differentials warn of the risk of a wider trade shortfall.  The revisions to Q3 GDP (likely higher) are unlikely to capture much attention as it is too backward-looking.   The second batch of data may see a bigger market reaction, especially in the debt market.  The US is expected to report a jump in personal spending (consumption needs to accelerate if the economy strengthens this quarter).  Income is likely to recover a bit from the 1.0% drop reported in September.  The market may be most sensitive to the deflators.  Here inflation is set to accelerate.  The headline is projected to rise above 5%, while the core should peak above 4%.   Lastly, new homes sales surged 14% in September and maybe lucky to sustain those higher levels in October.  Late in the session, when many in the US may be winding down ahead of the holiday, the FOMC minutes from this month's meeting will be released.  The current focus is on the possibility that the Fed accelerates its tapering next month, and anything that sheds light on this could shape the market's reaction.    The US dollar reversed lower yesterday after reaching CAD1.2745.  It settled near its lows (~CAD1.2670), but there has been no follow-through selling, and the five-day moving average, which it has not closed below since November 15, held (~CAD1.2660). Initial resistance is seen now around CAD1.2700-CAD1.2720.  We note that Canadian bonds are under some pressure, and the 10-year yield is above 1.80%, the highest level since April 2019.  The dollar rose to MXN21.30 yesterday and remains firm, even if off the high today.  News that Mexico's President pulled the nomination of Herrera, the former finance minister, as the next central bank governor, injected some volatility into the peso.  Reports suggest that Herrera's nomination was retracted a few months ago but was kept confidential.  It is not clear what happens next.  Some suspect Herrera may still get the nomination.  It does not appear that any official statement or clarification has been provided.  The median seems to be playing up the likelihood of some announcement in the coming days.  Meanwhile, Mexico reports its bi-weekly CPI figures, and inflation is still accelerating.  Tomorrow's final Q3 GDP is expected to confirm that the economy contracted.  The dollar recorded the high for the year against the peso in March near MXN21.6360.   Disclaimer
Cleaning Up with Carbon Credits

Cleaning Up with Carbon Credits

Callum Thomas Callum Thomas 25.11.2021 08:59
The price of EU carbon credits hit a fresh record high last week following COP26. Global carbon prices are up 4x off the March 2020 low and 9x above the 2017 nadir. Retail traders and advisors can access the space through a growing ETF While appearing a bit faddish and overheated, the bull market in carbon could still be in the early phases   Winter is coming. Households in China, Europe, and the States will be faced with higher than average heating bills due to this year’s spike in commodity prices—namely in natural gas and coal. In a similar vein, credits of carbon offsets have also surged.   Carbon: The New Asset Class?   Carbon as an asset class has grown in popularity. Trading (and holding) carbon credits is a market born out of regulation. Investors might be familiar with the “cap and trade” concept. The idea is that regulators cap the amount of carbon emissions and then allow emitters to trade the credits. A cleaner environment is the goal while allowing the market to discover a fair price.   Scarcity Meets AUM   High government regulation and surging fund flows culminated in an interesting and volatile situation this year. Carbon credits are scarce, but investor allocations continue to pour in. The buyers of these credits are, of course, energy and utility firms, but demand grows from other corporate entities looking to put their green foot forward. Even golfer Rory McIlroy is paying up to reduce his carbon footprint. Retail investors have interest, too. Naturally, as prices rally and volatility increases, speculative traders enter the scene.   Prices Rally Following Regulation Talks   Last week, the European Union Emissions Trading System (ETS) Carbon Price notched a new record high above €66 following the COP26 conference which happened to coincide with a cold snap in the region. Carbon credits often become more valuable during a summer heatwave or winter cold blast due to higher power burns and electricity generation to meet demand.   Getting In on the Game   Retail investors and advisors don’t need a futures trading seat or a source of institutional credit to get in on the carbon trading action. The KraneShares Global Carbon ETF (KRBN) tracks the EU ETC carbon price fairly well. KRBN traded with very low volume up until energy commodity prices began to surge in 2Q21.   Our Weekly Macro Themes report details the growing interest in this unique asset. This week’s featured chart illustrates how much money is pouring into the carbon credit space. We aggregated all the carbon credit ETFs that trade globally. AUM in these exchange-traded products was just a trace a year ago ($35 million) but now approaches $2.5 billion.   Featured Chart: Carbon Credit ETF Assets Under Management   The growth in ESG flows is no joke, and it seems like nothing is stopping that freight train. But is the parabolic move in carbon credit ETFs just another mini-bubble we have come to expect as pandemic stimulus ignites a wave of speculation? It has the hallmarks of just that. Investor interest is driving up prices, but the nuance here is that the speculators might be less demonized given the arguably positive benefits to climate change (in contrast to speculators in other energy and agricultural commodities).   Search Trends and Price Correlation   Our weekly report investigates the similarities between ESG’s growth and interest in trading carbon credits. There is an obvious link. Google Search Trends of “carbon” matches the price chart of the EU ETS Carbon index. From an impact investing standpoint, putting upward pressure on carbon prices is a very direct way of influencing climate outcomes (by raising the cost of emitting and incentivizing investment in clean tech).   Bottom Line: Is this the new hot trading craze? Speculating in carbon credits? We are not there yet, but growth in the niche is surging along with prices. The rise in speculative manias over the last 18 months collides with the powerhouse that is growth in ESG. The bullish combination has led to substantial flows into the asset class and new all-time highs in price.   Follow us on: Substack https://topdowncharts.substack.com/ LinkedIn https://www.linkedin.com/company/topdown-charts Twitter http://www.twitter.com/topdowncharts
Cryptocurrencies to be tested this holiday season

Cryptocurrencies to be tested this holiday season

Alex Kuptsikevich Alex Kuptsikevich 25.11.2021 09:13
The bitcoin price changed slightly over Wednesday and is moving Thursday morning without a clear direction, around $57.3K. In the past 24 hours, the rate has added 1.6%, slightly better than the dynamics of the entire crypto market, whose capitalisation is up 1%. The observed strengthening of bitcoin right now is nothing more than a sign of the pull into a more liquid instrument from several other major altcoins. Cardano, for example, came under pressure yesterday, losing more than 10% intraday, but managed to bounce back somewhat by the close of the session. Solana is digging 4.5% in 24 hours, and Polkadot is under pressure. Due to pressure on top altcoins, the cryptocurrency Fear and Greed Index remains in the fear territory, at 32, where it was last in early October. BTCUSD, remaining below its 50-day moving average, is in the clutches of the bears, threatening to ramp up its fall. Many bulls seem to have moved into Ether, which, time after time, manages to fend off sellers, staying above its 50-day moving average and building up positions above $4000. The upcoming US holiday season promises to be an important test of crypto-enthusiasts strength. Four years ago, Bitcoin collapsed sharply around Christmas: probably due to the eagerness of investors at the time to lock in multiple price increases for that year. Advances in cryptocurrencies not only make them easier to buy but also easier to sell. The top coins are easy to pay for, and many can be easily, cheaply, and quickly exchanged for fiat currencies. As the crypto market stalls and inflation eats away at physical commodity prices, conditions begin to form where retail and casual investors who are not long-term crypto-enthusiasts may want to lock in profits and exit the market for the coming months ushering in a sell-off season for altcoins.
The Euro's oversold is a sign for more volatility to come

The Euro's oversold is a sign for more volatility to come

Alex Kuptsikevich Alex Kuptsikevich 25.11.2021 08:32
The Euro fell against the dollar to 1.1200, a new 16-month low, having lost more than 4% in the last four weeks. The downward trend in the single currency accelerated in November on the divergence between Fed and ECB policies. And the latest news on business activity from Europe reinforces this divergence by feeding the bears in a single currency. The recovery in Europe appears to have peaked in May and June, after which business sentiment indicators are methodically falling. The latest data from Germany's Ifo marked the fifth consecutive month of deteriorating business conditions, driven by logistical problems, the energy crisis in Europe and a rise in coronavirus cases, followed by stricter lockdown measures. Technically, on the weekly candlestick charts, the EURUSD is oversold as last seen in 2015. Often this is a precursor for some recovery. However, historically for EURUSD, this oversold signal means we may see a further acceleration of the downside and increased volatility ahead. In 2014, 2010, 2008 and 1996, the dip of the RSI below 30 on the weekly charts followed the acceleration collapse, sometimes taking almost a free fall form. In those cases, the signal for a reversal was a rebound of the indicator above the oversold level (i.e. higher than 30), signalling the end of the sell-off in the Euro. It can take a long time between these points, e.g., in 2014-2015, it took more than half a year for the EURUSD exchange rate to collapse by 18%. The multi-year and repeatedly tested EURUSD support level is located around 1.07, and that is where the Euro could end up in the next six months. This will be especially true if economic growth in the Eurozone slows down while bond yields rise. These are conditions we are currently experiencing.
Crude Oil: Anticipating Dips in the Near-Term

Crude Oil: Anticipating Dips in the Near-Term

Sebastian Bischeri Sebastian Bischeri 24.11.2021 16:49
The market is struggling with further downward pressure, triggered by a stronger US dollar, and threats that the US and others will start using their strategic oil reserves. Trade Plan Review Indeed, Japanese Prime Minister Fumio Kishida said on Saturday (Nov 20th) that his government was considering drawing on oil reserves in response to rising crude prices. Since Japan sources most of its oil from the Middle East, the recent surge in prices and the decline of the yen have pushed up import cost for the Japanese archipelago. As a reminder, last week I anticipated a lower dip that would take place onto the $75.25-76.22 yellow band. The recommended objective would be the $79.37 and 82.24 levels. My suggested stop would be located on the $74.42 level (below both the previous swing low from 7-October and the previous high-volume node and volume point of control (VPOC) from September). Alternatively, you could also eventually use an Average True Range (ATR) ratio to determine a different level that may suit you better. For now, that dip did happen Friday around that support area (likely to become a demand zone) where we might see some ongoing accumulation for the forthcoming hours. Now, we can observe a doji formation (candlestick figure), and more precisely a long-legged doji appearing on the daily chart, which is generally synonymous with indecision. WTI Crude Oil (CLF22) Futures (January contract, daily chart) To visualize how the price action is currently developing, let’s zoom into the 4H chart, which illustrates a much clearer downtrend: WTI Crude Oil (CLF22) Futures (January contract, 4H chart) So, as you can see, even on that lower timeframe we have a doji pattern, where the bulls are trying to take over the bears to push the market towards higher levels. Will the current 4H downtrend extend lower, or will the longer-term (daily) uptrend resume its rally? Let’s see where this is going to end up. Here is the latest chart from today (Nov 24th): Figure 1 - WTI Crude Oil (CLF22) Futures (January contract, monthly chart) By the way, my trade target for WTI Crude Oil positions has almost been reached. Please check out more details on my latest oil targets in Monday’s article. That’s all for today, folks. Happy trading! Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Oil Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Sebastien BischeriOil & Gas Trading Strategist * * * * * The information above represents analyses and opinions of Sebastien Bischeri, & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Sebastien Bischeri and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Bischeri is not a Registered Securities Advisor. By reading Sebastien Bischeri’s 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. Sebastien Bischeri, Sunshine Profits' employees, affiliates as well as their family members 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.
November: Is a Bigger Drop in Gold Just Around the Corner?

November: Is a Bigger Drop in Gold Just Around the Corner?

Przemysław Radomski Przemysław Radomski 24.11.2021 15:18
  As expected, after the applauded increase, gold fell. But will it manage to bounce off the bottom or rather slide lower? Today’s analysis is going to be all about gold, and for a good reason. Based on yesterday’s and Monday’s sessions, November is now a down month for gold. Please let that sink in. Gold ended last week above $1,850, with almost everyone in the market cheering and making bets, on how soon gold will move above $1,900 and then rally to new yearly highs. It was after the completion of the inverse head-and-shoulders pattern, after all! Well, I warned you that there were more long-term-based factors in place than the above-mentioned inverse head-and-shoulders pattern, and since longer-term patterns are more important than the shorter-term-based ones, the outlook was bearish, not bullish. In fact, it was the very short-term rally that made the outlook bearish, because of three separate time-based indications for a reversal. And I don’t even mean other bearish indications like gold’s invalidation of the small breakout above the declining red resistance line. Two of the indications that I described previously were the triangle-vertex-based reversals based on the below chart. When resistance and support lines cross, markets tend to reverse their previous course. There’s no good logical explanation for why it should work, but it does. Not in every case, and I’m not promising that it will work in all cases, but I’ve seen it work so many times in the precious metals market so that I can say that ignoring these indications is a very costly endeavor. Another indication came from gold’s long-term chart – its cyclical turning point was pointing to a major reversal, and the preceding move was up. Consequently, gold was likely to top. And that’s exactly what it did. Gold moved lower this week and taking into account the weekly high to yesterday’s closing price, it declined by over $100. Not bad for just two days. But perhaps the most interesting things are now visible on gold’s monthly chart (based on monthly candlesticks). The above chart is loaded with clues. Let’s start with the similarity between now and 2013 that we see from this perspective. The consolidation is similar not only in terms of the shape of the price move but also in terms of the decline in long-term volatility. The upper part of the above chart represents the width of the Bollinger Bands – a tool that is based on the volatility of the market. In short, greater volatility means broader Bands, meaning the above indicator would move higher. So, it’s essentially a proxy for volatility. Since we’re using monthly candlesticks here, it’s a proxy for long-term volatility. Please note that the BB width not only moved from similar levels in 2011 and 2020 to similar levels in late-2012 and now, but it took approximately the same time to get there (if we start both moves with the final monthly high). Like a Decade Ago? The interesting thing about long-term volatility is that periods of low volatility tend to be followed by periods of high volatility – in either way. I marked four previous cases when we saw very low volatility after gold’s several-year-long rally, and it was indeed very close to the start of big moves. One of those cases was the late-2012 case, which appears similar to what we see right now. Consequently, gold is likely to move quite significantly in the following months. If the similarity to 2013 continues, gold would be likely to decline just as the blue dashed line suggests. This implies a move below $1,300. Will gold indeed decline to that low? I doubt it, as there’s very strong support a bit below $1,400. It’s based on the previous highs and the rising support line based on the 2015 and 2018 lows. The decline to those levels would have been enough of a reaction that was likely to follow the failed 2020 breakout above the 2011 highs. Invalidations of breakouts are strong “sell” signals, and invalidation of a breakout that was extremely important (as well as a breakout to a new all-time high), is likely to have very dire consequences. Summing up, gold declined in tune with my long-term-based indications and the medium-term downtrend appears to have resumed. Based on the analogy to 2013 and other factors, a bigger decline in gold appears to be just around the corner (regardless of what happens in the very near 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, CFAFounder, 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.
Is the S&P 500 Topping or Just Consolidating?

Is the S&P 500 Topping or Just Consolidating?

Paul Rejczak Paul Rejczak 24.11.2021 15:44
The S&P 500 continues to fluctuate along the 4,700 level. So is this a topping pattern or just a flat correction before another leg up? The S&P 500 index extended its Monday’s decline yesterday, as it fell to the daily low of 4,652.66. But it closed 0.17% higher following an intraday rebound. The market rebounded to the 4,700 level again. The broad stock market keeps trading within an over two-week-long consolidation. For now, it looks like a flat correction within an uptrend. However, it may also be a topping pattern before some more meaningful downward reversal. The nearest important support level remains at 4,630-4,650 and the next support level is at 4,600. On the other hand, the resistance level is at 4,700-4,750. The S&P 500 continues to trade along the 4,700 level, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Nasdaq Broke Below the Trend Line Let’s take a look at the Nasdaq 100 chart. The technology index reached the new record high on Monday, led by the megacap tech stock rallies, but it reversed its intraday course and yesterday it fell below the 16,200 level. The index broke below its short-term upward trend line, as we can see on the daily chart: Apple and Microsoft – a Potential Reversal Let’s take a look at the two biggest stocks in the S&P 500 index, AAPL and MSFT. Apple accelerated its uptrend on Monday and Microsoft slightly extended its recent advance. Both reached the record highs before reversing lower. Yesterday they were mixed, and today we may see some more short-term uncertainty. Conclusion The S&P 500 index is expected to open 0.4% lower this morning following a series of economic data releases. The market will wait for some more economic data releases - the Core PCE Price Index, Personal Income/ Personal Spending at 10:00 a.m., and the FOMC Meeting Minutes at 2:00 p.m. We may see a short-term consolidation ahead of tomorrow’s holiday break and the long holiday weekend. So overall, the broad stock market may be trading within a topping pattern. However there have been no confirmed negative signals so far. Nevertheless, we decided to open a speculative short position yesterday, and we are expecting a 5% correction from the current levels. Here’s the breakdown: The S&P 500 backed from the new record high on Monday and it looked like a short-term or medium-term topping pattern. A speculative short position is justified from the risk/reward perspective. We are expecting a 5% correction from the current levels. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his 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. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members 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.
The Turkish Lira rebound, but hardly for long

The Turkish Lira rebound, but hardly for long

Alex Kuptsikevich Alex Kuptsikevich 25.11.2021 13:55
The Turkish Lira added 10% against the dollar and Euro from lows at the start of Wednesday. At the beginning of trading on Thursday, there was also a relative calm in the exchange rate performance. However, an important question to be answered in the coming days is how temporary this calm will be. The fundamentals for the Turkish currency are unchanged: The Turkish central bank and the President continue to argue about the benefits of low-interest rates for the economy and benefits of competitiveness through a weaker currency. But it should not be forgotten that these factors only have a positive effect when the currency has stabilised, and the financial markets have a point of reference. Right now, the economy is suffering a severe shock from a 40% devaluation of the Lira against the USD so far this month to yesterday low. Even worse, such rate hikes are shaping expectations for further depreciation and further spurring sales of the Lira. Retailers and manufacturers in such circumstances prefer to fix prices of goods in harder currencies, which causes a shock freeze in economic activity. The example of Apple’s retail shops being closed because of the Lira’s devaluation is striking but hardly the only one. What we are likely seeing today, and perhaps for the next couple of days, is just a brief moment of stabilisation before a new wave of pressure on the Lira, which could continue right up to the policy changes. Whether it will be capital controls or rate hikes is an open question, but for sure, the answer won’t be easy.
Santa preparing to take back the reins of the market! | MarketTalk: What’s up today? | Swissquote

Silver on Christmas gift list

Korbinian Koller Korbinian Koller 26.11.2021 11:06
Monthly chart, Silver in US-Dollar, favorable timing: Silver in US-Dollar, monthly chart as of November 26th, 2021. Timing for a physical acquisition is in alignment as well. The monthly chart shows a high likelihood for November’s candle closing as an inverted hammer. Consequently, it provides for silver prices approaching the low end of the last 17-month sideways range near US$22. The white line assumes a potential price projection for 2022. Even if we are wrong with our assessment, a gift of silver for a long-term horizon is highly likely to appreciate from momentary levels to a much higher price target. Silver in US-Dollar, weekly chart, silver on Christmas gift list: Silver in US-Dollar, weekly chart as of November 26th, 2021. The value of a gift like this doesn’t stop there. Numismatics provides for children and teenagers a way to study history. Beautiful coins and bars inspire us to hold on to value for future times and encourage saving. The weekly silver chart shows in a bit more detail possible price expansion from a time perspective. This would be our most conservative picture of the future. The green bordered box is an entry zone for a potential reversal to the upside. With a high likelihood of an interest rate change by the Federal Reserve Bank in the second quarter of 2022, the inner yellow curve supersedes in probability for the expected time frame for a price increase. Silver in US-Dollar, daily chart, physical only, spot to risky: Silver in US-Dollar, daily chart as of November 26th, 2021. If you look at the daily chart above, you will find that we have seen a swift downward move in the past. Under our beauty principle, there is a good likelihood that this might occur again. If so, reaction times are much longer with a physical purchase than with spot price trading. Meaning there is no need to precision trade (precision purchase) physical silver, but be not spooked if a swift, extended decline might happen. Consequently, we are pointing this purchase out for physical acquisition only but do not advise taking a spot price position based on the risk.   Phase 1 drilling program at Guigui discovered not only the largest intrusive ever found in the district, but it’s the first mineralized skarn ever seen in Guigui! Silver on Christmas gift list: In this bargain hunting season around Black Friday, we find it is especially sensible to refocus and ask different questions. The human psyche is prone to give in to instant gratification, especially after the hard time the last two years provided. But with this much at stake for 2022, possibly being a year that sets a mark in history, it might be more prudent to look for wealth preservation in a longer time horizon to invest one’s fiat currencies rather than short-lived pleasures. After all, a careful look for generations to come, your children, is a view most valuable in general. 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 also subscribe to our free newsletter. This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting. By Korbinian Koller|November 26th, 2021|Tags: Crack-Up-Boom, Gold, Gold/Silver-Ratio, inflation, low risk, Silver, silver bull, Silver Chartbook, silversqueeze, technical analysis, time frame, trading principles|0 Comments About the Author: Korbinian Koller Outstanding 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.
New virus strain pulls back online vs offline bets in equities

New virus strain pulls back online vs offline bets in equities

Peter Garnry Peter Garnry 26.11.2021 11:52
Equities 2021-11-26 11:20 7 minutes to read Summary:  Equities markets are selling off due to new virus strain due to this strain being much more infectious than the current dominant variants, but more importantly uncertainty over how effective the vaccines will be on this new strain. This uncertainty lifts the probability of more lockdowns and travel restrictions and as a result traders selling off physical companies in energy, mining, financials and consumer discretionary against health care, utilities, and technology stocks. While overshadowed of today's risk-off event there have been several key news out on Chinese equities related to Didi Global, Evergrande, and Meituan which we cover in today's equity update. Equities react to increased likelihood of new lockdowns Financials markets are in upheaval over a new Covid virus strain (called the Nu variant) has been identified in South Africa, which seems to be more infectious than the current dominant strains. With Europe and some northern parts of the US in a stretched situation to an already high number of new cases and hospitalizations, this new virus strain comes at the worst possible time. The good thing is that the more infectious the virus get the less likely it is to also get more virulent, but it can still put pressure on hospitals. Equities are reacting negatively because it is unknown at this point to what degree the vaccines will be effective against the new strain, and thus it increases risk of new lockdowns which leads to an economic hit. Another good thing is that South Africa has been open and transparent about the virus strain which means that countries can react faster and because societies are better prepared the impact overall on the economy such be less than initially during the pandemic. The online vs offline companies trade is expressed today Due to the rising probability of lockdowns, which was already in play before the news of the new virus strain, traders and investors are again pulling out the pandemic playbook on equities. The chart below shows Nasdaq 100 futures vs Stoxx 50 futures over the past 10 trading days which expresses the online/technology vs offline/physical companies. The idea is that online companies can better weather new lockdowns where as companies operating in the physical world obviously are more impacted by travel restrictions and potential lockdowns. Smaller companies are also more vulnerable which is why Russell 2000 futures and the global index on small cap companies are under pressure today. Liquidity is thin today going into the weekend and being on the backside of Thanksgiving in the US (trading in US equities ends today at 1300 EST) and thus the initial reaction in equities was aggressive, whereas a couple of hours into trading European equity futures have bounced back somewhat. Not surprisingly the worst performing sectors today in Europe are energy (lower demand for oil), financials (potential hit to loan books), industrials (more supply constraints and lower demand), consumer discretionary (lower demand for cars and other large consumer items), where as health care, utilities, and technology companies are less off as these sectors are necessities and can weather lockdowns better. China equities continue to weighed down by bad stories Besides the risk-off trade in equities several key stories have hit Chinese equities over the past 24 hours. The Chinese government has asked Didi Global to delist from NYSE emphasizing once again the hidden volatility in Chinese listed stocks in the US. Our view remains that investors that want exposure to China should do that through mainland and Hong Kong listings. Stocks related to the housing market was impacted negatively today from news that Evergrande’s founder Hui Ka Yan has sold shares worth $344mn which is seen as a negative for the company and the industry’s outlook, as the Chinese government is urging Hui to use his own wealth to bolster the company’s finances. Finally, Meituan has reported Q3 earnings showing revenue growth of 38% as expected but operating margins under pressure leading to widening losses as the technology crackdown and “Common Prosperity” are forcing Meituan to increase operating expenses on social security for its gig workers. Appendix: 5-year chart on Nasdaq 100 and Stoxx 50 futures
Crude Oil Didn’t Like Thanksgiving Turkey This Year

Crude Oil Didn’t Like Thanksgiving Turkey This Year

Sebastian Bischeri Sebastian Bischeri 26.11.2021 15:46
  It appears that the US markets didn’t find the Thanksgiving turkey very tasty this year. CBOE Volatility S&P 500 Index (VIX) Futures (daily chart) With the “indicator of fear” (also known as the VIX or Volatility Index) spiking over 13.5 % in the European session, propelling some precious metals (gold and platinum) and natural gas to the roof, while sending the crude and petroleum products to the lower ground, the volatility has just clearly reached a higher level. (Source: FINVIZ) Most of our premium subscribers enjoyed a last ride on the long side for WTI crude oil this month while following our trade projections. For more details of the last oil trading position provided last week, I have just released that trade as it got very close to reach its projected target on Wednesday (Nov. 24). WTI Crude Oil (CLF22) Futures (January contract, daily chart) The main fears on the oil market come from the possibility of a demand slowdown starting from Q1 2022. Additionally, that timing happens when the United States, along with a larger group of countries (including China, India, Japan, Republic of Korea, and the UK) have made the decision to release some of their strategic oil reserves on the market, aiming at artificially increasing the supply, and thus lowering oil prices. Well, this may represent one driver of prices indeed, although a more general economic slowdown associated with a non-sustained demand as we are getting into the winter, may be the main concern now. On the other hand, the winter – expected to be colder in certain regions – is also supporting the gas prices, hence the recent surge on the Henry Hub futures, along with sustained US exports of Liquefied Natural Gas (LNG) that are also supporting natural gas prices. Henry Hub Natural Gas (NGF22) Futures (January contract, daily chart) In conclusion, we could be entering a new volatile period on the global markets, associated with various fears maintained through headlines by media (Covid variants, restrictions, etc.). For now, I would suggest staying away from the noisy headlines and just relax and enjoy some new pieces of turkey leftovers, or whatever else if you don’t eat meat. Ignore the noise and trade what you see (not what you think). Stay tuned and enjoy your weekend! As always, we’ll keep you, our subscribers well informed. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Oil Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Sebastien BischeriOil & Gas Trading Strategist * * * * * The information above represents analyses and opinions of Sebastien Bischeri, & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Sebastien Bischeri and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Bischeri is not a Registered Securities Advisor. By reading Sebastien Bischeri’s 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 a high risk of loss. Sebastien Bischeri, Sunshine Profits' employees, affiliates as well as their family members 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.
The Dollar Moves Back to the Fulcrum between the Funding and Higher Beta Currencies

The Dollar Moves Back to the Fulcrum between the Funding and Higher Beta Currencies

Marc Chandler Marc Chandler 29.11.2021 10:46
November 28, 2021  $USD The new covid variant injected a new dynamic into the foreign exchange market.  The World Health Organization cautioned against the need to impose travel restrictions, but policymakers, by and large, do not want to be bitten by the same dog twice.  To err on the side of caution is to minimize one's biggest regret.  The risk is that the uncertainty is not lifted quickly but lingers, which would likely unpin volatility.   US and European benchmark 10-year yields fell sharply ahead of the weekend.  In the US, the market unwound some of its aggressive pricing in of Fed policy.  This is reflected in the commensurate drop at the short-end.  In Europe, the decline in 10-year yield reflected a slowing of growth/inflation as its short-end was largely unchanged.   There are three areas in which market participants cannot be as confident as they were in the middle of last week.  First, the odds of a Bank of England hike next month were diminishing and fell further at the end of last week.  Second, an acceleration in the Fed's tapering seemed increasingly likely given the strength of recent data and the jump in price pressures.  However, the emergence of this new strain makes an aggressive rate hiking campaign less likely.  Third, the prospects for stronger world growth diminished on the margins.  This undermines risk appetites and weakens those currencies that often appear to do better in robust growth phases (e.g., dollar bloc, Scandis, and most emerging market currencies).   Dollar Index:  The Dollar Index put in a new high for the year on November 24, slightly below 97.00. It was confined to a narrow range when the US markets were closed on November 25 and sold off on news of the new variant and imposition of travel controls by several countries.  The setback was sufficient to turn the MACD lower from over-extended territory, though the Slow Stochastic hasn't and remains stretched.  If we assume a correction has begun, a key question is what move is being retraced.  A conservative but logical assumption is that the last leg up, since the November 10 CPI, is in play.  The first (38.2%) target is near 95.75, and then the (50%) retracement is around 95.40.  A break of 95.00 could signal another cent decline.  Euro:  Interest rate differentials and the surge in delta variant cases had sent the euro to almost $1.1185 in the middle of the last week, the lowest since July 2020.  When news of the new variant broke, what appears to be a short-covering rally lifted the euro to almost $1.1325.  The (38.2%) retracement of the leg down since November 10 is near $1.1340.  A more formidable resistance area is in the $1.1375-$1.1400 band.  As was the case with the Dollar Index, the MACD is turning, but the Slow Stochastic is lagging.  Initial support now is seen near $1.1260. With the old and now new variant, the surge accelerated inflation expected to be reported next week may not be the fodder for the ECB has that some anticipated.   Japanese Yen:  We have suggested that the dollar was in a JPY113-JPY115 range.  Earlier this month, it had dipped briefly below JPY112.75 and snapped back.  Indeed, in the first part of last week, it was fraying the upper end of the range and traded slightly through JPY115.50.  However, the pre-weekend turmoil saw the greenback drop back to the lower end of the range (~JPY113.05).  The trendline connecting the August low and the two November lows, found near JPY114.10 ahead of the weekend, was taken out with determination. The MACD is turning down but never recovered from the mid-October-mid-November decline.  The Slow Stochastic is edging back into over-extended territory. British Pound:   As the December short-sterling futures contract rallied, implying a less likely chance of a BOE hike before year-end, the pound fell.  The interest rate futures contract will begin next week with a seven-day rally intact.  Sterling, itself has fallen for six sessions, and a new low for the year was set near  $1.3320 before the weekend.  Here, both the MACD and Slow Stochastic are falling while being over-extended on the downside.   A move above $1.3350 would help stabilize the tone,  but it requires a push above $1.3400 to be notable.  On the downside, we continue to see a risk of a test on the  $1.3165, the first retracement (31.8%) of sterling's rally since Mach 2020.     Canadian Dollar:  Talk about trending currencies; the Canadian dollar fell for the fifth consecutive week following a five-week rally.  Net-net,  it is little changed.  The US dollar settled near CAD1.2765 on September 17, which was between the Bank of Canada meeting and the FOMC.  The greenback reached CAD1.28 ahead of the weekend before settling back near CAD1.2760.  There is little chart resistance until closer to CAD1.29.  As one would expect, the momentum indicators are stretched and frayed the upper Bollinger Band (~CAD1.2770).  It requires a break of the CAD1.2630-CAD1.2640 area to be meaningful.   Australian Dollar:  In the pre-weekend carnage, the Australian dollar came within a whisker of the year's low set in August near $0.7100.  The Aussie, like the Canadian dollar, has been streaking.  Its four-week decline comes are a four-week rally.  The move was underway before the new variant was announced.  The next target is around $0.7050, the (38.2%) retracement of the rally from the March 2020 low (~$0.5500).  Below there is the $0.7000 area, which caught the lows in September and October 2020.   The MACD continues to fall, while the Slow Stochastic has begun to flatline in the trough.  The 25 bp hike by the Reserve Bank of New Zealand, which was fully expected, and disappointed those that looked for a larger move, did little to support the New Zealand dollar.  Indeed, it was the worst-performing major currency last week, losing about 2.5%, more than twice as much as the Canadian dollar and two-thirds more than the Australian dollar.  It also tested the year's low set in August (~0.6800). A break would open the door to steeper losses, but the next area of support may be found in the $0.6760-$0.6780 area.   Mexican Peso:  The peso was the second weakest currency in the world last week (after the Turkish lira), falling around 4.3% to a new low for the year.  It had three strikes against it last week.  First, emerging market currencies broadly are out of favor.   The JP Morgan Emerging Market Currency Index has fallen for 10 of the past 12 weeks.  Second, the new variant and the dramatic risk-off saw the peso's losses accelerate.  Third are domestic considerations.  AMLO's nomination to head the central bank starting next year did not bolster the market's confidence, which was on the heels of the Turkish debacle.  Also, domestic economic conditions have worsened.  The data have been softer than expected, including a downward revision in Q3 GDP showing a contraction of 0.4% rather than 0.2%. At the same time, the bi-weekly CPI rose above 7%.   Ahead of the weekend, the dollar rose to MXN22.1550, and although it pulled back, it found support above the previous session's high (~MXN21.60).  Nearly all the emerging market currencies fell against the dollar (The Brazilian real was a notable exception.  It eked out ~0.5% gain).  However, Mexico seems particularly vulnerable.  The credibility of the central bank may be called into question.  The economic challenge of surging inflation and weak economic activity would seem to require fiscal support, for which AMLO shows little interest.  In April 2020, the greenback reached nearly MXN25.7850, and the MXN22.47 area corresponds to the halfway mark of its subsequent decline.   Chinese Yuan:  Chinese officials appear to have expressed mild displeasure with the foreign exchange market, cautioning against a one-way market and checking prop positions.  Officials would seem to think that the banks are short dollars, while many outside observers, trying to reconcile the large current account surplus with little currency movement and stable reserves, think the large banks are accumulating dollars ostensibly on behalf of officials (hence the talk of stealth intervention). In fact, the one-way market has been broken.  On November 16, the dollar traded between CNY.3670 and CNY6.3965 and has not moved out of that range.  We suspect the risk is for an upside break for the dollar and initially see a move toward CNY6.42.   Disclaimer
Things are not adding up any longer in the car industry

Things are not adding up any longer in the car industry

Peter Garnry Peter Garnry 29.11.2021 13:49
Equities 2021-11-29 13:00 10 minutes to read Summary:  In today's equity research note we take a look at the global car industry. Since late 2005 it has been a low growth industry also reflected in the low total return of the industry prior to the pandemic. But during the pandemic and with the high revenue growth rates of pure electric vehicles makers the industry's combined market value across traditional carmakers and pure EV-makers has gone to unprecedented levels reflecting excessive expectations that we do not think can hold. The reason behind this is the acceleration in EV adoption and we provide concrete alternatives to bet on this transition without getting exposure to pure EV-makers with elevated equity valuations. Market value does not add up with structural growth profile This year should have been the year when the global car industry came back from the dismal 2020 impacted by the global pandemic and a 6% rise in global new passenger car registrations could be interpreted as the industry coming back. However, as the chart on car registrations in the US, Europe, and China shows, the global car market has been weakening the past couple of months and most notably in Europe. In fact, the combined new car registrations across the three largest car markets in the world are down 19% from the peak in August 2018. Since December 2015, global new car registrations have only grown by 1.8% annualized with a clear saturation starting in early 2017 and then turning into a longer term decline by late 2018. It seems that the global car market has become saturated and the pandemic exacerbated an already weak industry on the demand side. As demand came back, the car industry faced new issues on supplies of semiconductors. In the early days of the pandemic, car manufacturers cancelled orders on semiconductors as they believed demand to be weak for a long time, but as governments unleashed unprecedented stimulus economies weather the pandemic and with the vaccines approved in late 2020, the economy came roaring into 2021. But car manufacturers buy lower margin semiconductors and as they were late to come back ordering semiconductors, the semiconductor industry had already found willing buyers due to high demand on graphics cars for gaming and crypto, and semiconductors used in datacenters and computers. Car manufacturers were put back in line and have ever since scrambled to get priority causing production to be reduced on lack of semiconductors. The pandemic and climate change awareness also happened to ignite demand for electric vehicles (EVs) and the EV transition may have reached an inflection point where it is beginning to drive postponement of buying a gasoline car. Why buy a technology that is being phased out and why not buy an EV when governments are providing incentives to do so? Despite these structural challenges and low growth profile the MSCI World Automobile Index has exploded in value over the past 18 months driven by a bonanza in EV-makers and excessive expectations best exemplified around the Rivian IPO. From December 2005 to the peak in new car registrations in August 2018, the index gained 5.2% annualized compared to 3.9% annualized gains over the period in new car registrations. This highlights that market value more or less follows volume plus/minus changes in price mix and operating margins. With the recent gain in the global index on car manufacturer the industry’s market value has become completely unanchored to the underlying structural growth rate. The only explanation that can justify this is new car registrations quickly closes the drawdown from August 2018 and that EVs can be manufactured at higher operating margins, but this requires that competitive forces do not force retail prices on new cars down to the old profitability level on gasoline cars. Source: Bloomberg EV bonanza will end in a graveyard The key change in the car industry is the production ramp-up of EVs as consumers are increasingly demanding these new cars. Public markets have been flooded with new car companies producing only EVs and the market is currently putting a higher market value on the 11 largest EV-makers compared to the 11 largest traditional carmakers. As we have written in previous research notes this reflects excessive expectations on EVs that we find difficult to justify given the structural growth profile of the overall car industry. Having said that the outlook for cars over the coming three decades is clearly in our view. ICEs will experience a negative growth profile while EVs will have a steep growth curve over the next 10 years before gradually slowing down. But are pure EV-makers the best play? At current market values, we believe expectations are set above what these companies can deliver and we encourage investors to find other ways to bet on the high growth rates in EVs. One way is to find exposure among semiconductor companies with exposure to cars, lithium miners or battery makers for the batteries to EVs. The list below highlights a few names across this supply chain for EVs. Infineon Technologies (semiconductors) NXP (semiconductors) Renesas (semiconductors) Texas Instruments (semiconductors) STMicroelectronics (semiconductors) Jiangxi Ganfeng Lithium (lithium miner) Albemarle (lithium miner) SQM (lithium miner) Livent (lithium miner) Orocobre (lithium miner) Panasonic (battery) QuantumScape (battery) TDK (battery) Gotion High-tech (battery) Varta (battery) Should carmakers spin off their EV units? Given the market value on pure EV-makers the traditional carmakers should in our view consider spinning out their EV units into separate businesses with their own public listing, but maintaining majority shareholder control. The higher market value for a pure EV-business could be used to raise significant amount of capital to accelerate growth in production, but a separate business unit could reduce friction from internal culture and political fights. The recent problems internally at VW show that labour unions and workers in the traditional internal combustion engine divisions will make the transition difficult. Porsche is a good bet on a specific EV spinoff from a traditional carmaker and something that could yield a significant valuation improvement. Porsche is aiming to get 40% of revenue from EVs in 2025. If traditional carmakers are not spinning off their EV units, we believe they will have difficulties keeping up with pure EV-makers.
Day That Changed the World?

Day That Changed the World?

Monica Kingsley Monica Kingsley 29.11.2021 15:48
S&P 500 and pretty much everything apart from Treasuries and safe haven plays down precipitously, with panic hitting oil the hardest. The post Thanksgiving session turned out not so light volume one, but the fear wasn‘t sending every risk-on asset cratering by a comparable amount. What we have seen, is an overreaction to uncertainty (again, we‘re hearing contagion and fatality rate speculations – this time coupled with question mark over vaccine efficiency for this alleged variant), and the real question is the real world effect of this announcement, also as seen in the authorities‘ reactions. Lockdowns or semi-equivalent curbs to economic activity are clearly feared, and the focus remains on the demand side for now, but supply would inevitably suffer as well. Do you believe the Fed would sit idly as the economic data deteriorate? Only if they don‘t extend a helping hand, we are looking at a sharp selloff. Given the political realities, that‘s unlikely to happen – the inflation fighting effect of this fear-based contraction would be balanced out before it gets into a self-reinforcing loop. With the fresh stimulus checks lining up the pocket books, Child and Dependent Care Tax Credit etc., we‘re almost imperceptibly moving closer to some form of universal basic income. Again, unless the governments go the hard lockdown route over scary medical prognostications (doesn‘t seem to be the case now), such initiatives would cushion financial markets‘ selloffs. Looking at Friday‘s price action, PMs retreat shows that all won‘t be immediately well in commodities, where oil looks the most vulnerable to fresh bad news in the short run (while stocks would remain volatile, they would find footing earliest). Demand destruction fears are though overblown, but the dust looks to need more time to settle than it appeared on Friday above $72-$73: (…) New corona variant fears hit the airwaves, and markets are selling off hard. We can look forward for a light volume and volatile session today – S&P 500 downswing will likely be cushioned by the tech, but high beta plays will be very subdued. Commodities are suffering, and especially oil is spooked by looming (how far down the road and in what form, that’s anyone’s guess) economic activity curbs / reopening hits. Precious metals are acting as safe havens today (mainly gold) while the dollar is retreating – and so will yields, at least for the moment. Time for readjustment as the wide stop-loss in oil was hit overnight – it’s my view that the anticipated demand destruction taken against the supply outlook, is overrated. When the (rational / irrational) fears start getting ignored by the markets, we‘re on good track. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 is still far out of the woods, and a good sign of better days approaching would be tech and healthcare sound performance joined by financials and energy clearly on the mend. Earliest though, HYG should turn. Credit Markets It‘s too early to call a budding reversal in credit markets – HYG needs to not merely retrace half of its daily trading decline. Money coming out of hiding in Treasuries, would be a precondition of prior trends returning. They will – they had been merely punctured. Gold, Silver and Miners Precious metals gave up opening gains, and with the hit to inflation expectations, lost the developing tailwind. It would though come back in an instant once calm minds prevail or fresh stimulus gets sniffed out. Crude Oil Crude oil had a catastrophic day – how far are we along capitulation, remains to be seen. The oil sector didn‘t decline by nearly as much, highlighting the overdone and panicky liquidation in black gold. Copper Copper decline didn‘t happen on nearly as high volume as in oil, making the red metal the likelier candidate for a rebound as the sky isn‘t falling. Bitcoin and Ethereum Bitcoin and Ethereum marching up on the weekend, were a positive omen for the above mentioned asset classes. In spite of cryptos still being subdued, the overall mood is one of catious optimism and risk very slowly returning. Summary Friday‘s rout isn‘t a one-off event probably, and S&P 500 would turn higher probably earlier than quite a few commodities. Cynically said, the variant fears let inflation to cool off temporarily, even as CPI clearly hasn‘t topped yet. As demand destruction was all the rage on Friday, supply curbs would get into focus next, helping the CRB Index higher – and that‘s the worst case scenario. Precious metals certainly don‘t look to be on the brink of a massive liquidation – the current selloff can‘t be compared to spring 2020. For now, the price recovery across the board remains the question of policy, of policy errors. Thank you for having read today‘s free analysis, which is available in full 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 five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Decentraland price to provide a buy opportunity before MANA sets new highs at $7.5

Decentraland price to provide a buy opportunity before MANA sets new highs at $7.5

FXStreet News FXStreet News 30.11.2021 14:58
Decentraland price is seeing a minor pullback after a 10% upswing. The correction could extend, allowing MANA to retest $4 before rallying to a new all-time high at $7.5. A breakdown of the range low at $2.73 will invalidate the bullish thesis. Decentraland price is currently undergoing a minor retracement. This downswing is likely to continue until it retests a crucial reversal zone. But the move will provide sidelined buyers with an opportunity to accumulate before starting a new upswing to potentially fresh all-time highs. Decentraland price prepares for a blastoff Decentraland price has been teetering around the 50% retracement level at $4.32 for quite some time. Even the COVID-induced crash did not push it below the level. Instead, MANA rallied roughly 10% to $5.23, but it is now experiencing a short-term pullback. Investors can expect Decentraland price to head lower and pierce through the trading range’s midpoint at $4.32. This move will put it closer to a reversal zone, extending from $3.40 to $3.94. A dip into this area will allow sidelined buyers to accumulate and get on the Metaverse bandwagon, propelling Decentraland price to rally. The first hurdle that MANA will face is $4.32, followed by the range high at $5.9. Clearing these ceilings will open the path to new highs. The 100% Fibonacci extension level at $6.31 is close to the range high and is likely to be tagged quickly. However, it could go further – market participants could expect MANA to retest the 161.8% Fibonacci extension level at $7.53. This run-up will indicate a 91% ascent from $3.93 and set a new high for the Metaverse token. The downswing into the buy zone might sound alluring, but investors should note that it will only arrive if the midpoint of the trading range at $4.32 is breached. Failing to do so might trigger a premature uptrend for MANA. MANA/USDT 4-hour chart While things are looking up for Decentraland price, a breakdown through the base of this high probability reversal zone, ranging from $3.93 to $3.40, will be indicative of weak bullish momentum. A daily close below $3.40 is likely to trigger a retest of the range low at $2.74. If Decentraland price produces a swing low beneath this barrier, it will invalidate the bullish thesis.
Feeling the Quickly Changing Pulse

Feeling the Quickly Changing Pulse

Monica Kingsley Monica Kingsley 30.11.2021 16:15
S&P 500 rebound still ran into selling pressure before the close – the bulls lost momentum however well the government and Fed‘s words were received. Credit markets hold the key – specifically, how corporate bonds and Treasuries perform compared to each other. This would be also reflected in the yield spreads, dollar moves, or cylicals vs. stay-at-home stocks.Today‘s analysis will be shorter than usually, so let‘s dive into the charts to fulfill my title‘s objective (all charts courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 is still far out of the woods, and the bulls have to decidedly repel any selling pressure - a good sign of which would be a close in the 4,670s.Credit MarketsAs encouraging as the HYG upswing is, it‘s too early to call a budding reversal a done deal. LQD to TLT performance is a good start, which however needs to continue. The worst for the bulls would be renewed rush into Treasuries, sending other parts of the bond market relatively down.Gold, Silver and MinersPrecious metals retreated again, but the bullish case is very far from lost. As discussed in the caption, the upswing appears a question of time – gold and silver are ready to turn on soothing language of fresh accomodation.Crude OilCrude oil upswing left a lot to be desired and as I tweeted yesterday, remains the most vulnerable within commodities. The dust clearly hasn‘t settled yet within energy broadly speaking.CopperCopper held up considerably better than many other commodities, and gives the impression of sideways trading followed by a fresh upswing as having the highest probability to happen next.Bitcoin and EthereumBitcoin and Ethereum marching up today, is a positive omen for gradual and picky return of risk-on trades. The overall mood is still one of catious optimism.SummaryFriday‘s rout hasn‘t been reversed entirely, and markets remain vulnerable to fresh negative headlines. The degree to which current ones (relatively positive ones, it must be said) helped, is a testament of volatility being apt to return at a moment‘s notice. I‘m certainly not looking for the developments to break inflation‘s back – CPI clearly hasn‘t peaked. Precious metals are well positioned to appreciate when faced with any grim news necessitating fresh monetary or fiscal activism.Thank you for having read today‘s free analysis, which is available in full 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 five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Ahead Of The US CPI, Speaking Of Crude Oil And Metals - Saxo Market Call

Market Quick Take - December 1, 2021

Saxo Bank Saxo Bank 01.12.2021 09:27
Macro 2021-12-01 08:45 6 minutes to read Summary:  Even more whiplash for global markets yesterday as Fed Chair Powell has clearly set an entirely different tone ahead of his new term as Fed Chair, saying that it was time to retire the word transitory when discussing inflation and pointing to accelerating the slowing of Fed asset purchases, among other comments. This led to a sharp repricing of Fed expectations higher just after they had been taken sharply lower by the news of the omicron covid variant. What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) - the initial reaction to Powell’s statement about retiring “transitory” inflation was lower equities and higher interest rates, but the subsequent price action has not followed through. Nasdaq 100 futures, which are the most interest rate sensitive, are trading at the high end of the recent trading range around the 16,380 level with the obvious resistance level at 16,438. Short-term the price action way be confusing with low signal-to-noise ratio, but our view has been clear for over a year, and that is, that inflation is coming and in size not seen in many decades. This will have a negative effect on the most richly valued equities such as our bubble basket on stocks. Stoxx 50 (EU50.I) - one would think that Powell’s comments on inflation would lift value stocks and interest rates, and thereby creating a bigger rebound in European equities, but that is not what we are observing this morning. Stoxx 50 futures are trading around the 4,100 level with an important resistance level at 4,125; if this level can be overcome then our view is that Stoxx 50 futures could go to 4,200 and test the 200-day moving average. USDJPY and JPY crosses – whiplash for JPY cross traders yesterday, as the hawkish comments from Fed Chair Powell on inflation took Fed expectations for next year sharply back higher. Longer US yields, to which USDJPY is normally more sensitive, were less impacted, somewhat muting the impact on USDJPY, but the development came at a critical time, just after USDJPY had dipped below 112.73 range support yesterday. The reversal is a tentative sign that the pair will avoid pushing lower, but we would likely need to see the entire US yield curve lifting to have support for a renewed rally focusing on the 115.00+ recent top. EURUSD - will the ECB be forced to change its tune? Christine Lagarde’s insistence that inflation is a temporary phenomenon is under severe strain, even as she has been out this week defending this viewpoint, as was the ECB’s Schnabel, who boldly claimed that the November CPI data (more below) would prove the peak of the cycle. EURUSD churned sharply yesterday from a high of 1.1383 to a low of 1.1236 on the Fed Powell comments (below) before rebounding to 1.1336. The resilience later in the day despite a sharp repricing of Fed expectations is an interesting development, but the price action would need to threaten above 1.1500 to point to a technical reversal of the recent large sell-off. Crude oil (OILUKFEB22 & OILUSJAN21) trades sharply higher after hitting a three-month low on Tuesday in response to omicron related demand worries and general weak risk sentiment following Fed chair Powell’s comments on inflation. The market attention now turns to tomorrow’s OPEC+ meeting where the group may decide to pause production hikes while signaling a willingness to cut production should the demand suffer from fresh initiatives to curb mobility, especially for overseas travel. As a sideshow, the EIA will release its weekly inventory report later with the API reporting a 0.7m barrels draw in crude oil stock while fuel stocks rose. Gold (XAUUSD) trades higher after once again recovering from a Powell statement. Yesterday the Fed chair confirmed his recent change in focus away from creating jobs towards increasing efforts to curb elevated inflation. Risk appetite took another setback on the news but has recovered overnight as traders weighed positive regional economic data and divided views from drugmakers over how effective existing vaccines are against omicron. Overall, gold chart looks increasingly messy with no clear signal to be found at present. A break above the 21-DMA at $1820 is needed to spark fresh momentum interest while support continues to be found below $1780. US Treasuries (IEF, TLT). Powell’s testimony in front of the senate put things in perspective: inflation is not transitory, and the Federal Reserve will use its tools to stop it. These words provoked a fast bear-flattening of the yield curve where short term yields rose faster than log-term yields were dropping. We expect this trend to continue throughout winter as a new wave of covid will pin down the long part of the yield curve, but the Fed is likely to accelerate the pace of tapering. An inversion risk cannot be excluded. The 20s30s part of the yield curve is already inverted, while the 7s10s is just 7bps to get inverted. Although the 2s10s and 5s30s spreads are much wider, any flattening can pose a threat to next year’s Fed’s interest rate hike agenda. Powell and Yellen will testify again in front of the Senate today. Job numbers remain a big focus for Friday. US junk bonds (HYG, JNK). According to Bloomberg Barclays indexes, junk bonds’ OAS widened by 30bps to 330bps amid Friday’s selloff reflecting the lack of liquidity in markets. Despite negative real rates continuing to support corporate bond valuations, it’s safe to expect junk bond spreads to widen throughout the end of the year amid poor liquidity. If the volatility in rates remains sustained, the widening of spreads could accelerate, posing a threat also for stocks. German Bunds (IS0L) and Italian BTPS (BTP10). Inflation accelerated more than expected in the Eurozone during the month of November setting the yearly figure to 4.9%. Inflation figures together with the new German government adds to the catalysts of higher Bund yields. However, covid distortions are keeping yield in check. We exclude Bund yield to rise to test 0% until the new wave of covid eases. However, as soon as the worries concerning covid ease, they will resume their rise. What is going on? Fed Chair Powell confirms that Fed emphasis has shifted to inflationary risks. In testimony before a Senate committee yesterday, Fed Chair Powell waxed far more hawkish than the market anticipated on inflation concerns, saying outright that it is time to retire the word “transitory” regarding the description of inflation, that “the risk of higher inflation has increased” and that “the risk of persistent high inflation is also a major risk to getting back to such a labor market.“ (referring to the pre-pandemic labor market). Powell also pointed to the likelihood that the Fed would wind down Fed balance sheet expansion more quickly than previously anticipated: “perhaps a few months sooner”. In response, expectations for Fed rate hikes next year were jolted back higher, just after they had been jolted lower by the omicron covid variant news. Hot EU CPI numbers for November. Preliminary headline November EU CPI was out at 4.9% year-on-year, far above the 4.5% expected and the 4.1% in October and by far the highest inflation print since the launch of the euro. Core CPI rose to 2.6% year-on-year, above the 2.3% expected and the October level of 2.0%. This is also the highest level since the launch of the euro in 1999. Germany’s incoming chancellor Scholz speaks on inflation, compulsory covid vaccination. The political pressure on the ECB to act is ratcheting higher after incoming German chancellor Scholz said that action must be taken if inflation fails to drop, though he seemed now to accept the notion that inflation is linked to covid measures and the spike in energy prices. He also spoke yesterday in favor of mandatory covid shots. Salesforce shares down 6% on Q4 guidance. Investors are used to being spoiled by Salesforce with consistently beating analyst expectations, but last night the cloud application software company disappointed on Q4 guidance with revenue in line and adj EPS at $0.72-0.73 vs est. $0.82. The company also announced that Bret Taylor will become co-CEO next to founder Marc Benioff in a sign that the founder may soon step down like so many other technology founders in recent years. What are we watching next? Markets adjusting to new reality of a more hawkish Fed. In particular if the omicron variant of the covid virus proves a temporary distraction, global markets will need to adjust the major adjustment in the Federal Reserve’s focus and what that could mean for the US dollar and asset valuations ahead. Fed Chair Powell’s rhetoric yesterday likely mean a heightened reactivity to incoming data from here on out, all modulated in the very near term by headline risks in either direction on the omicron variant. The first major data points are the ISM Service index and November jobs report up on Friday. The Average Hourly Earnings could take over in importance from the payrolls change number if it shows more aggressive rises, as it seems clear that labor supply is the chief problem US companies face, as seen in record job availability and “quits” as workers leave jobs for greener pastures. ADP employment figures for November. With the US economy operating at full capacity according to estimates from CBO, continued strong job gains will add fuel to the “inflation fire”, so today’s ADP figures could more interest rates and equities. Economists are looking at 525K vs 571K in October which would be a significant two-month change for an economy that has closed the output gap, but on the other hand, the US economy is still short around 8.5mn jobs from current levels to where employment would have been if we did not have the pandemic. Earnings Watch – growth investors will have their eyes on Snowflake set to report after the market close with analysts expecting FY22 Q3 (ending 31 Oct) revenue growth of 92% y/y. Crowdstrike, being one of the fastest growing cyber security companies in the world, will also be key to watch today. Wednesday: Trip.com, Royal Bank of Canada, National Bank of Canada, Snowflake, Synopsys, Crowdstrike, Veeva Systems, Okta, Splunk, Elastic, Five Below Thursday: Canadian Imperial Bank of Commerce, Toronto-Dominion Bank, Cooper Cos, Marvell Technology, DocuSign, Ulta Beauty, Asana, Dollar General, Kroger Friday: Bank of Montreal Economic calendar highlights for today (times GMT) 0730 – Switzerland Nov. CPI 0815-0900 – Euro Zone Final Nov. Manufacturing PMI 1315 – US Nov. ADP Employment Change 1330 – Canada Oct. Building Permits 1445 – US Nov. Final Markit Manufacturing PMI 1500 – US Fed Chair Powell, Treasury Secretary Yellen to testify before House panel 1500 – US Nov. ISM Manufacturing 1530 – DOE’s Weekly Crude Oil and Fuel Inventories 1900 - Fed Beige Book 0030 – Australia Oct. Trade Balance   Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple Spotify Soundcloud Sticher
Intraday Market Analysis – USD Treads Water

Intraday Market Analysis – USD Treads Water

John Benjamin John Benjamin 01.12.2021 08:17
USDCAD seeks support The Canadian dollar edged higher after Q3’s GDP beat expectations. A bullish MA cross on the daily chart indicates a bullish bias in the US dollar’s favor. The break above the resistance at 1.2770 suggests that the bulls retain control of the direction. An overbought RSI has tempered the bullish fever temporarily, which may be an opportunity for buyers to accumulate. September’s high at 1.2900 is the next target. A bullish breakout could trigger an extended rally towards 1.3100. 1.2730 is now fresh support. AUDUSD falls towards 11-month low The Australian dollar bounced back on upbeat GDP in Q3. The break below 0.7170 has negated October’s rally. A bearish MA cross on the daily chart confirms that sentiment has turned sour. The Aussie is heading to October 2020’s low and the psychological level of 0.7000. An oversold RSI has prompted sellers to start to cover in that congestion area. 0.7190 is a resistance from the previous demand zone and trend followers are likely to sell a rebound. Buyers will need to take out those offers to ease the pressure. UK 100 to test daily support The FTSE 100 struggles with doubts about vaccine efficacy against the omicron variant. A drop below the daily support at 7190 triggered a sharp liquidation. Then a short-lived rebound has met stiff selling pressure at 7170. The index is hovering above the origin of the October rally at 6945. The bulls will need to clear the resistance before they could hope for a recovery. Otherwise, a bearish breakout would send the price to test the triple bottom (6830) from the daily timeframe. And that is the key to the uptrend’s integrity in the medium term.
Apple Stock Price and Forecast: AAPL still could reach $200 by year end

Apple Stock Price and Forecast: AAPL still could reach $200 by year end

FXStreet News FXStreet News 30.11.2021 17:39
Apple stock recovers ground on Monday as it rises 2%. AAPL shares close above $160 and just below all-time highs. Apple and equity indices see increased volatility as Omicron data awaited. After a freaky Friday, it was back to business as usual on Monday with equity markets putting in a solid start to the week. All those rookie traders who panicked on Friday were likely given a stern rebuke from returning senior traders who know that this market in 2021 is a one-way bet. That is thanks to the flow of money from the Fed juicing markets, a huge earnings potential from mega tech names and now a large buyback season as companies are past earnings blackouts. That is certainly what happened on Monday as volumes returned from Friday's reduced levels and markets got back to rallying. Goldman Sachs had said it does not see Omicron as a risk, and the South Africans appear to see this as an overreaction, with cases being reported as mild so far. Hopefully, this plays out to be true, but while it is hard to derail this 2021 bull, we could be in for some volatile weeks ahead. Apple (AAPL) stock news We await more concrete evidence on how sales look for Black Friday/Cyber Monday, but initial reports were not positive with overall online sales down on previous years. Wedbush though sees Apple selling 10 million iPhones over the Thanksgiving weekend and predicts 40 million iPhone sales between now and Christmas. It should be noted Wedbush is strongly bullish on Apple. They have been largely correct with that stance. Apple did receive some good news yesterday in the form of a price target raise from HSBC. Apart from that, it was relatively calm on the news front. Apple (AAPL) stock forecast AAPL stock really needs to break above $162 to hold Monday's gains and push on. Above there, volume thins out, so a move to all-time highs should be achievable. Failure though will likely see a move lower to $150. Volume is light until then apart from a slight spike with support at $157. AAPL 30-minute chart The daily chart shows the strong trend intact and the $157 support. Large volume support sits at $148. AAPL 1-day chart
The Fed Worries About Inflation. Should We Worry About Gold?

The Fed Worries About Inflation. Should We Worry About Gold?

Arkadiusz Sieron Arkadiusz Sieron 30.11.2021 16:43
Oops!... Gold did it again and declined below $1,800 last week. What’s happening in the gold market? Did you enjoy your roast turkey? I hope so, and I hope that its taste – and Thanksgiving in general – sweetened the recent declines in gold prices. As the chart below shows, the price of the yellow metal (London P.M. Fix) plunged from above $1,860 two weeks ago to above $1,780 last week. It has slightly rebounded since then, but, well, only slightly. What exactly happened? Funny thing, but actually nothing revolutionary. After all, the reappointment of the same man as the Fed Chair and the publication of the FOMC minutes from the meeting that had already took place earlier in November, were the highlights before Thanksgiving. Well, sometimes lack of changes is a change itself and information about the past can shed some light on the future. Let’s start from Powell’s renomination for the second term as the Federal Reserve chair. In response, the market bets that the Fed will hike interest rates more aggressively in 2022 have increased. At first glance, the strong investors’ reaction seems strange, given that the monetary policy shouldn’t radically change with Powell still at the helm. However, the continuation of Powell’s leadership implies that Lael Brainard, regarded as more dovish than Powell, won’t become the new Fed Chair – what was expected by some market participants. Hence, the dovish scenario won’t materialize, which is hawkish for gold. Just two days later, the FOMC revealed the minutes from its November meeting. The main message – the Fed decided to taper its quantitative easing – was, of course, included in the post-meeting statement. The minutes revealed, however, that the Fed officials had become more worried about inflation and had expressed a more hawkish stance than the statement suggested. First of all, we learned from the minutes that some central bankers opted for more aggressive tapering and a more flexible approach that would allow for adjustments in the face of high and persistent inflation: Some participants preferred a somewhat faster pace of reductions that would result in an earlier conclusion to net purchases (…). Some participants suggested that reducing the pace of net asset purchases by more than $15 billion each month could be warranted so that the Committee would be in a better position to make adjustments to the target range for the federal funds rate, particularly in light of inflation pressures. Various participants noted that the Committee should be prepared to adjust the pace of asset purchases and raise the target range for the federal funds rate sooner than participants currently anticipated if inflation continued to run higher than levels consistent with the Committee's objectives (…) participants noted that the Committee would not hesitate to take appropriate actions to address inflation pressures that posed risks to its longer-run price stability and employment objectives. This is because the FOMC members’ concerns about inflation strengthened. As we can read in the minutes, They indicated that their uncertainty regarding this assessment had increased. Many participants pointed to considerations that might suggest that elevated inflation could prove more persistent. These participants noted that average inflation already exceeded 2 percent when measured on a multiyear basis and cited a number of factors—such as businesses' enhanced scope to pass on higher costs to their customers, the possibility that nominal wage growth had become more sensitive to labor market pressures, or accommodative financial conditions—that might result in inflation continuing at elevated levels. Last but not least, the Fed officials also made other hawkish comments. Some participants argued that labor force participation would be lower than before the pandemic because of structural reasons. It implies that we are closer to reaching the “full employment”, so monetary policy could be less accommodative. What’s more, “some participants highlighted the fact that price increases had become more widespread”, while a couple of them noted possible signs that inflation expectations had become less anchored. So, the Fed officials’ worries about inflation strengthened. Implications for Gold What does it all imply for the gold market? Well, both the reappointment of Powell as the Fed Chair and the latest FOMC minutes were interpreted as hawkish, which pushed gold prices down. The more upbeat prospects for monetary tightening are clearly negative for the yellow metal, as they boosted the bond yields (see the chart below). This is something I warned investors against earlier this month. I wrote in the Fundamental Gold Report on November 16 that “when something reaches the bottom, it should rebound later. And if real interest rates start to rally, then gold could struggle again.” This is exactly what happened. Later, in the article on November 18, I added that “I will feel more confident about the strength of the recent rally when gold rises above $1,900”. Well, gold failed to do this, so I’m not particularly bullish on gold right now. We could say that gold did it again: it played with the hearts of gold bulls but got lost in the game, as it didn’t resist the pressure. Yes, the new Omicron variant of coronavirus has been noted, and uncertainty about this strain could provide short-term support for the yellow metal. However, it seems that the prospects of monetary tightening and higher real interest rates will continue to put downward pressure on gold prices. I agree, the rally looked refreshing after months of disappointment. However, it seems that we have to wait longer, possibly for the start of the Fed’s increasing the interest rates, to see gold truly shining. If you enjoyed today’s free gold report, we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today. If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care
Dogecoin price could see 400% gains if DOGE holders band together

Dogecoin price could see 400% gains if DOGE holders band together

FXStreet News FXStreet News 30.11.2021 17:39
Dogecoin price is moving sideways after a breakout from a descending triangle pattern. A potential 400% move to $1.08 will face obstacles up to $0.35, beyond which, DOGE should rally swiftly. On-chain metrics are hinting at an increase in large transactions and a paradigm shift in the nature of holders. Dogecoin price is at a crucial tipping point in its evolution with the potential for it to trigger a massive volatile move. Hurdles exist, however, that will make it difficult to reach its intended target, of a new all-time high. Dogecoin price at make or break levels Dogecoin price has set up three lower highs and two higher lows, which when connected using trend lines reveals a descending triangle. This technical formation forecasts a 361% upswing to $1.09, obtained by adding the distance between the first swing high and low to the breakout point at $0.24. DOGE breached the triangle’s hypotenuse on October 18 at $0.24. Since this point, the meme coin has struggled to move higher but failed. Interestingly, Dogecoin price has been moving sideways and has retested the $0.193 support level thrice since August 3 with the latest revisit on November 26. This created a triple-tap setup, a bullish technical formation that forecasts a reversal in the trend. Since Shiba Inu has stolen DOGE’s spotlight, things have been calm and consolidative for the original meme coin. If the buying pressure increases, however, pushing Dogecoin price to pierce through the $0.29 level to $0.35, and it produces a daily close above it, it will trigger an uptrend. In this scenario, it will allow market makers to collect the sell-stop liquidity resting above $0.35. This development will allow DOGE to create a platform for the next leg-up at $0.44. Clearing this hurdle will open the path to retest the current all-time high for Dogecoin price at $0.74. According to this prediction, DOGE could extend its bull rally to tag $1.09, its intended target. Due to the recent downswing, this upswing will represent a 400% gain from the current position at $0.22. DOGE/USDT 1-day chart As mentioned earlier, Shiba Inu seems to have siphoned off the hype, investors, and capital from Dogecoin, affecting its price, but things seem to be reverting, with some on-chain metrics suggesting a flip of the narrative is possible. On-chain metrics predict a bright future Looking at the transaction data tells a story about the nature of investors. Large transactions track transfers that are $100,000 or more. An increase in this metric serves as a proxy for institutions and their investment thesis. Over the past six months, the number of such transactions has increased by 70.7% from 1,570 to 2,680. This uptick in the metric suggests that high networth investors are starting to take interest in DOGE at the current price levels. DOGE large transaction chart While the above metric provides an insight into the potential investments, IntoTheBlock’s Global In/Out of the Money (GIOM) model shows where significant blockades are present. This fundamental index reveals that the DOGE will face formidable challenges ranging from $0.30 to $0.34. Here roughly 500,000 addresses that purchased 47 billion DOGE are “Out of the Money” and are likely to sell to breakeven, increasing the selling pressure. If buyers overcome this uptick in sell-side momentum and produce a daily close above $0.35, however, it will clear the daily demand mentioned above. This move will also open the path up for market makers to collect liquidity. All in all, this on-chain metric also promotes a bullish idea for DOGE with a contingency that the bullish momentum pushes the meme coin above $0.35. DOGE GIOM chart While the on-chain metrics described above serve as a tailwind for the bullish thesis, the new addresses joining the network add a dent to it. This metric shows that new users joining the Dogecoin network over the past six months have declined by 34.7% from 34,320 to 22,380. This reduction indicates that despite the capital inflows observed in the large transaction metric, a majority of investors are not yet interested in DOGE. Hence, this divergence between the new addresses and the large transaction chart paints indecision. DOGE new addresses chart The discrepancy noticed above can be explained in the holders’ chart which shows a paradigm shift. In November 2020, the composition of DOGE investors was 74.2% holders (1+ years), 18.6% Cruisers (1 month to 1 year) and 7.2% traders (less than a month). As of November 2021, this composition has changed and shows that cruisers are currently dominating with a 50.7% stake, while holders have dropped to 42.1%. This drastic decrease in the long-term holders suggests that these investors have been distributing their holdings over the past year ie., indicating increased sell-side pressure, which adds credence to DOGE’s lackluster performance over the period. In summary, if long-term holders stop offloading their DOGE holdings, investors can expect Dogecoin price to start inflating. DOGE Ownership chart On the other hand, if the selling pressure increases, knocking Dogecoin price below the $0.193 support level, it will lead to a retest of the descending triangle’s base at $0.16. If the bears produce a daily candlestick below this crucial barrier, it will open up DOGE to a massive 45% crash to $0.09, with a potential pitstop at $0.12.  
Bitcoin retreats, but interest in meta-currencies and ether persists

Bitcoin retreats, but interest in meta-currencies and ether persists

Alex Kuptsikevich Alex Kuptsikevich 30.11.2021 15:28
The cryptocurrency market remains in a state of apprehension, although the degree of it continues to weaken, as reflected in the rise in the relevant index from 33 yesterday to 40. The overall capitalisation of the cryptocurrency market, according to CoinMarketCap estimates, has fallen by 0.7% in the past 24 hours. However, the situation in the financial markets is firmly tied to the news of a new strain and therefore things could change very quickly. The main pressure during the last 24 hours was in the last hours, so it is worth being prepared for higher volatility later in the day. Fear in the financial markets, if entrenched, promises to seriously push down the price of bitcoin and ether, and through them spread negativity across the entire cryptocurrency market. Bitcoin is currently clinging to $56K. At 5% below, at 54 there is a signal support level, the capture of which could signal an acceleration of the sell-off. The opposite is also true, at 5% above the current price, at 59 lies an area of local highs. An ability to consolidate above this level would indicate strong buying demand. Despite Bitcoin's weak performance, which has been hovering around current levels for the past week and a half, the Ether remains up-trending. It has added 1.5% in the last 24 hours and over 6% in the last seven days. On the intraday charts, there is still a buying trend on the downtrends. In our view, this looks like a good trend. Bitcoin is often seen to preserve capital, while Ether and several other coins are working projects. In recent weeks, there has been an influx of interest in meta-currency projects, as crypto enthusiasts see a real business model behind them. All of this is bringing the crypto market closer to the stock market, only taking it to a new, less centralised, and regulated level. Everyone has their answer for good or bad. But it is almost certainly temporary.
EUR/USD: Sellers aligning around the 1.1300 level

EUR/USD: Sellers aligning around the 1.1300 level

FXStreet News FXStreet News 30.11.2021 14:58
Concerns about the Omicron covid variant weigh on the market’s sentiment. German inflation peaked at 6% YoY in November, according to preliminary estimates. EUR/USD has lost bullish strength and may soon resume its decline. The EUR/USD pair trades marginally lower on Monday around the 1.1280 price level after hitting an intraday high of 1.1313. The American dollar is slowly recovering some of the ground shed on Friday as the market’s mood improves. Asian stocks plummeted, although European indexes trade with modest gains, leading to an uptick in US futures. US Treasury yields are also recovering ground, with the yield on the 10-year note currently at 1.54%. Concerns about a new coronavirus variant firstly detected in South Africa spurred risk aversion on Friday and triggered some measures such as borders closures. Still, the variant, named Omicron, has already been detected in different European countries. So far, the WHO has called it a variant of concern, although there’s not much information about it. Pfizer is developing a study to understand whether their vaccine works against this new strain, while Moderna announced a new shot to combat it could be developed by early 2022. Meanwhile, European Central Bank (ECB) governing council member Pablo Hernandez de Cos said this Monday that European policymakers aim to avoid the premature tightening of the monetary policy, repeating that high inflation could be expected to be transitory, despite being stronger and more persistent than anticipated a few months ago. On the data front, the EU published the November Economic Sentiment, which came as expected at 117.5, down from the previous 118.6. Germany published the preliminary estimate of its November Consumer Price Index, which came in higher than anticipated, up by 0.3% in the month and 6% YoY. The US will publish October Pending Home Sales and the November Dallas Fed Manufacturing Business Index after Wall Street’s close. EUR/USD short-term technical outlook The EUR/USD pair was unable to advance beyond the 23.6% retracement of its November decline at 1.1305, the immediate resistance level. According to the daily chart, the latest advance seems corrective, as technical indicators bounced from extreme readings, now resuming their declines and hinting at a bearish continuation. The 20 SMA maintains its firmly bearish slope above the 38.2% retracement of the same decline, reflecting sellers’ strength. The 4-hour chart shows that the pair remains above a mildly bullish 20 SMA, while technical indicators retreat from oversold readings but remain within positive levels. The bearish case will be firmer on a break below 1.1245, the immediate support level. Support levels: 1.1245 1.1200 1.1165 Resistance levels: 1.1305 1.1340 1.1395
Intraday Market Analysis – USD Seeks Support - 30.11.2021

Intraday Market Analysis – USD Seeks Support - 30.11.2021

John Benjamin John Benjamin 30.11.2021 09:27
USDJPY tests daily support The yen consolidates gains after a drop in Japan’s unemployment rate. The pair has met stiff selling pressure at March 2017’s high (115.50). The drop below 114.80 then 114.00 has forced short-term positions to bail out, exacerbating the sell-off. The US dollar is hovering above the key daily support at 112.70. An oversold RSI has brought in some buying interest. 114.20 is a fresh resistance. On the downside, a breakout could dent the optimism in the medium-term and pave the way for a bearish reversal. NZDUSD breaks major support The New Zealand dollar remains under pressure as risk assets suffer from the omicron variant scare. A break below the daily support at 0.6860 has put the buy-side on the defense. Sentiment has become increasingly downbeat after the pair fell past last August’s low at 0.6805, which is a second line of defense on the daily chart. 0.6700 would be the next support. The RSI’s repeatedly oversold situation has caused a temporary rebound. But buyers will need to clear 0.6890 before they could turn the tables. US 30 sees limited rebound The Dow Jones 30 struggled to bounce as investors grew cautious. A break below the demand zone near 35500 has prompted the bulls to exit and reassess the short-term sentiment. An oversold RSI may cause a limited rebound as traders take profit. 35700 is now a resistance and the bears may see a rally as an opportunity to sell into strength. The demand zone between 34150 and 34400 from mid-October is a major floor to keep the uptrend intact. A deeper correction may send the index towards 33000.
Bitcoin, overcoming adversity

Bitcoin, overcoming adversity

Korbinian Koller Korbinian Koller 30.11.2021 10:47
Nevertheless, this might be over soon. Regulation might kill the majority of the expanded crypto world. Bitcoin might be banned, as it has been in the past in various countries. And yet, once fiat currency value implodes, bitcoin will be the last man standing. BTC in US-Dollar, Weekly Chart, last weeks call on the nose: Bitcoin in US-Dollar, weekly chart as of November 23rd, 2021. We posted the above weekly chart of bitcoin in last week’s chart book release. We anticipated a low-risk entry. BTC in US-Dollar, Weekly Chart, as planned: Bitcoin in US-Dollar, Weekly chart as of November 29th, 2021. Since then, prices have swiftly penetrated our entry zone. We caught two trades, a daily and a weekly time frame position. We posted these trades (entries and the partial exits), as usual, in real-time in our free Telegram channel.Furthermore, we employ a quad exit strategy that ensures instant risk elimination by quickly taking half of the position off. With entries of US$ 53,877 (daily timeframe trade) and US$ 54,000 (weekly timeframe trade), we were able, with first exits at US$ 54,591 and US$ 55,797, to not only eliminate risk but ensure profits on half of the positions of 1.33% and 3.33%. As well our next following targets have been reached! We took another 25% of position size out at US$ 55,811.6 and US$ 57,317.7, which booked us another 3.59% return on the daily position and 6.14% on the weekly position. The remaining 25% of position sizes on each trade we call runners. With stops set now at break-even entry levels, we can only produce additional winnings for each trade. Each trade had tight stops, assuring less than half a percent of risk per trade.   BTC in US-Dollar, Monthly Chart, modest odds for follow through: Bitcoin in US-Dollar, Monthly chart as of November 30th, 2021. The possible contrarian short signal on the monthly chart makes the weekly trades success probabilities for the runner smaller. Nevertheless, this quad exit approach allows for low-risk positioning versus endless mind chatter and debate since it is typical that different time frames show different long, short and sideways plays. Here, bitcoin again overcomes adversity. Typically, tight ranged instruments erase many trade opportunities for profit margins relating to commissions and risk to small. The earlier mentioned profit percent numbers are typical for bitcoins volatility and, as such, allow for risk reduction and short- to midterm profitability being more extensive than the average S&P500 annual return. Bitcoin, overcoming adversity: Bitcoin will be the cure to inflation damage for those you invested in it in a timely manner. Inflation is a creeping disease to money. Humans seem to have in history always procrastinated towards dangers of inflation, mostly since inflation treads slowly. Inflation also holds illusions supporting hope, hope that also fuels procrastination. While most who suffer under inflationary times think prices for goods went up, the reality is that monetary value went down. With this illusion, we hold on to stock portfolios seemingly rising, bonds, 401ks, and Roth IRAs trusting governments for the status quo to be protected or at least trouble to be temporary. Much more likely, most citizens are drained of their savings and cheated out of their retirements. At the end of such a monetary devaluation cycle, it will be the last time bitcoin will defend its place.  Doubt will finally vanish. Unfortunately, too late for those who did not educate themselves early enough to find a haven in this principled way to protect one’s wealth. 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. This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting. By Korbinian Koller|November 29th, 2021|Tags: Bitcoin, Bitcoin bounce, Bitcoin bullish, bitcoin consolidation, crypto analysis, Crypto Bull, crypto chartbook, DeFi, low risk, quad exit, technical analysis, trading education|0 Comments About the Author: Korbinian Koller Outstanding 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.
Stocks Will Rebound After Friday’s Rout, but Is the Correction Over?

Stocks Will Rebound After Friday’s Rout, but Is the Correction Over?

Paul Rejczak Paul Rejczak 29.11.2021 15:50
  The S&P 500 sold off on Friday after news about the new Covid variant. Today we will likely see a rebound but the short-term picture remains bearish. For in-depth technical analysis of various stocks and a recap of today's Stock Trading Alert we encourage you to watch   The S&P 500 index lost 2.27% on Friday, Nov. 26, as investors reacted to the news about new Covid variant detected in South Africa. The market broke below its recent local lows and it got away from the 4,700 level. The Friday’s trading action looked like a meaningful downward reversal. The nearest important support level is now at 4,550-4,580. On the other hand, the resistance level is at 4,650, marked by the recent local lows. The S&P 500 retraced most of its early November advance, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Nasdaq 100 Fell Closer to 16,000 Let’s take a look at the Nasdaq 100 chart. The technology index remained relatively stronger than the broad stock market on Friday, as it didn’t break below the early November local low. However, it got close to the 16,000 level and it retraced almost 800 points from its last Monday’s new record high of 16,764.85. The index closed above the 16,000 mark on Friday, as we can see on the daily chart: Apple Is At the Previous High Let’s take a look at biggest stock in the S&P 500 index: AAPL. Apple accelerated its uptrend a week ago on Monday and it reached the new record high of $165.70. However, it retraced almost all of its intraday advance that day. On Friday it got back to a potential support level of around $157. For now, it looks like a downward correction. Conclusion The S&P 500 index is expected to open 1.0% higher this morning, as global markets are shrugging off the new Covid fears. We will likely see an intraday consolidation following higher opening. The broad stock market index may enter a flat correction within a short-term downtrend. Here’s the breakdown: The S&P 500 traded within a short-term topping pattern last week and on Friday it suffered an over 2% sell-off. A speculative short position is still justified from the risk/reward perspective. We are expecting a 5% correction. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his 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. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members 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.
Can You Hear It? That’s the Crowd Booing Gold’s Downturn

Can You Hear It? That’s the Crowd Booing Gold’s Downturn

Przemysław Radomski Przemysław Radomski 29.11.2021 15:46
Even though the technicals have been predicting this for several months, people were still taken aback by gold’s fall — that’s why they are booing. While the precious metals received a round of applause for their performances in October, I warned on several occasions that the celebration was premature. And with gold, silver, and mining stocks resuming their 2021 downtrends, investors’ cheers have turned into jeers in short order. To explain, I warned previously that the GDX ETF could rally to or slightly above $35 (the senior miners reached this level intraday on Nov. 12, moving one cent above it). However, with the GDX ETF’s RSI (Relative Strength Index) signaling overbought conditions, I highlighted just how quickly the air often comes out of the balloon. For context, the blue vertical dashed lines below depict the sharp reversals that followed after the GDX ETF’s RSI approached or superseded 70. Why am I telling you this? To emphasize that what happened recently was neither random nor accidental. What you see is a true, short-term top that formed in tune with previous patterns. You also see a fake inverse head-and-shoulders formation that was invalidated. This means that the implications of what happened really are bearish. Let’s check why and how, in tune with the past patterns, the previous broad top really was. Please see below: The GDX ETF rallied on huge volume on Nov. 11 and there were only 4 cases in the recent past when we saw something like that after a visible short-term rally. In EACH of those 4 cases, GDX was after a sharp daily rally. In EACH of those 4 cases, GDX-based RSI indicator (upper part of the chart above) was trading close to 70. The rallies that immediately preceded these 4 cases: The July 27, 2020 session was immediately preceded by a 29-trading-day rally that took the GDX about 42% higher. It was 7 trading days before the final top (about 24% of time). The November 5, 2020 session was immediately preceded by a 5-trading-day rally that took the GDX about 14%-15% higher (the high-volume day / the top). It was 1 trading day before the final top (20% of time). The January 4, 2021 session was immediately preceded by a 26-trading-day rally that took the GDX about 17%-18% higher (the high-volume day / the top). It was 1 trading day before the final top (about 4% of time). The May 17, 2021 session was immediately preceded by a 52-trading-day rally that took the GDX about 30% higher. It was 7 trading days before the final top (about 13% of time). So, as you can see these sessions have even more in common than it seemed at the first sight. The sessions formed soon before the final tops (4% - 24% of time of the preceding rally before the final top), but the prices didn’t move much higher compared to how much they had already rallied before the high-volume sessions. Consequently, since history tends to rhyme, it would have been only natural for one to expect the GDX ETF to move a bit higher here (but not significantly so) and for one to assume that this move higher would take between additional 0 to 7 trading days (based on the Nov. 12 session). That’s what is wrote to my subscribers – to expect this kind of performance. The final top formed on Nov. 16 - 4 trading days after the huge-volume session, practically right in the middle of the expected 0-7 trading day range. Moreover, since the GDX topped very close to its 38.2% Fibonacci retracement, it seems that miners corrected “enough” for another huge downswing to materialize. Having said that, let’s move on to more recent developments. Gold price declined heavily recently and the same goes for the silver price. What’s more, the proxy for junior mining stocks - the GDXJ ETF (our short position) materially underperformed on Nov. 26 – after it declined by nearly 3x the percentage of the GDX ETF – and, in my opinion, more downside is likely to materialize over the medium term. The GDXJ ETF ended the Nov. 26 session slightly below its 50-day moving average, and the milestone is often a precursor to sharp drawdowns. That’s what happened in late February 2020 and also in mid-June 2021. Big declines followed in both cases. Moreover, with the S&P 500’s weakness on Nov. 26 mirroring the onslaught that unfolded in early 2020, the GDXJ ETF’s underperformance follows a familiar script. As a result, another ‘flash crash’ for the pair may unfold once again. Keep in mind, though: while asset prices often don’t move in a straight line, a bullish pause may ensue if/once gold reaches its previous lows. All in all, though, lower lows should confront the GDXJ ETF over the short term and my $35 price target remains up to date. As a reminder, that’s only an interim target, analogous to the late-Feb. 2020 low. Interestingly, it is the February 2020 low along with its late-March 2020 high that created this target. Also, the GDXJ/GDX ratio is falling once again. And with the price action implying that the GDXJ ETF is underperforming the GDX ETF, a drop below 1 isn’t beyond the realms of possibility. In fact, it’s quite likely. As such, this is why I’m shorting the junior mining stocks. For context, I think that gold, silver and the GDX ETF are all ripe for sharp re-ratings over the medium term. However, I think that the GDXJ ETF offers the best risk-reward proposition due to its propensity to materially underperform during bear markets in the general stock market. Finally, the HUI Index/gold ratio is also eliciting bearish signals. For example, I marked (with the shaded red boxes below) just how similar the current price action is to 2013. And back then, after a sharp decline was followed by a small corrective upswing before the plunge, the ratio’s current behavior mirrors its historical counterpart. What’s more, the end of the corrective upswing in 2013 occurred right before gold sunk to its previous lows (marked with red vertical dashed lines in the middle of the chart below). Thus, the ratio is already sending ominous warnings about the PMs’ future path. In addition, with the S&P 500 acting as the bearish canary in the coal mine, the ratio plunged in 2008 and 2020 when the general stock market tanked. Thus, if a similar event unfolds this time around, the gold miners’ sell-off could occur at a rapid pace. For more context, I wrote previously: A major breakdown occurred after the HUI Index/gold ratio sunk below its rising support line (the upward sloping black line on the right side of the chart above). Moreover, with the bearish milestone only achieved prior to gold’s crash in 2012-2013, the ratio’s breakdown in 2013 was the last chance to short the yellow metal at favorable prices. And while I’ve been warning about the ratio’s potential breakdown for weeks, the majority of precious metals investors are unaware of the metric and its implications. As a result, investors’ propensity to ‘buy the dip’ in gold will likely backfire over the medium term. In conclusion, the crowd has turned on the precious metals, and the narrative has shifted once again. However, despite all of the drama and the volatility that came with it, the technicals have been predicting this outcome for several months. And with the GDXJ ETF down by more than 20% YTD (as of the Nov. 26 close), the junior miners’ 2021 performance is far from critically-acclaimed. As a result, the chorus of boos will likely continue over the short- and/or 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, CFAFounder, 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.
Chart of the Week - Crude Oil Capex Collapse

Crude oil year-long uptrend questioned but not yet broken

Alex Kuptsikevich Alex Kuptsikevich 29.11.2021 15:13
Oil bounced back on Monday morning, adding 4% for Brent and 4.5% for WTI after a more than 11% plunge on Friday. At the end of last week, the collapse was triggered by reports of a new covid variant. Reduced liquidity due to the holidays and shortened trading hours in the US increased the fluctuation amplitude. The liquidation of long positions brought Brent back to the level of the 200-day moving average, a critical support line for the uptrend. A consolidation below this level is usually seen as a signal of a long-term trend change. Oil's strong uptrend and staying above the 200-day moving average line has come into question on reports that the variant detected is resistant against existing vaccines. These fears subsided somewhat over the weekend, accounting for a pullback of a third from Friday's failure. Investors are now waiting for news and clarifications from virologists and politicians to finally decide whether the current price is attractive to buy or whether we could see an even bigger discount in the coming weeks. The technical analysis so far is on the side of the bulls. The oil price correction over the last month fits into traditional patterns if we consider the movement from November 2020 to October 2021 as one market impulse. The 200-day moving average has so far acted as support. Oil now looks less red-hot than at the end of October, having cleared the way for a new upward momentum and should return to multi-year highs by the end of this year.
Intraday Market Analysis – Yen’s Rally Gains Traction

Intraday Market Analysis – Yen’s Rally Gains Traction

John Benjamin John Benjamin 29.11.2021 10:01
EURJPY breaks double bottom The safe-haven Japanese yen soars on news of a vaccine-resistant covid variant. A bearish MA cross on the daily chart indicates weakness in the euro’s previous rebound. The pair has closed below last September’s low at 127.90, a major floor to keep price action afloat in the medium term. This is a bearish signal that the sell-off is yet to end with 127.00 as the next support. The RSI’s double bottom in the oversold area may attract some buying interest. However, the bulls will need to lift 129.50 before a reversal could take shape. GBPUSD struggles to bounce back The pound continues on its way down against the US dollar over divergent monetary policy. The pair is hovering near a 12-month low around 1.3280. Sentiment remains bearish after a failed rebound above 1.3420. A bullish RSI divergence suggests a deceleration in the downward momentum. 1.3390 is the first hurdle ahead. Its breach would prompt the short side to cover and open the door to the daily resistance at 1.3510. Otherwise, a bearish breakout would send the price to 1.3200. GER 40 to test major floor The Dax 40 plunged as investors fret that new lockdowns could wreck the recovery. The gap below 15760 has forced leveraged buyers to bail out, stirring up volatility in the process. The momentum is typical of a catalyst-driven sell-off. Below 15150 the index is testing the psychological level of 15000. The RSI’s oversold situation has attracted a ‘buying-the-dips’ crowd in the demand zone. Further down, 14820 is a key floor to maintain the uptrend. 15530 has become the closest resistance in case of a rebound.
Ether is once again a step away from historic highs

Ether is once again a step away from historic highs

Alex Kuptsikevich Alex Kuptsikevich 01.12.2021 11:50
The cryptocurrency market is developing its growth, which is now also supported by Bitcoin. In the last 24 hours, the capitalisation of all cryptocurrencies has risen by 2.7% to 2.66 trillion, while the first cryptocurrency has risen by 0.8%. At the same time, it is important to note the continued pressure on BTCUSD, which is being kept off the ground by financial market worries. On Tuesday, Powell acknowledged the inflation problem in the US and suggested abandoning the term "transitory", which he coined at the start of the year. For the markets, this means that the world's top central bank has stepped up the inflation warpath and become more hawkish, promising a higher degree of volatility for traditional markets. Among cryptocurrencies, this promises to have the greatest impact on bitcoin as it is the most populated by financial institutions. Likely due to volatility and Bitcoin's inability to move to sustained growth, the cryptocurrency Fear and Greed Index has once again been pushed down 6 points to 34. However, note that ETHUSD is up almost 12% in the last seven days, continuing to climb the ladder again step by step. Its current level of $4720 is an arm's length away from the historical highs set in November at $4840 and has been gaining steadily for the fourth day in a row. Here we see a classic market pattern: consolidation at an important level in September, a breakout and subsequent steady and methodical buying throughout October and the first half of November, and finally a period of correction and cooling off in November while maintaining significant levels. Now, the correction and consolidation look complete, and the ether looks set to rewrite historical highs. Among the fundamental global drivers behind this sentiment are improvements in the network itself and its applicability to working projects, as well as the balance between supply and demand for coins. In choosing between the leading currencies, the cryptocurrency world is betting on Ether as the future of cryptocurrency as a business, with bitcoin still being a good savings vehicle, but now becoming vulnerable to the turmoil of the traditional financial.
Stocks - More Volatility Following Hawkish Powell

Stocks - More Volatility Following Hawkish Powell

Paul Rejczak Paul Rejczak 01.12.2021 15:12
  Stock prices were volatile on Tuesday, as the S&P 500 fell to the new local low. But today it may rebound again. but will the downtrend continue? For in-depth technical analysis of various stocks and a recap of today's Stock Trading Alert we encourage you to watch   The S&P 500 index lost 1.90% on Tuesday, Nov. 30. The market went lower following testimonies from the Fed Chair Powell and the Treasury Secretary Yellen. On Monday the broad stock market retraced more than a half of its Friday’s sell-off, but yesterday it fell to the new local low of 4,560.00. Today it is expected to open 1.0% higher again, so we will see more short-term volatility. The nearest important support level is at 4,560-4,600. On the other hand, the resistance level is at 4,650, marked by the recent local lows. The S&P 500 retraced most of its early November advance, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Nasdaq 100 Remains Relatively Stronger Let’s take a look at the Nasdaq 100 chart. The technology index remained relatively stronger than the broad stock market yesterday, as it didn’t extend a short-term downtrend. It remained above its Friday’s local low and above the 16,000 mark, as we can see on the daily chart: Apple Got Close to the Record High Again Let’s take a look at biggest stock in the S&P 500 index: AAPL. Apple accelerated its uptrend a week ago and it reached the new record high of $165.70. However, it retraced almost all of its intraday advance that day. On Friday it got back to a support level of around $157. And yesterday it got back to the all-time high, as it closed slightly above the $165 price level. Conclusion The S&P 500 index is expected to open 1.0% higher this morning following an overnight rebound from the yesterday’s new short-term low. We will likely see an intraday consolidation following a higher opening. And for now, it looks like a consolidation within a short-term downtrend. Here’s the breakdown: The S&P 500 extended its short-term downtrend yesterday, but today it is expected to open higher again. A speculative short position is still justified from the risk/reward perspective. We are expecting a 5% correction. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his 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. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members 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.
Don’t Get Yourself Into a Bull Trap With Gold

Don’t Get Yourself Into a Bull Trap With Gold

Finance Press Release Finance Press Release 01.12.2021 15:40
You see a commodity going down, then it reverses and starts teasing you with an upward move… only to end up declining further. Is this the case now?I started yesterday’s analysis with a question that I then replied to, explaining why I thought that it wasn’t necessarily a good idea take profits from one’s short positions at this time, as the corrective upswings could be nothing to write home about, and that it might not be that easy to get back in the short positions at better (higher) prices.Well, yesterday’s session showed exactly what I meant, and the 4-hour chart found below provides the details.The upper part of the chart features the GDX ETF (proxy for gold mining stocks), and the lower part thereof features the GLD ETF (proxy for gold price itself.)First of all, gold stocks were first to break below their rising support line – that happened a couple of days ago. Gold moved decisively below its rising support line only yesterday. This emphasizes that gold stocks are leading gold lower. This, in turn, is a bearish confirmation in itself, as that’s what tends to happen at the beginning of a bigger move lower.The way both markets performed yesterday was also quite interesting.In case of mining stocks, the intraday rally took GDX just slightly above its rising support line and then miners moved back down in a flash. In other words, if anyone had exited their short positions in order to re-enter them at higher prices, they had very little time to do so, and the most realistic version of this scenario is that they ended the session while missing the 1% decline in the GDX. The silver price was down by just 4 cents, but still, it was a move lower despite an intraday rally.In the case of GLD, one might have thought that gold was bound to rally since it stopped at its rising support line (based on the Sep. and Nov. lows). And gold even rallied by about $20 intraday… Only to decline more and end yesterday’s session lower.That was not a reversal. That was a bull trap.And the most bearish thing about yesterday’s decline – and weakness? It happened while the USD Index moved lower during the day. The USDX ended the day 0.33 lower, which “should have” triggered gold’s rally. Instead, gold declined, proving that it really wants to move lower. And suggesting that profits from one’s short positions in mining stocks are likely to become bigger.Don’t get me wrong – I do think that we’ll see a counter-trend upswing, but it’s just not that likely that we’ll see it right now. For quite some time, I’ve been repeating that it’s likely that we’ll see some kind of corrective upswing once gold moves back to its yearly lows, and this remains to be the case.Then, after the rebound, gold is likely to decline once again, perhaps to its final lows (for many years to come).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, CFAFounder, 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.
It‘s the Fed, Not Omicron

It‘s the Fed, Not Omicron

Monica Kingsley Monica Kingsley 01.12.2021 15:51
S&P 500 plunged on accelerated tapering intentions, and much of the risk-on sectors and commodities followed – even precious metals declined a little in sympathy. But where is the larger reasoning? If the Fed truly intends to taper faster in its belated fight against inflation, it‘s a question of not only markets throwing a tantrum, but of the real economy keeling over. Inflation is a serious problem, including a political one, and here come the Omicron demand-choking effects if the fear card gets played too hard. Thankfully, reports indicate that the alleged variant is merely more contagious and having comparatively milder effects. That‘s how it is usually turns out with mutations by the way – remember that before the number 30 frequently thrown around, shuts off thinking including in the markets. The world‘s economic activity didn‘t come to a standstill with Delta, and it appears such a policy route won‘t be taken with Omicron either. That‘s why I was telling you on Monday that any inflation reprieve the scary news buys, would likely turn out only temporary. Unless the Fed decides to make it permanent, which is what I am doubting based on its track record and the more rocky landscape ahead that I talked in mid Nov extensive article. For now, the Fed‘s pressure is real, and premarket rallies that are sold into during regular sessions, must be viewed with suspicion. It‘s not that we‘ve flipped into a (secular) bear market, but the correction is palpable and real – I‘m not looking for the habitual Santa Claus rally this year. Big picture, the precious metals resilience is a good sign, and return of cyclicals with commodities is the all-clear signal that I‘m however not expecting this or next week. Cryptos resilience is encouraging as much as various stock market ratios (XLY:XLP offers a more bullish view than XLF:XLU – I‘ve been covering these helpful metrics quite often through 2020), which makes me think we‘re in mostly sideways markets for now. At least as I told you on Monday, the (rational / irrational) fears started getting ignored by the markets, meaning we‘re on a gradually improving track. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 isn‘t out of the hot water, and it‘s still just a close in the 4670s that would mark the end of peril to me. The financial sector has to turn, strength has to come to smallcaps simultaneously – the 500-strong index is still performing in a too risk-off way. Credit Markets Positive HYG divergence isn‘t enough – the broad underperformance of S&P 500 must be reversed to establish stronger stock market foundations. Powell just added to the risk-off posture in bonds, and I‘m looking keenly at the expected, ensuing (in)ability to absorb less loose monetary conditions. Gold, Silver and Miners Precious metals are acting weak, but not overly weak. When the markets get fed up with having to bear the tapering / tightening (real and verbal) interventions, it would be gold and silver that rise first. Crude Oil Crude oil turned out indeed weakest of the weak when fear overruled everything. Capitulation is a process, and it‘s quite underway already in my view. The way black gold crashed, the way it would rise once the sky meaningfully clears. Copper Copper weakness is what I don‘t trust here as other base metals did quite better. But again, yesterday was an overreaction to the Fed news that it would discuss speeding up taper. Just discuss. Bitcoin and Ethereum Bitcoin and Ethereum holding relatively high ground, is a reason to think the risk-on scales would tip positive. While BTC is still correcting, I‘m looking for it to join Ethereum. Summary S&P 500, risk-on and commodities aren‘t yet on solid footing as Powell pronouncements outweighed the dissipating corona uncertainty. Either way, the effects on inflation would be rather temporary – inflation indicators clearly haven‘t topped yet as the implicit Fed admission of dropping the word temporary confirms. Once the tightening mirage gets a reality check in the economy and markets, look for precious metals to truly shine. Thank you for having read today‘s free analysis, which is available in full 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 five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
December Monthly

December Monthly

Marc Chandler Marc Chandler 02.12.2021 15:00
December 01, 2021  $USD, Macro The pandemic is still with us as the year winds down and has not yet become endemic, like the seasonal flu.  Even before the new Omicron variant was sequenced, Europe was being particularly hard hit, and social restrictions, especially among the unvaccinated, were spurring social strife.  US cases, notably in the Midwest, were rising, and there is fear that it is 4-6 weeks behind Europe in experiencing the surge.  Whatever herd immunity is, it has not been achieved.  Moreover, despite plenty of vaccines in high-income countries, inoculation efforts in many low-income countries won't begin in earnest until next year.   That said, the new variant has injected a new element into the mix, and it is with a heightened degree of uncertainty that we share our December outlook.  Given the unknowns, policymakers can choose the kind of error they are willing to make. They are trying to minimize their maximum regret.  The utmost regret is that the mutation is dangerous and renders the existing vaccines and treatment significantly less effective.  This will leave them vulnerable to accusations of over-reacting if the Omicron turns out to be a contagious but less deadly variation.   Meanwhile, there has been some relief to the supply chain disruptions.  Covid-related factory closures in Asia, the energy shortage, and port congestion are easing. Large US retailers have stocked up for the holiday shopping season, some of which chartered their own ships to ensure delivery. There are also preliminary signs that the semiconductor chip shortage may be past its worst.  Indeed, the recovery of the auto sector and rebuilding of inventories will help extend the economic expansion well into next year, even though fiscal and monetary policy are less supportive for most high-income countries.  The flash November US manufacturing PMI saw supplier delivery delays fall to six-month lows.   We assume that the US macabre debt ceiling ritual will not lead to a default, and even though it distorted some bill auctions, some resolution is highly probable.  The debate over the Build Back Better initiative, approved by the House of Representatives, will likely be scaled back by moderate Democratic Senators and Republicans.  Besides assessing the risks posed by the new variant, the focus in December is back on monetary policy.  Four large central banks stand out.  The Chinese economy has slowed the People's Bank of China quarterly monetary report modified language that signals more monetary support may be forthcoming.  Many observers see another reduction in reserve requirements as a reasonable step.  Unlike in the US and Europe, which saw bank lending dry-up in the housing market crisis (2008-2009), Beijing is pressing state-owned banks to maintain lending, including the property sector.   The Federal Reserve meets on December 15.  There are two key issues.  First, we expect the FOMC to accelerate the pace of tapering to allow it to have the option to raise rates in Q2 22.  The Fed's commitment to the sequence (tapering, hikes, letting balance sheet run-off) and the current pace of tapering deny the central bank the needed flexibility.  The November CPI will be reported on December 10.  The headline will likely rise to around 6.7%, while the core rate may approach 5%.  Second, the new "Summary of Economic Projections" will probably show more Fed officials seeing the need to hike rates in 2022.  In September, only half did.  The rhetoric of the Fed's leadership has changed.  It will not refer to inflation as transitory and is signaling its intention to act.  The European Central Bank and the Bank of England meet the day after the FOMC.  The ECB staff will update its forecasts, and the key here is where it sees inflation at the end of the forecasting period.  In September, it anticipated that CPI would be at 1.5% at the end of 2023.  Some ECB members argued it was too low.   It may be revised higher, but the key for the policy outlook is whether it is above the 2% target.  We doubt that this will be the case.  While the ECB will likely announce that it intends on respecting the current end of the Pandemic Emergency Purchase Program next March, its QE will persist. The pre-crisis Asset Purchase Program is expected to continue and perhaps even expand in Q2 22.  The "modalities" of the post-emergency bond-buying program, size, duration, and flexibility (self-imposed limits) will be debated between the hawks and doves.  With eurozone inflation approaching 5% and Germany CPI at 6%, the hard-money camp will have a new ally at the German Finance Ministry as the FDP leader Linder takes the post.  On the other hand, the Social Democrats will name a Weidmann's replacement at the head of the Bundesbank, and nearly anyone will be less hawkish.   While we correctly anticipated that the Bank of England would defy market expectations and stand pat in November, the December meeting is trickier.  The decision could ultimately turn on the next employment and CPI reports due 1-2 days before the BOE meeting.  The risk is that inflation will continue to accelerate into early next year and that the labor market is healing after the furlough program ended in September.  On balance, we suspect it will wait until next year to hike rates and finish its bonds purchases next month as planned.   Having been caught wrong-footed in November, many market participants are reluctant to be bitten by the same dog twice. As a result, the swaps market appears to be rising in about a 35% chance of a 15 bp move that would bring the base rate up to 25 bp.  Sterling dropped almost 1.4% (or nearly two cents) on November 4, the most since September 2020 when the BOE failed to deliver the hike that the market thought the BOE had signaled.   The combination of a strong dollar and the Fed tapering weighed emerging market currencies as a whole.  The JP Morgan Emerging Market Currency Index fell by about 4.5% in November, its third consecutive monthly decline, bringing the year-to-date loss to almost 10%.  It fell roughly 5.7% in 2020.  Turkey took the cake, though, with the lira falling nearly 30% on the month.  It had depreciated by 15% in the first ten months of the year.  This follows a 20% depreciation last year.  Ten years ago, a dollar would buy about 1.9 lira.  Now it can buy more than 13 lira.  The euro's weakness was a drag, and the geopolitical developments (e.g., Ukraine, Belarus) weighed on central European currencies. The central bank of Hungary turned more aggressive by hiking the one-week deposit rate by 110 bp (in two steps) after the 30 bp hike in the base rate failed to have much impact.  The forint's 3.1% loss was the most among EU members.   Colombian peso was the weakest currency in Latam, depreciating by almost 5%. It was not rewarded for delivering a larger than expected 50 bp rate hike in late October.  Bannockburn's GDP-weighted global currency index (BWCI) fell by nearly 1% in November, the largest monthly decline since June.  It reflected the decline of the world's largest currencies against the dollar.  Three currencies in the index proved resilient  On the GDP-weighted basis, China has immense gravity, with a 21.8% weighting (the six largest EM economies, including China, account for a 32.5% of the BWCI). It appreciated by about two-thirds of a percent. The Brazilian real managed to rise (~0.25%) too.  Since the day before the Omicron variant was sequenced, the Japanese yen gained a little more than 2%, reversing the earlier decline that had brought it to four-year lows.  It rose by  0.7% in November, making it the strongest currency in the index.  Among the major currencies, the Australian dollar fell the most, declining about 5.2%.  The Canadian dollar was next, with around a 3% loss.   As it turns out, the dollar (Dollar Index) recorded its low for the year as shocking events were unfolding in Washington on January 6.  The bottomed against the yen and euro the same day.   The greenback did not bottom against the Australian dollar until February, but it took it until early June to put in a low against sterling and the Canadian dollar.  The BWCI peaked in early June and, by the end of last month, had retreated by about 2.7%.  We suspect it may decline by another 2%, which would return it the levels of late 2019.  That, in turn, implies the risk of a stronger dollar into the first part of next year.     Dollar:  The jump in US CPI to above 6%, and a strong sense that it is not the peak, spurred speculation that the Federal Reserve would likely accelerate the pace of tapering at the December meeting. Several Fed officials seemed sympathetic, including San Francisco President Daly, who is perceived to be a dove. The minutes of the November meeting underscored the central bank's flexibility over the pace of tapering.  At the same time, most of the high-frequency data for October came in stronger than expected, lending credence to ideas that after a disappointing Q3, the world's largest economy is accelerating again in Q4.  The divergence of monetary policy and the subsequent widening interest rate differentials is the primary driver of expectations for dollar appreciation against the euro and yen.  The market had been leaning toward three rates hikes in 2022 before news of the new Covid mutation emerged and trimmed the odds.  Powell was renominated for a second term at the helm of the Federal Reserve, Brainard was nominated to be Vice-Chairman.  There is still the Vice-Chair for supervision and an empty governor seat for President to Biden to fill.  In addition to the changes in leadership, the rotation of the voting members of the FOMC brings in a somewhat more hawkish bias next year.   Euro:  In contrast with the US, eurozone growth is set to slow in Q4. After two quarters that growth exceeded 2% quarter-over-quarter, growth is likely to moderate to below 1% in Q4 21 and Q1 22.  Food and energy are driving inflation higher.  The EC continues to negotiate with the UK over changes to the Northern Ireland Protocol.  The dispute over fishing licenses and migrant crossing of the channel are also unresolved sources of tension with the UK. Tensions between the EC and Poland/Hungary over the rule of law, judicial independence, and civil liberties have also not been settled.  As was the case in the spring, Russia's troop and artillery movement threatened Ukraine, though the tension on the Poland/Belarus border has eased.  The ECB's leadership continues to maintain the price pressures are related to the unusual set of circumstances but are ultimately temporary.  Its December 16 meeting, the last one before Bundesbank President Weidmann steps down, is critical. In addition to confirming the end of the Pandemic Emergency Purchase Program in March 2022, and the expansion of the Asset Purchase Program, the ECB staff will update its inflation forecasts.  The focus here is on the 2023 CPI projection of 1.5%.  There was a push back against it in September, and a slight upward revision is likely. Nevertheless, it will probably remain below the 2% target.  The swaps market is pricing in a 25 bp hike in 2023.   (November indicative closing prices, previous in parentheses)   Spot: $1.1335 ($1.1560) Median Bloomberg One-month Forecast $1.1375 ($1.1579)  One-month forward  $1.1350 ($1.1568)    One-month implied vol  7.1%  (5.1%)         Japanese Yen:  Japan has a new prime minister who has put together a large fiscal stimulus package that will help fuel the economic recovery that had begun getting traction since the formal state of emergency was lifted at the end of September.  After a frustratingly slow start, the inoculation efforts have started bearing fruit, with vaccination rates surpassing the US and many European countries.  Unlike most other high-income countries, Japan continues to experience deflationary pressures.  Food and energy prices may be concealing it in the CPI measure, but the GDP deflator in Q2 and Q3 was  -1.1%. However, the BOJ does not seem inclined to take additional measures and has reduced its equity and bond-buying efforts.  The exchange rate remains sensitive to the movement of the US 10-year note yield, which has chopped mostly between 1.50% and 1.70%. With a couple of exceptions in both directions, the greenback has traded in a JPY113-JPY115 range.  The emergence of the new Covid mutation turned the dollar back after threatening to break higher.  A convincing move above the JPY115.50 area would likely coincide with higher US rates and initially target the JPY118 area.    Spot: JPY113.10 (JPY113.95)       Median Bloomberg One-month Forecast JPY113.30 (JPY112.98)      One-month forward JPY113.00 (JPY113.90)    One-month implied vol  8.2% (6.4%)   British Pound:  Sterling never fully recovered from disappointment that the Bank of England did not hike rates in early November.  Market participants had understood the hawkish rhetoric, including by Governor Bailey, to signal a hike.  The implied yield of the December 2021 short-sterling interest rate futures plummeted by 30 bp by the end of the month, and sterling has not seen $1.36, let alone $1.37, since then.  Indeed, sterling chopped lower and recorded new lows for the year in late November near $1.3200.  Growth in the UK peaked in Q2 at 5.5% as it recovered from the Q1 contraction.  It slowed to a 1.3% pace in Q3 and looks to be slowing a bit more here in Q4.  The petty corruption scandals and ill-conceived speeches by Prime Minister Johnson have seen Labour move ahead in some recent polls.  An election does not need to be called until May 2024, but the flagging support may spur a cabinet reshuffle.  The next important chart point is not until around $1.3165 and then the $1.30 area, which holds primarily psychological significance.       Spot: $1.3300 ($1.3682)    Median Bloomberg One-month Forecast $1.3375 ($1.3691)  One-month forward $1.3315 ($1.3680)   One-month implied vol 7.5% (6.8%)      Canadian Dollar:  The Canadian dollar appreciated by almost 2.4% in October and gave it all back, plus some in November.  Indeed, the loss was sufficient to push it fractionally lower for the year (-0.4%), though it remains the best performing major currency against the US dollar.   The three major drivers of the exchange rate moved against the Canadian dollar last month.  First, its two-year premium over the US narrowed by 17 bp, the most in four years.  Second, the price of January WTI tumbled by around 18.2%.  Commodity prices fell more broadly, and the CRB Index snapped a seven-month rally with a 7.8% decline.  Third, the risk appetites faltered is reflected in the equity markets. The Delta Wave coupled with the new variant may disrupt growth.  Still, the swaps market has a little more than two hikes discounted over the next six months.   The government is winding down its emergency fiscal measures, but the spring budget and election promises mean that the fiscal consolidation next year will be soft.     Spot: CAD1.2775 (CAD 1.2388)  Median Bloomberg One-month Forecast CAD1.2685 (CAD1.2395) One-month forward CAD1.2770 (CAD1.2389)    One-month implied vol 7.2% (6.2%)      Australian Dollar:  The Australian dollar fell by more than 5% last month, slightly less than it did in March 2020.  It did not have an advancing week in November after rallying every week in October.  Australia's two-year premium over the US was chopped to less than 10 bp in November from nearly 28 bp at the end of October.  The Reserve Bank of Australia pushed back against aggressive rate hike speculation.   The unexpected loss of jobs in October for the third consecutive month took a toll on the Australian dollar, which proceeded to trend lower and recorded the low for the year on November 30, slightly below $0.7065.  A break of $0.7050 would initially target $0.7000, but convincing penetration could spur another 2-2.5-cent drop.  The 60-day rolling correlation between- changes in the Australian dollar and the CRB commodity index weakened from over 0.6% in October to below 0.4% in November. The correlation had begun recovering as the month drew to a close.       Spot:  $0.7125 ($0.7518)        Median Bloomberg One-Month Forecast $0.7195 ($0.7409)      One-month forward  $0.7135 ($0.7525)     One-month implied vol 9.7%  (9.1%)        Mexican Peso:  The broadly stronger US dollar and the prospects of more accelerated tapering weighed on emerging market currencies in November, but domestic considerations also weighed on the peso.   The Mexican peso fell by around 4.1%, the most since March 2020.  The economy unexpectedly contracted by 0.4% in Q3.  There is little fiscal support to speak of, while monetary policy is becoming less accommodative too slowly compared with some other emerging markets, such as Brazil.  Price pressures are still accelerating, and the bi-weekly CPI rose above 7% in mid-November. The swaps market discounts nearly a 25 bp hike a month for the next six months.  The government's policies, especially in the energy and service sectors, are not attractive to investors.  President AMLO dealt another blow to investor confidence by retracting the appointment of former Finance Minister Herrera for his deputy to head up the central bank starting in January.  This is seen potentially undermining one of the most credible institutions in Mexico.  Lastly, Mexico's trade balance has deteriorated sharply in recent months and through October has recorded an average monthly trade deficit of nearly $1.2 bln this year.  In the same period, in 2020, it enjoyed an average monthly surplus of almost $2.5 bln, and in the first ten months of 2019, the average monthly trade surplus was a little more than $150 mln.     Spot: MXN21.46 (MXN20.56)   Median Bloomberg One-Month Forecast  MXN21.23 (MXN20.42)   One-month forward  MXN21.60 (MXN20.65)     One-month implied vol 14.9% (9.6%)      Chinese Yuan:  The Chinese yuan has been remarkably stable against the US dollar, and given the greenback's strength, it means the yuan has appreciated sharply on a trade-weighted basis.  Going into the last month of the year, the yuan's 2.6% gain this year is the best in the world.  Chinese officials have signaled their displeasure with what it sees as a one-way market.  At best, it has orchestrated a broadly sideways exchange rate against the dollar, mainly between CNY6.37 and CNY6.40. The lower end of the dollar's range was under pressure as November drew to a close.   Even though the Chinese economy is likely to accelerate from the near-stagnation in Q3 (0.2% quarter-over-quarter GDP), it remains sufficiently weak that the PBOC is expected to consider new stimulative measures.  It last reduced reserves requirements in July, and this seems to be the preferred avenue rather than rate cuts.  Yet, given the interest rate premium (the 10-year yield is around 2.85%), record trade surpluses ($84.5 bln in October), portfolio inflows, and limited outflows, one would normally expect a stronger upward pressure on the exchange rate.    Spot: CNY6.3645 (CNY6.4055) Median Bloomberg One-month Forecast  CNY6.38 (CNY6.4430)  One-month forward CNY6.3860 (CNY6.4230)    One-month implied vol  3.5% (3.5%)    Disclaimer
Sundial Growers News and Forecast: SNDL back up in premarket after devastating 9% drop

Sundial Growers News and Forecast: SNDL back up in premarket after devastating 9% drop

FXStreet News FXStreet News 02.12.2021 17:11
SNDL shares fell 9% on Wednesday as the entire sector becomes less attractive. Sundial is still up 19% YTD but down 41% since November 12 high. Indiana and Germany mull further legalization. Sundial Growers (SNDL) stock dropped another 9% to $0.5655 on Wednesday. This arrives after the 2.1% fall in Tuesday's session. SNDL stock has dropped 41% since mid-November's range high, which was a product of better than expected Q3 earnings. The cannabis grower and distributor saw its stock rebound 2.7% to $0.5810 in Thursday's premarket. Sundial Growers (SNDL) Stock News: Indiana, Germany next on the list for possible legalization The Indiana Democratic Party has announced its intent to push for the legalization of cannabis on both the medical and recreational front. As such, it is holding the first of several community meetings in the Midwest state next week to receive public input. Germany's new coalitional government has signalled in recent days that it intends to legalize cannabis for recreational use. The central European country is already the world's largest medical marijuana market. Kentucky State Rep. Nima Kulkarni (D) has filed bills that would work to legalize cannabis in her state. The first bill would decriminalize the growing and sale of small amounts of marijuana. The second bill would allow those over 21 years of age to possess, buy or sell up to one ounce of marijuana and grow as many as five plants for personal use. There is no word yet on whether or not the newfound takeover king of Canada's cannabis industry will announce yet another acquisition. Since the beginning of the year, Sundial has used its own shares to buy up multiple assets. It began the year by acquiring cannabis retailer Inner Spirit for C$131 million. It bought Canadian liquor distributor Alcanna for C$346 million. Alcanna owns two-thirds of Nova Cannabis, a retail operation that should drive future revenue growth. Nova Cannabis owns more than 60 cannabis retail shops in Canada. With more than C$500 million still on its balance sheet, many observers think the shopping spree is not yet over as Sundial seeks to grow itself via acquisition. If Sundial again issued new shares to pay for another acquisition instead of its cash, then-current investors would be even further diluted. This concern may be driving the current sell-off in the share price. SNDL key statistics Market Cap $1.2 billion Price/Earnings 5 Price/Sales 25 Price/Book 1 Enterprise Value $737 million Operating Margin -142% Profit Margin 0% 52-week high $3.96 52-week low $0.42 Short Interest 15% Average Wall Street Rating and Price Target Hold, $1.01   Sundial Growers (SNDL) Stock Forecast: Stock price headed to $0.50 On Wednesday, SNDL shares broke through long-term support from October 6 just above $0.61. This means the stock has little if any support until $0.50. From Wednesday's story: "If SNDL breaks this level to close below $0.60, then $0.50 is the next support. The stock danced around this level from December 2019 through January 2020. Tuesday saw a brief low below October 6, so expect the break lower to happen again." Though the stock is up about 2.7% in the premarket on Thursday, FXStreet expects it to keep tumbling. The 20-day moving average crossed over the 9-day moving average at $0.71 on Monday, meaning that level is the price to beat in order for bulls to ride to the rescue. Above here is only the mid-November swing high at $0.95 where the stock faced resistance two sessions in a row. XCAN, the S&P/TSX Cannabis Index, is down 34% year to date, while SNDL is up 17%. SNDL 1-day chart
Hawks Triumph, Doves Lose, Gold Bulls Cry!

Hawks Triumph, Doves Lose, Gold Bulls Cry!

Arkadiusz Sieron Arkadiusz Sieron 02.12.2021 17:20
The hawkish revolution continues. Powell, among the screams of monetary doves, suggested this week that tapering could be accelerated in December! People live unaware that an epic battle between good and evil, the light and dark side of the Force, hard-working entrepreneurs and tax officials is waged every day. What’s more, hawks and doves constantly fight as well, and this week brought a victory for the hawks among the FOMC. The triumph came on Tuesday when Fed Chair Jerome Powell testified before Congress. He admitted that inflation wasn’t “transitory”, as it is only expected to ease in the second half of 2022. Inflation is therefore more persistent and broad-based than the Fed stubbornly maintained earlier this year, contrary to evidence and common sense: Generally, the higher prices we’re seeing are related to the supply and demand imbalances that can be traced directly back to the pandemic and the reopening of the economy. But it’s also the case that price increases have spread much more broadly and I think the risk of higher inflation has increased. Importantly, Powell also agreed that “it’s probably a good time to retire that word.” You don’t say! Hence, the Fed was wrong, and I was right. Hurray! However, it’s a Pyrrhic victory for gold bulls. This is because the recognition of the persistence of inflation pushes the Fed toward a more hawkish position. Indeed, Powell suggested that the FOMC participants could discuss speeding up the taper of quantitative easing in December: At this point the economy is very strong and inflationary pressures are high and it is therefore appropriate, in my view, to consider wrapping up the taper of our asset purchases, which we actually announced at the November meeting, perhaps a few months sooner, and I expect that we will discuss that at our upcoming meeting in a couple of weeks. What’s more, Powell seemed to be unaffected by the Omicron coronavirus strain news. He was a bit concerned, but not about its disturbing impact on the demand side of the economy; he found supply-chain disruptions that could intensify inflation way more important. That’s yet another manifestation of Powell’s hawkish stance.   Implications for Gold What does the Fed’s hawkish tilt imply for the gold market? Well, gold bulls get along with doves, not hawks. A more aggressive tightening cycle, including faster tapering of asset purchases, could boost expectations of more decisive interest rates hikes. In turn, the prospects of a more hawkish Fed could increase the bond yields and strengthen the US dollar. All this sounds bearish for gold. Indeed, the London price of gold dropped on Wednesday below $1,800… again, as the chart above shows. Hence, gold’s inability to stay above $1,800 is disappointing, especially in the face of high inflation and market uncertainty. Investors seem to have once again believed that the Fed will be curbing inflation. Well, that’s possible, but my claim is that despite a likely acceleration in the pace of the taper, inflation will remain high for a while. I bet that despite the recent hawkish tilt, the Fed will stay behind the curve. This means that the real interest rates should stay negative, providing support for gold prices. The previous tightening cycle brought the federal funds rate to 2.25-2.5%, and we know that after an economic crisis, interest rates never return to the pre-crisis level. This is also what the euro-dollar futures suggests: that the upcoming rate hike cycle will end below 2%. The level of indebtedness and financial markets’ addiction to easy money simply do not allow the Fed to undertake more aggressive actions. Will gold struggle in the upcoming months then? Yes. Gold bulls could cry. But remember: tears cleanse and create more room for joy in the future. If you enjoyed today’s free gold report, we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today. If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care
Bitcoin's downtrend is a sign of market maturity

Bitcoin's downtrend is a sign of market maturity

Alex Kuptsikevich Alex Kuptsikevich 02.12.2021 10:19
Over the past 24 hours, cryptocurrency market capitalisation has fallen by 1.8% to $2.59 trillion, with bitcoin losing only 0.5% to $56.7K. On bitcoin's daily charts, the RSI index remains in the lower half of the scale, at 45. The 50-day moving average is now at $60.7K and the 200-day at $48.2K, both moving horizontally. On balance, this means that Bitcoin is in a medium-term decline phase but is still on a long-term bull phase. Locally, a steady sequence of lower highs and lower lows has been forming in Bitcoin since the 17th of November. The intraday charts clearly show BTCUSD bouncing back from increasingly lower levels. And this is a serious reason to think about selling by the big players. The cryptocurrency Fear and Greed Index lost one point, declining to 32. The market failed to pick up the pace of the recovery and use fear as a reason to buy because of the negative stock market dynamics. Players rushed to lock in some of the profits in those coins that had been rising ahead of the recent gains. As a result, ETHUSD lost 4% over 24 hours, Binance Coin -1.4% and Polkadot -5.6%. Despite the latest downtick, the cryptocurrency market continues to distance itself from the situation in traditional financials without going into a deeper profit correction mode. The local downtrend in BTCUSD, if not accelerated in the coming days, promises to be a sign of a healthy maturity of the market without hurting it. Cryptocurrency investors are becoming more sophisticated, viewing the sector as a business rather than a capital-savings vehicle or casino, where a bet played can multiply an investment.
Huge News! The Fed’s Tapering Is Finally Here!

Huge News! The Fed’s Tapering Is Finally Here!

Arkadiusz Sieron Arkadiusz Sieron 04.11.2021 15:04
The Fed has announced tapering of its quantitative easing! Preparing for the worst, gold declined even before the release - will it get to its feet? . Ladies and gentlemen, please welcome to the stage the one and only tapering of the Fed’s quantitative easing! Yesterday was that day – the day when the FOMC announced a slowdown in the pace of its asset purchases: In light of the substantial further progress the economy has made toward the Committee's goals since last December, the Committee decided to begin reducing the monthly pace of its net asset purchases by $10 billion for Treasury securities and $5 billion for agency mortgage-backed securities. Beginning later this month, the Committee will increase its holdings of Treasury securities by at least $70 billion per month and of agency mortgage‑backed securities by at least $35 billion per month. It’s all but a bombshell, as this move was widely expected by the markets. However, what can be seen as surprising is the Fed’s decision to scale back its asset purchases already in November instead of waiting with the actual start until December. Hawks might be pleased – contrary to doves and gold bulls. How is the tapering going to work? The Fed will reduce the monthly pace of its net asset purchases by $10 billion for Treasury securities and $5 billion for agency mortgage-backed securities each month: Beginning in December, the Committee will increase its holdings of Treasury securities by at least $60 billion per month and of agency mortgage-backed securities by at least $30 billion per month. The Committee judges that similar reductions in the pace of net asset purchases will likely be appropriate each month, but it is prepared to adjust the pace of purchases if warranted by changes in the economic outlook. So, instead of buying Treasuries worth $80 billion and agency mortgage‑backed securities worth $40 billion (at least), the Fed will purchase $70 billion of Treasuries later this month and $35 billion of MBS, respectively. Then, it will buy $60 billion of Treasuries and $30 billion of MBS in December, $50 billion of Treasuries and $25 billion of MBS in January, and so on until the last round of purchases in May 2022. This means that the quantitative easing will be completed by mid-year if nothing changes along the way. The announcement of the tapering was undoubtedly the biggest event; however, I would like to point out one more modification. The sentence “inflation is elevated, largely reflecting transitory factors” was replaced in the newest statement with “inflation is elevated, largely reflecting factors that are expected to be transitory”. It’s not a big alteration, but “expected to be” is weaker than simply “is”. This means that the Fed’s confidence in its own transitory narrative has diminished, which implies that inflation might be more persistent than initially thought, which could support gold prices more decisively at some point in the future. The Fed also explained why prices are rising: “Supply and demand imbalances related to the pandemic and the reopening of the economy have contributed to sizable price increases in some sectors”. Unsurprisingly, the Fed didn’t mention the surge in the money supply and the unconventional monetary and fiscal policies, just “imbalances”! Implications for Gold What does the Fed’s announcement of a slowdown in asset purchases imply for the gold market? Well, the yellow metal showed little reaction to the FOMC statement, as tapering was in line with market expectations. Actually, gold prices fell to three-week lows in the morning — right after the publication of positive economic data but before the statement. However, gold started to rebound after the FOMC announcement, as the chart below shows. Why? The likely reason is that both the statement and Powell’s press conference were less hawkish than expected. After all, the Fed did very little to signal interest rate hikes. What’s more, Powell expressed some dovish remarks. For instance, he said that it was a bad time to hike interest rates: “it will be premature to raise rates today” (…) We don’t think it is a good time to raise interest rates because we want to see the labor market heal more.” The bottom line is that gold’s reaction to the FOMC statement was muted, as tapering was apparently already priced in. The lack of bearish reaction is a positive sign. However, gold’s struggle could continue for a while, perhaps until the Fed starts its tightening cycle. For now, all eyes are on Friday’s non-farm payrolls. Stay tuned! If you enjoyed today’s free gold report, we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today. If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care
Considering Portfolios In Times Of, Among Others, Inflation...

Profit-Taking on Dollar Longs after Better than Expected Jobs Report Sets Stage Until CPI

Marc Chandler Marc Chandler 08.11.2021 09:57
The US dollar turned in a solid week's performance, rising against most currencies and recording a marginal new high for the year against the euro.  Sterling and the Australian dollar competed for the worst performer.  Both central banks pushed against market expectations for aggressive near-term tightening.  The central banks triggered a short squeeze in the bond market, where 10-year benchmark yields from 10 bp in the US to 34 bp in Italy.  UK 10-year Gilts and French Oats yields fell nearly 22 bp.  Germany lagged with an almost 18 bp decline.  The speculative market had its largest net short Treasury note futures position since March 2020.  It has swung from its largest net long position in four years (~181k contracts) in early October to a net short position of almost 270k as of November 2.  The macro focus shifts back to inflation next week with American and Chinese reports.  Rising inflation in the world's two largest economies may arrest the rally in the bond markets. We anticipated the dollar to move broadly higher this month, and the move we envision does not appear over.  However, important support has been approached in a sharp thrust that has penetrated Bollinger Bands, suggesting some patience may be needed.  The dollar did close relatively softly, especially given the stronger than expected employment report.   Dollar Index: A new high for the year was recorded after the employment report was slightly above 94.60.  The momentum indicators are trending higher, and the five-day moving average crossed back above the 20-day moving average.  Recall that the 94.50 area is (38.2%) retracement of the sell-off since the March 2020 peak (~103).  The high from last September was closer to 94.75, but above there, nothing stands out until the 95.70-96.10 band. Yet ahead of the weekend, it finished poorly and formed a potential bearish shooting star candlestick.  Initial support is seen around 93.80.   Euro:   The single currency was virtually flat last week, but it does not hide the fact that a new low for the year (~$1.1515) was recorded.  The MACD and Slow Stochastic are moving lower, and the price action has been poor.  The $1.1490 area corresponds to the (50%) retracement objective of the rally from the March 2020 low (~$1.0635).  The next retracement (61.8%) is found a little below $1.13.  The euro finished on a firm note near session highs, suggesting scope for some corrective gains at the start of the new week. The new momentum shorts are frustrated with the lack of follow-through and maybe in weak hands.  A close above $1.1620 would lift the technical tone.  Japanese Yen:  The Japanese yen was the strongest of the major currencies, gaining an inconsequential 0.25% against the dollar.  The decline in US rates helped drag the dollar lower against the yen.  In terms of market positioning, short-yen carry trades had become momentum trades, too and the unwind was also supportive of the yen.   The dollar-yen exchange rate continues to track US 10-year yields.  The 10-year yield fell below 1.50% for the first time in a month ahead of the weekend, and the dollar made a new low for the week near JPY113.30.  Recall that in the big picture, we have suggested a range-trading affair between around JPY113.00 and JPY114.50-JPY115.00.  That still seems reasonable.  However, we note the dollar's momentum is flagging, and the five-day moving average slipped below the 20-day for the first time since late September.   The Slow Stochastic and MACD are trending lower.  A break of JPY113.00 signals the next leg down into the JPY112.00-JPY112.50 band.  British Pound: After the Bank of England confounded market expectations, sterling was spanked, falling more than 1% for only the second time this year (the other was on September 28, which arguably was more of a dollar move).  Expectations, partly facilitated by official comments, for tighter monetary policy spurred a roughly 4.3-cent rally in sterling last month.  If the BOE is saying, "sorrow about the mate, you misunderstood the conditionality and our job," it seems only fitting that sterling return to the late-September low near $1.3400.  It did so ahead of the weekend to $1.3425.  Ahead of the weekend, it settled below the lower Bollinger Band for the second consecutive session.  The momentum indicators are still falling. However, it managed to close near session highs, and a potential hammer candlestick may have been formed.  However, if $1.34 does not hold, it is difficult to find much chart support ahead of the $1.3165-$1.3200 area should $1.3400 be convincingly broken.  Canadian Dollar:  The Canadian dollar fared better than the other dollar-bloc currencies but still lost about 0.5% against the US dollar.  Since meeting the head and shoulders objective near CAD1.23, the US dollar has been consolidating and forming a rounded bottom.  The five-day moving average crossed back above the 20-day for the first time in a month.  The greenback finished the week bumping against the 200-day moving average (CAD1.2480), while the momentum indicators suggest there is more to come.  A retracement (38.2%) of the greenback's slide since September 20 high (~CAD1.29) is found near CAD1.2520, and the next retracement (50%) is slightly below the neckline of the head and shoulders pattern (~CAD1.2600).     Australian Dollar:  The Australian dollar's pullback has been more profound than the other majors.  It dropped almost 2.6% from the late October higher (~$0.7555), which was its best level since early July, and retraced half of last month's rally at the pre-weekend low (~$0.7360).  The momentum indicators are still falling, and the five and 20-day moving averages have crossed for the first time in nearly a month.  The next (61.8%) retracement target is closer to $0.7315.  Still, it closed firmly and with a possible bullish hammer candlestick, suggesting a bounce early next week is likely. The $0.7430-$0.7450 area may be the first important hurdle.  The Reserve Bank of Australia, like many other central banks, is emphasizing labor market developments in their forward guidance. Given the gap between what the RBA is saying (no hike likely until 2024) and what the market is saying (the swaps market implies nearly 70 bp of tightening over the next 12 months), next week's October jobs data may have greater impact.  Australia lost almost 285k jobs in August and September amid the lockdown.  A modest recovery is expected. In fact, the worst was probably in August. Full-time positions increased by almost 27k in September.   Mexican Peso:   The peso staged a brilliant recovery last week, but only after first falling to its lowest level since March.  The fall in US rates helped take pressure off the peso and emerging markets more broadly.  The strong US employment report bolstered risk appetites and lifted the JP Morgan Emerging Market Currency Index, which had been lower on the week, ahead of the data.  The dovish FOMC tapering announcement saw the dollar record a key downside reversal against the peso by reversing lower after making new highs and closing below the previous session's low.  Modest follow-through selling pushed the dollar through the (61.8%) retracement objective (~MXN20.46) of the rally that had begun in late October (from ~MXN20.21), ahead of the FOMC meeting and jobs report.  Before the weekend, it settled at the lows for the week (~MXN20.30).  Initial support is seen near MXN20.20.  The central bank meets next week (November 11).  Most expect a 25 bp hike, but an acceleration in CPI last month ( to be reported on November 9) may boost the risk of a 50 bp move.   Chinese Yuan:  The yuan's 2% gain this year puts it in third place globally, behind the Russian ruble (4.5%) and the Canadian dollar (2.3%).  The yuan has drifted higher in recent weeks.  It has risen for the past three months for a cumulative gain of a little less than 1%.  For the past several weeks, the PBOC consistently set the dollar's reference rate above market expectations (median projection in Bloomberg's survey) but did not do so ahead of the weekend.  Last week the dollar traded quietly within the range seen in the past two weeks.  The dollar recorded four-month lows in October in front of CNY6.38.  Given the official penchant for stability, the issue now is the upper end of the range, and it seems to be CNY6.40-CNY6.41.  Since late September, the dollar has not settled above the 20-day moving average (~CNY6.4075), the middle of the Bollinger Bands.  China's 10-year bond yields peaked in mid-October near 3.05% and last week finished below 2.90% for the first time in several weeks. It is the only country whose 10-year yield has fallen this year (~25 bp).  The October inflation gauges are the market's focus, but trade and lending figures may generate more insight into the economic drivers.   Disclaimer
Bridge Too Far

Bridge Too Far

Monica Kingsley Monica Kingsley 02.12.2021 16:36
S&P 500 gave up sharp intraday gains on the first Omicron patient in CA. Corona packing punch still, and sending TLT far above yesterday‘s highs while the dollar remained unchanged. That‘s as risk-off as can be on a little surprising headline – the key difference is though that the Fed doesn‘t have the back of buy the dippers this time. The accelerated taper noises coupled with demand destruction thanks to Omicron, is delivering an inflation repreive. Make no mistake though, should demand be choked off too hard, fresh stimulus would have to come – for now in the heat increasingly being turned on, practically all asset classes suffer to varying degrees. The market isn‘t yet at a stage of sniffing out fresh stimulus countering the destructive policy effects which are being felt currently. Economic activity around the world hasn‘t been hampered, but markets are willing to err on the pessimistic side. For now and still – only when the riskier debt instruments such as HYG turn up to deal with the prior downswing, would be a reason to cheer for animal spirits returning. That idea sounds though hollow at this time. The bears have the upper hand unless proven otherwise – that is, by a close in the 4670s. Which is what the title says... Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 breaking below the 50-day moving average, and taking time consolidating below, isn‘t bullish at all. The reversal was broad based, arguably hitting value more. Yes, market breadth is dismal. Credit Markets Positive HYG divergence is gone – the broad underperformance of S&P 500 must be reversed first to make stock market upswings trustworthy. It remains unclear how much would HYG be able to rebound when quality debt instruments cool off. Gold, Silver and Miners Precious metals weakness remains, but isn‘t convincing enough to short the market, no. The coming reversal to the upside would be ferocious, but we aren‘t there yet. Crude Oil Crude oil plunge is slowing down, and it‘s more than black gold that‘s looking for direction here – this concerns the commodities complex as such. I‘m looking for copper to show the way, and oil to follow. Copper Copper is sitting at a rising support line, undecided yet whether to take the Fed and Omicron threats seriously or not. It‘s wait and see for now, but the bullish side has the medium-term upper hand. Bitcoin and Ethereum Bitcoin and Ethereum are cautious as well, but the bears are looking for an ambush – let‘s see how far they can get. Summary The ugly S&P 500 close concerns both value and tech – and there was no premarket upswing to speak of. The bears have the upper hand for today as markets look to be in the phase of sell first, ask questions later. Any reversal (in stocks or commodities) has to be accompanied by a credible upswing in riskier bonds, ideally with money coming out of the dollar as well. Thank you for having read today‘s free analysis, which is available in full 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 five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Intraday Market Analysis – USD Accumulates Support

Intraday Market Analysis – USD Accumulates Support

John Benjamin John Benjamin 02.12.2021 08:58
USDCHF to test key support The US dollar stabilized after Jerome Powell hinted at speeding up the taper pace. The break below 0.9270 has put the rally on hold. The support has turned into resistance with the latest rebound fading. But a bullish divergence suggests a loss of momentum in the retracement as the price approaches 0.9140. Buying could be expected in this demand zone around November’s low 0.9100. Sentiment remains upbeat as long as the greenback is above this level. A bounce above 0.9270 may resume the uptrend. XAGUSD remains under pressure Silver struggled after US Treasury yields jumped on Fed’s hawkish tilt. A bearish MA cross on the daily chart indicates a deterioration in the market mood after a drop below the floor at 23.00. An oversold RSI caused a limited rebound which was then capped by 23.30. This was a sign that the bears were still in control of the direction. The psychological level of 22.00 is the next support. Its breach would lead to September’s lows at 21.50, an important level to keep the metal afloat in the medium term. USOIL tests major demand zone WTI crude inches higher as OPEC+ discuss whether to let additional output flow as previously planned. The price is hovering above a major demand zone between 62.00 and 64.00. A bullish RSI divergence indicates that the selling pressure might have eased. A rally above 71.20 could force the short side to cover and bring in more buying momentum. Then 76.00 would be the next hurdle before a full-blown recovery. On the downside, a bearish breakout could trigger a broader sell-off and potentially derail a 19-month long rally.
Top 3 Price Prediction Bitcoin, Ethereum, Ripple: ETH outperforming its peers, BTC struggles and XRP bearish

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: ETH outperforming its peers, BTC struggles and XRP bearish

FXStreet News FXStreet News 02.12.2021 17:11
Bitcoin refrains from making new highs as Tuesday’s gap-fill kills uptrend continuation. Ethereum outpaces its peers by barely hitting new all-time highs. XRP price again looking for direction as investors interest wanes. The Bitcoin bull rally got stopped in its tracks this week after BTC price came under more pressure from the Omicron story, and the resulting market turmoil. Ethereum price, however, came just $16 away from making a new record high, making gains in contrast to the other two majors. XRP saw investors buying the dip, but the uptrend hit a wall and got stopped in its tracks. Bitcoin price on the backfoot after a slowdown that made it lose bullish momentum Bitcoin (BTC) price popped higher at the beginning of the week, shrugging off investors' concerns about the new Covid variant. On Monday, BTC price opened up much higher than where it closed on Sunday, forming a gap in the chart. As a general rule, gaps get filled sooner rather than later, and this was the case on Monday, when bulls saw their early gains lost as BTC price retraced to fill the gap. Bears have seized the opportunity to defend the new monthly pivot for December at $59,586, which coincides with the start of a Fibonacci retracement.. Evidence of this weakening can be found in the Relative Strength Index (RSI), dipping back below 50, showing that bullish demand is starting to wane. BTC/USD daily chart As a result of current market uncertainty, expect potential investors to stay on the sidelines. Although the red descending trend line has been broken a little, it still holds importance and investors will probably only step in following a break back above it, helped, perhaps, by breaking news about vaccine effectiveness against the new strain. Either that or investors will sit on their hands and wait for another bounce off $53.350. Should that level fail to hold, however, and there is more bad news, expect a quick 6% drop towards the $50,000 psychological level and previous historical support. At that level bulls will likely mount a defence against a further downturn. Ethereum price outpaces its peers and could make new highs by the end of this week Ethereum (ETH) price, unlike Bitcoin and XRP, saw bulls run a tight and steep rally from $4,000 towards $4,936 in just five days. That was in a troubled market-facing considerable headwinds. That said, bulls now need to keep a tight stop on current ETH price action in order for a bull trap not to form, after the pull-back on profit-taking that occurred in the wake of price barely hitting an all-time high. ETH quickly reversed from its highs on Wednesday and tested the December pivot at $4,481. That is just $16 above the historical technical level marked up on the chart from November 12. This is a level of great importance and it will be very interesting to see if bulls can maintain price action above it, perhaps, helped by a possible bounce off the red top line that has so far been successfully capping price action to the upside. ETH/USD daily chart That red descending trend line, on the other hand, should support a break below $4,465, but if bulls flee the scene, expect a bull trap to form and price to run down lower. The first support tested in that decline is the historical double top at $4,060, with the monthly S1 support level at $4,000 just below there. The correction could already hold 18% of accrued losses from the highs of Wednesday, which would attract investors interested in the buying opportunity at those levels. Ethereum prices breaks all resistance barriers, with $5,000 within sight XRP price sees bulls rejected at $1.05, pushing price back towards $0.88 Ripple (XRP) price saw sparks fly in a nice uptrend on Wednesday, but then hit a bump in the road after the $1.05 level held firmly, following two failed tests to the upside. The rejection that squeezed prices to the downside on Tuesday, probably washed out quite a lot of investors and technical traders, and caused the lack of momentum and drive in XRP price action to tackle that $1.05 resistance. As the price fades further to the downside today, expect current market uncertainty to weigh further on XRP and see a possible retest of the short-term double bottom at $0.88. XRP/USD daily chart On a retest of that double bottom, a break looks more than likely, as the level holds no historical or other significance. That would hand bears the opportunity to push XRP price down towards either $0.84, for the third test of support at that level, or breakthrough and run down to $0.80, which is a prominent figure and the level of the monthly S1 pivot support level, combined with a historical significant support level at $0.78, originating from June 8. This would provide the perfect zone for a fade-in trade for XRP traders. XRP price appears to develop nasty bear trap
Weekly Macro Themes - 3 December 2021

Weekly Macro Themes - 3 December 2021

Callum Thomas Callum Thomas 03.12.2021 13:05
Here's a brief overview of the topics and charts covered in the latest edition of the Weekly Macro Themes report. I send this report out late Friday NZ time and aim to cover a good mix of macro/ideas/risk topics, across a global macro/multi-asset universe. This week I covered the following topics/ideas:   1. Sentiment & Technicals Check: We take a timely and comprehensive check-in on sentiment and technicals across global equities in the wake of the selloff. 2. Inflation Transit: "Transitory" has retired, and with that a policy pivot is underway. 3. Crude & Commodities: Currently viewing the crude oil crash as a “healthy correction”, some cause for optimism. On commodities in general it's about squaring up the short-term vs medium/longer-term case. The charts tell the story...     Request a trial of our institutional research service for your firm, simply fill in the form here. (n.b. the full service is aimed at fund managers and institutional investors)       About the Weekly Macro Themes report The "Weekly Macro Themes" is part of our institutional offering aimed at multi-asset and macro-driven portfolio managers and strategists. The report takes a chart-driven macro, fundamental and multi-factor approach; a powerful combination of cross-asset idea generation for portfolio managers, charts on key global macro trends, analysis on portfolio risks, asset allocation research, and innovative indicators, in a format that delivers a balance of brevity and depth so that you can efficiently assimilate the insights. Also part of the service is the monthly market cycle guidebook, global cross asset market monitor, and quarterly strategy pack. (or just follow us for now): LinkedIn https://www.linkedin.com/company/topdown-charts Twitter http://www.twitter.com/topdowncharts
Ready, set, silver, go

Ready, set, silver, go

Korbinian Koller Korbinian Koller 03.12.2021 12:56
The most obvious first step is: “How much?” Depending on your time horizon and if your approach is purely diversification for your overall portfolio, a percentage of total investment capital needs to be set. This percentage should be higher on a more aggressive wealth preservation strategy and higher expected returns on beating inflation. Another aspect is if silver is traded as the only hedge or alongside other precious metals. Silver already has a leverage factor in relationship to gold. For example, gold’s response to covid was a 37% up move, while silver moved up 80%. This volatility leverage works both ways, increasing the risk for silver if not purchased on low-risk entry points and traded with appropriate money management. We have pointed out various reasons why we find silver an extremely attractive play long term in this year’s chart book releases. Monthly chart (a week ago), Silver in US-Dollar, ready: Silver in US-Dollar, monthly chart as of November 26th, 2021. The above chart was posted in our last week’s publication. We wrote:” The monthly chart shows a high likelihood for November’s candle closing as an inverted hammer. Consequently, it provides for silver prices approaching the low end of the last 17-month sideways range near US$22.” Monthly chart, Silver in US-Dollar, set: Silver in US-Dollar, monthly chart as of December 3rd, 2021. We were spot on. The anticipated entry zone has been reached. We added to our physical holdings and shared the trade live in our free Telegram channel. Silver in US-Dollar, weekly chart, silver: Silver in US-Dollar, weekly chart as of December 3rd, 2021. We asked, “how much?” and in what diversification, which leaves us with the question of what denomination. The rule of thumb is that the smaller the weight amount is and the more recognizable the brand, the higher the cost. In addition, valuable numismatic collector’s coins have premiums as well. Generally, we find the added cost of brand items (Canadian maple leaf, American eagles, Austrian Philharmonic, and alike) to be of value since it adds to liquidity at a time of sale. While we would stay away from the added cost of numismatic collectible coins, we find there to be value to have a mix of coins and larger bars to arrive at a reasonably low-cost basis with a high degree of liquidity at the time of sale (larger bars are harder to sell than one-ounce coins). The weekly chart above illustrates that as much as we have entered the “shopping zone” for silver, there is a probability that we might see a quick spike down as we have seen at the end of September. As pointed out in the previous chart book, the goal of physical acquisition should not be the ultimate lowest price but availability and execution itself. We make a point of this, especially since we noticed that physical acquisition prices have in percentage retraced much less than the spot price right here, and once the turn is complete, could proportionally faster jolt up. Silver in US-Dollar, quarterly chart, go: Silver in US-Dollar, quarterly chart as of December 3rd, 2021. It is essential to have an exit strategy in place before entry. These exit projections are necessary to measure risk/reward-ratios. Moreover, with the entire plan clear, there will be no debate while in the trade. This part of exit psychology is often overlooked, but a low-risk entry point alone does not provide a good strategy. We expect a price advance on silver within the next six to eight quarters to a price target of US$74.40! Significant profits allowing for an outstanding risk/reward-ratio. Ready, set, silver, go: Last week, we anticipated the market’s direction correctly and find ourselves now at the desired low-risk entry zone. With possible additional questions about physical acquisition answered today, we might have reduced doubt. The devil is in the details, and due to the various countries, their taxation law, and the wide variety of official precious metal dealers, we did not dive into the details on where to take possession of your possibly desired purchase.  Nevertheless, our multinational membership in our free Telegram channel might provide helpful information to your specific situation. We hope we have provided enough knowledge to erase doubt. We encourage participation since we see procrastination towards a wealth preservation strategy as the poorest choice in this challenging time for your hard-earned money. 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 also subscribe to our free newsletter. This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting. By Korbinian Koller|December 3rd, 2021|Tags: Crack-Up-Boom, Gold, Gold/Silver-Ratio, inflation, low risk, Silver, silver bull, Silver Chartbook, silversqueeze, technical analysis, time frame, trading principles|0 Comments About the Author: Korbinian Koller Outstanding 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.
Polkadot price ready to breakout after DOT forms double bottom

Polkadot price ready to breakout after DOT forms double bottom

FXStreet News FXStreet News 04.12.2021 17:39
Polkadot price is hovering above a support level at $35.47, hinting at the start of a new uptrend. A bounce off this barrier is likely to trigger a 20% ascent to $42.77. If DOT fails to hold above $32.23, it will invalidate the bullish thesis. Polkadot price began turning around and moving higher on November 28. It is currently resting on support after a brief pull-back, with the potential for using this floor as a launchpad higher. A resumption of the bullish impulse will provide fresh confirmation for the new uptrend. Polkadot price eyes higher highs Polkadot price rallied 72% after bottoming at $32.18 on October 12. This upswing soon began stalling, however, due to profit-taking, knocking DOT back down by roughly 41% in about three weeks, creating the second swing low at $32.18. This development has led to the formation of a double bottom reversal pattern, hinting at the potential for more upside. So far, Polkadot price has rallied only 22% and is likely to provide another ‘buy’ opportunity before it enters an ‘up only’ bullish mode. In fact, DOT is currently in a buy zone as it retests the $35.47 support floor. A bounce off this level will likely trigger a 20% surge to $42.77. Polkadot price needs to pierce through the $37.55 hurdle to confirm the start of this new uptrend, however. DOT/USDT 12-hour chart Regardless of the bullish outlook, if Polkadot price fails to hold above the $35.47 support level, it will suggest that investors are not done booking profits. In such a situation, DOT is likely to revisit the $32.23 demand barrier. While there is a chance Polkadot price might sweep below this level to collect liquidity, a daily close below it will invalidate the bullish thesis. In such a situation, market participants can expect DOT to continue its descent to the next platform at $29.74.
Bonds Didn‘t Disappoint

Bonds Didn‘t Disappoint

Monica Kingsley Monica Kingsley 03.12.2021 15:57
S&P 500 sharply rebounded, and signs are it has legs. My key risk-on indicator to watch yesterday, HYG, turned up really strongly. No problem that the dollar didn‘t decline, it‘s enough that financials and energy caught some breath. We‘re turning to risk-on as Omicron didn‘t cause the sky to fall. What a relief! Seriously, it doesn‘t look that hard lockdowns would be employed, which means the market bulls can probe to go higher again. What I told you on Wednesday already in the title It‘s the Fed, Not Omicron, today‘s non-farm payrolls illustrate. Such was the game plan before the data release, and this refrain of bad is the new good, is what followed. The Fed is desperately behind the curve in taming inflation, and its late acknowledgment thereof, doesn‘t change the bleak prospects of tapering (let alone accelerated one) into a sputtering economy. What we‘re experiencing currently in the stock market, is a mere preview of trouble to strike in 2022. We‘re in the topping process, and HYG holds the key as stated yesterday. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 returned above the 50-day moving average, the volume wasn‘t suspicious – the bulls have regained the benefit of the doubt, and need to extend gains convincingly and sectorally broadly next. Credit Markets HYG successfully defending gained ground, would be a key signal of strength returning to risk-on assets and lifting up S&P 500. There is still much to go – remember that the sharpest rallies happen in bear markets, so all eyes on HYG proving us either way. Gold, Silver and Miners Precious metals weakness looks deceptive and prone to reversal to me – the real fireworks though still have to wait till the Fed gets doubted with bets placed against its narratives. Crude Oil Crude oil plunge is getting slowly reversed, about to. Beaten down the most lately, black gold is readying an upside surprise. Copper Copper is turning higher, taking time, but turning up – it‘s positive, but still more of paring back recent setback than leading higher. I‘m reasonably optimistic, and acknowledge much time is needed to reach fresh highs. Bitcoin and Ethereum The bearish ambush of Bitcoin and Ethereum didn‘t get too far – crypto consolidation goes on, no need to panic or get excited yet. Summary S&P 500 is in a recovery mode, and the bulls look ready to prove themselves. The keenly watched HYG close presaged the odds broadly tipping the risk-on way, just as much as cyclicals did. It‘s a good omen that commodities are reacting – not too hot, not too cold – with precious metals in tow. In tow, as the Fed isn‘t yet being doubted – the NFPs are a first swallow of its inability to carry out tapering plans till the (accelerated or not) end. Thank you for having read today‘s free analysis, which is available in full 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 five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
The Trade Entry Has Been Triggered – How to Secure Profits?

The Trade Entry Has Been Triggered – How to Secure Profits?

Sebastian Bischeri Sebastian Bischeri 03.12.2021 15:34
  Entry… triggered! The price rallies to the Moon, but you don’t want to cash out “just yet” - am I right? So, let’s see how to prevent hard landing. There are obviously several methods to assess risk and thus to manage it, depending on one’s risk appetite or what is also more commonly known as risk profile. One method I use on swing (longer-term) trades is to manually lift my stop once – at least – 50% of the first target has been reached on a swing trade. I provide such trades on Sunshine Profits based on the projections I draw. Let’s take a practical case: in my last trade position on WTI crude oil provided on Nov-30, the market found a floor around $66. Then after being pushed up by the bulls, it rebounded onto that support level ($65.70-66.21), and rallied up to $69.49. So, if we take our reference entry in the middle of the yellow band at $66, the market moved up exactly 70% of the total distance to the target 1. At this point, to avoid giving profits away, an option would be to lift the stop to net breakeven ($66 + commissions/fees) so that the risk for that trade could get offset once 50% of the distance to the target 1 is passed. Following that, if, for example, the market pursues its rally further – let’s say up to 60% – then the stop will be lifted to net breakeven + 10% of the distance to the target 1. In our case the market rallied up to 70% of the distance to the target 1, so the stop should be lifted to net breakeven + 20% of the distance to the target 1. From my experience, this may represent a good way to manually trail your stop. Of course, there are many different methods to do so, but I haven’t heard of many investors or traders mentioning that one, therefore I wanted to present it here. The following chart is the one I posted in my trade review published on Wednesday, the 1st of December: WTI Crude Oil (CLF22) Futures (January contract, daily chart from Dec-1) To better visualize the price action that occurred, we zoomed into the 4-hour chart: WTI Crude Oil (CLF22) Futures (January contract, 4H chart from Dec-1) As you can see, the level provided was optimum given its function to act as a floor for rebounding prices. Then, the market was up to 70% of the total distance to reach the target 1, and finally reverted back down to the stop level. Now, this is today’s chart: WTI Crude Oil (CLF22) Futures (January contract, daily chart) Again, a zoom into the 4H chart lets us see more details of the price action that occurred: WTI Crude Oil (CLF22) Futures (January contract, 4H chart) In summary, using such a method of risk management to keep intermediate profits before the trade reverts strongly to the downside might be a good idea, particularly during high volatility periods. Are you interested in seeing this strategy in action? Make sure to check my Oil Trading Alerts! Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Oil Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Sebastien BischeriOil & Gas Trading Strategist * * * * * The information above represents analyses and opinions of Sebastien Bischeri, & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Sebastien Bischeri and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Bischeri is not a Registered Securities Advisor. By reading Sebastien Bischeri’s 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. Sebastien Bischeri, Sunshine Profits' employees, affiliates as well as their family members 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.
S&P 500 – Is a 5% Correction Enough?

S&P 500 – Is a 5% Correction Enough?

Paul Rejczak Paul Rejczak 03.12.2021 15:57
  The S&P 500 bounced from the 4,500 level on Thursday, as it retraced most of its Wednesday’s sell-off. Was it a reversal or just another upward correction? For in-depth technical analysis of various stocks and a recap of today's Stock Trading Alert we encourage you to watch   The broad stock market index gained 1.42% on Thursday after opening slightly lower and bouncing from the new local low of 4,504.73. The index fell the lowest since the October 19 and it went below its early September local high of around 4,546. Overall, it lost 5.04% from the Nov. 22 record high of 4,743.83. But Thursday’s trading session was bullish and stocks were gaining. Was it an upward reversal? This morning stocks are expected to open 0.3% higher after the mixed monthly jobs data release. For now, it looks like a correction within a downtrend. We may see a short-term consolidation following the recent declines. The nearest important support level is now at 4,500. On the other hand, the resistance level is at 4,580-4,600, marked by the recent local lows. The S&P 500 remains below its short-term downward trend line, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Nasdaq 100 Remains Close to the 16,000 Level Let’s take a look at the Nasdaq 100 chart. The technology index remains relatively stronger than the broad stock market, as it is still trading above the early September local highs of around 15,700. However, the technology index gained just 0.7% yesterday, as we can see on the daily chart: Apple Remains Volatile After Reaching New Record High Let’s take a look at biggest stock in the S&P 500 index: AAPL. Apple accelerated its uptrend once again and on Wednesday it reached the new record high of $170.30. Apple’s market cap reached almost 2.8 trillion dollars! But on Thursday, the stock was 7.3% below its Wednesday’s high, before bouncing back above the $160 level. So the stock priceremains very volatile and we may see a medium-term topping pattern. Conclusion The S&P 500 index is expected to open 0.3% higher this morning after the mixed monthly jobs data release. We may see a consolidation and some more volatility following the recent declines. There have been no confirmed positive signals so far. Here’s the breakdown: The S&P 500 slightly extended its short-term downtrend yesterday before bouncing from the 4,500 level. A speculative short position is still justified from the risk/reward perspective. We are expecting an over 5% correction. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his 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. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members 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.
Weekly Close Out

Weekly Close Out

Luke Suddards Luke Suddards 04.12.2021 17:45
Omicron: In today’s weekly I’ll be dedicating some digital ink for the latest information on the new variant omicron. Ok so what are the major points of importance. New admissions to hospitals in Gauteng increased by 144% last week (hospitalisations lag cases by around 1-3 weeks). So far the early data shows the majority of these hospitalisations are from the unvaccinated (if that trend remains that’s positive). However, a recent study released from South Africa indicates reinfection risk is 3 times higher than previous variants. In terms of the deadliness of this variant, the early data looks good with Australia’s Chief Medical Officer Paul Kelly stating that of the 300 cases recorded worldwide all were very mild or had no symptoms at all. However, the sample size is too small so we can’t draw solid conclusions at this stage. The major vaccine makers have offered timelines of two to six weeks for assessing the vaccine escape properties of omicron via in-vitro lab tests. Interestingly, Moderna is less optimistic than Pfizer about expecting current vaccines needing to be tweaked to fend off the omicron variant. Volatility will remain high as the market remains on tenterhooks as new information drips through. Dollar Index (DXY): The greenback is flat on the week, with many quite perplexed by the lack of gains (particularly against the euro) given the hawkish Fed pivot and risk sentiment remaining on edge. The dollar coming in flat is a combination of gains against high-beta cyclical companies offset by losses against traditional safe haven currencies. Just take a look at the charts of USDJPY and AUDUSD. In terms of the euro, I’ll chat more about that below in the EURUSD paragraph. The big domestic news for the dollar this week was Jerome Powell’s hawkish rhetoric. The word transitory is to be retired as he admits the threat of persistently higher inflation has grown. On the QE purchases side of things, he remains open to it being wrapped up earlier than originally expected with a discussion on a faster pace taking place in 2 weeks at their December meeting. He elucidated his thoughts on the employment side of their mandate, stating that a great labour market requires a protracted expansion and in order to achieve this price stability has to occur. I see this as inflation now taking primacy over employment goals, indicating a shift in the Fed’s thinking with regards to inflationary pressures. The hawkish commentary from FOMC members this week such as Daly, Quarles, Barkin and Bostic would certainly suggest this is the case. STIRs are showing rate lift-off for practically June 2022 (96%) and over 2.5 hikes through December 2022. All attention now falls to the Non-Farm Payrolls number out today. The preliminary indicator such as ISM manufacturing index, ADP and jobless claims all pointing towards decent numbers from the jobs report today disappointed as NFP numbers missed expectations by a significant amount. Price moves have been muted as traders may be reluctant to place any fresh positions on and chase with the risk of adverse news over the weekend regarding omicron. Bottom line - traders should expect cross-asset volatility to remain higher over December. Next week we’ll receive November US inflation data, which is expected to remain elevated. DXY has regained the upper trend line of its ascending channel, putting some distance between price and its moving averages. The 21-day EMA continues to provide some dynamic support to price dips. The RSI has held above the key 55 level of support. Targets wise keep an eye out on the 96.5 on the upside and to the downside the 21-day EMA and former support around 95.5. EURUSD: So why did EURUSD strengthen on the market sell-off due to omicron on Friday and has remained fairly defensive throughout this week? It’s certainly not because the euro is a safe-haven currency in times of risk aversion. This price action has more to do with its use as a funding currency. Traders borrow euros to search for higher yield globally which is a decent strategy when risk conditions are favourable, however, when that risk dial flips in other direction we see the typical carry trade unwind, leading to flows back into the euro. Additionally, because expectations for rate hikes with regards to the eurozone are already significantly low, it’s at much less risk of a dovish repricing working favourably in terms of spread differentials with the dollar. Political pressure is rising on the ECB to act, particularly from Germany. A Reuters article out mid-week pointed towards some members wanting to rather hold off declaring their asset purchase intentions at this December meeting due to uncertainty caused by omicron. However, the ECB's Muller stated that he doesn’t think omicron is a reason to shift the scheduled end date for PEPP. Following this line of thought just today Madame Lagarde expressed that she feels certain that PEPP will cease in March as planned, saying markets require clarity in December. On the data front we had better than expected inflation prints from Germany (5.2% YoY) and the eurozone (4.9% YoY). It’s quiet in terms of economic data next week with the ZEW survey out as we lead up to a crucial ECB meeting in two weeks. EURUSD is drifting lower from its 21-day EMA. The RSI has stalled around the 40 level. Looking at the technicals clearly EURUSD is in a downtrend. Rallies in my opinion should be short lived with sellers coming in. Key levels to monitor in both directions are 1.135 (21-day EMA) and on the downside 1.12. GBPUSD: With a vacuum of economic data for the UK, the words of central bankers took centre stage. Bailey didn’t provide much meat at his speech this Wednesday. However, Saunders (leans hawkish) who spoke today has caused a repricing lower in the probability of a 15bps rate hike come December (only an additional 4bps now from around 8bps pre-speech). He expressed the need for potentially taking a patient approach with the uncertainty from omicron. Cable is lower as a result. On the virus front, the UK regulator has given the green light for booster doses to be offered to all adults. Additionally, the government has signed a contract for 114 million vaccine doses from Pfizer and Moderna, including access to modified vaccines if they're needed to tackle omicron and other future variants of concern. On the political front, domestically the Tories held the seat of Old Bexley and Sidcup, however, with a reduced majority. On Brexit, it’s been quiet of late with some optimism around the granting of additional fish licences to French fisherman in Guernsey, Jersey is the more important zone though prone to flare ups in tension. However, temperatures remain high between France and the UK on issues related to immigration. Next week sees UK October GDP data released. EURGBP has been moving higher on the back of dovish commentary (given he’s a hawk) from Saunders as well as benefiting from any souring in risk-sentiment. The 200-day SMA isn’t far aware, which has previously capped price gains. Cable continues to -plumb fresh YTD lows and is now nearing 1.32. The RSI is near to oversold territory but with some room remaining to eke out further losses. Moving averages are all pointing downwards. Targets wise, on the upside the 1.335 and above there former support around 1.34 (21-day EMA too). USDJPY: This pair continues to trade on US 10-year yield moves and now it’s status as a safe-haven currency has kicked back in. Early Friday morning has seen a bid coming in, which could be some pre NFP positioning on expectations of a move higher in the back end of the US yield curve. Put EURJPY on your radar, price is at a key support level around 128. USDJPY is finding support around its 50-day SMA, 113 round number and the 38.2% Fibonacci level. Price is trying to overcome resistance from the 50-day SMA. The former range support is providing some resistance around 113.5. The RSI is trying to get back into its range support around 46. Targets wise on the upside, 114 will be important and on the downside 112.5 (this week's lows). Gold: Gold has slipped below the $1775 support level as the hawkish fed leads to higher short term rates, kryptonite for the shiny yellow metal. Fears over inflation have failed to help gold stay propped up as well as risk-off fears from omicron. Inflation data out from the US next week will be a risk event for gold traders as well as the Fed meeting the following week. Today’s NFP hasn’t ignited much excitement in gold markets. Gold is trying to reclaim the $1775 support level. The 50-day SMA has made a very minor cross above the 200-day SMA. The 21-day EMA has been capping further gains. The RSI is in no man's land around 38. Targets wise, if $1775 is cleared then $1800 opens up (moving averages just below there). On the downside, $1750 comes into view. Oil: Crude fell sharply into a bear market this week as risk-off, Fed tightening, fears over further lockdowns and travel bans from the new omicron variant led to a repricing on the demand side of the equation. OPEC+ the main event for crude traders this week, decided to stick to their scheduled 400k bpd for January, but caveated this with the meeting remaining in “session”, meaning changes to the supply side could be made before their 4 January meeting if omicron causes a further deterioration. This led to yo-yo style price behaviour. Until there is more clarity regarding omicron, I expect oil’s price to remain choppy without a solid price trend. Backwardation spreads have narrowed, indicating a more balanced supply and demand equation. Iranian Nuclear Negotiations began the week positively, but sentiment turned pessimistic towards the end of this week, providing further short-term bullish tailwinds to crude’s price. JPM has some very bullish forecasts with the bank expecting crude to hit $150 by 2023. Oil is having a run at its 200-day SMA. The RSI has moved out of overbought territory and is a fair distance below its 50-day SMA (some mean reversion). Right now price will remain choppy within a range as omicron news flow prevents a trend from forming. Targets wise, on the upside the 200-day SMA and $73.50 dollar mark will be key. On the downside $68 support is important.
Intraday Market Analysis – USD Shows Weakness

Intraday Market Analysis – USD Shows Weakness

John Benjamin John Benjamin 06.12.2021 10:44
USDCHF struggles to bounce The US dollar softened after November’s nonfarm payrolls missed the mark. The pair has met stiff selling pressure at 0.9270, a former support that had turned into a resistance. The bullish RSI divergence suggests a slowdown in the sell-off though there is no confirmation yet for a sustainable bounce. 0.9120 is a key demand area on the daily timeframe and a bearish breakout would invalidate the November rebound. Buyers may switch sides as sentiment further deteriorates, exacerbating volatility to the downside. CADJPY breaks higher The Canadian dollar surged after November’s unemployment rate fell to 6%. A bearish MA cross on the daily chart still indicates a pessimistic mood. An oversold RSI on the hourly chart caused a limited bounce as short-term traders took profit. Sellers are eager to fade rebounds with the latest being at 89.20. 87.20 at the base of the October rally would be the next support. A deeper correction may send the loonie to 85.90. The bulls will need to lift said resistance before they could initiate a reversal. UK 100 attempts to rebound The FTSE 100 recouped some losses bolstered by a weaker US jobs report. The index saw buying interest over the psychological level of 7000 which sits in the daily demand zone. The RSI’s double-dip in the oversold area has attracted a ‘buying-the-dips’ crowd in this congestion area. A close above the immediate resistance at 7150 is an encouraging sign of a bullish attempt. 7310 is a major hurdle ahead, its breach could short circuit the correction. 7060 is the closest support in case of weakness in the rebound.
Crypto market shaken as market cap approaches drops below $2.2T

Crypto market shaken as market cap approaches drops below $2.2T

Walid Koudmani Walid Koudmani 06.12.2021 12:19
While the cryptocurrency market is known for its volatility and potential price spikes, the correction experienced this weekend appeared to shake confidence in the market as a whole. Prices were under increasing pressure following news of the new Omicron variant and the reaction seen in stock markets as many of them retreated below previous support levels, and over the weekend we saw a 20-30% drop in most major coins, including Bitcoin. Today the situation appears quite uncertain as BTC trades around $47,000 and as investors focus on headlines to ascertain the severity of the matter. One thing to note is that although prices dropped across the board, a look at the ETH/BTC chart indicates that a significant part of the money flowed into Ethereum rather than into the main crypto and we actually saw BTC dominance drop to the lowest level in several months. While this could point to the beginning of a new cycle in the crypto market, it remains unclear how investors will react to future price swings in this already puzzling environment. UK Construction PMI and Car sales point to improving conditions Today's IHS construction data showed the fastest increase in construction output for four months, driven partly by robust and accelerated rise in commercial work along with a drop in the number of firms reporting supplier delays and as input cost inflation dips to seven-month low. While these are all positive signs for the economy, pressure remains on the BoE to keep monetary and fiscal policy under control and to facilitate the continuation of the post pandemic recovery despite potential unexpected events. Today’s car registration figures paint a slightly different picture of the current situation in the UK economy with figures showing an increase of around 1.7% on a monthly basis and a return to the level seen last november. However, as inflation pressures continue and as uncertainty related to the new variant increases, we could be seeing an impact on multiple sectors of the economy, including car sales and registrations as consumers worry about rising costs.    
China turns from stick to carrot

China turns from stick to carrot

Alex Kuptsikevich Alex Kuptsikevich 06.12.2021 13:00
Last Friday was marked by strong pressure on Chinese shares, which lost 10-20% each in New York trading due to the announcement that DiDi, the Chinese counterpart to Uber, will delist in the US and float in China by the middle of next year. This is a significant concession to the Chinese authorities, and investors took it as a signal that we will be hearing more announcements like this soon. This is probably Politburo’s policy turn from a stick to a carrot. Chinese equity indices have been falling since February due to three negative factors: regulatory restrictions on the technology sector, tight monetary policy and waning economic growth. However, the risks of an economic slowdown seem to have come to the forefront, pushing back fears of inflation and turning to monetary stimulus to stabilise financial markets. On Monday, the People’s Bank of China lowered the reserve requirement for banks, freeing up about $188bn of liquidity. The measures are designed to support small businesses by easing access to finance. The bank took the step because of early signs that inflationary pressures are stabilising and the need to get the economy back on growth. The policy easing is moderately negative for the renminbi and should weaken the yuan, taking it away from the 2.5-year highs against the dollar. Furthermore, the Chinese Politburo promises “healthy development” for the real estate sector. It is unlikely that this wording will allow the asset holders of distressed property developers Evergrande or Kaisa to breathe a sigh of relief. But for the market, such top-level attention raises hopes that the peak of pressure is over. Since the global financial crisis, China has largely ensured a growth recovery thanks to the massive stimulus to the economy. This year, the Politburo avoided such sweeping actions for fear of adding fuel to the inflation fire. However, it seems that they are not prepared to stay on the sidelines any further. Friday’s sell-off in the Chinese giants is reminiscent of a final blow to a trend, which is often followed by a reversal. We saw a similar thing with oil in April 2020. Today the H-Shares Index is taking out Friday’s momentum on the US markets, losing 2% and trading at 5.5-year lows, near the bottom of the long-term trading range, down more than 30% from the peaks. Reaching these levels has caused the authorities to move to support the economy and the financial system. We could then see increased buying on the realisation that the sell-off in Chinese companies has gone too far, pushing them back to multi-year lows.
Topping Process Roadmap

Topping Process Roadmap

Monica Kingsley Monica Kingsley 06.12.2021 15:43
S&P 500 bulls missed a good opportunity to take prices higher in spite of the sharp medim-term deterioration essentially since the taper announcement. It‘s the Fed and not Omicron as I told you on Wednesday, but the corona uncertainty is reflected in more downgrades of real economy growth. There are however conflicting indicators that make me think we‘re still midway in the S&P 500 topping process and in for a rough Dec (no Santa Claus rally) at the same time, and these indicators feature still robust manufacturing and APT (hazmat manufacturer) turning noticeably down.Still, it‘s all eyes on the Fed, and its accelerated tapering intentions (to be discussed at their next meeting) as they finally admitted to seeing the light of inflation not being transitory. The ever more compressing yield curve is arguably the biggest watchout and danger to inflation and commodity trades – one that would put question mark to the point of answering in the negative whether we are really midway in the topping process. Another indicator I would prefer turning up, would be the advance-decline line of broader indices such as Russell 3000. And of course, HYG erasing a good deal of its prior sharp decline, which I had been talking often last week – until that happens, we‘re in danger of things turning ugly and fast, and not only for stocks should 4530s decisively give.In spite of decreasing yields, the dollar continues acting on the bullish argument introduced 2 weeks ago. Seeing antidollar plays struggle (part of which is the function of inflation expectations drifting lower on the Fed‘s turn – let‘s see when the central bank breaks something, which is a story for another day), is truly a warning of downside risks having sharply increased since Thanksgiving. Not only for stocks, where we might not be making THE correction‘s low, but also for commodities, cryptos and precious metals. In a series of two tweets yesterday, the warning is in regardless of a smooth Monday ahead.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 bears are looking a bit tired here, and the room for an upswing is getting evident. The surge late on Friday concerned both tech and value, thankfully – overall, the market breadth isn‘t though much encouraging.Credit MarketsHYG did successfully defend gained ground, and strength appears very slowly returning – the gains have to continue to sound the all clear, for considerably longer. As said on Friday, the sharpest rallies happen in bear markets, so all eyes on HYG proving us either way.Gold, Silver and MinersPrecious metals are looking fairly stable at the moment – not ready to decline, and still taking time to rebound. The accelerated taper idea didn‘t take them to the cleaners – the real fireworks though still have to wait till the Fed gets really close to choking off growth.Crude OilCrude oil could keep the intraday gains, but appears base building here – similarly to natgas, this is a medium-term buying opportunity as prices would inevitably recover.CopperCopper prices reflect the combined Fed and (to a lesser degree) Omicron uncertainty – it‘s casting a verdict about upcoming real economy growth, and the red metal is still looking undecided, and merely gently leaning towards the bulls.Bitcoin and EthereumThe bearish ambush of Bitcoin and Ethereum was reserved for the weekend, and the bleeding hasn‘t stopped so far.SummaryS&P 500 looks to have reached the low, but the jury remains out as to whether that‘s THE low. I highly recommend reading today‘s analysis for it lays out the key metrics to watch in its opening part. The nearest days and weeks will be of crucial importance in determining whether the worst in the stock market and commodities correction is behind us, or whether we still have some more to go.Thank you for having read today‘s free analysis, which is available in full 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 five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
S&P 500 Still Above 4,500 – Have Stocks Bottomed?

S&P 500 Still Above 4,500 – Have Stocks Bottomed?

Paul Rejczak Paul Rejczak 06.12.2021 15:31
  The S&P 500 index broke slightly below the 4,500 mark on Friday, but it bounced from that support level again. Is this a bottoming pattern? For in-depth technical analysis of various stocks and a recap of today's Stock Trading Alert we encourage you to watch   The broad stock market index lost 0.84% on Friday following Thursday’s advance of 1.4%. On Friday the index fell the lowest since the October 19 and it went below its early September local high of around 4,546 again. Overall, it lost 5.24% from the Nov. 22 record high of 4,743.83. Stocks fluctuate since last week’s Wednesday, so is this a bottoming pattern? For now, it looks like a flat correction or a consolidation within a downtrend. This morning the broad stock market is expected to open 0.4% higher and we may see some more short-term consolidation following the recent declines. The nearest important support level is still at 4,500. On the other hand, the resistance level is at 4,580-4,600, marked by the recent local lows. The S&P 500 remains below its short-term downward trend line, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Nasdaq 100 Broke Below the 16,000 Level Let’s take a look at the Nasdaq 100 chart. The technology index remained relatively stronger than the broad stock market recently but on Friday it broke below the support level of 16,000 and it was relatively weaker than the S&P 500 index that day. The tech stocks’ gauge fell below the early September local highs, as we can see on the daily chart: Conclusion The S&P 500 index slightly extended its downtrend on Friday and it was 5.24% below the November 22 record high. So it is still just a downward correction and not a new bear market. But we may see some more downside. For now, it looks like a consolidation within a downtrend, as there have been no confirmed positive signals so far. Here’s the breakdown: The S&P 500 slightly extended its short-term downtrend on Friday. A speculative short position is still justified from the risk/reward perspective. We are expecting an over 5% correction. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his 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. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members 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.
US Dollar Still Has the Green Light

US Dollar Still Has the Green Light

Przemysław Radomski Przemysław Radomski 06.12.2021 16:13
  The dollar looks poised for another rally, to gold’s dismay. So, what’s the price target for the greenback over the winter months? While the consensus across the financial markets (especially at the beginning of the year) was that the U.S. dollar was destined for devaluation, I warned that the greenback would rise from the ashes. And with gold, silver, and mining stocks often moving inversely to the U.S. dollar, the latter’s ascent helped make the precious metals one of the worst-performing asset classes in 2021. Moreover, after more dollar doubters emerged in October – and the precious metals rallied hard – the USD Index eventually cut through 94, 95, and then 96 like a knife through butter. And with the precious metals reversing sharply once again, I expect another rally to push the USD Index to ~98 over the medium term. Perhaps quite soon. And the implications for the precious metals sector, are bearish. On top of that, while overbought conditions elicited a short-term pullback, end-of-month turnarounds and / or rallies are commonplace for the greenback. For context, I warned that a consolidation was likely overdue by highlighting the USD Index’s overbought RSI (Relative Strength Index) readings with the red arrows above. Conversely, the blue vertical dashed lines above demonstrate how the USD Index often bottoms near the end of each month, and rallies often follow. And while the current consolidation may need some more time to run its course, higher highs should materialize over the medium term. To explain, after the USD Index recorded sharp rallies in June and July, consolidation phases unfolded before the uptrends continued. And while the secondary uprisings occurred at more moderate paces, the USD Index still managed to make new highs. As a result, ~98 should materialize during the winter months. Furthermore, if the forecast proves prescient, the USD Index’s strength will likely usher gold back to its previous 2021 lows. Adding to our confidence (don’t get me wrong, there are no certainties in any market; it’s just that the bullish narrative for the USDX is even more bullish in my view), the USD Index often sizzles in the summer sun and major USDX rallies often start during the middle of the year. Summertime spikes have been mainstays on the USD Index’s historical record and in 2004, 2005, 2008, 2011, 2014 and 2018 a retest of the lows (or close to them) occurred before the USD Index began its upward flights (which is exactly what’s happened this time around). Furthermore, profound rallies (marked by the red vertical dashed lines below) followed in 2008, 2011 and 2014. With the current situation mirroring the latter, a small consolidation on the long-term chart is exactly what occurred before the USD Index surged in 2014. Likewise, the USD Index recently bottomed near its 50-week moving average; an identical development occurred in 2014. More importantly, though, with bottoms in the precious metals market often occurring when gold trades in unison with the USD Index (after ceasing to respond to the USD’s rallies with declines), we’re still far away from that milestone in terms of both price and duration. Again, the recent move higher in the USD Index doesn’t necessarily apply in the case of the above rule, as it was not the strength of the USD but weakness in the euro that has driven it. Likewise, with the USD Index now approaching its long-term rising support line (which is now resistance), a rally above the upward sloping black line below would invalidate the prior breakdown and support a move back above 100. Also, please note that the recent medium-term rally has been calmer than any major upswing witnessed over the last 20 years, where the USD Index’s RSI has hit 70. I marked the recent rally in the RSI with an orange rectangle and I did the same with the second-least and third-least volatile of the medium-term upswings. The sharp rallies in 2008 and 2014 were of much larger magnitudes. And in those historical analogies, the USD Index continued its surge for some time without suffering any material corrections. As a result, the short-term outlook is more of a coin flip. However, the medium-term outlook remains profoundly bullish, and gold, silver, and mining stocks may resent the USD Index’s forthcoming uprising. Just as the USD Index took a breather before its massive rally in 2014, it seems that we saw the same recently. This means that predicting higher gold prices (or the ones of silver) here is likely not a good idea. Continuing the theme, the eye in the sky doesn’t lie. And with the USDX’s long-term breakout clearly visible, the wind remains at the dollar’s back. Furthermore, dollar bears often miss the forest through the trees: with the USD Index’s long-term breakout gaining steam, the implications of the chart below are profound. And while very few analysts cite the material impact (when was the last time you saw the USDX chart starting in 1985 anywhere else?), the USD Index has been sending bullish signals for years. Please see below: The bottom line? With my initial 2021 target of 94.5 already hit, the ~98 target is likely to be reached over the medium term (and perhaps quite soon), mind, though: we’re not bullish on the greenback because of the U.S.’ absolute outperformance. It’s because the region is fundamentally outperforming the Eurozone, the EUR/USD accounts for nearly 58% of the movement of the USD Index, and the relative performance is what really matters. In conclusion, gold, silver, and mining stocks have reversed sharply in recent weeks. And though the trio tried to ignore the USD Index’s recent uprising, I wrote on Jul. 23 that the time-tested relationship of ‘U.S. dollar up, PMs down’ will likely be a major storyline during the Autumn months. To that point, with the theme likely to continue over the medium term, lower lows should confront gold, silver, and mining stocks over the next few months. 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, CFAFounder, 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.
Intraday Market Analysis – USD Treads Water - 07.12.2021

Intraday Market Analysis – USD Treads Water - 07.12.2021

John Benjamin John Benjamin 07.12.2021 09:00
GBPUSD attempts to rebound The sterling consolidates as BOE officials stress due to inflationary pressure from a tight labor market. So far, rebounds have been an opportunity for trend followers to sell into strength. The pound is testing last December’s demand zone around 1.3200. An oversold RSI may help lift bids momentarily as sellers take profit. 1.3300 is the immediate resistance. Then the bulls will need to clear the origin of the latest sell-off at 1.3370 to attract more buying interest. On the downside, a breakout would send the price to 1.3100. NZDUSD sticks to downtrend The US dollar edged higher thanks to a rally in Treasury yields. Increasing divergence between the 20 and 30-day moving averages suggests a deterioration in market sentiment. On the hourly chart, a short-lived rebound has struggled to stay above 0.6780. And that is a sign that the bears are still in control of the direction. 0.6700 is the next support. Its breach would extend the sell-off to November 2020’s lows near 0.6600. The RSI’s oversold situation may cause a limited rebound with 0.6810 as the closest resistance. US 30 breaks higher The Dow Jones recoups losses as the omicron variant may have less impact than feared. The index bounced off last October’s lows around 34000. An oversold RSI in this demand zone has attracted a crowd to buy the dips. A break above 34950 and then 35300 would prompt short-term sellers to cover, paving the way for a sustainable rally. 35950 would be a key hurdle and its breach may turn the cautious mood around and resume the bullish trend. 34700 is the first support when the bulls try to catch their breath.
Bitcoin, going from strength to strength

Bitcoin, going from strength to strength

Korbinian Koller Korbinian Koller 07.12.2021 14:07
Like a whale diving deep to gorge on krill to emerge even more empowered shortly after. When catching these cycles right, bitcoin is ever rewarding. BTC in US-Dollar, Monthly Chart, up and up and up: Bitcoin in US-Dollar, monthly chart as of December 7th, 2021. Typically, fortunes are slowly acquired and quickly destroyed, not so with bitcoin. Bitcoin’s up moves can be as dramatic as their declines. In addition, bitcoin seems bulletproof to fundamental attacks. With China’s ban on mining, its share of the global hash rate sank from 75% held in September 2019 to zero by now. Miners migrated to the US and had its 2019 4% hash rate rise to 35%. It is essential to remind oneself of facts like these, when emotions overcome one with doubt and confidence falters at these steep declines in bitcoin. At times when opportunity knocks and self-confidence is critical for accurate trade execution. The monthly chart above shows the roller coaster moves that can make even the stern trader doubtful, yet bitcoin rose closer to the sun after each cloud. We find six figure bitcoin prices to be likely within the next few months, as indicated in the very right green up arrow in the chart. Gold in Bitcoin, Daily Chart, measuring true value: Gold in Bitcoin, daily chart as of December 7th, 2021. Where we see bitcoin going from strength to strength, as well, is the relatively rare occurrence of fiat currencies being endangered by inflation to the level that we are right now. Fortunes can change hands quickly. Typically, procrastination is fueled by the belief of a rise in the cost of things. In reality, currency is less valuable. We, as such, encourage you not to measure everything in your country’s currency. We find measurements towards a gold price or a bitcoin price a more realistic view of price/value changes. The chart above shows how the relationship between gold and the bitcoin price changed over the short term, with bitcoins’ recent sharp decline.   BTC in US-Dollar, Weekly Chart, in the not to distant future: Bitcoin in US-Dollar, weekly chart as of December 7th, 2021. A six-sigma event risk in the overall market environment is always present. Such a market crash would temporarily drag bitcoin to lower prices and needs to be reflected in your money management. Other than that, we see prices right here as a good starting zone for the next push-up which should exceed all-time highs in the not-too-distant future, as portrayed in the above chart. Bitcoin, going from strength to strength: No matter what we tell ourselves, when prices decline, we feel fearful. It is always hard to step into such selling pressure for a low-risk entry spot based on the action/ reaction principle to be part of the next cycle up.  Moreover, practice and planning are required to be part of these upswings and to ride the wave. Our quad strategy aims to reduce initial risk quickly after an entry has been made. Last Friday’s entries near the lows of the day allowed for a more than ten percent profit-taking on half of the position size, a target we call “financing.” Unheard of in any other liquid, low-risk market. 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. This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting. By Korbinian Koller|December 7th, 2021|Tags: Bitcoin, Bitcoin bounce, Bitcoin bullish, bitcoin consolidation, crypto analysis, Crypto Bull, crypto chartbook, DeFi, low risk, quad exit, technical analysis, trading education|0 Comments About the Author: Korbinian Koller Outstanding 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.
The worst-case scenario for Bitcoin

The worst-case scenario for Bitcoin

Alex Kuptsikevich Alex Kuptsikevich 07.12.2021 08:42
On Monday, along with rising risk appetite in global markets, buying interest in cryptocurrencies returned. The cryptocurrency fear and greed index added 9 points to 25 overnight. This is still an area of extreme fear, but recent dynamics of the largest coins indicate that this is now the moment for investors with increased risk appetite to enter. BTCUSD has added 4.9% in the last 24 hours, trading just above the $51K level. The RSI on the daily candlestick charts has retreated from below 30 (oversold area). The price has found support from buyers at the important 200-day moving average. This is a strong signal for many participants that the whole market stays in a long-term bullish phase. But so far, we see very cautious buying, which is creating doubts. A better signal would be a sharp move up, crossing this line, as in July and October this year and before that in April 2020. This is quite an optimistic scenario for bitcoin, where it gets sustained bullish support, preventing it from descending into an uncontrollable fall. The pessimistic scenario for bitcoin, and the entire cryptocurrency market, assume a bullish/bearish sentiment tied to 4-year halving cycles. The previous two bear markets came in 2014 and 2018, giving speculators a good shake out of that train and leaving only the most resilient crypto enthusiasts. A sharp reversal to the downside after a dizzying rise came in late 2013 and 2017 and lasted about a year. This suggests a high risk of reversal at the end of 2021. From peak to bottom in 2013-2014, BTC lost more than 70%, and in 2017-2018 – 85%. A repetition of these scales sets BTCUSD up for a pullback in the 10-20k range. In our view, even a decline to 20k - the highs of the previous cycle - looks like a very pessimistic scenario for now. But it may well materialise under a negative set of circumstances, though it is bound to attract the interest of long-term buyers. Bitcoin needs to pass several checkpoints before we seriously consider such a scenario. The first one is the 200-day moving average (currently at 48k). Confirmation we will get on the decline under $40K, the level of previous local lows.
Alibaba Stock Price and Forecast: Why is BABA stock going up?

Alibaba Stock Price and Forecast: Why is BABA stock going up?

FXStreet News FXStreet News 07.12.2021 15:59
BABA stock rallies over 10% on Monday in broad rally. Chinese names have suffered as DIDI delisting hits sentiment. BABA and others rally on Monday as China cuts commercial bank reserve requirements. Chinese stocks are nothing if not volatile, and this continued on Monday with huge rallies in most names. The reason was that China cut the reserve requirement for commercial banks in an effort to try and pump liquidity into the system. This can be taken two ways, and investors chose to see the positives. China is struggling to contain problems in the banking and property sectors from spreading, and the travails of Evergrande Group have been well documented. Evergrande was due to pay $82.5 million on Monday, but we are still in the dark on whether it met this latest payment or not. Bloomberg is reporting that another Chinese developer, Kaisa Group Holdings, received a forbearance proposal from bondholders on Tuesday. A forbearance proposal would be a form of an agreed delay or reduction in repayments. If agreed by both bondholders and the company, it averts a formal debt default. BABA chart, 15-minute Alibaba (BABA) stock news BABA stock has been under pressure throughout 2021 as a wave of negative sentiment hit Chinese equities and in particular Chinese tech names. This was kickstarted by BABA itself as it had to shelve the proposed spin-off IPO of ANT Group late in 2020. China then began taking a more cautious approach to its tech sector as worries over the huge amounts of data generated by them escalated. Didi Group (DIDI) did manage to get its IPO off the ground in New York but now plans to delist to Hong Kong. Alibaba stock is down 47% so far in 2021 and 22% over the last month as the sell-off has accelerated. Alibaba (BABA) stock forecast Investors may rejoice at the current bounce in Chinese tech stocks, but this has all the makings of yet another dead cat bounce. Take a look at the monthly chart below. BABA has broken the huge $130 level, which was really the last hope of support. Now it is lookout below until $100. The longer-term view is strongly negative until $169 is broken to the upside. Alibaba chart, monthly Shorter-term traders will be aware of the 9-day moving average offering resistance at $127.56. The MACD, stochastics and RSI all remain in bearish territory. The 15-minute chart does show short-term support at $112 with a large amount of volume at that level on Friday that provided a base for Monday's rally. This may carry on for Tuesday as risk assets are due to bounce, but $130 will likely cap any further gains. Alibaba daily chart above and the 15-minute chart below. The 15-minute shows the large support volume at $112.  
Turning the Corner in Style

Turning the Corner in Style

Monica Kingsley Monica Kingsley 07.12.2021 16:05
S&P 500 bulls delivered, and the revival in risk-on is increasingly getting legs as HYG rebounded sharply. The sharply increasing participation is counterbalanced by still compressing yield curve, but yields finally rose yesterday. Finally, we saw a truly risk-on positioning in the credit markets – and that won‘t be without (positive) consequences. Still, it pays to be ready for the adverse scenario that I‘ve described in yesterday‘s key analysis, in connection with which I have received an interesting question. It‘s essentially a request to dig in some more so that my thinking can‘t be interpreted as being on the verge of immediately flipping bearish: Q: Your analysis of today: "Downside risks having sharply increased since Thanksgiving. Not only for stocks, where we might not be making THE correction's low, but also for commodities, cryptos and precious metals". I am not sure if I am interpreting this right (English is not my native language). Are you saying that the market might turn down spectacular, even for precious metals? A: it's specifically the market breadth for larger than 500 stock indices that tells me we possibly aren't out of the woods yet - no matter the technical improvements that I looked for us to get yesterday, and that are likely to continue thanks not only to solid HYG performance. What I'm saying is that unless there is broader participation in the unfolding S&P 500 rally (and in the rally of other indices), we're in danger of a more significant move to the downside than we saw already (those few percents down). You can also watch for the sensitivity to Fed pronouncements - on one hand, we have the taper, even accelerated one on the table, yet through Nov, total assets grew by practically $100bn, and it was only the 7-day period preceding Dec 01 that marked balance sheet contraction. This sensitivity to hawkish statements would show in downside hits to risk-on assets (cyclicals), and also in VIX spikes. There, my mid-session Friday call made on Twitter for VIX to better reverse from its highs for Friday's close, came true. So, should a sharper decline happen (as said, the risks thereof haven't disappeared), it would (at least initially) influence precious metals too, and not remain limited to stocks and commodities. Having answered, let‘s move on. I like the strength returning to energy – both oil and natural gas as I tweeted yesterday. While financials are taking their time, and consumer discretionaries lagged hugely on a daily basis behind staples, I look for more strength to return to cyclicals at expense of interest rate sensitive sectors (that includes utilities also). Rising yields (however slowly) would underpin commodities, and it‘s showing already. Precious metals continue needing the newfound Fed hawkishness image to start fracturing, or causing inordinate level of trouble in the real economy. The latter would take time as manufacturing is pretty much firing on all cylinders, which is why I‘m not looking for overly sharp gold and silver gains very soon. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 bears were more than a bit tired, and Friday‘s candle being unable to break below preceding day‘s lows while not too much stood in the way, was telling. What can‘t go down, would sooner or later go up. Credit Markets HYG upswing is a pleasant sight for the bulls – half of the prior decline has already been erased. Quite some more still needs to happen, and the lack of volume yesterday is a sign that patience could very well be required (let‘s temper our expectations while still being positioned bullishly). Gold, Silver and Miners Precious metals are still looking stable, and are waiting for the Fed perceptions to fade a little. CPI inflation hasn‘t peaked neither in the U.S. nor around the world (hello, Europe), neither have energy prices or yields – so, get ready for the upswing to continue at its own pace. Crude Oil Crude oil confirmed the bullish turn, and the modest volume isn‘t an issue for it indicates lack of sellers willing to step in. Plenty of positioning anticipating the upswing happened in the days before, I think. Copper Copper prices are taking the turn alongside the CRB Index – it‘s starting to lean as much as APT in the direction of no economy choking response to Omicron that would necessitate further GDP downgrades. I‘m looking for the red metal to continue gradually favoring the bulls even more. Bitcoin and Ethereum Bitcoin and Ethereum attempt base building, but both cryptos (Bitcoin somewhat more) remain vulnerable. There are a few good explanations for that, and the most credible ones in my view revolve around stablecoins backing. Summary S&P 500 reversal higher is looking increasingly promising, and the signs range from sharply broadening market breadth to encouraging HYG performance. Commodities aren‘t being left in the cold, and I‘m looking for their own reversal to gradually spill over into precious metals – depending upon the evolving Fed perceptions, of course. The odds of us having seen the worst in this correction have considerably improved, and while positioned appropriately, I‘m not yet sounding the analytical all clear of blue skies ahead. Thank you for having read today‘s free analysis, which is available in full 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 five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Oil and more...

Oil and more...

Luke Suddards Luke Suddards 07.12.2021 17:07
Oil: Crude has been rocketing higher after positive news flow with regards to omicron. Early evidence from South Africa indicates that ICU and oxygen usage are lower than previous waves at similar points on the timeline as well as those in hospital being largely unvaccinated. Based on this small sample size of evidence (which makes me still cautious) this leads one to believe omicron seems more transmissible, but less severe. Fauci (Biden’s Chief Medical Adviser) also shared optimism over the weekend stating that early signals show not a whole lot of severity. GlaxoSmithKline Plc also announced from their recent research that their Covid-19 antibody treatment is effective against mutations in omicron. Risk assets, which oil is falls into got a boost from this and current price action indicates some hot money has flowed back into the black liquid. Adding fuel to the bullish fire we had news that Iran-US Nuclear talks have stumbled a bit. Looking at the daily chart, technicals are strong with an oversold bounce having taken place with $68 support holding. Price is now above its 200-day SMA. Targets wise, on the upside the 21-day EMA around $76 and $78 will be important. On the downside $73.5 (just above the 200-day SMA) will be key. AUDUSD: The RBA left their policy settings unchanged as expected by the market. On the technicals, looking at the 1-hour chart here we can see price is facing some resistance in the form of the intersection of the 200 period SMA, downtrend line and 61.8% Fibonacci level. The RSI is in overbought territory. Could we see a dip lower towards the 0.705 area between the 21 period EMA and the 50 period SMA. On the upside 0.715 would be important. EURJPY: EURJPY on the 1 hour chart has been fluctuating between the 128.5 and 127.5 range bounds. Keep this one on your radar if you like playing the range.
Intraday Market Analysis – USD Edges Lower

Intraday Market Analysis – USD Edges Lower

John Benjamin John Benjamin 08.12.2021 09:07
EURUSD seeks support The euro bounced higher after the bloc’s Q3 GDP beat expectations. A previous rebound was capped by the 20-day moving average, suggesting that the bearish sentiment still prevails. The RSI’s double top in the overbought area has prompted short-term buyers to take profit. The pair has met support above 1.1240. The bulls will need to lift offers around 1.1330 before they could attract momentum buyers. A bearish breakout would send the price to the floor at 1.1190. Its breach would trigger a new round of sell-off. AUDUSD breaks higher The Australian dollar soared after the RBA remained optimistic about the economic recovery. The pair saw strong buying interest at the psychological level of 0.7000, which also sits near November 2020’s lows. An oversold RSI on the daily chart compounds the ‘buying-the-dips’ behavior. An initial pop above 0.7070 forced bearish trend followers to cover their latest bets. 0.7170 would be the next target though the RSI’s overbought situation may limit the surge. 0.7040 is the first support for buyers to regroup and accumulate. USDJPY attempts to rebound The yen stalled after Japan’s GDP showed an unexpected contraction in Q3. A break below the daily support at 112.70 has put the bulls on the defensive. The latest consolidation is a sign of indecision as to whether the correction would continue. The greenback found support over 112.50 and a close above 113.95 could help the bulls regain the upper hand. Then the psychological level of 115.00 would be the next step before the uptrend could resume. On the downside, a fall below 113.10 would retest the key support at 112.50.
Weak November Payrolls Won’t Help Gold

Weak November Payrolls Won’t Help Gold

Arkadiusz Sieron Arkadiusz Sieron 07.12.2021 17:14
  November employment report was mixed. Unfortunately for gold, however, it won’t stop the Fed’s hawkish agenda. Nonfarm payrolls disappointed in November. As the chart below shows, the US labor market added only 210,000 jobs last month. This number is much lower than both October’s figure (546,000 gains) and the market expectations (MarketWatch’s analysts forecasted 573,000 added jobs). So, it’s a huge blow to those optimistic about the US economy. However, this is a huge blow that nobody will care about because the disappointing payrolls were accompanied by a big decline in unemployment. As the chart above shows, the unemployment rate decreased by 0.4 percentage points, from 4.6% in October to 4.2% in November. What’s more, the unemployment rate declined simultaneously with the increases in both the labor-force participation rate (from 61.6% to 61.8%) and the employment-to-population ratio (from 58.8% to 59.2%). This means that the reduction in unemployment was genuine and rather not a result of dropping out from the labor market. Additionally, wage inflation has slowed down from 4.84% in October to 4.8% in November, remaining below expectations, which could slightly ease inflationary concerns. Last but not least, after revisions, employment in September and October combined was reported to be 82,000 higher than previously indicated, and the monthly job growth has averaged 555,000 so far this year. Therefore, even a weak November doesn’t change the fact that 2021 marked a great improvement in the US labor market.   Implications for Gold What does the November employment report imply for the gold market? The nonfarm payrolls disappointed, but it’s not enough to stop the Fed from accelerating the pace of tapering its quantitative easing, especially given the significant reduction in the unemployment rate. So, the hawkish revolution won’t be stopped. It may even be strengthened, as a big decline in unemployment brings us closer to “full employment” and meeting the criteria for hiking interest rates. This is, of course, not good news for the gold bulls. After hearing worries about inflation a few weeks ago, the Fed managed to calm investors. They’ve believed that Powell and his colleagues would take the inflationary threat seriously. Markets now expect a speed-up in the pace of tapering in December and as much as three interest rates hikes in 2022 (there are even investors who bet on seven hikes by the end of the next year!). However, there is a silver lining here. With the unemployment rate at 4.2%, the potential for further improvement is rather limited. And when a new upward trend begins, we will have rising unemployment rate and high inflation at the same time. Such conditions create stagflation, which would take gold higher. This is still a song of the future, though. Let’s focus on the recent past: gold prices increased slightly on Friday (December 3, 2021). Although the London P.M. Fix hardly changed (see the chart below), the New York price rebounded to about $1,783 on Friday from $1,769 the day before. However, it doesn’t change the fact that gold remains stuck in a sideways trend below $1,800, as concerns about inflation exist along with expectations of a more aggressive Fed tightening cycle. Luckily for gold, despite its hawkish rhetoric, the US central bank will remain behind the inflation curve. The cautious, dovish policy is simply too tempting, as hitting the brakes too hard could trigger a financial crisis and a recession. With the CPI annual rate above 6%, the Fed should have already hiked the federal funds rate instead of waiting until Q2 2022. And even with three 25-basis point hikes, real interest rates will remain deeply in negative territory, which should be supportive of gold prices. If you enjoyed today’s free gold report, we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today. If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care
The anatomy of Fed tapering is different this time

The anatomy of Fed tapering is different this time

Peter Garnry Peter Garnry 08.12.2021 14:20
Equities 2021-12-08 14:00 8 minutes to read Summary:  Growth and bubble stocks celebrated its best day in nine months yesterday on good news about the Omicron variant, but the true underlying risk in the form of higher interest rates has not gone away. The Fed has acknowledged inflation which will give it less flexibility should tapering cause some wave splash in equities. Interest rate sensitivity will be a key theme in 2022 for equities and especially growth and bubble stocks. For those growth companies that can lift expectations for operating margin trajectory can mitigate the negative impact from higher interest rates, but those growth companies that fail to lift profitability will likely experience a tough 2022. Bubble stocks are back on positive Omicron news It was a blockbuster equity session like we have not seen in nine months with our NextGen Medicine, E-commerce, and Bubble Stocks baskets gaining between 5% and 6.6%. The culprit was of course the continued positive news flow suggesting that the new Covid-19 variant Omicron is less virulent than feared and today Pfizer announced that three shots with their vaccine protect against Omicron. Does that change the overall concern for growth and especially bubble stocks? In our recent equity note Interest rate sensitivity is back in town haunting technology stocks we show quantitatively how the Nasdaq 100 Index (US technology stocks) is significantly more interest rate sensitive than the S&P 500 Index and STOXX 600 Index (see chart below). This interest rate sensitivity is key to understand the underlying risk in growth and especially bubble stocks, and the risk of higher interest rates has gone away. The Fed will have less flexibility this time In fact the Fed has acknowledged that inflationary pressures are more rooted and broad based, and of concern for US households seeing their purchasing power declining. The Fed has three times since early 2013 tried to taper its bond purchases all with negative impact on financial assets. Every time markets hit a big enough pain point, the Fed reversed and restarted quantitative easing. This could be done because inflation expectations were low and well anchored. But fast forward and today’s inflationary outlook is very different and the Fed might not be in a position where it can go back to expanding the balance sheet. Tapering will be accelerated in the coming months and then rate hikes are coming and if the economy or financial markets are deteriorating the Fed might have to remain tight to control inflation. As we have said many times the past couple of months investors must balance their portfolios before the tighter monetary policy cycle kicks properly into gear. Investors should reduce exposure to growth and bubble stocks, while increasing exposure to themes that can provide some cover during inflationary pressures. The themes we think will do well during inflationary periods are mega caps (Microsoft’s recent price hike shows why), semiconductors, logistics, financial trading firms (bet on volatility), cyber security (business necessity), and the commodity sector. The fact that mega caps have reached unimaginable market power and are hugely profitable is bad for the overall economy, but it is likely going act as a cushion for the equity market when interest rates start rising. The chart below shows another important aspect of markets that we need to be aware of. The decade of the 2010s was the best decade in terms of earnings growth adjusted for inflation in the S&P 500 since WWII. It explains the multiple expansion under lower interest rates, but it also explains the rise of passive investing as the rapid earnings growth has lifted all boats. The 2010s is unlikely be repeated in the current decade and a higher inflationary outlook will likely give rise to a different investing climate in equities and active strategies might stage a big comeback. Higher operating margin will differentiate growth stocks in 2022 We recently modeled a growth stock which had a price implied expectation of four years into the future, meaning that the market value was derived by extrapolating consensus expectations of growth and operating margin until 2025. The interesting part of this analysis is to find out which parameter gives rise to the biggest change in market value. In this case it was not revenue growth unless it went down a lot, which would only happen under a recession scenario. An upside change to operating margin expectations drives a rather large change in value; in other words, growth companies that can raise operating margin faster than expected will get rewarded. But the most sensitive parameter to the market value was the interest rate. By moving up the 10-year interest rate by 100 basis point the company’s value fell 26% because the higher interest rate impact financing costs on debt and the cost of equity. The example above provide a glimpse into the important battleground in equities in 2022. Higher interest rates because of higher inflation combined with the fiscal drag will create an environment with higher discount rate on cash flows while likely lower overall growth. This will penalize a lot of growth and bubble stocks, these companies can only mitigate this impact by raising operating margin beyond current expectations. If they do not manage to do that, then we could see great losses in 2022 in these pockets of the equity market.
The Pound: will the bears win the market without news?

The Pound: will the bears win the market without news?

Alex Kuptsikevich Alex Kuptsikevich 08.12.2021 09:27
The pound was down against the dollar on Tuesday. However, the very nature of the movements, as in the case of the euro rate, was far from ideal and straightforward. The mixed dynamics is clearly visible on the 30-minute timeframe, where the rate consolidated above a strong downtrend line with four pivots. The chart first crossed this line and then decided to resume the downward movement. It was as if the obvious buy signal turned out to be false, and it was possible to exit from it by the downward reversal of the MACD indicator. In general, it turns out that the downward trend of the pound has continued, but at the same time, the annual lows set on November 30th have not been updated so far. It should also be noted that during Tuesday, neither the UK nor the US saw a single important event or publication of economic data. They will not be there today either. Despite this, the volatility increased yesterday, and today, during the session, more calm movements are expected. On the 30-minute timeframe, the pound continues to have a downward trend. Earlier today, the downtrend line was broken, so both the continuation of the fall and a rematch, in which traders will try to return the rate above it, is possible. In general, the worsening epidemiological situation and the introduction of quarantine by the authorities of European countries make investors expect a drop in activity and sentiment by the end of the week.
New Year Resolutions: what to watch in 2022? | MarketTalk: What’s up today? | Swissquote

Fireworks to Go On?

Monica Kingsley Monica Kingsley 08.12.2021 16:01
S&P 500 sharply extended gains, and credit markets indicate some continuation even if by pure inertia. A trend in place, stays in place until reversed – and yesterday‘s upswing was sufficiently supported by the credit markets. The late day retreat in HYG is an obvious warning of a pause possibly coming next, but not of a reversal – the improvements in market breadth speak for themselves. So, I‘m looking for a lean day today, and I‘m keenly watching bonds and cyclicals such as financials for further short-term direction clues. While yesterday‘s upswing was driven by tech, the daily rise in yields and inflation expectations (however modest) was balanced out by still more yield curve compression. The risk-on turn in credit markets isn‘t over, and the key question is whether HYG can extend gains or at least go only sideways for a while. Today‘s key premarket news propelling risk assets up, was about Pfizer extolling its three-dose alleged efficiency against Omicron – even though the news was sold into shortly thereafter, it has the power to buy more time and provide fuel for stocks and commodities. The copper weakness remains the only watchout in the short term, and silver sluggishness reflects lack of imminent inflation fears. As if the current prices accurately reflected above ground stockpiles and yearly mining output minus consumption. It‘s the same story in the red metal, by the way. Patience in the precious metals – it‘s about Fed either relenting, or placing inordinate amount of stress on the real economy, which would take time. Spring 2022 most probably would bring greater PMs gains than 2021 with its fits and starts – aka when inflation starts to bite the mainstream narratives and stocks, some more. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 gapped higher, and is once again approaching ATHs. Hold your horses though for it would take some time to get there. I would prefer to see broader participation within value, which isn‘t totally there at the moment. It‘s improving, but still. Credit Markets HYG upswing was considerably sold into, and that spells some consolidation ahead. The degree to which it spills over into stocks, remains to be seen. Gold, Silver and Miners Precious metals are still looking stable, and ever so slowly improving after the Fed hawkish turn hit. The central bank and real yields projections hold the key, but the countdown to higher prices is firmly on. Crude Oil Crude oil upswing indeed continued, and black gold looks set to consolidate gains unless value stocks spring some more to life later today. Anyway, the medium-term chart remains bullish. Copper Copper is another reason why I‘m not overly bullish for today – the red metal‘s base building looks to need a bit more time to play out. Bitcoin and Ethereum Bitcoin and Ethereum are still base building, and looking vulnerable. While a downswing isn‘t guaranteed, it can come and turn out to be sharp. Summary S&P 500 is likely to consolidate recent strong gain, not accelerating the surge today. The bulls within risk-on assets look to be slowly gaining the upper hand, and the opening part of today‘s analysis describes it‘s not a one-way street to fresh highs as the Fed has turned from a tailwind to a headwind. Thank you for having read today‘s free analysis, which is available in full 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 five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Bitcoin’s dominance went below 40%: crypto winter or maturity?

Bitcoin’s dominance went below 40%: crypto winter or maturity?

Alex Kuptsikevich Alex Kuptsikevich 09.12.2021 08:46
The cryptocurrency market capitalisation rose slightly, by 0.4%, to 2.36 trillion in the past 24 hours. The cryptocurrency Fear & Greed Index added another 1 point overnight to 29, a significant retreat from the December 6 lows of 16 points, but still in the fear zone. Binance Coin, XRP and Luna have added between 4% and 10% over the past 24 hours, leading the gains among the top altcoins. Growth has been held back by the negative dynamics of the first cryptocurrency, which is losing more than any other of the top-20 coins. The pressure intensified on exceeding the $50K level, pushing it down 1.7% in a day and 12% in seven days. As another result, bitcoin’s overall crypto market share fell below 40%. Approaching this mark in May was a manifestation of sharp profit-taking in Bitcoin after a dizzying rally. Any sustained period when the share of the first cryptocurrency fell below 40% was in January -March and April-June periods in 2018. After that, the BTC domination has recovered with altcoins’ deeper crash, called later the crypto winter. But there is another crucial point: Bitcoin’s peak share declines from cycle to cycle as more new players emerge. At the beginning of 2017, it was 87%, then in 2019, it is already less than 70%. Many other projects have appeared in place of XRP, which has lost its former strength, like a hydra with several new ones growing in an area of its severed head. That said, neither the mechanics (BTCUSD above its 200-day average and retreating from an oversold area on the daily charts) nor the sentiment in the stock markets are pessimistic, indicating that we see purely local momentum in Bitcoin. Ether continues to pivot around its 50-day moving average, sticking to local bullish momentum. As always, it should be stated that a sustained negative on Bitcoin has the power to affect the entire crypto market, but the smooth slide in price suggests that enthusiasts are looking for other ideas in the sector, but not a general flight out of it. Perhaps capital flowing from one cryptocurrency to another is the best scenario for the entire market. However, as Saturday showed, it is easy to scare the whole market with solid moves in BTCUSD.
Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Crypto markets recover, but BTC could ruin the party

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Crypto markets recover, but BTC could ruin the party

FXStreet News FXStreet News 09.12.2021 09:24
Akash Girimath Bitcoin price continues to stride with $53,687 and $56,276 as its short-term targets. Ethereum price pauses before retesting the $4,659, followed by the $4,777 hurdles. Ripple price to face a declining resistance level before it retests $0.956. Bitcoin price has been on a steady recovery phase after the recent flash crash. Ethereum and Ripple follow big crypto and are on their trajectories of retracement. The upswing for BTC is likely to continue, but investors need to note that a downswing might emerge such that a range forms. Bitcoin price eyes higher highs Bitcoin price is recovery from its December 4 crash and is currently hovering around $50,000 psychological level. This ascent comes as BTC tries to flip the inefficiency left by the bears during the recent sell-off. While $53,687 is still the short-term resistance barrier BTC wants to tag, investors need to know that BTC might sweep the swing low at $46,698 and set a trading range. Although this might result in a brief correction, it can serve as an opportunity to accumulate for sidelined buyers. Clearing $53,687 will open the path for Bitcoin price to tag the next level at $56,276. In total, this run-up would constitute an 11% ascent from the current position. BTC/USD 4-hour chart On the other hand, if Bitcoin price retraces to the extent that it produces a lower low below the December 4 swing low at $40,867, it will invalidate the bullish thesis. Ethereum price promptly follows BTC Ethereum price has rallied roughly 30% from its December 4 swing low at $3,370 and shows signs that it wants to go higher. The $4,493 resistance barrier is the first level ETH will encounter. Clearing this level will place $4,659 and $4,777 hurdles in its path. Ethereum will easily tag these levels, but the holders should keep a close eye on the all-time high at $4,878, as ETH might revisit. In a highly bullish case, Ethereum price could extend beyond its record level and set up a new one at $5,000. ETH/USD 4-hour chart While things are looking up for Ethereum price, a failure to breach through the $4,493 hurdle could indicate a weakness among buyers. If ETH retraces lower and produces a lower low below $3,890, it will invalidate the bullish thesis. Ripple price faces two hurdles Ripple price has seen a considerable recovery, similar to Bitcoin and Ethereum. As it stands, the XRP price looks ready to tackle the bear trend line extending from November. Any uptick in buying pressure pushes the remittance token toward this barrier. A decisive 4-hour candlestick close above this trend line at roughly $0.87 will set a higher high and confirm an uptrend. This move could attract sidelined buyers and propel XRP price to retest the $0.956 barrier. In total, this climb would represent a 15% gain from the current position. XRP/USD 4-hour chart On the contrary, if Ripple price fails to slice through the declining trend line, it will suggest that the sellers are not done offloading. In this situation, the XRP price will knock on the $0.764 support level. A breakdown of this barrier that produces a lower low will invalidate the bullish thesis for XRP.  
Tension Beetween Ukraine And Russia Definetely Shaped News In Recent Days

EUR/USD Forecast: Further near term gains in the docket

FXStreet News FXStreet News 09.12.2021 09:24
EUR/USD Current price: 1.1300 Valeria Bednarik Stocks markets are giving mixed hints on sentiment heading into Wall Street’s opening. US Treasury yields recovered from an early dip, challenging weekly highs. EUR/USD is mildly bullish in the near term, needs to clear the 1.1310 resistance. The EUR/USD pair recaptured the 1.1300 level heading into the US opening, although so far, there has been no follow-through. The market´s mood is unstable, as investors are still struggling to price in the latest coronavirus developments and the latest from central banks after the Fed announced it might speed up tapering in their next meeting. The American currency managed to advance during European trading hours, following softer US government bond yields and as stocks traded with a sour tone. Equities bounced, putting mild pressure on the greenback, but as government bond yields remain strong, the dollar’s decline is modest. The EU did not release relevant macroeconomic figures, while the US published MBA Mortgage Applications for the week ended December 3, up 2% from -7% in the previous month. The US will publish October JOLTS Job Openings. EUR/USD short-term technical outlook The EUR/USD pair trades near a daily high of 1.1307, mildly bullish in the near term. The 4-hour chart shows that the price is currently extending above its 20 and 100 SMAs, both converging flat a few pips below the current level. At the same time, technical indicators crossed their midlines into positive territory, maintaining their bullish slope. The pair needs to break through the 1.1310 resistance to have further chances of advancing. Support levels: 1.1265 1.1220 1.1185 Resistance levels: 1.1310 1.1345 1.1380
What Happens After a Bullish Stampede?

What Happens After a Bullish Stampede?

Przemysław Radomski Przemysław Radomski 08.12.2021 15:14
  The bulls pumped up the market, but with fundamentals deteriorating and corporations largely responsible for the spike, regular investors will be left holding the bag. With investors betting on a Santa Clause rally despite the deteriorating fundamentals, the S&P 500 helped the GDXJ ETF (proxy for junior mining stocks) outperform on Dec. 7. However, with short-covering and corporate buybacks primarily responsible for the daily spike, another ‘Minsky Moment’ could be on the horizon. To explain, I wrote on Nov. 19: While European markets have largely ignored the recent coronavirus spikes, a sharp sell-off could be the spark that lights the S&P 500’s correction. To explain, the DAX 30 Index (Germany) and the CAC 40 Index (France) both closed slightly lower on Nov. 18. However, prior to Nov. 18, the DAX 30 had closed in the green for 13 of the last 15 trading days, and one-upping its European counterpart, the CAC 40 had closed in the green for 15 of the last 16 trading days. On top of that, the CAC 40 had an RSI (Relative Strength Index) north of 80, while the DAX 30 had an RSI north of 75. As a result, both indices are materially overbought at a time when Germany is implementing new restrictions. Thus, if a Minsky Moment strikes in Europe, don’t be surprised if the negativity cascades across the Atlantic. To that point, after volatility erupted on cue, the DAX 30 suffered an intraday peak-to-trough decline of 7.8%, the CAC 40 dropped by 7.3%, and the S&P 500 dropped by 5.2%. Please see below: However, with overzealous equity bulls back at it again on Dec. 7, the PMs benefited from the risk-on sentiment. However, with the fundamental problems still present, investors may have set themselves up for more disappointment. To explain, with hedge funds increasing their short bets a little too late, Goldman Sachs Prime Brokerage reported that last week, “US equities on the GS Prime book made up more than 85% of the global $ net selling (-1.4 SDs), driven by short sales and to a lesser extent long sales (9 to 1).”  In a nutshell: hedge funds increased their short bets at the worst possible time. Please see below: Thus, with the Dec. 7 rally driven mainly by a reversal of these positions, the profound short squeeze helped uplift the PMs. For example, Bank of America data shows that last week’s corporate buybacks were the highest weekly total since March. And by repurchasing nearly $3.4 billion of their own stock (focus on the first blue column from the left), their bids helped calm the S&P 500’s selling pressure. Please see below: What’s more, while Bank of America said that hedge funds and retail investors somewhat bought the dip last week (though, they’re still net-sellers over the last four weeks), corporations did much of the heavy lifting.  As a result, with retail investors running out of gas and hedge funds mainly closing out their shorts on Dec. 7, the S&P 500 should resume its correction. More importantly, though, mining stocks’ recent strength should wilt away as the drama unfolds.  Please see below: And now for the grand reveal: corporations' buyback blackout period begins on Dec. 10. And since they can't repurchase more shares until the New Year, the elephant in the room won't be able to support the S&P 500. Likewise, after hedge funds covered their shorts on Dec. 7, short-covering won't be able to support the S&P 500 either. As a result, mining stocks should suffer if the negativity resurfaces over the next few weeks. Please see below: To explain, the red line above tracks the hourly movement of the S&P 500, while the gold line above tracks the hourly movement of the GDXJ ETF. As you can see, the junior miners often follow in the S&P 500’s footsteps. And with the S&P 500 setting itself up for another drop, the GDXJ ETF likely won’t be far behind. To that point, with the headline Consumer Price Index (CPI) scheduled for release on Dec. 10 and the Fed’s next monetary policy meeting scheduled for Dec. 14/15, sources of volatility will arrive at a time when corporations are stuck on the sidelines.  For context, I wrote on Nov. 12: I’ve highlighted on several occasions how the Commodity Producer Price Index (PPI) often leads the following month’s headline CPI. And after the former increased by 2% month-over-month (MoM) on Nov. 9 – which is a material MoM increase – and by 22.2% YoY (a new 2021 high), it implies a headline CPI print of roughly 5.75% to 6.25% when the data is released on Dec. 10. Please see below: To explain, the green line above tracks the YoY percentage change in the commodity PPI, while the red line above tracks the YoY percentage change in the headline CPI. If you analyze the relationship, you can see that the pair have a close connection. In addition, after expectations for September were pulled forward to July, and then expectations for July were pulled forward to June, now, the probability of a Fed rate hike in May 2022 has reached ~69%. Please see below: Also noteworthy, St. Louis Fed President James Bullard said on Dec. 3 that “the danger now is that we get too much inflation.... It's time for the [Fed] to react at upcoming meetings.” He added: “the inflation numbers are high enough that I think [ending the taper by March] would really help us to create the optionality to do more if we had to, if inflation doesn't dissipate as expected in the next couple of months.” For context, Bullard reiterated that he expects two Fed rate hikes in 2022. The bottom line? While the bulls stampeded through Wall Street on Dec. 7, things aren’t as rosy as they appear. And while the PMs benefited from the renewed optimism, their tepid rallies are even more fragile. Moreover, with another inflation print on the horizon and the FOMC’s Dec. 15 decision including its Summary of Economic Projections, the hawkish revelations could rattle the financial markets. And with corporate buybacks starting their holiday vacation on Dec. 10, stock market investors are on their own to navigate what comes next. In conclusion, the PMs rallied on Dec. 7, as risk-on sentiment reigned supreme. However, with the S&P 500 rallying by more than 2% and WTI rallying by nearly 4%, the PMs’ daily upswings were relatively muted. As a result, precious metals investors sense that caution is warranted. And with their trepidation a sign of heightened anxiety, they likely realize that going long the PMs involves much more risk than reward. 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, CFAFounder, 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.