indices

The Swing Overview – Week 25

There was a rather quiet week in which the major world stock indices shook off previous losses and have been slowly rising since Monday. However, this is probably only a temporary correction of the current bearish trend.  The CNB Bank Board met for the last time in its old composition and raised the interest rate to 7%, the highest level since 1999. However, the koruna barely reacted to this increase. The reason is that the main risks are still in place and fear of a recession keeps the markets in a risk-off sentiment that benefits the US dollar.


Macroeconomic data

We had a bit of a quiet week when it comes to macroeconomic data in the US. Industrial production data was reported, which grew by 0.2% month-on-month in May, which is less than the growth seen in April, when production grew by 1.4%. While the growth is slower than expected, it is still growth, which is a positive thing.

 

In terms of labor market data, the number of jobless claims held s

Strong Bid In The USD

Strong Bid In The USD

Ivan Delgado Ivan Delgado 14.10.2020 08:48
Daily EdgeIt was turnaround Tuesday as risk-off came back rather aggressively leading to a steady bid in the US Dollar, Japanese Yen and a surprisingly strong Canadian Dollar, decoupled from the underperformance of other commodity-related assets (AUD or Gold). The Pound also suffered from the lack of clarity on Brexit.To see an expanded version, right-click and select ‘open link in new tab‘. The indices show the performance of a currency vs a G8 FX basket. After scanning through the news, there was no specific catalyst that may have been pin pointed to spark the run to safe haven assets. The dominant themes remain the fiscal stimulus talks, with a positive outcome ahead of the US election rather illusive while the Presidential polls continue to show Biden pulling further away in the lead. The deterioration in COVID-related cases worldwide and some setback in vaccine news was attributed as a factor not helping either.When it comes to today’s hot trade of the day, I’ve made a video where I walk viewers through a potential short setup in the AUD/USD during the last European session. This was a short clearly identified via my proprietary order flow script. Traders could have been exposed to a ridiculous 15:1 risk reward assuming they let the position run as it turned out to be a monster of a trade off an hourly supply area.Hot Trade Of The DayTo see an expanded version, right-click and select ‘open link in new tab‘. In this section I pick a market or several ones that presented an opportunity to buy on weakness or sell on strength based on the higher timeframes outlook. My video analysis below will further elaborate on the logic behind the trade.   Insights – Hot Trade Of The DayIn this video analysis I dissect the information above. Ultimately, it is the traders’ call, via a set of entries thoroughly backtested, to enter and manage a position, hence the video is intended as educational in nature and not financial advice. 
Hot Trade: GBP/CHF

Hot Trade: GBP/CHF

Ivan Delgado Ivan Delgado 21.11.2020 08:42
The Daily EdgeThe first thing that comes to mind when analysing the currency space is how focused the market has become to the immediate future. In other words, short-term economic jitters due to stricter lockdowns in many parts of the world appear to be overriding any hopes for the longer-term vaccine-fuelled positivism and Trump’s presidential departure.To see an expanded version, right-click and select ‘open link in new tab’. The indices show the performance of a currency vs a G8 forex basket. Indicators are available to use these measures via Tradingview and MT4. The underperformance of the Aussie, despite positive economic news in the form of an upbeat Australian jobs report, is a telling sign of precisely the narrative I am referring to. The market remains very cautious to commit capital into risky assets at a time when the surge in COVID-19 cases globally may see economies take another hard hit.Very narrow ranges dominateAnother observation that reflects the convoluted state of affairs in the forex market includes the narrow ranges. Even if the Aussie was the weakest on Thursday, the net gains in the rest of forex indices were so minuscule, that the extension of the AUD bear trends became largely limited when compared to normal dynamics. In fact, by matching the EUR (strongest) vs the AUD (weakest), the EUR/AUD only rose 60 pips for the day, which is way below the daily ATR.This week has been unusually quiet in the forex market. It’s a major rarity to see the overall performance of currencies being encapsulated within excruciatingly narrow ranges of -/+ 0.10% through the London session. Remember, this session in the UK is characterised by being the most volatile for currencies given the amount of customers’ volumes. As traders we must remain patient and let the market come to us. This is one of those times when patience pays off.Hot trade of the dayIn this section, I pick a market or several ones that presented an opportunity based on the concepts I teach. My video analysis below elaborates on the logic behind the trade.Global Prime offers one account type. ECN only, for all clients.Ivan Delgado
Tech Leads Market Declines on a Down Wednesday

Tech Leads Market Declines on a Down Wednesday

Finance Press Release Finance Press Release 10.12.2020 17:22
After the market rose to intraday highs on Wednesday (Dec 9), the indices pulled back and closed in the red - largely led by the tech sector.News RecapThe Dow closed 105 points lower for a loss of 0.35%, the S&P 500 fell 0.8%, and the Nasdaq dropped 1.9% for its worst day since Oct. 30. The tech-heavy index also snapped a four-day winning streak. The small-cap Russell 2000 also fell by 0.82%.Wednesday was a resumption of the rotation out of tech that we saw in early November. Tech led the declines, and in particular, chip stocks such as Lam Research (LRCX) which fell by nearly 3.5%.Other big 2020 winners fell sharply on Wednesday as well such as Tesla (TSLA) which fell nearly 7% and Netflix (NFLX) which fell 3.72%.Stocks reversed downwards after Senate Majority Leader Mitch McConnell told Politico that Republicans and Democrats were “still looking for a way forward” on stimulus negotiations.COVID-19 continues to worsen in the U.S, but Tuesday’s rollout of Pfizer’s vaccine in the U.K., has spurred optimism. However, there are some concerns about people with a history of allergic reactions receiving the vaccine.Meanwhile, the Food and Drug Administration (FDA) may be just days away from approving Pfizer’s vaccine.COVID-19 continues surging to uncontrolled and grim levels. For the first time since the start of the pandemic, the U.S. hit 3,000 deaths in one day.We may have reached a crossroads in the market between mixed short-term sentiment, and mid-term and long-term optimism. In the short-term, there will be some optimistic days where investors rotate into cyclicals and value stocks, and pessimistic days where investors rotate into tech and “stay-at-home” names. On other days, such as Wednesday, the markets may broadly decline, and be led by specific sectors. On Wednesday, for example, the leading laggard was tech - specifically high flying chip stocks.In the mid-term and long-term, there is certainly a light at the end of the tunnel. Once this pandemic is finally brought under control and vaccines are mass deployed, volatility will stabilize, and optimism and relief will permeate the markets. Stocks especially dependent on a rapid recovery and reopening, such as small-caps, should thrive.According to Ed Yardeni, president and chief investment strategist at Yardeni Research, “Renewed lockdown restrictions in response to the third wave of the pandemic are likely to weigh on the economy in coming months, but we don’t expect a double-dip…(but) the economy could be booming next spring if enough of us are inoculated against the virus.”Other Wall Street strategists are bullish on 2021 as well. According to a JPMorgan note to clients released on Wednesday, a widely available vaccine will lift stocks to new highs in 2021.“Equities are facing one of the best backdrops for sustained gains next year,” JPMorgan said. “We expect markets to be driven by recovery from the COVID-19 crisis at the back of highly effective vaccines and continued extraordinary monetary and fiscal support.”JPMorgan’s S&P 500 target for 2021 is 4,400. This implies a nearly 20% gain from Wednesday’s closing price.On the other hand, for the rest of 2020, and maybe early on into 2021, markets will wrestle with the negative reality on the ground and optimism for an economic rebound.Additionally, since election week, the rally has invoked concerns of overheating with bad fundamentals. Commerce Street Capital CEO, Dory Wiley, advised caution in this overheated market. He pointed to 90% of stocks on the NYSE trading above their 200-day moving average as an indication that valuations might be stretched.“Timing the market is not always well-advised and paring back can miss out on some gains the next two months, but after such good returns in clearly a terrible fundamentals year, I think taking some profits and moving to cash, not bonds, makes some sense here,” he said.Amidst the current fears of a stall in economic recovery with further COVID-19-related shutdowns and no stimulus, it is very possible that short-term downside persists. However, if a stimulus deal passes before the end of the year, it could mean more market gains.Due to this tug of war between sentiments, it is truly hard to say with conviction that another crash or bear market will come. If anything, the mixed sentiment will keep markets relatively sideways.Therefore, to sum it up:While there is long-term optimism, there is short-term pessimism. A short-term correction is very possible. But it is hard to say with conviction that a big correction will happen. Can the Dow Stay Above 30,000?Since piercing the 30,000 level for a second time last Friday, and reaching record highs, the Dow Jones has largely traded sideways and hovered around the 30,000 level. There are some questions in the short-term as to whether or not the Dow can maintain this level. Outside of the Russell 2000, the Dow may be the index most vulnerable to news and sentiment.Volume has also quietly declined this week as well, which poses doubts on how sustainable the 30,000 level is. Low volume, especially a declining trend in volume, means that there are fewer shares trading. Lower volume also means less liquidity across the index, and an increase in stock price volatility.With so much uncertainty and the RSI still firmly in hold territory, the call on the Dow stays a HOLD.On pessimistic “sell the news” kinds of days, the Dow may have more downside pressure than other indices. Many cyclical stocks that depend on a strong economic recovery trade on this index, and any change in sentiment can adversely affect their performances.It is hard to say with certainty that a drop in the index will be strong and sharp relative to the gains since March - let alone November. But for now, as seen in the last week, I believe that we could be in a sideways holding pattern while investors digest all the news being thrown at them on a daily basis. For an ETF that attempts to directly correlate with the performance of the Dow, the SPDR Dow Jones ETF (DIA) is a strong option.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were 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 believed to be accurate, Matthew Levy, 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. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’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. Matthew Levy, 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.
Stocks Close Mixed Amid Poor Jobless Data, COVID-19 Fears, and Stimulus Doubts

Stocks Close Mixed Amid Poor Jobless Data, COVID-19 Fears, and Stimulus Doubts

Finance Press Release Finance Press Release 11.12.2020 16:27
Stocks closed mixed on Thursday (Dec. 10) after a new report showed that new jobless claims resurged to their worst level in months, while COVID-19 cases climbed to record numbers, and stimulus gridlock continues.News RecapThe Dow Jones fell 69.55 or .23%, the S&P 500 fell 0.13%, and the Nasdaq rose 0.54%.For the week ended Dec. 5th, 853,000 new jobless claims were reported. This is the worst level since September, the first increase in 4 weeks, and well above the market estimates of 725,000.A U.S. FDA advisory panel voted 17 to 4 to approve Pfizer’s vaccine for emergency use. The full FDA approval could grant emergency use authorization of Pfizer’s vaccine as early as Friday.Stimulus talks continued to slog forward . While lawmakers plan to pass a one-week government funding extension through to Dec. 18, to buy more time to craft a stimulus deal before year’s end, there are still significant hurdles to cross. Democrats and Republicans apparently have found consensus in some areas such as PPP loans, but issues including state and local aid, liability protections, unemployment assistance and stimulus checks are still dividing Congress.After DoorDash (DASH) IPO’d on Tuesday, and surged, AirBnB (ABNB) followed suit and closed nearly 113% higher on Thursday.This has been the most lethal week yet for COVID-19 in the U.S. Thursday saw a record 229,000+ cases and over 3,100 deaths. The worst may not be over yet either. According to the CDC Director Robert Redfield, US COVID-19 deaths are likely to exceed the 9/11 death toll for the next 60 days.There is simply too much short-term uncertainty right now to predict what the next 1-3 months will be like. In the short-term, there will be optimistic days where investors rotate into cyclicals and value stocks, and pessimistic days where there will be a broad sell-off or rotation into “stay-at-home” names. Thursday’s session, for example, was a reflection of pessimistic sentiment, and a rotation back into tech. Other days, such as Wednesday (Dec. 9), tech may sharply sell-off and lead the declines.In the mid-term and long-term, however, there is certainly a light at the end of the tunnel. Once this pandemic is finally brought under control and vaccines are mass deployed, volatility will likely stabilize, while optimism and relief will permeate the markets. The FDA advisory committee’s approval of Pfizer’s vaccine for emergency usage is certainly a step in the right direction. We could be just days away from vaccinations finally happening in America. Stocks especially dependent on a rapid recovery and reopening such as small-caps should thrive.Markets will continue to wrestle with the negative reality on the ground and optimism for a 2021 economic reopening. This is simply the lay of the land nowadays. More positive vaccine news seemingly trickles in by the day despite increasingly horrifying COVID-19 numbers, economic news, and political news.Because of how much the markets have heated the last 6-7 weeks, a correction could be a welcome sign. While short-term downside pressure could certainly persist based on days where bad news outweighs good news, due to this “tug of war” between sentiments, any subsequent move downwards would likely be modest in comparison to the gains since the bottom in March and since the U.S. election at the start of November. The vaccine is simply the “injection” that the markets need right now. It is truly hard to say with conviction that another crash or bear market will come. If anything, the mixed sentiment could keep markets trading relatively sideways.Therefore, to sum it up:While there is long-term optimism, there is short-term pessimism. A short-term correction is very possible. But it is hard to say with conviction that a big correction will happen.The premium analysis this morning will showcase a “Drivers and Divers” section that will break down some sectors that are in and out of favor. As a token of my appreciation for your patronage, I decided to give you a free sample of one “driver” and one “diver” sector. Do me a favor and let me know what you think of this segment! Always happy to hear from you. DrivingMaterials (XLB) The materials sector, as represented by the XLB ETF (shown above) , has been one of the largest beneficiaries of the vaccine rally. Vaccine news briefly sent the XLB ETF to its 2020 high in November. However, since then, the ETF has traded relatively sideways, and has slightly declined this week.Cyclical sectors such as materials are set to be the biggest winners from an economic reopening in 2021. However, ever since peaking at $72.41 a share, the ETF’s volume has plummeted and stayed low. There are not enough strong fundamentals to justify calling this sector a BUY at this time.I do like this ETF’s modest decline on Thursday (Dec. 10), and generally this week. But for me, it is not a large enough pullback for a convincing buy. I believe that the sector could pull back further or stay in a sideways pattern for the rest of the month. For the materials ETF to come back, exceed its 52-week high, and pierce that $72 resistance level, a stimulus package MUST pass ASAP, and a COVID-19 vaccine must be efficiently rolled out and scalable. If this happens and a near-term economic slowdown can be somewhat averted, then materials could benefit. But for now, my view is muddled.For the time being, there is too much uncertainty to make a conviction call. Therefore, this is a HOLD for the short-term. However, I am considerably more bullish on materials in the long-term. DivingUS Dollar ($USD)Although the U.S. Dollar somewhat recovered earlier in the week and pierced the 91 level, it plunge again on Thursday. I have been calling this dollar weakness for weeks despite the low level and expect the decline to continue.The world’s reserve currency is still hovering around its 2-year low and has plunged in excess of 12% since March. After briefly rising above an oversold RSI of 30, it has also returned right back towards that level. The dollar is also significantly trading below both its 50-day and 200-day moving averages, while emerging market indices and currencies continue to grossly outperform this perceived safe asset.Further illustrating the dollar’s decline has been its performance relative to emerging markets. Just compare the performance of the iShares MSCI Emerging Market ETF (EEM) relative to the Invesco DB USD IDX Bullish ETF (UUP) since January. The difference continues to widen too.Many believe that the dollar could fall further as well due to a multitude of headwinds.If the world returns to relative normalcy within the next year, investors may be more “risk-on” and less “risk-off.” Which means that the dollar’s value will decline further.Additionally, because of all of the economic stimulus combined with record low-interest rates, the dollar’s value has declined and could have more room to fall. Do not forget that the Fed plans on holding interest rates this low for at least another two years. For the dollar’s value, rates remaining this low for two years is an eternity.As the world’s reserve currency, this plunge in value is concerning both in the short-term and mid-term for the US economy. A declining dollar means the strengthening of other foreign currencies- and this has already been happening. For example, the Australian dollar has now officially hit its highest level in 2 ½ years against the U.S. dollar . This may not be the end either.While the dollar may have more room to fall, this MAY be a good opportunity to buy the world’s reserve currency at a discount. The RSI at nearly 30 reflects this. But I just have too many doubts on the effect of interest rates this low, government stimulus, strengthening of emerging markets, and inflation to be remotely bullish on the dollar’s prospects over the next 1-3 years.For now, where possible, HEDGE OR SELL USD exposure.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were 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 believed to be accurate, Matthew Levy, 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. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’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. Matthew Levy, CFA, Sunshine Profits' employees, and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
What Markets To Focus On This Monday?

What Markets To Focus On This Monday?

Ivan Delgado Ivan Delgado 14.12.2020 02:22
The Daily EdgeThe Sterling has been given a major boost in the open of the Asian session as the UK and the EU agreed to extend post-Brexit trade talks beyond Sunday following a call between leaders earlier on Sunday. In a joint statement, Boris Johnson and European Commission President Ursula von der Leyen said it was "responsible at this point to go the extra mile".To see an expanded version, right-click and select ‘open link in new tab’. The indices show the performance of a currency vs a G8 forex basket. Indicators are available to use these measures via Tradingview and MT4. Amid the absence of fundamental catalysts elsewhere, the Pound continues to dominate the headlines. The volatility around the currency is not for the faint-hearted as liquidity in the market quickly dries up each and every time that a Brexit-related headlines alters the market perception towards a deal or not deal in the trade talks. Not the safest conditions for market makers.By going through my scan of the key movers in the currency space, aside from the perky Pound, the commodity-linked currencies have been the best movers as of late. The Euro, the Swissy and the USD are off to a rocky start this week, especially the latter, extending its multi-month downtrend whose origin dates back to the COVID-19 led spike from March this year. Quite a trend!Aside from the Brexit talks going down to the wire, the events to pencil in the calendar for traders this week include. The European and US PMIs, alongside US retail sales, all on Wednesday. The very same day, in the American afternoon, the biggest event in the form of the FOMC takes place. Early Thursday in Asia, volatility is expected to be rich as well with the release of the New Zealand GDP data, followed soon after by the Australian jobs report. Later on Thursday, in European hours, the BoE and the SNB will meet. Lastly, on Friday, the BoJ must be accounted for.Analysis of the Forex trendsIn my video analysis below I use concepts such as momentum, market structures or order flow to come up with the daily outlook in the currency market.https://youtu.be/nNVGXm7rFTc20 Commodities available to trade at Global Prime.Ivan Delgado
Stocks Surge on Stimulus Hopes

Stocks Surge on Stimulus Hopes

Finance Press Release Finance Press Release 16.12.2020 17:48
Stocks rose sharply on Tuesday (Dec. 15) as optimism grew that Congress could pass another economic stimulus package before year’s end.News RecapThe Dow Jones gained 337.76 points, or 1.1%, and closed at 30,199.31. The S&P 500 also gained 1.3% and snapped a four-day losing streak. The tech-heavy Nasdaq climbed 1.3% and reached a new record closing high of 12,595.06. However, the Russell 2000 small-cap index once again beat the other indices and gained 2.40%.In the strongest indication yet that we may be coming closer to a stimulus agreement, the top four congressional leaders-House Speaker Nancy Pelosi, Senate Majority Leader Mitch McConnell, Senate Minority Leader Chuck Schumer, and House Minority Leader Kevin McCarthy - all were set to meet after market close on Tuesday (Dec. 15).Democrats and Republicans still remain deeply divided on certain matters, but a two-part bipartisan stimulus plan proposed on Tuesday (Dec. 15) has a chance of passing.The stimulus package would provide around $908 billion in total aid. The first part would be a $748 billion stimulus package that includes an additional $300 per week in federal unemployment benefits and another $300 billion for more PPP loans. This segment would also include money for vaccine distribution, education, and rental assistance. The second segment would be a $160 billion aid package and cover the more partisan issues of business liability protections and financial aid to state and local governments.The first round of shots from the vaccine developed by Pfizer and BioNTech were given in the U.S. on Monday (Dec. 14) with further distributions occurring Tuesday (Dec. 15).FDA staff announced that they endorsed emergency usage of Moderna’s vaccine. The FDA’s vaccine advisory panel will meet Thursday (Dec. 16) to decide whether to recommend clearance for emergency use. Upon authorization, government officials plan to ship nearly 6 million doses of Moderna’s vaccine in addition to the 2.9 million Pfizer doses already in distribution.Apple led the Dow higher, jumping 5% after Nikkei reported that the company will increase iPhone production by about 30% in the first half of 2021.All 11 S&P 500 sectors gained on Tuesday (Dec. 15) and were led by energy and utilities.We are approaching the darkest days of the COVID-19 pandemic yet. 300,000 people across the country have now lost their lives to the disease. However, the worst may not be over yet. According to the CDC Director Robert Redfield, US COVID-19 deaths are likely to exceed the 9/11 death toll for the next 60 days.The short-term may see some pain and/or mixed sentiment due to two major catalysts - the lack of stimulus and an out-of-control virus.According to Art Hogan , chief market strategist at National Securities:“There’s been a tug of war between the vaccine news and the virus news. The only tiebreaker that’s kept the averages on their way higher seems to be the potential for getting stimulus out of gridlock...It certainly feels like one of the proposals that’s on the table ... can go through.”Additionally, Luke Tilley , chief economist at Wilmington Trust, said that another stimulus package was needed to keep the economic recovery from stalling before a mass distribution of a vaccine.“With the continued rising cases and mass vaccinations still a ways out, we could see some further weakness in jobs and even a flattening where we’re not even adding jobs at all ... that’s absolutely a possibility for this next jobs report,” Tilley said. “And if we were to not get another stimulus package, you’re going to have 10 to 11 million people fall off the unemployment rolls right away, and that would hit spending as well.”On the other hand, the mid-term and long-term optimism is very real. While there may be some semblance of a “Santa Claus Rally” occurring, the general consensus between market strategists is to look past the short-term pain, and focus on the longer-term gains.According to Robert Dye, Comerica Bank Chief Economist :“I am pretty bullish on the second half of next year, but the trouble is we have to get there...As we all know, we’re facing a lot of near-term risks. But I think when we get into the second half of next year, we get the vaccine behind us, we’ve got a lot of consumer optimism, business optimism coming up and a huge amount of pent-up demand to spend out with very low interest rates.”In the short-term, there will be some optimistic and pessimistic days. On some days, like Monday (Dec. 14), the broader “pandemic” market trend will happen - cyclical and recovery stocks lagging, and tech and “stay-at-home” stocks leading. On other days, like Tuesday (Dec. 15), there will be a broad market rally due to optimism and 2021 related euphoria. On other days (and in my opinion this will be most trading days), markets will trade largely mixed, sideways, and reflect uncertainty.However, if a stimulus deal passes before the end of the year, all bets are off. It could mean very good things for short-term market gains.In the mid-term and long-term, there is certainly a light at the end of the tunnel. Once this pandemic is finally brought under control and vaccines are mass deployed, volatility will stabilize, and optimism and relief will permeate the markets. Stocks especially dependent on a rapid recovery and reopening such as small-caps should thrive.Due to this tug of war between sentiments though, it is truly a challenge to predict the future with certainty.Therefore, to sum it up:While there is long-term optimism, there is short-term pessimism. A short-term correction is very possible. But it is hard to say with conviction that a big correction will happen.The premium analysis this morning will showcase a “Drivers and Divers” section that will break down some sectors that are in and out of favor. As a token of my appreciation for your patronage, I decided to give you a free sample of a “driver” and “diver” sector. Do me a favor and let me know what you think of this segment! Always happy to hear from you. DrivingEnergy (XLE)Energy is a sector largely dependent on sentiment, with several question marks.On one hand, if you are bullish, all of this vaccine news bodes well for a full economic reopening by the second half of 2021. That means travel, and therefore fuel demand, could surge back to pre-pandemic levels. WTI crude futures on Tuesday (Dec. 15) extended gains to trade around 1% higher at $47.5 a barrel due to cautious optimism on further US stimulus in addition to the vaccine(s).On the other hand, there are very real short-term concerns. There are fresh concerns over global fuel demand as countries, states, and cities across the world tighten coronavirus restrictions. Germany and the Netherlands will enter a new lockdown, while the UK government imposed tighter Covid-19 measures on London. In New York City, Mayor Bill De Blasio warned that the city is on the path towards a second full shutdown. Governor Andrew Cuomo already banned all indoor dining. The newly inaugurated Mayor of Baltimore, Brandon Scott, also banned all dining - both indoor and outdoor. OPEC also lowered its projections for global fuel consumption in Q1 2021 by 1 million barrels a day as well. The organization will meet on January 4th to evaluate if they can move on with supply increases. Much anticipated data from the EIA is also due on Wednesday.This is such an unpredictable sector experiencing great volatility. It is almost as if energy is either the S&P 500’s leader or its laggard. There is never anything in between. These are simply risky and major percentage swings on a day-to-day basis.It is a very difficult sector to make a bullish call on. There are still simply too many headwinds to be overly euphoric. While energy is still largely undervalued, and the RSI is no longer overbought, the volume is not stable. Most importantly, nobody truly knows what oil’s long-term prospects are, with the increased adoption of renewable energy and ESG investing.This year we have seen that when energy rallies, it eventually pulls back. Judging from the chart, that inevitable pullback could possibly come again. For the month of December, the ETF is up nearly 8%. But I would be more confident in either calling BUY or HOLD or a pullback - not during such a volatile time.While there is vaccine optimism now that there wasn’t before, conditions are largely the same on the ground with regard to COVID-19 and travel demand. Therefore, my call is to take profits and SELL. DivingCommunication Services (XLC)I really don’t like this sector and I will explain why. Although the Communication Services ETF touched a 52-week high recently, the gains have not been as stable or as robust compared to other sectors. But this is generally par the course for communications stocks. This is a sector that continuously underperforms other sectors both in the short-term and long-term.While traditionally this is a good sector to find value in, right now I just don’t see it. I see downside risk without the same type of upside potential as exists in other sectors that may benefit more from a successful vaccine roll-out and economic reopening.Furthermore, the ETF’s volume is already low, and has been in decline. This screams volatility to me.I just can’t see how you would benefit buying into this sector. It is hard to foresee how this sector will truly benefit from a vaccine and 2021 reopening relative to other sectors. Therefore, I give it a SELL call.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were 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 believed to be accurate, Matthew Levy, 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. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’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. Matthew Levy, 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 Watchlist: Analysis Of Forex Flows

The Watchlist: Analysis Of Forex Flows

Ivan Delgado Ivan Delgado 17.12.2020 02:02
Daily EdgeIn the last 24h, since I last sat down to write my take-away in the marketplace, the level of flow imbalances in the Forex market has gone down a notch. The Sterling takes the podium once again as the best performing currency even if the gap opened up against the G8 FX peers was minimal. The CAD, meanwhile, is the exception with sellers overwhelmingly in charge.To see an expanded version, right-click and select ‘open link in new tab’. The indices show the performance of a currency vs a G8 forex basket. Indicators are available to use these measures via Tradingview and MT4. In terms of the fundamental drivers playing a role in the last movements seen, this is what the script looked like. Early in Asia, the New Zealand Dollar was pressured lower in a move that dragged on through the London session. This occurred despite the release of the half-yearly update from the NZ Treasury saw GDP forecasts boosted and that for the peak unemployment rate lowered.As Europe came online, we learned some encouraging news out of Europe, with the positive French and German PMI prints for December. The Euro and the Swiss Franc, which often move in lockstep, reaped the most benefits as algo-buying activity followed suit in the immediate aftermath. However, we failed to see follow-through demand.The bullish moves in the EUR or the CHF proved legless, and certainly didn’t dispute the dominance of the Pound since early this week as hopes of a trade deal have definitively been brought back to be the forefront as the default narrative the market is buying into. Negotiations between the EU and the UK will likely stretch into the weekend again.Lastly, the one even we were all waiting for, even if the chances to see sustained volatility were pretty slim, came in the form of the FOMC. After all said and done, it proved to be a rather muffled affair. The lack of any new action from the FOMC was well reflected in how the market reacted. After an initial knee-jerk response in the US dollar, vol ended up being short-lived and legless. Fed’s Chairman Powell reiterated for the zillionth time that the Central Bank will remain in hyper-dovish mode with no rush whatsoever to raise rates.When it comes to trading opportunities, there was a phenomenal TT structure to play long CHF/JPY in Europe that ended up being a scratch trade. As I shift gears to the merits of a few selected currency pairs that currently offer for the best contextual settings to find opportunities, the video below invites you into my thoughts of the market for today.Analysis of the Forex trendsIn my video analysis below I use concepts such as momentum, market structures or order flow to come up with the daily outlook in the currency market.Holding trades overnight? Check out Global Prime swap rates.
Nasdaq Hits Yet Another Record Close

Nasdaq Hits Yet Another Record Close

Finance Press Release Finance Press Release 17.12.2020 18:23
The major indices closed mixed on Wednesday (Dec. 16), as the Nasdaq hit yet another record close amidst stimulus optimism and the Fed’s dovish tone.News RecapAlthough the Dow Jones closed lower by 44.77 points, or 0.15%, the S&P 500 gained for the second day in a row and rose by 0.18%. The Nasdaq closed once again at a record high and gained 0.5%.Sentiment for the day started negatively after the Commerce Department reported a steeper-than-expected drop in U.S. retail sales. The department stated that retail sales fell by 1.1% in November compared to estimates of 0.3%.Cautious optimism that some sort of stimulus could be passed before the end of the year encouraged investors.According to Politico , Congress was on the brink of a $900 billion stimulus deal that would include a new round of direct payments to consumers. However, that package would exclude the more contentious areas of liability shields for businesses and state and local aid.We have reached the deadliest weeks of the COVID-19 pandemic. More than 300,000 total COVID-19 related deaths have now been confirmed in the U.S., with over 16 million confirmed cases. Additionally, US officials reported 3,400 new COVID-19 deaths - a daily record.After an FDA panel officially endorsed Moderna (MRNA) - following a review which confirmed safety and efficacy earlier in the week – the big day is finally here. On Thursday (Dec. 17), the FDA will officially vote on Moderna's vaccine. This will strongly complement the mass deployment of Pfizer (PFE) and BioNTech’s (BNTX) vaccine.The Federal Reserve ’s announcement on monetary policy was largely as dovish as expected. The Fed vowed to continue its asset purchase program at the current rate, “until substantial further progress has been made toward the committee’s maximum employment and price stability goals.”Microsoft (MSFT) and Salesforce (CRM) led the Dow with gains of 2.4% and 1.6%, respectively, while Walgreens (WBA) was the laggard and declined 2.15%.Moderna (MRNA), despite its big week ahead, dropped 6.9%.While there is some short-term uncertainty and mixed sentiment, there is some general consensus: While the short-term may see some pain and/or mixed sentiment, it may be worth it for the medium-term and long-term optimism.The overwhelming majority of market strategists are bullish on equities for 2021- despite near-term risks. Outside of the pandemic raging to out of control levels, another near-term risk that has been largely overlooked is the Senate runoff election in Georgia. Investors have largely already priced in a divided government - however, if Republicans end up losing both seats in Georgia, this could potentially upend everything.According to Jimmy Lee, CEO of the Wealth Consulting Group ,“I think that we can get a little bit of consolidation before year-end just due to normal selling at the year-end for rebalancing or tax loss harvesting. Also, depending on where the pulse is for the Senate race in Georgia, investors might want to get ahead of that if they think that capital gains taxes may go up in the future...So that could cause some additional selling before year-end and we could get a little bit of a pullback. But I am very bullish on equities at this point. And I do think we may get a little bit more of a rotation into the economy-opening sectors.”Meanwhile, progress on the stimulus package appears to be more optimistic than many expected in the near-term.“The odds of a fiscal deal before year’s end have been improving,” Goldman Sachs economists led by Jan Hatzius wrote in a note Tuesday (Dec. 15). “While we had expected a smaller package to pass now with a larger package waiting until early 2021, it appears increasingly likely that most of this could pass this week.”While markets for the rest of 2020 (and perhaps early 2021), will wrestle with the negative reality on the ground and optimism for an economic rebound, the general consensus appears to be looking past the short-term painful realities, and focusing more on the longer-term - a world where COVID-19 is expected to be a thing of the past and we are back to normal.In the short-term, there will be some optimistic and pessimistic days. On other days, such as Wednesday (Dec. 16) (and in my opinion this will be most trading days), markets will trade largely mixed, sideways, and reflect uncertainty. Therefore, it is truly hard to say with conviction what will happen with markets in the next 1-3 months. However, if a stimulus deal passes within the next week, it could mean very good things for short-term market gains.In the mid-term and long-term, there is certainly a light at the end of the tunnel. Once this pandemic is finally brought under control and vaccines are mass deployed to the general public, volatility will stabilize, and optimism and relief will permeate the markets. Stocks especially dependent on a rapid recovery and reopening such as small-caps should thrive.Due to this tug of war between sentiments, it is truly hard to say with any degree of certainty whether another crash or bear market will come.Therefore, to sum it up:While there is long-term optimism, there is short-term pessimism. A short-term correction is very possible. But it is hard to say with conviction that a big correction will happen. Nasdaq Hits Another Record Close - Too Good to Be True?Is the Nasdaq’s performance since its sharp sell-off last Wednesday (Dec. 9) too good to be true? Truthfully, I don’t know. But it’s very possible - especially if shut down measurements become harsher and stricter and investors return to the “stay-at-home” trade that led markets from April through the end of October.Additionally, I still have many concerns about tech valuations and their astoundingly inflated levels. Last week’s IPOs of DoorDash (DASH) and AirBnB (ABNB) reflect this and invoke traumatic memories of the dotcom bubble era. I believe that more pullbacks along the lines of last Wednesday (Dec. 9) could inevitably come in the short-term. Frankly, it would make me feel far more confident about initiating tech positions as well for the long-term.Pay close attention to the RSI. While an overbought RSI does not automatically mean a trend reversal, I called keeping a very close eye on this for the Nasdaq. Last Wednesday’s (Dec. 9th) Nasdaq pullback after it exceeded a 70 RSI reflects that.The Nasdaq has sharply rallied in the week since then. But its RSI is nearly 69. Monitor this . If the index goes on another bull-run and hits more record closes, it could surely exceed an RSI of 70 by the end of market close on Thursday (Dec. 17). I did not make a conviction call last week but I will now- if the RSI exceeds 70 this time, take profits- but don’t fully exit .One thing I do like is how stable the volume has been this week and since the sharp sell-off last week. Stable volume is a good thing, especially if one is concerned about volatility. Low volume, especially a declining trend, means that there are fewer shares trading. Lower volume also means less liquidity across the index, and an increase in stock price volatility.On pessimistic days, having NASDAQ exposure is crucial because of all the “stay-at-home” trade. However, positive vaccine-related news always induces the risk of downward pressure on tech names - both on and off the NASDAQ. What concerns me most are sharp sell-offs due to overheating and mania. Don’t ever let anyone tell you “this time is different” if fears of the dot-com bubble are discussed. History repeats itself, especially in markets.It is very hard to say with conviction to sell your tech shares though. However, as I said before - if the RSI exceeds 70 again - consider selling some shares and taking profits. For now, however, the NASDAQ stays a HOLD .For an ETF that attempts to directly correlate with the performance of the NASDAQ, the Invesco QQQ ETF (QQQ) is a good option.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were 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 believed to be accurate, Matthew Levy, 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. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’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. Matthew Levy, 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.
Stocks Surge to New Records on More Optimism

Stocks Surge to New Records on More Optimism

Finance Press Release Finance Press Release 18.12.2020 17:41
Major averages hit both all-time intraday and closing highs on Thursday (Dec. 17), riding on vaccine optimism and hopes that a stimulus package could be passed in a matter of days.News RecapThe Dow Jones climbed 148.83 points, or 0.5%, to 30,303.37 for a record close. Both the S&P 500 and Nasdaq hit intraday and closing records as well and gained 0.6% and 0.8%, respectively. In typical fashion, the Russell 2000 small-cap index once again beat the other indices and gained 1.30%.Senate Majority Leader Mitch McConnell on Thursday (Dec. 17) said that a stimulus deal was closing in. Congress appears to be nearing a $900 million stimulus package that would include direct payments to individuals. However, the package would exclude the partisan issues of liability protections for businesses and aid to state and local governments.Despite the optimistic tone of the day, jobless claims disappointed for a second consecutive week. Jobless claims totaled 885,000 last week, hitting their highest levels since early September. This was also significantly worse than the expected 808,000.An FDA panel officially endorsed Moderna's (MRNA) COVID-19 vaccine. It could officially be cleared for emergency usage as early as Friday (Dec. 18), and be distributed as soon as after the weekend. Upon authorization, government officials plan to ship nearly 6 million doses of Moderna’s vaccine in addition to the 2.9 million Pfizer (PFE) doses already in distribution.Real estate, materials and health care were the best-performing sectors in the S&P 500, each gaining over 1%. Johnson & Johnson (JNJ) rose 2.6% to lead the Dow higher.Tesla (TSLA) gained 5.32% and will now officially join the S&P 500.We are in the darkest days of the pandemic. On average, the U.S. is recording at least 215,729 additional COVID-19 cases a day . More than 114,200 Americans are also now hospitalized , and over 3,400 new deaths were recorded. According to the CDC Director, Robert Redfield, US COVID-19 deaths are likely to exceed the 9/11 death toll for the next 60 days.While sentiment has been positive over the last two trading sessions, there will still be a short-term tug of war between good news and bad news. It’s quite simple really - until a stimulus is passed and the virus is somewhat brought under control, there will be negative pressure on the markets. Even though a stimulus package passing appears to be imminent, time is running short and we may be at a fork in the road.For now, though, hopes that a deal could pass through are sending stocks higher.“Stimulus is still the main driver in the market right now until they get something done, and it does appear there is some motivation on that front to get something done,” said Dan Deming, managing director at KKM Financial, further stating that “the market’s benefiting from that (enthusiasm).”Additionally, Luke Tilley , chief economist at Wilmington Trust, said that another stimulus package was needed to keep the economic recovery from stalling before the mass distribution of a vaccine.“With the continued rising cases and mass vaccinations still a ways out, we could see some further weakness in jobs and even a flattening where we’re not even adding jobs at all ... that’s absolutely a possibility for this next jobs report,” Tilley said. “And if we were to not get another stimulus package, you’re going to have 10 to 11 million people fall off the unemployment rolls right away, and that would hit spending as well.”The overwhelming majority of market strategists are bullish on equities for 2021 though, despite near-term risks. While there may be some semblance of a “Santa Claus Rally” occurring, the general consensus between market strategists is to look past the short-term pain and focus on the longer-term gains. The mid-term and long-term optimism is very real.According to Robert Dye, Comerica Bank Chief Economist :“I am pretty bullish on the second half of next year, but the trouble is we have to get there...As we all know, we’re facing a lot of near-term risks. But I think when we get into the second half of next year, we get the vaccine behind us, we’ve got a lot of consumer optimism, business optimism coming up and a huge amount of pent-up demand to spend out with very low interest rates.”In the short-term, there will be some optimistic and pessimistic days. On some days, the broader “pandemic” market trend will happen, with cyclical and recovery stocks lagging, and tech and “stay-at-home” stocks leading. Sometimes a broad sell-off based on fear or overheating may occur as well. On other days, there will be a broad market rally due to optimism and 2021-related euphoria. Additionally, there will be days (and in my opinion this will be most trading days), when markets will trade largely mixed, sideways, and reflect uncertainty. But if we get an early Christmas present and a stimulus package passes, all bets are off. It could mean very good things for short-term market gains.In the mid-term and long-term, there is certainly a light at the end of the tunnel. Once this pandemic is finally brought under control and vaccines are mass deployed, volatility will stabilize, and optimism and relief will permeate the markets. Stocks especially dependent on a rapid recovery and reopening, such as small-caps, should thrive.Due to this tug of war between sentiments though, it is truly hard to say with any degree of certainty that a correction will happen or more record high rallies will occur.Therefore, to sum it up:While there is long-term optimism, there is short-term pessimism. A short-term correction is very possible, but it is hard to say with conviction that a big correction will happen.The premium analysis this morning will showcase a “Drivers and Divers” section that will break down some sectors that are in and out of favor. As a token of my appreciation for your patronage, I decided to give you a free sample of a “driver” and “diver” sector. Please do me a favor and let me know what you think of this segment! I’m always happy to hear from you. DrivingSmall-Caps (IWM)In typical fashion, the Russell 2000 small-cap index once again beat the other indices and gained 1.30% on Thursday (Dec. 17). I truly love small-cap stocks in the long-term and this small-cap rally is more encouraging than the “stay-at-home” stock rallies from April/May. This is a bullish sign for a long-term economic recovery and shows that investors are optimistic that a vaccine will return life to relatively normalcy in 2021.I do have some concerns of overheating in the short-term however, especially with the headwinds that still exist. The Russell keeps outperforming no matter what the market sentiment of the day or week is. For example, although the week ended December 11th was an overall down week, the Russell 2000 STILL managed to outperform the larger indices and eek out another weekly gain of 1.02%. While it is remarkable, I do not see how this is sustainable in the short-term.The performance of the Russell 2000 index since early November has been nothing short of staggering. Although the Russell index is composed mostly of small-cap value cyclical stocks dependent on the recovery of the broader economy, and may be more adversely affected on “sell-the-news” kind of days, its hot streak since November has not cooled off in the slightest.Since the start of November, the Russell 2000 has skyrocketed and considerably outperformed the other major indices. The iShares Russell 2000 ETF (IWM), in comparison to the ETFs tracking the Dow (DIA), S&P (SPY), and Nasdaq (QQQ), has risen 28.62%. This is at least 13% higher than all of the other major indices. Since the start of December, the Russell ETF has also outperformed the other ETFs between 4%-5%.However, when looking at the chart for the Russell 2000 ETF (IWM) , it becomes pretty evident that small-cap stocks have overheated in the short-term. These are stocks that will experience more short-term volatility. Stocks don’t always go up but the Russell’s trajectory since November has been essentially vertical. The IWM ETF keeps hitting record highs while the RSI keeps overinflating way past overbought levels. I would SELL and trim profits for the short-term but do not fully exit these positions. A stimulus could be imminent and send these stocks soaring more. But if there is a pullback, BUY for the long-term recovery. DivingUS Dollar ($USD)The U.S. Dollar’s plunge continues to its lowest levels in years. I called the return to oversold levels this week despite the currency piercing the 91-level last Wednesday (Dec. 9). I knew it was “fool's gold” and not the sign of any sort of breakout. I have been calling the dollar’s weakness for weeks despite its low levels, and I expect the decline to continue.For the first time since April 2018, the world’s reserve currency is now trading below 90.Why did the dollar plunge so much on Thursday (Dec. 17)? You can thank the Fed! After the Federal Reserve’s dovish tone and reassurance on Wednesday (Dec. 16) that it won’t be soon tapering its bond purchases, bearish traders took this as a sign to continue selling the dollar.“The latest blow to the dollar came from the Fed, which vowed not to touch policy even if the outlook for the U.S. economy brightens as it now expects,” said Joe Manimbo , senior analyst at Western Union Business Solutions.After hitting a nearly 3-year high in March, the dollar has plunged in excess of 13%.Meanwhile, other currencies continued strengthening on Thursday (Dec. 17), relative to the dollar:The euro rose 0.6% to $1.2270, hitting its highest level versus the dollar since April 2018. The euro is up more than 9% year to date.The dollar fell to a more-than-three-year low versus the Japanese yen and declined 0.4% to ¥103.07.The British pound was up 0.5% at $1.3575 - its highest since April 2018.Both the Australian dollar and the New Zealand dollar each gained 0.6% versus the US dollar.The US dollar was off 0.1% vs. the Canadian dollar.After briefly rising above an oversold RSI of 30 last week, the dollar’s RSI is at an alarmingly low 22.96. The dollar is also significantly trading below both its 50-day and 200-day moving averages.Many believe that the dollar could fall further too.If the world returns to relative normalcy within the next year, investors may be more “risk-on” and less “risk-off,” meaning that the dollar’s value will decline further.Additionally, because of all of the economic stimulus and seemingly imminent additional stimulus, the dollar’s value has declined and could have more room to fall. With a dovish Fed and record low-interest rates projected to remain this low for at least another two years, the dollar may not appreciate again for a very long time.While the dollar may have more room to fall, this MAY be a good opportunity to buy the world’s reserve currency at a discount - at least for a quick short-term trade. The low RSI reflects this.But I just have too many doubts on the effect of interest rates this low, government stimulus, strengthening of emerging markets, and inflation to be remotely bullish on the dollar’s prospects over the next 1-3 years.For now, where possible, HEDGE OR SELL USD exposure.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were 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 believed to be accurate, Matthew Levy, 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. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’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. Matthew Levy, 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.
Gold & the USDX: Correlations

Stocks Fall but Close Week Positive

Finance Press Release Finance Press Release 21.12.2020 16:45
Quick UpdateDear readers, before we get into today’s news and stock analysis and because I’ve been receiving many questions from you, I’d like to first clarify what I mean by BUY, SELL, or HOLD. Here, I am largely referring to outperforming the S&P 500. When the conditions favor adding risk and buying the U.S. market overall, I will be issuing an "alert." I am not sure yet whether I will be moving to entry prices or target prices & stop losses, however, I have discussed this internally with the team at Sunshine Profits. In the current market environment, when fundamentals have essentially fallen to the wayside, I prefer to invest directionally rather than being married to certain levels in the market. In my view, trading with specific figures in mind can hurt long term returns if you do not let your winners run and cut your losers fast. I do update my calls daily, though, and any changes will be highlighted! Thank you again for being such great readers - I truly value your trust. Stay tuned for updates and let me know if you have any other questions!Let’s begin Monday by reviewing what happened at the close of last week.Volatile trading occurred on Friday (Dec. 18), with Congress struggling to close out a stimulus package, causing stocks to slip from record highs.News RecapThe Dow Jones fell 124.32 points, or 0.4%, to 30,179.05. At its session low, the index fell more than 270 points. The S&P 500 also dipped 0.4% and snapped a three-day winning streak. The Nasdaq fell only 0.1%, while the small-cap Russell 2000 fell 0.41%.While Congress claims to be on the brink of a $900 billion stimulus deal , it is working against time. In public, leaders are speaking optimistically that a deal will pass, however, there are last-minute partisan disputes on direct payments, small business loans, and a boost to unemployment insuranceThere was an unusually large amount of trading volume on Friday (Dec. 18) as Tesla (TSLA) was set to officially join the S&P 500 after the closing bell. Tesla is being added to the index in one fell swoop, marking the largest rebalancing of the S&P 500 in history. After surging 700% in 2020, from day 1, Tesla will be the seventh-largest company in the S&P in terms of market cap.The FDA officially approved Moderna’s vaccine for emergency use. Government officials plan to ship nearly 6 million doses of Moderna’s vaccine in addition to the 2.9 million Pfizer (PFE) doses already in distribution.Despite Friday’s (Dec. 18) losses, the indices closed out the week with mild gains. The Dow closed up 0.4%, the S&P 500 advanced 1.3%, and the NASDAQ closed up 3.1%. The small-cap Russell 2000 continued its strong run as well and gained 2.5% for the week.Meanwhile, the pandemic has reached its darkest days and is hitting unforeseen and unprecedented numbers . The U.S. shattered the previous record of daily deals on Wednesday (Dec. 16), recording over 3,600 deaths. As of Friday (Dec. 18), the country has also now surpassed 17 million confirmed cases, with death totals soaring past 300,000. California, Illinois, Pennsylvania, and Texas alone reported more than 1,000 deaths in the past week.While the general focus between both investors and analysts appears to be on the long-term potential in 2021, there are certainly short-term concerns. Inevitably, there will be a short-term tug of war between good news and bad news. For now, though, the main catalyst is the stimulus package. If a stimulus package is passed before Christmas, the markets could benefit. If it doesn’t, markets will drop. Time is running short and we may be at a fork in the road.According to Luke Tilley , chief economist at Wilmington Trust, another stimulus package was needed to keep the economic recovery from stalling before the mass distribution of a vaccine.“With the continued rising cases and mass vaccinations still a ways out, we could see some further weakness in jobs and even a flattening where we’re not even adding jobs at all ... that’s absolutely a possibility for this next jobs report,” Tilley said. “And if we were to not get another stimulus package, you’re going to have 10 to 11 million people fall off the unemployment rolls right away, and that would hit spending as well.”However, despite near-term risks, the overwhelming majority of market strategists are bullish on equities for 2021, especially for the second half of the year. While there may be some short-term worries, the consensus between market strategists is to look past the short-term pain and focus on the longer-term gains. Although the economic recovery could stutter in the early half of the year, the general focus is on the second half of the year when we could potentially return to normal. Many analysts expect double-digit gains to continue in 2021, with strategists in a CNBC survey expecting an average 9.5% rise in 2021 for the S&P 500.Additionally, according to Robert Dye, Comerica Bank Chief Economist :“I am pretty bullish on the second half of next year, but the trouble is we have to get there...As we all know, we’re facing a lot of near-term risks. But I think when we get into the second half of next year, we get the vaccine behind us, we’ve got a lot of consumer optimism, business optimism coming up and a huge amount of pent-up demand to spend out with very low interest rates.”In the short-term, there will be some optimistic and pessimistic days. On some days, the broader “pandemic” market trend will happen, with cyclical and recovery stocks lagging, and tech and “stay-at-home” stocks leading. Sometimes a broad sell-off based on fear or overheating may occur as well. On other days, there will be a broad market rally due to optimism and 2021-related euphoria. Additionally, there will be days (and in my opinion this will be most trading days), when markets will trade largely mixed, sideways, and reflect uncertainty. But if we get an early Christmas present and a stimulus package passes, all bets are off. It could mean very good things for short-term market gains.Despite the optimistic potential, the road towards normalcy will hit inevitable speed bumps. While it is truly hard to say with conviction that a short-term rally or bear market will come, I do believe that some consolidation and a correction could be possible in the short-term on the way towards another strong rally in the second half of 2021.Outside of economic damages and an out-of-control virus, the market itself is flashing potential signs of over-optimism and euphoria. In its most recent survey, for example, the American Association of Individual Investors (AAII) found that 48.1% of investors identified as being bullish - well above the historical average of 38%. With an overabundance of cocky, euphoric, and optimistic investors, the market becomes more vulnerable to selling pressure. Corrections are very common though. Only twice in the last 38 years have we had years WITHOUT a correction (1995 and 2017). Because there has not been one since the lows of March, we could be due for one in the early part of 2021.Therefore, to sum it up:While there is long-term optimism, there are short-term concerns. A short-term correction in early 2021 is very possible, but I do not believe, with certainty, that a correction above ~20% leading to a bear market will happen. Has the Nasdaq Officially Overheated?Don’t ever let anyone tell you “this time is different” if fears of the dot-com bubble are discussed. History repeats itself, especially in markets. I have many concerns about tech valuations and their astoundingly inflated levels. The recent IPOs of DoorDash (DASH) and AirBnB (ABNB) reflect this. I believe that more pullbacks along the lines of Wednesday, December 9th’s session could inevitably come in the short-term.Pay close attention to the RSI. While an overbought RSI does not automatically mean a trend reversal, I called keeping a very close eye on this for the Nasdaq. The December 9th Nasdaq pullback, after it exceeded a 70 RSI, reflects that.The RSI is now above 70. Monitor this . With unstable volume to start the week on the horizon, as Tesla officially joins the S&P 500, I am calling for some short-term volatility. I did not make a conviction call last week but I am not making that mistake again. Because the RSI is officially above 70, and because I foresee unstable volume thanks to Tesla, take profits and SELL some shares, but do not fully exit .While tech has overheated, there is still some very real long-term optimism based on stimulus hopes and 2021’s potential.Furthermore, on pessimistic days, having Nasdaq exposure is crucial because of the “stay-at-home” trade.For an ETF that attempts to directly correlate with the performance of the NASDAQ, the Invesco QQQ ETF (QQQ) is a good option.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were 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 believed to be accurate, Matthew Levy, 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. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’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. Matthew Levy, 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.
Gold & the USDX: Correlations

Stimulus Hopes Fail to Rally Markets

Finance Press Release Finance Press Release 23.12.2020 15:59
The S&P 500 closed down for the third consecutive day (Dec. 22), despite Congress’s long-overdue approval of an economic stimulus package.News RecapThe Dow Jones declined 200.94 points, or 0.7%, to 30,015.51. The S&P 500 closed down for a third consecutive day and fell 0.2%. Reflecting a return to the “stay-at-home” tech trade, the Nasdaq gained 0.5% on the day (Dec. 22). The small-cap Russell 2000 index managed to outperform yet again, rising 1.01%.Congress finally voted on and approved a $900 billion stimulus package to aid struggling Americans. Attached to this bill was also a $1.4 trillion measure to fund the government through Sept. 30. President Trump is expected to sign the bill into law within the next few days.A mutant strain of COVID-19 discovered in the UK weighed on markets for a second consecutive day. While the vaccine(s) could still be effective on this strain, the strain appears to be more contagious than others. The discovery of this virus strain has caused stricter lockdown measures and travel restrictions worldwide.Travel stocks were the laggards of the day due to fears of the new strain of COVID-19. American Airlines (AAL) fell 3.9% and United (UAL) dropped 2.5%. Cruise lines all fell as well. Carnival (CCL) fell nearly 6%, Royal Caribbean (RCL) dropped nearly 3%, and Norwegian (NCL) plummeted 6.9%Apple (AAPL) led the Nasdaq higher as it jumped 2.9% due to investor excitement about their EV plans to challenge Tesla (TSLA) by 2024Mixed economic data came in on Tuesday (Dec. 22). The final reading on Q3’s GDP growth found that the US GDP grew 33.4% on an annualized basis, compared to the estimated 33.1%. On the other hand, US consumer confidence fell for the second month in a row and missed expectations - despite vaccine optimism.COVID-19 has now killed over 318,000 Americans (and counting). The CDC announced that this is now the deadliest year in American history as total deaths are expected to top 3 million for the first time. Deaths are also expected to jump 15% from the previous year. This would mark the largest single-year percentage leap since 1918, when WWI and fatalities from the Spanish Flu Pandemic caused deaths to rise an estimated 46%.Markets have officially stumbled before Christmas and experienced a predictable tug-of-war between good news and bad news. While the general focus of both investors and analysts has appeared to be the long-term potential of 2021, there are some very concerning short-term headwinds.Although there was some anticipation that a stimulus deal could send stocks higher in the near-term, investors may be simply taking profits before the year’s end and rebalancing for 2021. On the other hand, it is very possible that the stimulus package was “too little too late,” and is being overshadowed by a more contagious strain of COVID-19 discovered over the past weekend in the U.K.While nobody predicted a renegade mutant virus weighing on market sentiment, short-term battles between optimism and pessimism were quite predictable.According to a note released on Monday (Dec. 21) from Vital Knowledge’s Adam Crisafulli“The market has been in a tug-of-war between the very grim near-term COVID backdrop and the increasingly hopeful medium/long-term outlook (driven by vaccines) – the latter set of forces are more powerful in aggregate, but on occasion, the market decides to focus on the former, and stocks suffer as a result.”Meanwhile, the overwhelming majority of market strategists, including myself, are bullish on equities for 2021. It might just be a bit of a bumpy road getting there. I believe that a correction and some consolidation could be very likely in the short-term, on the way towards another strong rally in the second half of 2021. While it is hard to say with conviction WHEN we could see a correction, I believe that the market’s behavior as of late could be a potential preview of what’s to come between now and the end of Q1 2020. There is optimistic potential, but I believe a potential 5% pullback before the year’s end is possible, as well as a minimum 10% correction before the end of Q1 2020.According to Jonathan Golub , Credit Suisse’s chief U.S. equity strategist, choppiness in the economy and markets in the coming months could be expected before a surge in consumer spending by mid-2021. Golub said, “I don’t think that there’s a smooth, easy straight-line story on this...I think for the next three or four months, the reopening process is going to be sloppy.”I believe that the S&P’s three-day losing streak could be an ominous sign of what’s to come in the near-term. I do believe though that this is healthy and could be a good thing.Before Monday’s (Dec. 21) session, I had warned that the market was flashing signs of over-optimism and euphoria. In its most recent survey, for example, the American Association of Individual Investors (AAII) found that 48.1% of investors identified as being bullish - well above the historical average of 38%.A correction could be just what this market needs. Corrections also happen way more often than people realize. Only twice in the last 38 years have we had years WITHOUT a correction (1995 and 2017). I believe we are overdue for one because there has not been a correction since the lows of March. This is healthy market behavior and could be a very good buying opportunity for what I believe will be a great second half of the year.The mid-term and long-term optimism are very real, despite the near-term risks. The passage of the stimulus package only solidifies the robust vaccine-induced tailwinds entering 2021, specifically for small-cap value stocks.In the short-term, there will be some optimistic and pessimistic days. On some days, such as Tuesday (Dec. 22), the “pandemic” market trend will happen - cyclical and COVID-19 recovery stocks lagging, and tech and “stay-at-home” stocks leading. On other days, a broad sell-off based on virus fears may occur as well. Additionally, there will also be days where there will be a broad market rally due to optimism and 2021 related euphoria. And finally, there will be days (and in my opinion, this will be most trading days), that will see markets trading largely mixed, sideways, and reflecting uncertainty.Therefore, to sum it up:While there is long-term optimism, there are short-term concerns. A short-term correction between now and Q1 2021 is very possible. But I do not believe, with conviction, that a correction above ~20% leading to a bear market will happen.The premium analysis this morning will showcase a “Drivers and Divers” section that will break down some sectors that are in and out of favor. As a token of my appreciation for your patronage, I decided to give you a free sample of a “driver” and “diver” sector. Please do me a favor and let me know what you think of this segment! I’m always happy to hear from you. DrivingSmall-Caps (IWM)The Russell 2000 small-cap index once again beat the larger-cap indices and gained 1.01% on Tuesday (Dec. 22). Despite the profit-taking and negative sentiment during Tuesday’s (Dec. 22) session, small-caps didn’t get the memo.I do love small-cap stocks in the long-term and this small-cap rally is more encouraging than the “stay-at-home” stock rallies from April/May. This is a bullish sign for long-term economic recovery and shows that investors are optimistic that a vaccine will return life to relative normalcy by mid-2021.I do have some concerns about overheating in the short-term though. As I mentioned before, I believe that the S&P’s losing streak is only a preview of what could come in the next 1-3 months.According to the chart above for the Russell 2000 ETF (IWM) , it becomes pretty evident that small-cap stocks have overheated in the short-term. Stocks won’t always go up, but the IWM’s trajectory since November has been essentially vertical. The ETF keeps hitting record highs while the RSI keeps overinflating way past overbought levels as the volume shows instability.Since November, the Russell index has been on a run nothing short of astounding. Just look how the iShares Russell 2000 ETF (IWM) compares to the ETFs tracking the Dow, S&P, and Nasdaq in that time frame. Since November, the IWM has risen nearly 28% and has at least doubled the returns of the ETFs tracking the other major indices.Although the Russell index is composed mostly of small-cap cyclical stocks dependent on the recovery of the broader economy and may be more adversely affected on “sell-the-news” kind of days, its hot streak since November has seemingly not cooled off as much as other indices and sectors.But I believe this will eventually happen in the short-term, and I hope it does for a long-term buying opportunity.In the short-term, small-cap stocks may have overheated and could experience the greatest volatility. SELL and take short-term profits if you can, but do not fully exit positions .If there is a pullback, BUY for the long-term recovery. DivingUS Dollar ($USD)If the dollar rallies at all again soon, do not be fooled.Ever since I called the dollar’s rally past the 91 level two Wednesdays ago (Dec. 9) a mirage, the dollar has declined by 1.25%.I believed it to be “fool's gold” then and I believe any subsequent rally that could come will be “fool’s gold” too.I still am calling out the dollar’s weakness after several weeks, despite its low levels. I expect the decline to continue as well thanks to a dovish Fed.The world’s reserve currency is still trading below 90 and has not traded this low since April 2018. Joe Manimbo , a senior analyst at Western Union Business Solutions, seemingly agrees with me as well and said that “the latest blow to the dollar came from the Fed, which vowed not to touch policy even if the outlook for the U.S. economy brightens as it now expects.”Since hitting a nearly 3-year high on March 20th, the dollar has plunged nearly 13% while emerging markets and other currencies continue to strengthen.On days when COVID-19 fears outweigh any other positive sentiments, dollar exposure might be good to have since it is a safe haven. But in my view, you can do a whole lot better than the US dollar for safety.I have too many doubts on the effect of interest rates this low for this long, government stimulus, strengthening of emerging markets, and inflation to be remotely bullish on the dollar’s prospects over the next 1-3 years. Meanwhile, the US has $27 trillion of debt, and it’s not going down anytime soon.Additionally, according to The Sevens Report , if the dollar falls below 89.13, this could potentially raise the prospect of a further 10.5% decline to the next support level of 79.78 reached in April 2014After briefly rising above an oversold RSI of 30 last week, the dollar’s RSI is now at an alarmingly low 27.87. The dollar is also significantly trading below both its 50-day and 200-day moving averages.While the dollar may have more room to fall, this MAY be a good opportunity to buy the world’s reserve currency at a discount as the RSI is oversold. But I just feel you can do a whole lot better than the USD right now.I’m not a crypto guy either myself, but Bitcoin’s run compared to the dollar’s disastrous 2020 has to really make you think sometimes….For now, where possible, HEDGE OR SELL USD exposure.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were 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 believed to be accurate, Matthew Levy, 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. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’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. Matthew Levy, 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.
Major Averages Hit More Record Highs

Major Averages Hit More Record Highs

Finance Press Release Finance Press Release 29.12.2020 19:27
Quick UpdateAs a quick update to kick off today’s newsletter, I would like to summarize my correct calls and what I profited on since beginning to publish these updates. While nobody can predict the future, the major calls I am most proud of since producing these letters are 1) adding emerging market exposure and 2) hedging or selling the U.S. Dollar.Emerging markets have been some of the best performers in 2020, and I have made some bullish calls on specific regional markets for 2021 as well. I have been touting emerging markets since my first report, but when I switched my focus to specific regions, my calls became even more correct. On December 3rd, I called Taiwan ( EWT ETF) the best bet for emerging market exposure while avoiding the risks and baked in profits of China. Since then, the EWT ETF which tracks Taiwan has gained over 4.3% while the MCHI ETF which tracks China has fallen over 3.3%. The Taiwan ETF has also outperformed the SPY S&P 500 ETF and the IEUR ETF which tracks Europe.My calls on the U.S. dollar were also correct. Since I started doing these newsletters about a month and a half ago, I consistently reiterated that the dollar should be hedged or avoided because of the Fed’s policies, effect of interest rates this low for this long, government stimulus, strengthening of emerging markets, and inflation. I also said that any minor rally the dollar would experience would be fool’s good. In the last month and a half, the dollar has fallen around 2.3%, and since it briefly pierced the 91-level on December 9th , it has fallen another 1%.Markets kicked off the final week of 2020 with a surge towards record highs after President Trump finally signed off on the stimulus bill.News RecapAll major indices closed at record highs. The Dow Jones rose 204.10 points higher, or 0.7%, to close at 30,403.97. The S&P 500 climbed 0.9% to 3,735.36, and the Nasdaq rose 0.7% to 12,899.42. Meanwhile, the small-cap Russell 2000 underperformed and declined 0.38%.After President Trump called the $900 billion stimulus package an unsuitable “disgrace,” and alluded to possibly vetoing the bill, over the weekend the president signed the bill into law . By signing off, a government shutdown was averted while unemployment benefits were extended to millions of Americans.After President Trump demanded stimulus checks for Americans to be raised from $600 to $2,000 each , the Democrat-led House voted for this measure on Monday (Dec. 28). The ball is now in the GOP-led Senate’s court on the measure. They are not expected to approve the measure.Apple led the Dow higher, and gained 3.6%. Disney also climbed nearly 3%.Communication services, consumer discretionary and tech were the best performing sectors in the S&P 500, with each rising over 1%.Amidst fears of a COVID-19 “surge on top of a surge” after the Christmas holiday, over one million people in the U.S. have now been vaccinated. Meanwhile, the U.S. has averaged at least 184,000 new infections per day.Markets cheered President Trump’s signing of the stimulus package and are further encouraged by the possibility of larger stimulus checks. After the market traded flat last week, it kicked off the final week of 2020 with a bang. Although it is still very possible that consolidation, profit taking, and rebalancing could happen in this shortened week, the general focus of both investors and analysts has appeared to be the long-term potential of 2021.As Tom Essaye, founder of The Sevens Report said :“The five pillars of the rally (Federal stimulus, FOMC stimulus, vaccine rollout, divided government and no double dip recession) remain largely in place, and until that changes, the medium and longer-term outlook for stocks will be positive.”While I still do believe that there will be a short-term tug of war between good news and bad news, I am now convinced that these moves are manic and based on sentiment. There has not been a pullback to end the year as I anticipated. But I still do believe that markets have overheated, and that between now and the end of Q1 2020 a correction could happen.There is optimistic potential, but the road towards normalcy will hit inevitable speed bumps.I do believe though that a correction is healthy and could be a good thing. Corrections happen way more often than people realize. Only twice in the last 38 years have we had years WITHOUT a correction (1995 and 2017). I believe we are overdue for one since there has not been one since the lows of March. This is healthy market behavior and could be a very good buying opportunity for what I believe will be a great second half of the year.The mid-term and long-term optimism are very real, despite the near-term risks. The passage of the stimulus package only solidifies the robust vaccine-induced tailwinds entering 2021.The general consensus is that 2021 could be a strong year for stocks, despite short-term headwinds. According to a new CNBC survey which polled more than 100 chief investment officers and portfolio managers, two-thirds of respondents said the Dow Jones will most likely finish 2021 at 35,000 - a roughly 16% gain from Thursday’s close of 30,199.87. Five percent also said that the index could climb to 40,000 by the end of 2021.Therefore, to sum it up:While there is long-term optimism, there are short-term concerns. A short-term correction between now and Q1 2021 is very possible. But I do not believe, with conviction, that a correction above ~20% leading to a bear market will happen. Will the Dow Approach 31,000 or 29,000 Before Mid-2021?Figure 1 - Dow Jones Industrial Average ($INDU)After trading as low as around 29,650 at one point last Monday (Dec. 21), the Dow has been firmly back above 30,000 for the last week. The blue-chip index also closed at yet another record high on Monday (Dec. 28).I do think that the Dow has some more room to run in the next few days to close off the year. Trump’s signing of the stimulus bill was a belated Christmas gift for investors everywhere. If the Senate approves $2,000 stimulus checks, then another short-term pop can certainly happen.My short-term questions though still remain as to whether or not the Dow can not only stay above 30,000 for more than a week at a time but also hit more all-time highs before March. The volume has also been very unstable as of late, but that is likely due to shortened trading weeks to close off the year.In the short-term, I believe it is just as likely for the Dow to approach 29,000 as it is to approach 31,000 in the early months of 2021.While I think a 35,000 call to close out 2021 is a bit aggressive, I do believe that the second half of 2021 could show robust gains for the index.With so much uncertainty and the RSI still firmly in hold territory, the call on the Dow stays a HOLD.This is a very challenging time to make calls with conviction. But one thing I do believe is that if and when there is a drop in the index, it will not be strong and sharp relative to the gains since March, let alone November. I believe that more likely than not we will be in a sideways holding pattern until vaccines are available to the general public by mid-2021.For an ETF that attempts to directly correlate with the performance of the Dow, the SPDR Dow Jones ETF (DIA) is a strong option.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were 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 believed to be accurate, Matthew Levy, 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. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’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. Matthew Levy, 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.
Hot Trade: Time To Turn Bullish The USD?

Hot Trade: Time To Turn Bullish The USD?

Ivan Delgado Ivan Delgado 05.01.2021 02:12
Daily EdgeChart of the dayTo see an expanded version, right-click and select ‘open link in new tab’. The indices show the performance of a currency vs a G8 forex basket. Indicators are available to use these measures via Tradingview and MT4. Oftentimes there is this constant debate. What matters the most, technicals or fundamentals? My personal stance in the subject is that while the latter is critical to understand the ‘whys’ of long-term trends, it is the technicals that show us the road map to get there, in other words, the ‘hows’.With that out of the way, in today’s write-up I want to solely concentrate on the technicals of the world’s reserve currency. Where the USD index (equally-weighted vs G8 FX) has landed, the way it’s gotten there (in terms of the volatility expansion seen) and the structure it’s formed, all suggest to me we may be in for a resurgence of USD buy-side flows this January.These are the reads I am getting in the USD index from a monthly chart perspective:The index is testing what’s arguably been the most determinant inflection point since the GFC in 2008.Every time this area has been tested, without exceptions, a major trend change has followed.The area is confluent with not one but two 100% projection targets. These measures are depicted via green arrows in the chart above.If history is any indication, January is by a large margin the best performing month of the year for the USD index (data since 1982).The over-extension to the downside has reached a 2-standard deviation (ATR-based) away from its central mean (13ema off the monthly chart).Analysis of the USD indexIn my video analysis below I lay out the rationale that leads me to think there are significant risks for bullish price action in the USD in coming months.Need a VPS? Check out Global Prime’s complimentary offers.
Major Averages Plummet to Start 2021

Major Averages Plummet to Start 2021

Finance Press Release Finance Press Release 05.01.2021 17:11
Quick UpdateIn a quick update to kick off 2021, I wanted to summarize my correct calls, and what I profited on since beginning to publish these updates. While nobody can predict the future, the major calls I am most proud of since writing these letters are calling the short-term downturn in small-cap stocks, adding emerging market exposure, and hedging or selling the U.S. dollar.I switched my call on small-caps, specifically the Russell 2000 from a HOLD to a short-term SELL on December 16th. The iShares Russell 2000 ETF (IWM) surged to unprecedented record gains since November 2020, however, I believed then and still believe that the index has overheated by many measurements. Since December 16th, the IWM ETF is largely flat. However, since peaking on December 23rd, the IWM has underperformed ETFs tracking the larger indices and has declined by nearly 3%. While I am still bullish on small-caps in the long run and maintain my STRONG BUY call on the Russell for the long-term, it is contingent on a pullback . I believe that pullback may have begun. I am hoping for a minimum 10% decline before jumping back in for the long-term.Emerging markets have been some of the best performers in 2020, and I have made some bullish calls on specific regional markets for 2021 as well. I have been touting emerging markets since my first report, but when I switched my focus to specific regions, my calls became even more correct. I called Taiwan ( EWT ETF) the best bet for emerging market exposure while avoiding the risks and baked in profits of China on December 3rd. Since then, the EWT ETF which tracks Taiwan has gained over 7% while the MCHI ETF which tracks China has barely gained over 1.4%. The Taiwan ETF has also outperformed the SPY S&P 500 ETF and the IEUR ETF which tracks Europe.In conjunction with my bullish calls on emerging markets, my bearish calls on the U.S. dollar were also correct. Since I started doing these newsletters about a month ago, I consistently said that the dollar should be hedged or avoided because of the Fed’s policies, effect of interest rates this low for this long, government stimulus, strengthening of emerging markets, and inflation. I also said that any minor rally the dollar would experience would be fool’s good. Since the dollar briefly pierced the 91-level on December 9th, it has fallen nearly 1.4%. Despite it experiencing another mini-rally and nearly piercing the 91-level again on December 22, I remained steadfast in my bearish outlook of the dollar. Since the open on December 23rd, the U.S. Dollar has declined another 0.77%. I believed it would drop back below 90 before the new year, and here we are to start off 2021, with the dollar at 89.85.Markets kicked off the first trading day of 2021 with a dud, due to further concerns of COVID-19 cases and the Georgia Senate run-off elections.News RecapMonday (Jan.4) marked the first negative start to a year for the Dow Jones since 2016. The Dow Jones closed 382.59 points lower, or 1.3%, at 30,223.89. The Dow at one point fell more than 700 points.The S&P 500 also fell 1.5% to 3,700.65, the Nasdaq fell 1.5%, and the small-cap Russell 2000 fell 1.47%.This was the biggest one-day sell-off since Oct. 28 for the Dow and S&P 500, and the Nasdaq’s worst sell-off since Dec. 9.While the sell-off to start the year could be due to natural consolidation, the growing number of COVID-19 cases around the world and its potential impact on the global economic recovery weighed on investors. To start the year off, U.K. Prime Minister Boris Johnson announced a national lockdown to slow the spread of a new, more contagious, coronavirus strain. With this lockdown, people are only allowed to leave their homes for essentials, work if they can’t from home, and exercise. Most schools, including universities, will also move to remote learning.According to data compiled by Johns Hopkins University , more than 85 million COVID-19 cases have been confirmed globally, including 20.7 million in the U.S. and 2.7 million in the U.K.Pay very close attention to the Georgia Senate run-offs on Tuesday (Jan. 5). The balance of power in the Senate is hanging on the vote and markets could be volatile due to the results. If the Democrats gain a majority, it could impact market performance and leave Biden’s powers largely unchecked. If the Republicans keep just one seat, it could likely check Biden’s more progressive ambitions.Coca-Cola (KO) and Boeing (BA) were the laggards on the Dow, falling 3.8% and 5.3%, respectively. Real estate stocks were the worst performing on the S&P and fell 3.2%. Utilities also declined 2.6%.About 4.6 million people in the U.S. have now gotten a COVID-19 vaccine.Stocks dropped sharply on Monday (Jan. 4), to kick off 2021. It was the first time since 2016 that the Dow Jones started a year off with declines and was the biggest one-day sell-off since Oct. 28 for the Dow and S&P 500. It was also the Nasdaq’s worst one-day decline since Dec. 9.Several catalysts can be blamed for the gloomy start to the year: natural consolidation, COVID-19, and the Georgia Senate runoff elections.First and foremost, a decline like this was bound to happen, and I called this happening in the early part of the year. I still believe that there will be a short-term tug of war between good news and bad news, and that these moves are manic and based on sentiment. There was no pullback to end 2020 as I anticipated, but I still believe that markets have overheated in the short-term. Was Monday (Jan. 4) the start of a correction? Possibly. But either way, I think that between now and the end of Q1 2020, a correction could happen.Carl Icahn seemingly agrees with me, and told CNBC on Monday (Jan. 4), “in my day I’ve seen a lot of wild rallies with a lot of mispriced stocks, but there is one thing they all have in common. Eventually they hit a wall and go into a major painful correction.”I believe, though, that corrections are healthy and could be a good thing. Corrections happen way more often than people realize. Only twice in the last 38 years have we had years WITHOUT a correction (1995 and 2017). I believe we are overdue for one since there has not been one since the lows of March 2020. This is healthy market behavior and could be a very good buying opportunity for what I believe will be a great second half of the year.Meanwhile, COVID-19 continues surging and there are very real fears of new strains discovered in the U.K. and South Africa that could be more contagious. U.K. Prime Minister Boris Johnson announced a national lockdown that could potentially last until mid-February. With this lockdown, people are only allowed to leave their homes for essentials, work if they can’t from home and exercise. Most schools, including universities, will also move to remote learning. This could be an ominous sign for stricter lockdowns to be implemented in other regions across the world.Outside of COVID-19, political uncertainty has returned to the markets. The balance of power in the U.S. Senate is at stake, with Georgia run-off Senate elections set to occur on Tuesday (Jan. 5). Investors are likely to prefer a divided Senate. If the Democrats win both elections and wrestle away Senate control from the Republicans, it could leave President Biden’s powers largely unchecked, and enable him to pass more of his ambitious and progressive policies. Many investors do not anticipate these to be very market friendly. As results start to come in Tuesday evening, markets could react in a volatile manner.According to John Stoltzfus , chief investment strategist at Oppenheimer Asset Management, the S&P 500 could fall by 10% if the Democratic candidates win the Georgia runoffs.“It is thought by not just a few folks on Main Street as well as on Wall Street that if tomorrow’s run-off results in a sweep for the Democrats — providing them with control of the Senate as well as the House — that it would bode ill for business with the likelihood that corporate tax rates could rise substantially,” Stoltzfus said.This will also be a busy week for economic data with the manufacturing PMI report said to be released Tuesday (Jan. 5) and the non-farm payrolls report set to be announced Friday (Jan. 8).Monday's sell-off (Jan. 4) serves as a very painful reminder that markets will still have to weigh the near-term risks against some of the more positive mid-term and long-term hopes on vaccines and re-opening.The general consensus is that 2021 could be a strong year for stocks, despite short-term headwinds. According to a CNBC survey which polled more than 100 chief investment officers and portfolio managers, two-thirds of respondents said the Dow Jones will most likely finish 2021 at 35,000, while five percent also said that the index could climb to 40,000.Therefore, to sum it up:While there is long-term optimism, there are short-term concerns. A short-term correction between now and Q1 2021 is very possible. But I do not believe, with conviction, that a correction above ~20% leading to a bear market will happen. Does the Dow Approach 31,000 or 29,000 Before Mid-2021?I have too many short-term questions for the Dow Jones. I believe it’s just as likely for the Dow to touch 29,000 again as it is to touch 31,000 before March.After trading as low as around 29,650 at one point before the new year (Dec. 21), the Dow has remained firmly above 30,000. However, it has traded largely sideways over the last few weeks, despite opening Jan. 4 with a record high.Despite some long-term optimism, for now, my short-term questions take precedence. I don’t like how COVID-19 is trending (who does?), I am disappointed in the vaccine roll-out, and I am concerned about the Georgia election. In the short-term, I am not convinced that the Dow will stay above 30,000 for more than a week at a time and I am also not convinced that it will hit more all-time highs before March.In the short-term, I believe it is just as likely for the Dow to approach 29,000 as it is to approach 31,000 in the early months of 2021.While I think a 35,000 call to close out 2021 is a bit aggressive, I do believe that the second half of 2021 could show robust gains for the index.With so much uncertainty and the RSI still firmly in hold territory, the call on the Dow stays a HOLD.This is a very challenging time to make a call on the Dow with conviction. But one thing I do believe is that if and when there is a drop in the index, it will not be strong and sharply relative to the gains since March 2020. I believe that it is more likely than not that we will be in a sideways holding pattern until vaccines are available to the general public by mid-2021.For an ETF that attempts to directly correlate with the performance of the Dow, the SPDR Dow Jones ETF (DIA) is a strong option.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were 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 believed to be accurate, Matthew Levy, 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. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’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. Matthew Levy, 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.
Markets Recover Some Losses, While Eyeing Georgia

Markets Recover Some Losses, While Eyeing Georgia

Finance Press Release Finance Press Release 06.01.2021 16:28
Stocks gained on Tuesday (Jan. 5) after the major indices all sold off to start the year on Monday (Jan. 4).News RecapThe Dow Jones closed 167.71 points higher, or 0.6%, at 30,391.60. The S&P 500 advanced 0.7% and the Nasdaq climbed nearly 1%The Georgia Senate run-off elections on Tuesday (Jan. 5) were the main focus of investors. At the time of publication, Democrat candidate Raphael Warnock was declared the winner over the incumbent Republican Kelly Loeffler for the first Senate seat up for grabs. The other contested seat between Democrat Jon Ossoff and incumbent Republican David Perdue had yet to be called.The balance of power in the Senate depends on these results and markets could be volatile. Many believe that if the Democrats sweep the Georgia seats and win control, then higher taxes and progressive policies could hurt the market. On the other hand, others believe that a Democrat sweep could bring on larger and quicker stimulus relief.Better-than-expected ISM U.S. manufacturing data came in and helped stocks higher. According to the ISM, manufacturing rose to 60.7 in December from 57.5 in November. The consensus was that the index would slightly decline to 57.Energy stocks led the S&P higher and soared by 4.5% after Saudi Arabia agreed to voluntary production cuts in February and March. Oil giants such as Chevron (CVX) rose 2.7% as a result.Oil futures surged by 4.9% and briefly broke past $50 a barrel for the first time since February.Copper is a precious metal traditionally seen as a leading indicator for the global economy. On Tuesday (Jan. 5), it hit its highest level in nearly eight years and gained more than 2%.Gold also reached an 8-week high due to more declines from the dollar.Boeing (BA) was the best-performing Dow stock and gained 4.4%.U.K. Prime Minister Boris Johnson on Monday (Jan. 4) announced a national lockdown to slow the spread of a new, more contagious, coronavirus strain. Under these restrictions, people are only allowed to leave their homes for essentials, work (if they can’t from home) and exercise. Most schools, including universities, will also move to remote learning.According to data compiled by Johns Hopkins University , more than 85 million COVID-19 cases have been confirmed globally, including 20.8 million in the U.S. and 2.7 million in the U.K.Meanwhile, over 5 million people in the U.S. have now received a COVID-19 vaccination.After stocks sharply dropped on Monday (Jan. 4) to kick off 2021, widespread gains on Tuesday (Jan. 5) offset some of these losses. While Monday (Jan. 4) was the first time since 2016 that the Dow Jones started a year off with declines, two major catalysts sent the major averages higher: the oil production agreement reached between OPEC and Russia, and better than expected manufacturing results from December.This tug of war between good news and bad news can be expected in the early part of this new year. Although Monday (Jan. 4) witnessed a sharp pullback (and in my opinion, a predictable one), Tuesday (Jan. 5) witnessed a reversal. In general, though, I still believe that markets have overheated and that between now and the end of Q1 2020, a correction could likely happen.Markets have overheated, and I believe that much of the good news ranging from economic stimulus to vaccines has been baked in. Eventually, the reality on the ground will outweigh the positive news in the short-term.National Securities’ chief market strategist Art Hogan put it best in my opinion, saying that he believes we could see a 5%-8% pullback as early as this month. Hogan said that“we have a tug of war between virus news and vaccine news the better part of six months, and that’s been balanced off by stimulus...That seems to be behind us, and right now I think the virus news takes over a little bit.”Additionally, if the Georgia elections on Tuesday (Jan. 5) go as I think they’ll go (Democrat sweep), it could be a short-term catalyst leading to a potential correction. The balance of power in the U.S. Senate is at stake with these elections. Investors are likely to prefer a divided Senate. If the Democrats sweep and wrestle away Senate control from the Republicans, it could leave President Biden’s powers largely unchecked, and enable him to pass more ambitious, progressive, and less market-friendly policies.At the time of this publication, Democrat candidate Raphael Warnock was declared the winner over the incumbent Republican Kelly Loeffler for the first Senate seat up for grabs. The other contested seat between Democrat Jon Ossoff and incumbent Republican David Perdue had yet to be called.According to John Stoltzfus , chief investment strategist at Oppenheimer Asset Management , the S&P 500 could fall by 10% if the Democratic candidates sweep the Georgia runoffs.“It is thought by not just a few folks on Main Street as well as on Wall Street that if tomorrow’s run-off results in a sweep for the Democrats — providing them with control of the Senate as well as the House — that it would bode ill for business with the likelihood that corporate tax rates could rise substantially,” Stoltzfus said.On the other hand, a Democrat sweep could mean potentially larger stimulus packages - and soon.There is optimistic potential, but the road towards normality will hit inevitable speed bumps and uncertainty. This Senate election and the potential market reactions reflect that.If and when a correction does happen, I believe it will be healthy and a good thing. Corrections are normal market behaviors and happen more frequently than most realize. Only twice in the last 38 years have we had years WITHOUT a correction (1995 and 2017). Since we have not had one since March 2020, I believe we are long overdue, and the catalysts are there. Most importantly though, a correction could be a great buying opportunity for what I believe will be a strong second half of the year.While there will certainly be short-term bumps in the road, I love the outlook in the mid-term and long-term once vaccines become more widely available. The pandemic is awful right now, and these new infectious strains are quite concerning. But despite this, I believe the positive manufacturing data released on Tuesday (Jan. 5) is a step in the right direction, especially considering all the restrictions that most countries are living through.The consensus is that 2021 could be a strong year for stocks. According to a CNBC survey which polled more than 100 chief investment officers and portfolio managers, two-thirds of respondents said the Dow Jones will most likely finish 2021 at 35,000, while five percent also said that the index could climb to 40,000.Therefore, to sum it up:While there is long-term optimism, there are short-term concerns. A short-term correction between now and Q1 2021 is very possible. But I do not believe, with conviction, that a correction above ~20% leading to a bear market will happen.The premium analysis this morning will showcase a “Drivers and Divers” section that will break down some sectors that are in and out of favor. As a token of my appreciation for your patronage, I decided to give you a free sample of a “driver” and “diver” sector. Please do me a favor and let me know what you think of this segment! I’m always happy to hear from you. DrivingSmall-Caps (IWM)Figure 1 - iShares Russell 2000 ETF (IWM)After seeing a sharp pullback since Christmas week, the Russell 2000 briefly returned to its winning ways on Tuesday (Jan. 5). The IWM Russell 2000 ETF which tracks the small-cap index witnessed a 1.55% gain - its best day in a while.Although I genuinely love small-cap stocks in the long-term as the world will eventually reopen, I believe that in the short-term the index has overheated. Until the start of this week, the RSI for the IWM Russell 2000 ETF was at an astronomical 74.54. Although the RSI is at a more manageable 62.84, I still believe that the party of seeing vertical gains is over for now.Small-caps in the short-term will be more sensitive to bad news, and right now there is a lot. Vaccine gains have possibly been baked in by now and stocks just don’t go up vertically the way that the Russell 2000 did between November and late December. It is very possible that small-caps in the near-term could trade sideways before an eventual larger pullback. I truthfully hope small-caps decline a minimum of 10% before jumping back in for long-term buying opportunities.For now, SELL and take short-term profits if you can - but do not fully exit positions .If there is a pullback, this is a STRONG BUY for the long-term recovery. DivingUS Dollar ($USD) Figure 2 - U.S. Dollar ($USD)I have zero faith in the U.S. Dollar as a safe asset, even if we may see some short-term volatility and “risk-off” trades. I still am calling out the dollar’s weakness after several weeks despite its low levels. I expect the decline to continue as well thanks to a dovish Fed.Any time the U.S. Dollar rallies, it is simply “fool’s gold.” Since I started doing these newsletters about a month ago, I have consistently said that any minor rally the dollar would experience would be a mirage. Since the dollar briefly pierced the 91-level on December 9th, it has fallen over 1.8%. Despite the dollar experiencing another mini-rally and nearly piercing the 91-level again on December 22, I remained steadfast in my bearish outlook of the dollar. Since the open on December 23rd, the U.S. Dollar has declined another 1.25%. I believed the dollar would drop back below 90 before the new year, and here we are to start off 2021 with the dollar at 89.41. Since hitting a nearly 3-year high on March 20th, the dollar has plunged nearly 13.8% while emerging markets, foreign currencies, precious metals, and cryptocurrencies continue to strengthen. Gold for example reached an 8-week high on Tuesday (Jan. 5)On days when COVID-19 fears outweigh any other positive sentiments, dollar exposure might be good to have since it is a safe haven. But in my view, you can do a whole lot better than the U.S. dollar for safety.I have too many doubts on the effect of interest rates this low for this long, government stimulus, strengthening of emerging markets, and inflation to be remotely bullish on the dollar’s prospects over the next 1-3 years. Meanwhile, the US has $27 trillion of debt, and it’s not going down anytime soon.Another headwind to consider for the dollar is the Georgia Senate election. If Democrats sweep, there could be more aggressive stimulus in the near term. With Democrats controlling both the House and the Senate, more stimulus could be bearish for the dollar.Additionally, according to The Sevens Report , if the dollar falls below 89.13, this could potentially raise the prospect of a further 10.5% decline to the next support level of 79.78 reached in April 2014. With the dollar now at 89.41, we are coming dangerously close.The dollar’s RSI is also nearly oversold once again and is trading significantly below both its 50-day and 200-day moving averages.For now, where possible, HEDGE OR SELL USD exposure.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were 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 believed to be accurate, Matthew Levy, 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. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’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. Matthew Levy, 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.
Stocks Post Records to Start 2021

Stocks Post Records to Start 2021

Finance Press Release Finance Press Release 11.01.2021 21:31
The indices hit record highs yet again to close off the first week of 2021 and weighed unrest, poor jobs data, and further prospects of economic stimulus.News RecapBoth the Dow and S&P 500 closed the week off with four-day win streaks. The Dow climbed 56.84 points, or 0.2%, at 31,097.97. The S&P 500 rose 0.6% to 3,824.68, and the Nasdaq popped 1% to 13,201.98. The small-cap Russell 2000 declined 0.25%.The Dow and S&P 500 each gained more than 1% on the week, while the Nasdaq gained 2.4%, and the Russell 2000 surged by nearly 6%. These gains to start the year came despite the unprecedented unrest and invasion of the Capitol by Trump supporters on Wednesday (Jan. 6).Despite Democrats winning full control of the Senate, the Dow briefly declined 200 points midday after moderate Democrat Senator Joe Manchin from West Virginia told The Washington Post that he would “ absolutely not ” support a round of $2,000 stimulus checks. Manchin mildly walked back those comments later in the day and said he was “undecided,” and not outright opposed to it.The U.S. economy lost 140,000 jobs in December , according to the Labor Department. This is significantly worse than the estimated gain of 50,000 according to economists polled by Dow Jones.The 10-year yield rose to its highest level since March 20, and broke above 1.1%.Coca-Cola (KO) rose 2.2% to lead the Dow higher. The consumer discretionary and real estate sectors each rose more than 1%, lifting the S&P 500. The Nasdaq got a boost from Tesla, which popped 7.8%.The first week of 2021 largely continued where 2020 left off- with turmoil, tension, and a barrage of news. Another 2020 pattern continued to kick off the new year- a resilient market.A week that started off with a sharp sell-off concluded with sharp weekly gains, all-time highs, and a four-day winning streak for the Dow and S&P 500. This is despite the first assault on the U.S. Capitol since 1814, despite COVID-19 cases continuing to wreak havoc, and despite a disastrous jobs report.How could this be?The results of the Georgia election can first and foremost be credited for the market surge.Although tech initially plummeted due to fears of higher taxes and stricter regulations, with full Democrat control of the Presidency, Senate, and House, there is finally clarity and expectations of further spending and government stimulus.Although President-elect Joe Biden had promised to pass a measure for bigger stimulus checks if Democrats secured control of the Senate, comments from West Virginia Senator Joe Manchin, a moderate Democrat, spooked investors for a time on Friday (Jan. 8). Although Manchin briefly walked these comments back, according to Bill Miller, founder of Miller Value Partners , “Nothing is going to get passed if they can’t get the moderates in the Democratic Party, or the Republican Party for that matter, to go along with (further stimulus).”President-elect Biden said Friday (Jan. 8) that a new aid package would be “ in the trillions of dollars .” This comes after Goldman Sachs stated that it expects another big stimulus package of around $600 billion . Value stocks and small-cap stocks have surged as a result of these prospects.Despite the prospect of further stimulus that could heat up the economy, the short-term tug of war between good news and bad news will continue. Many of these moves upwards or downwards are based on emotion and sentiment, and there could be some serious volatility in the near-term. Although markets have kicked off the new year with excitement from the “Blue Wave”, consider this.Stocks have overstretched valuations, the Capitol was invaded, the pandemic is out of control, and the vaccine roll-outs have been clunky at best.Even though the markets saw a nice weekly gain to kick off 2021 and the 10-year treasury is at its highest level in months, a correction between now and the end of Q1 2020 is likely.National Securities’ chief market strategist Art Hogan also believes that we could see a 5%-8% pullback as early as this month.Generally, corrections are healthy, good for markets, and more common than most realize. Only twice in the last 38 years have we had years WITHOUT a correction (1995 and 2017). I believe we are long overdue for one. We haven’t seen a correction since March 2020. This is healthy market behavior and could be a very good buying opportunity for what I believe will be a great second half of the year.While there will certainly be short-term bumps in the road, I love the outlook in the mid-term and long-term once the growing pains of rolling out vaccines stabilize. The pandemic is awful and the numbers are horrifying. But despite this, and despite the horrendous jobs report, there is one report released this past week that could be a step in the right direction - the ISM manufacturing data.The consensus is that 2021 could be a strong year for stocks. According to a CNBC survey which polled more than 100 chief investment officers and portfolio managers, two-thirds of respondents said the Dow Jones will most likely finish 2021 at 35,000, while five percent also said that the index could climb to 40,000.Therefore, to sum it up:While there is long-term optimism, there are short-term concerns. A short-term correction between now and Q1 2021 is very possible. I don’t think that a correction above ~20% leading to a bear market will happen. Can Small-caps Own 2021?Figure 1- iShares Russell 2000 ETF (IWM)Small-caps were the comeback kids this week. Although I believed that the Russell 2000’s record-setting run since the start of November was coming to an end, the iShares Russell 2000 ETF (IWM) had itself quite a week and rallied 7.35% since January 4th. Small-cap stocks were the most excited from the Democrat sweep in Georgia due to hopes of further economic stimulus on the horizon.I love small-cap stocks in the long-term, especially as the world reopens. A Democrat-dominated Congress could help these stocks too, but in the short-term, the index, by any measurement, has simply overheated. Before January 4th, the RSI for the IWM Russell 2000 ETF was at an astronomical 74.54. I called a pullback happening in the short-term due to this RSI, and it happened. Well now the RSI is back above 74 again, and I believe that a more significant correction in the near-term could be imminent.Stocks simply just don’t always go up in a straight line, and that’s what the Russell 2000 has essentially been between November and December. It’s looked eerily similar this week.What this also comes down to, is that small-caps are more sensitive to the news - good or bad. I think that vaccine gains have possibly been baked in by now. There could be another near-term pop due to further stimulus hopes, but it’s likely that small-caps in the near-term could trade sideways before an eventual larger pullback.I hope small-caps decline a minimum of 10% before jumping back in for long-term buying opportunities.SELL and take this week’s profits if you can - but do not fully exit positions .If there is a pullback, this is a STRONG BUY for the long-term recovery.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were 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 believed to be accurate, Matthew Levy, 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. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’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. Matthew Levy, 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.
Rosy February for S&P 500? Not So Fast

Rosy February for S&P 500? Not So Fast

Monica Kingsley Monica Kingsley 26.01.2021 09:20
With Biden in the White House, Trump's hallmark policies with the exception of 2017 tax cuts, are being undone. Would that be true also about the stock bull market that I called back in spring 2020? Still in autumn that year, I‘ve been saying that there isn‘t any stopping of the bulls (for now). The Fed‘s foot is back on the pedal, but inflation hasn‘t reared its ugly head yet – the path of least resistance for stocks remains higher. Unless the corona vaccination programs disappoint the markets, hurting cyclicals and the breadth of stock market advance, that is. Such a turn would take quite some activist economic policy steps to counter, as you can imagine. Can there be a better indicator than the dollar having rolled over to the downside, which I called in early summer to have happened? Ever since, the dollar has been largely on the defensive, and I projected that to last well into 2021. Here we are, with mammoth stimulus plans, reparations for slavery, minimum wage hikes, Green New Deal coming – you name it, we have it – and my prediction is naturally valid also today. Wait, there is one more clue, and that‘s interest rates. Slowly but steadily, they‘re rising, especially on the long end. With the decreasing foreign appetite (did you know that Russia‘s gold reserves already surpassed its dollar reserves in value terms?) for U.S. government bonds, the Fed will have to step forward increasingly more. Rising rates will be reinforcing inflation as the two go hand in hand. Rising rates thus can‘t be viewed exclusively as bullish spirits returning into the real economy, but as an inflationary surprise looming that will also be reflected in growing outperformance of international stocks vs. the U.S. stock indices. Hi, my name is Monica and I‘m finally back, with truly mine and free Stock Trading Signals, and own website to boot! Nothing is standing now in the way of my personal blog and active trading style. Yes, I am so happy to be making a return with my very own daily free analyses and intraday updates after being the author of Stock Trading Alerts since early 2020. What a great and rewarding experience I could have delivered to you, the truly grateful ones. Check out my fresh bio, drop me your questions anytime, and I‘ll answer to the benefit of all. Now that you know what‘s up, let‘s dive into the technicals (charts courtesy of www.stockcharts.com). S&P 500 Outlook 2021 is about stocks trading near the upper range of their Bollinger Bands volatility spectrum. The weekly indicators haven‘t flashed sell signals, yet volume isn‘t at its strongest. Still, it‘s representative of an ongoing bull market, where 2021 won‘t however be as good a year for the stock market as 2020 was. Still, it‘ll be a good year where S&P 500 would comfortably beat not only the 4,000, but 4,200 mark. We‘ll also experience significant corrections but the nearest one won‘t arrive in February in earnest. I see the coming month as a relatively weak one, muddle through if you will. The daily chart shows the upward sloping trend channel nicely, with the breakdown attempt at the turn of the year soundly defeated. The daily indicators seem to favor largely sideways to mildly higher trading action in the nearest days. That‘s one point of view, with the other being that prices haven‘t declined enough to lure in the buyers yet. Given the volume examination, I lean towards sideways trading coupled with an unsuccessful push lower as the most probable scenario over the coming 1-2 weeks. Then, higher prices. Credit Markets High yield corporate bonds (HYG ETF) aren‘t pushing higher as vigorously as they had been recently. A sell signal? Hardly. Sign of caution? Don‘t jump the gun. I count on the pattern of higher highs and higher lows to continue, supporting the stock market rally. The ratio of high yield corporate bonds to short-dated Treasuries (HYG:SHY) isn‘t flashing danger yet either. Visually, there is no relative overextension to S&P 500, and the recent moves favor muddling through with an upward bias over the coming weeks. Inspecting S&P 500 relative to the high yield corporate bonds to all bonds (PHB:$DJCB) ratio shows quite clear skies ahead. Risk appetite isn‘t really waning. Rising Treasury yields (i.e. falling Treasury prices) are synonymous with economic expansion but a bit more is at play in 2021. This year, I am turning towards the explanation of inflation slowly but surely making a return, which is nowhere better seen than with the food price indices. The Fed also says that food price inflation is the best predictor of forthcoming, broader inflation. That explains quite nicely the rising rates in the face of the real economy waiting for months for the stimulus to arrive. With the dollar stuck deep in its bear market as one more sign of the inflationary storm striking this year, who would want to take the other side of the trade? Emerging Markets, Smallcaps, and S&P 500 Market Breadth It‘s my view that we‘ve entered the era of emerging markets (EEM ETF) outperforming the U.S. indices. That doesn‘t mean the S&P 500 would crater, but it would lag behind in appreciation. The emerging markets support the stock upswing to go on still. The Russell 2000 (IWM ETF) keeps trading in sync with the S&P 500, helping in its rebound from the mid-Jan lows. Their strong performance shows that they expect smooth sailing for the announced $1.9T stimulus plan. New highs new lows are the only (temporary) fly in the bullish ointment here. Spelling solid potential for a bear raid, I look for the downside from this divergence in the making to prove rather temporary and shallow. Precious Metals and Bitcoin Let‘s talk real money, these safe haven assets. Yes, given the 2020 performance and cues from monetary policy taken, it‘s hard to argue that Bitcoin didn‘t behave as another fiat currency nemesis. Still, I‘ll focus on precious metals within this section, because I‘ll be introducing Gold Trading Signals in the near future, so stay tuned for yet another daily publication of mine. Another market call that proved correct – gold didn‘t really give up all its summer rally, and the prolonged base building is in its latter stages. Yes, it‘s my view that we‘re going to see gold fireworks enter this spring, and that these prices represent a favorable entry point for a medium-term oriented investor. As for the short-term one, I‘ll cater to their needs in my upcoming daily publication, and today, with my first 2021 analysis, aim to provide you with a big picture view over the financial landscape at large, kind of my gameplan for the first half of 2021 if not more. The gold miners to gold ratio is trading at favorable levels for the buyers, and I look for the miners to start performing better over the next few weeks. The healthy period of long base building is drawing to an end. Silver would also join in the party, and the gold chart is sending a signal that this is going to unfold before too long. Bitcoin, the greatest beneficiary of aggressive monetary policy in 2020, agrees. Its chart pattern would favor some more sideways trading as a healthy precondition of another upleg, but don‘t be surprised if the cryptocurrency correction doesn‘t flatten the 50-day moving average. Yes, I‘m looking for the bulk of the corrective move in terms of prices, to be over already. Summary Over the coming two weeks of earnings reports, stocks are in for some short-term volatility. Sizable correction? Not really. But we‘re trading at quite elevated levels, and the month of February is shaping up to be weaker than January. No doubt about it, but there won‘t be a correction to speak of this early in 2021. With the Fed stepping up its balance sheet expansion, the monetary policy hasn‘t yet lost its charm, and inflation isn‘t on the radar screen of most. Investor sentiment is at greed, but not extreme greed. The put to call ratio is rising, which points to a not so smooth sailing ahead. Still, the bull market has better days in its future, but given the momentary balance of forces and especially the risk-reward ratio, I‘m not jumping in with both feet. As this is my first analysis in 2021, I‘m actually waiting on the sidelines for now. Subscribers to Monica‘s Insider Club, which features the trade calls and intraday updates for both Stock Trading Signals and Gold Trading Signals, would know right away when I make any move.
Short Squeeze Mania - Stocks Swoon

Short Squeeze Mania - Stocks Swoon

Finance Press Release Finance Press Release 27.01.2021 15:24
It's officially "stonk season" in the markets. The IPO market continues to baffle, and SPACs continue to pop-up like weeds in your front yard.Plus if you’ve seen GameStop (GME), AMC Entertainment (AMC), and Blackberry (BB) lately, you know the Robinhooders are at it again.These speculative gambles are ridiculously frothy right now as hedge funds and institutions continue to try and cover their shorts. The moves these stocks are making are more detached from reality than the guy in a buffalo headdress at the Capitol 3 weeks ago.Complacency is the most significant near-term risk to stocks by far, and I have been warning about this for weeks. It also reminds me of the Q4 2018 pullback ( read my story here ).It’s also earnings season (for those who care, like analysts), and it’s time for some big swings and volatility.Well, not entirely. Monday (Jan. 25) saw a sudden mid-day plummet and subsequent recovery, and Tuesday (Jan. 26) traded slightly down. Wednesday (Jan. 27) looks set to open lower - we will see how that ends up.Earnings have so far impressed, though, and there were some big moves from individual stocks.General Electric (GE) popped over 9% thanks to a healthy outlook for 2021 and better than expected industrial free cash flow.Johnson & Johnson (JNJ) also saw a nice 3% gain after beating earnings. Investors are also eagerly anticipating results from its vaccine’s trial. Johnson & Johnson’s vaccine is one dose and does not require any crazy storage protocols like Pfizer (PFE) and Moderna’s (MRNA). Strong results and FDA approval could genuinely change the tide of the pandemic and vaccine rollout.Earnings from Microsoft (MSFT) and Advanced Micro Devices (AMD) also came in after the closing bell and impressed as well. Microsoft posted record quarterly sales, and AMD exceeded $3 billion in revenue.Does this mean we're all clear now and can party like it's 1999?Not exactly. Plus, if you're a stock nerd like I am, you don't want to party like it's 1999. Because that means 2000 will come—the end of one of the biggest parties, investors have ever seen. I'm talking about the dot-com bust.Fair warning: the S&P 500 is still at or near its most-expensive level in recent history on most measures, and the Russell 2000 has never traded this high above its 200-day moving average.The more GameStop pops, the more of a circus I think this market is. GameStop a $15+ billion company? Really? A correction at some point in the short-term would not be shocking in the least.John Studzinski , vice chairman of Pimco, believes that market valuations are sound and reflect expectations of this eventual reopening and economic recovery by the second half of the year.I agree on some level about the second half of the year. Outside of complacency, though, I have other short-term concerns.For one, trillions in imminent stimulus could be useful for stocks but bring back inflation by mid-year. The worst part about it? The Fed will likely let it run hot. With debt rising and consumer spending expected to increase as vaccines are rolled out to the masses, the Fed is undoubtedly more likely to let inflation rise than letting interest rates rise.All of this tells me that the market remains a pay-per-view fight between good news and bad news.We may trade sideways this quarter- that would not shock me in the least. But I think we are long overdue for a correction since we haven't seen one since last March.Corrections are healthy for markets and more common than most realize. Only twice in the last 38 years have we had years WITHOUT a correction (1995 and 2017).A correction could also be an excellent buying opportunity for what should be a great second half of the year.Therefore, to sum it up:While there is long-term optimism, there are short-term concerns. A short-term correction between now and Q1 2021 is possible. I don't think that a decline above ~20%, leading to a bear market will happen.In a report released last Tuesday (Jan. 19), Goldman Sachs shared the same sentiments.My goal for these updates is to educate you, give you ideas, and help you manage money like I did when I was pressing the buy and sell buttons for $600+ million in assets. I left that career to pursue one where I could help people who needed help, instead of the ultra-high net worth. Hopefully, you find my insights enlightening, and I welcome your thoughts and questions.We have a critical week ahead with the Fed set to have its first monetary policy meeting of 2021 and more earnings announcements. I wish you the best of luck. We'll check back in with you at the end of the week. Small-caps are Too Hot to HandleFigure 1- iShares Russell 2000 ETF (IWM)As tracked by the iShares Russell 2000 ETF (IWM) , small-cap stocks underperformed the larger indices on Tuesday (January 26). The RSI is no longer technically overbought, but I still think that the Russell has overheated in the short-term. Stocks don’t just go up in a straight line without experiencing a sharp pullback. That’s just the nature of the beast.Barron’s also claims that the Russell 2000/S&P 500 ratio has entered a powerful 15-year resistance area .Nobody knows what will happen during this critical week of earnings, but I called a decline after the IWM began the week over a 70 RSI. Indeed the IWM is having a down week to this point, but it’s not sharply down enough for me to switch my call. Not even close.I love small-cap stocks in the long-term, especially as the world reopens. Small-caps are also the most likely to benefit from Biden’s aggressive stimulus plan.But the index has overheated. Period.Before January 4, the RSI for the IWM Russell 2000 ETF was at a scorching hot 74.54. I called a sell-off happening in the short-term due to this RSI, and it happened.After the RSI hit another overbought level of approximately 77 two Wednesdays ago (January 13), the IWM declined by another 1.5%. I said that Russell stocks would imminently cool down because the RSI was too hot, and precisely that’s what happened.Consider this too. In its entire history as an index, the Russell has never traded this high above its 200-day moving average.Small-caps may have priced in vaccine-related gains by now, and some stimulus optimism may have been priced in too.I hope small-caps decline before jumping back in for long-term buying opportunities. I love where these stocks could end up by the end of the year.SELL and take profits if you can- but do not fully exit positions . If there is a deeper pullback, this is a STRONG BUY for the long-term recovery.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were 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 believed to be accurate, Matthew Levy, 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. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’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. Matthew Levy, 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.
Here’s What’s More Important than the Recent Reddit Mania

Here’s What’s More Important than the Recent Reddit Mania

Finance Press Release Finance Press Release 29.01.2021 16:36
GameStop! Reddit! Silver manipulation (that’s been discussed for over two decades)! It’s exciting but pay attention to these more important factors.Is the above really the key thing that’s happening in the markets right now? No, it’s only the most interesting thing. I admit, what we’re seeing on the Internet right now is truly absorbing, but one should realize that it’s what used to happen multiple times in history. This time it’s simply more visible as the conversations and associated images are publicly available and widely distributed.In yesterday’s intraday Alert , I commented on the issue of the likely implications of these cumulative purchases on the precious metals market as a whole and what difference they are likely to make over the course of the following months and weeks – next to none.Well, there is one effect that I’m expecting to see. It’s the increased volatility during the following price declines – likely proportionate to what was so vigorously bought in the last few days.Figure 1 – GameStop Corporation (GME) - NYSEThe above GameStop chart shows a near-vertical rally, and it also shows the spike in volume. The purchasing power seems to have dried up and the price – as expected – fell. Those, who bought at $300, were already at a 33% loss as of yesterday’s close.The various forums (other forums joined in, it’s not just Reddit anymore) are filled with messages and images encouraging to “hold”. But sooner or later people will realize that without fresh buyers the price is going to fall, and one by one, they are likely to panic and sell – especially knowing that they won’t be “punished” by the “forum community” in any way, as it’s not known to the forum participants who is selling and when.The topic of silver manipulation , paper silver and paper gold really is older than 20 years, and it’s been mostly the same argument over all those years. The price managed to rally from below $5 to about $50 – if there was a massive long-term manipulation, then it wasn’t particularly effective. If it didn’t prevent silver from rallying so far, then why would it prevent silver from rallying from below $20 to $200? Anyway, this topic is too broad to be fully discussed, even in a lengthy Alert – the point that I want to make here is that nothing new happened in the silver market – it just got more spotlight.So, what’s more important and timelier than the above topics, even though it doesn’t get as much attention – and can herald a decline in the precious metals?Figure 2 – S&P 500 (ES.F)First, the almost-confirmed medium-term breakdown in stocks!On Wednesday, the S&P 500 futures moved visibly below the rising support line and closed below it for the first time. Despite yesterday’s strength, stocks were unable to rally back above it and so far, today, stocks are moving lower. If the S&P 500 futures close today below this line, the breakdown will be confirmed by both: three consecutive daily closes and a weekly close. This will be a bearish sign for the short term.If stocks slide further shortly, it will be particularly bearish for silver and mining stocks, which means that those who bought yesterday based on forum messages etc. would be likely to find themselves at a loss relatively soon. This, in turn, means that the decline could be quite volatile.Second, there is also another market that could ignite the powerful decline in the PMs and miners – the rallying USD Index.Figure 3 – USD Index (DX.F)Despite the intraday decline, the USDX is once again close to its 2021 highs.The USD Index is testing its previous 2020 highs, and it might (!) be forming the right shoulder of a short-term head-and-shoulders pattern. The key word here is “might”. If the USDX rallies above its previous highs (about ~91), this pattern will be invalidated and the short-term outlook for the USDX will be clearly bullish. This would also serve as a breakout above the inverse head-and-shoulders pattern (mid-Dec. low being the left shoulder, the early 2021 low being the head, and the recent low being the right shoulder), which would have even more bullish implications (with the price target above 92).Would this be enough for gold to decline to $1,700? It might not be enough, but it might be enough for the miners to move to my above-mentioned initial downside targets ($31 and $42.5 for GDX and GDXJ, respectively).So, the bearish storm seems to be brewing. How are the precious metals responding? Let’s take a look at gold.Figure 4 – COMEX Gold Futures (GC.F)Gold shrugged off yesterday’s “exciting news” coming from the internet’s forums. It rallied initially, almost touched its declining resistance line, and then reversed, thus erasing the previous gains. It’s now trading pretty much at the same levels where it was trading two days ago. The outlook remains bearish and yesterday’s reversal actually makes it even stronger.Figure 5 – COMEX Silver Futures (SI.F)Silver is visibly stronger than it was a few days ago, but if the precious metals sector is about to head lower (especially given the breakdown in stocks) this would be normal even without the entire “let’s buy silver” forum theme.And miners?Figure 6 - VanEck Vectors Gold Miners ETF (GDX)Miners invalidated the breakdown below the neck level of the head and shoulders pattern. Invalidations of these breakouts tend to be “buy” signals. BUT yesterday’s session has “ this time really was different” written all over it.Part of the purchase encouragements on forums were for mining stocks. While silver has indeed rallied yesterday (and so did AG, which was particularly promoted), the GDX ETF moved higher only somewhat. It still closed more or less at its mid-January low and it didn’t manage to erase Tuesday’s decline.Overall, I think that the proper context is the relative weakness of miners and not the direct implications of the technical invalidation.Moreover, please note that if the symmetry in terms of shape between both green boxes on the above chart is to be upheld, then it shouldn’t be surprising to see a quick volatile upswing that’s very short. In fact, since the volatility now is smaller than it was in late April 2020, what we saw yesterday might have already been the analogy to what had happened back then.All in all, the outlook for the precious metals market remains bearish for the following weeks, regardless of what the next few days will bring.Also… Do you remember about bitcoin? Some time ago, I wrote that the bitcoin situation made the overall situation in currencies similar to late 2017 / early 2018.Figure 7 - Bitcoin Vault (BTC.V)Just as we saw back then, bitcoin soared while the USD Index plunged. Then both markets reversed .Figure 8That was also the time when precious metals and miners (and stocks) topped.So, what’s new?We just saw another clear confirmation that this is the very final inning of the rally. You probably heard that in the final part of a bull market, everything that’s in it soars. If it’s a gold bull market, then even stocks that have “gold” in their name will likely rally even though they might have nothing to do with the precious metals market. People don’t care to check, and emotions are too high to bother checking what they are actually buying.Well, there’s a cryptocurrency that started as a joke, but then became a relatively big market.Dogecoin .The reason why I’m mentioning it is that dogecoin just soared…Figure 9And it had previously soared in this way in early 2018, a few weeks after bitcoin topped.This is exactly what one would expect to see at a market top, based on common sense (analogy to buying just about anything close to the top), but the fact that we already saw pretty much the same thing in bitcoin, dogecoin, and the USD Index at the top 3 years ago should be flashing a big red light even for the most bearish of USD bears and most bullish crypto bulls.Remember, early 2018 was also the moment when the stock market and PMs topped.The above indications are on top of myriads of other factors pointing to lower precious metals and mining stock prices – this is all much more important than forum posts – even very convincing ones.Please note that today’s volatility is somewhat expected - it’s Friday (options expire) and it’s also the final session of the month. Quite many people and entities might want to push prices and indices in their favor, so that options expire on their preferred side of their options’ strike prices. So, whatever happens today might easily be erased in early February.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits’ associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski’s, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits’ employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Has the “Stock Market Bubble” Started to Pop?

Has the “Stock Market Bubble” Started to Pop?

Finance Press Release Finance Press Release 01.02.2021 15:51
After what happened last week with beaten-down stocks such as GameStop (GME) and AMC (AMC), there are indeed signs of a bubble forming. While these stocks don’t necessarily reflect the broader market, I have been calling a downturn for weeks.Complacency is by far the most significant risk in the markets right now, along with overstretched valuations beyond the GameStop “stonks,” and the possible return of inflation if the Fed lets the GDP run hot like I think they will.According to a recent Bank of America survey of 194 money managers, bullishness on stocks is at a three-year high, and the average share of cash in portfolios, which is usually a sign of protection from market turmoil, is at the lowest level since May 2013.Complacency.I still think we are long overdue for a correction since we haven't seen one since last March. The manic moves of the past week excite me but greatly concern me.Corrections are healthy for markets and more common than most realize. Only twice in the last 38 years have we had years WITHOUT a correction (1995 and 2017).Thus far, what has occurred in January could be the potential start of the correction I have been forecasting. A correction could also be an excellent buying opportunity for what should be a great second half of the year.We could also finally be approaching BUY levels on many of the SELL and HOLD calls I’ve made the last few weeks.Outside of my BUY call on the iShares MSCI Taiwan ETF (EWT), which has gained 10.12% since I made the call on 12-3, I called the Nasdaq and the Russell both overbought and foresaw last week’s downturn.I made the SELL call on the QQQ Nasdaq ETF 1-25, and since then, it has declined 4.13%. I made the SELL call on the Russell 2000 IWM ETF 12-16 anticipating this eventual pullback. The Russell is now at its lowest level since the beginning of the year declined 4.30% in the last week.I also called the Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF (PDBC) a BUY on 12-3, and it has gained 8.33%.Meanwhile, I’ve called the Dow Jones a HOLD for the last two months, and since 12-3, it is practically flat and up 0.15%.I’m not highlighting these calls to brag or toot my own horn. I’m highlighting these calls to remind everyone to please be level headed during these manic times and to please understand that stocks don’t only go up. The market saw its worst week since October last week, and has now declined in two of the last three weeks. More could come in the short-term.While GameStop and AMC are exciting, understand the risks you’re taking and don’t follow the herd.On the other hand, do not run and hide from a market decline, and do not let this deter you from chasing your goals. The market has overheated, but it is still not quite a broad sector-specific bubble like it was back in 2000. Yes, there are sectors more overvalued than others. But as we saw last week it’s more stock-specific. People still forget that shares of Eastman Kodak skyrocketed by 1,481% in three days last July. The broader indices seem to have done just fine since then.My goal for these updates is to educate you, give you ideas, and help you manage money like I did when I was pressing the buy and sell buttons for $600+ million in assets. I left that career to pursue one where I could help people who needed help, instead of the ultra-high net worth.With that said, Therefore, to sum it up:While there is long-term optimism, there are short-term concerns. A short-term correction between now and the end of Q1 2021 is possible. I don't think that a decline above ~20%, leading to a bear market will happen.Hopefully, you find my insights enlightening. I welcome your thoughts and questions, and wish you the best of luck.We’re all in this together! The S&P 500 May Be One More Pullback from a “BUY” Figure 1- S&P 500 Large Cap Index $SPXHow quickly things change.Before the start of last week, the S&P was hovering around a record-high. Its forward P/E ratio was the highest it’s been since the dot-com bust, and the RSI consistently approached overbought levels.Now the question is, how soon before it’s a BUY? The index declined over -3.3% last week and has fallen in two of the previous three weeks. The S&P is also an index that trades in a streaky manner and can rip off multiple-day win streaks and lose streaks.I said before that once the S&P approaches a 3600-level, that we can start talking about it as a BUY. There are short-term concerns, with long-term optimism. The S&P briefly dipped below 3700 on Friday, and the RSI is sitting around 43.25. To me, this keeps it at a HOLD, with maybe one or two pullbacks away from a BUY.What does worry me a bit is a week full of more earnings beats did not impress the index. Investors likely anticipated this. Remember- when the market usually gets what it expects, it’s usually a reason to sell more than buy.A short-term correction could inevitably occur by the end of Q1 2021, but for now, I am sticking with the S&P as a HOLD. You can definitely start “nibbling” though.For an ETF that attempts to directly correlate with the performance of the S&P, the SPDR S&P ETF (SPY) is a good option.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were 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 believed to be accurate, Matthew Levy, 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. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’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. Matthew Levy, 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.
Why Investors Should Consider Quality Dividend Stocks

Why Investors Should Consider Quality Dividend Stocks

Sure Dividend Sure Dividend 01.02.2021 08:42
Investors can buy stocks that fall into a wide variety of categories. There are growth stocks, which represent companies that are quickly expanding their businesses and reporting high revenue and/or earnings-per-share growth. Then there are value stocks, typically those with low stock valuations, as measured by various ratios such as price-to-earnings or price-to-sales. Finally, there are dividend stocks, which are companies that distribute cash to shareholders through periodic dividend payments. We believe investors looking for superior long-term returns should focus on the best dividend growth stocks, which are companies that offer the best of both worlds. The best dividend growth stocks, such as the Dividend Aristocrats, pay dividends to shareholders with the added bonus of dividend growth each year. We believe investors looking to generate long-term wealth should consider the Dividend Aristocrats. Dividend Aristocrats Overview The Dividend Aristocrats are a group of 65 stocks that have increased their dividends for at least 25 years in a row. There are additional criteria that must be satisfied in order to become a Dividend Aristocrat. For example, a company must be in the S&P 500 Index, have a market capitalization of at least $3 billion, and its shares must have a daily average volume traded of at least $5 million. The relative scarcity of the Dividend Aristocrats—which total 65 stocks out of more than 500 stocks in the S&P 500 Index—demonstrates the difficulty in raising dividends each year for over 25 consecutive years. Such a long period of time will inevitably include recessions, and a variety of other global issues to deal with. For a company to be able to raise its dividend through so many challenges, it must have a strong business model that generates steady profits year after year. It must also have long-term growth potential, and a shareholder-friendly management team that understands the importance of raising dividends each year. Another advantage of the Dividend Aristocrats is that many of them have significantly higher yields than the broader market average. For instance, the S&P 500 Index as a whole currently has an average dividend yield of 1.5%. Meanwhile, the ProShares S&P 500 Dividend Aristocrats (NOBL), the major exchange-traded fund that tracks the Dividend Aristocrats, currently yields 2.2%. Investors can purchase a basket of all Dividend Aristocrats with NOBL, or purchase the individual stocks, many of which have even higher yields than NOBL. For example, People’s United Financial (PBCT) is a Dividend Aristocrat from the banking industry, with a high dividend yield of 5.2%. AT&T (T) is a Dividend Aristocrat with an even higher yield of 7%. Our top-ranked Dividend Aristocrat has an even higher yield than People’s United or AT&T. Our Top Dividend Aristocrat Today Exxon Mobil (XOM) is our top-ranked Dividend Aristocrat, and it is also the highest-yielding Dividend Aristocrat with a 7.7% yield. While higher-yielding stocks are often accompanied by elevated levels of risk, there are multiple quality Dividend Aristocrats with high dividend yields above 5%. In the case of Exxon Mobil, its abnormally high dividend yield is due to its plunging share price over the past few years alongside the drop in oil prices. The broader energy sector was under duress over the past few years, as a global supply glut put downward pressure on oil prices. Then, the coronavirus pandemic of 2020 had a major impact on global demand for oil, which served as an added headwind for oil stocks. Exxon Mobil has deployed aggressive cost-cutting to preserve its dividend in the short-term. The company announced plans to cut its capital expenses 30% in 2020. It also announced it will cut 15% of its global workforce to further cut costs. Over the long-term, the company expects the global oil price to rebound as the global economy recovers from the coronavirus pandemic. It is also betting its future on growing its production, which will be possible due to the company’s premier assets. The Permian will be a major growth driver, as the oil giant has about 10 billion barrels of oil equivalent in the area and expects to reach production of more than 1.0 million barrels per day in the area by 2025. Guyana, one of the most exciting growth projects in the energy sector, will be the other major growth driver of Exxon. The company has nearly tripled its estimated reserves in the area, from 3.2 billion barrels in early 2018 to nearly 9.0 billion barrels. Overall, Exxon Mobil expects to grow production by 25%, from 4 million barrels per day to 5 million barrels per day by 2025. We expect Exxon Mobil to grow earnings-per-share by 8% per year over the next five years, driven by a higher oil price as well as rising production. Although we view the stock as slightly overvalued at the present time, with a fair value price of $42 versus a current price of $46, we still see the stock as generating strong total returns. In addition to earnings-per-share growth, future returns will be driven by the high dividend yield of 7.7%. Overall, we see the potential for total returns to reach nearly 14% per year over the next five years, a highly attractive expected return for a Dividend Aristocrat. Final Thoughts Investors should not overlook the value of dividends. While growth stocks tend to receive much of the coverage in the financial media, dividend stocks have been proven to build wealth for shareholder over the long run. According to Standard & Poor’s, dividends have accounted for approximately one-third of the stock market’s total return since 1926. We believe the highest-quality dividend growth stocks, such as the Dividend Aristocrats, can generate superior long-term total returns.   By Bob Ciura of Sure Dividend
GameStocks - Fun While It Lasted..

GameStocks - Fun While It Lasted..

Finance Press Release Finance Press Release 03.02.2021 15:45
So how about GameStop (GME) and AMC (AMC)? That Silver short-squeeze? Fighting the man? That was fun while it lasted.I don't want to lecture anyone or say that I told you so. During one of my newsletters last week, I even said that I tip my hat to anyone who profited from this—all the respect in the world.Me personally, though, I would never trade like this. Monday (Feb. 1) and Tuesday's market (Feb. 2) was nothing more than a reality check. GameStop's stock has lost nearly half of its value, and other Reddit darlings like AMC, Blackberry (BB), Koss (KOSS), and Silver (SLV) tanked.Stocks don't go up forever.Stonks especially don’t.Who knows, maybe the party's not over. But I think the plummet in the Reddit stocks was bound to happen. Bubbles always eventually pop.The market seems happy that the earth is back on its axis in stockland. The indices have recovered nearly all of last week's losses already.I didn't call the GameStop short-squeeze, but I had called last week's downturn for a while. The recovery so far this week wasn't entirely surprising either.Be that as it may, I remain concerned about complacency in the markets and overstretched valuations, plus the potential return of inflation. But the breather last week was needed and brought the indices to less overbought levels.Generally, investors and analysts are bullish these days. According to a recent Bank of America survey of 194 money managers, bullishness on stocks is at a three-year high, and the average share of cash in portfolios, which is usually a sign of protection from market turmoil, is at the lowest level since May 2013.We have still not declined 10% from the record highs- the minimum needed for a correction. Although the market needed last week's downturn, we're once again mostly right where we were several days ago.I know what you’re thinking. Amazon (AMZN) and Alphabet (GOOGL) are the latest companies to crush their earnings estimates, how could we possibly have a correction?For one, there are still things to be concerned about from a public health and economic perspective.We are also long overdue for one. We haven't seen one since last March. Corrections are healthy for markets and more common than most realize. Only twice in the last 38 years have we had years WITHOUT a correction (1995 and 2017).A correction could also be an excellent buying opportunity for what should be a great second half of the year.We're no longer as close to those same BUY levels as we were after market close on Friday. But we're not quite at SELL again, and I still think we're a few pullbacks away from making more BUY calls with conviction. In other words, welcome to no man's land.In my last newsletter, I cautioned against making manic moves and trading with emotions. We saw our worst week since October last week and declined in two of the previous three. Much of that was due to the GameStops and AMCs freaking out Wall Streeters. But I reminded you then, and I'll remind you again. Shares of Eastman Kodak surged by 1,481% in three days last July, and the broader market seems to have done just fine since then.Do not let the noise deter you from your goals. My goal for these updates is to educate you, give you ideas, and help you manage money like I did when I was pressing the buy and sell buttons for $600+ million in assets. I left that career to pursue one where I could help people who needed help, instead of the ultra-high net worth.With that said, to sum it up:While there is long-term optimism, there are short-term concerns. A short-term correction between now and the end of Q1 2021 is possible. I don't think that a decline above ~20%, leading to a bear market will happen.Hopefully, you find my insights enlightening. I welcome your thoughts and questions and wish you the best of luck.We're all in this together! Is It Safe to Buy Tech Again?Figure 1- Nasdaq Composite Index $COMPEarnings season for tech stocks hit record numbers last week, and is set to continue this week with Amazon and Alphabet clobbering estimates. Usually, when investors get what they expect, it’s more of a reason to sell rather than buy.But the Nasdaq so far this week has already recovered almost all of last week’s losses, and then some.I’m not ready to call this a BUY though, or recommend buying into momentum. There are still concerns. Tech valuations, especially the tech IPO market, terrify me. SPACs don’t help either. The Nasdaq last week declined to a more "normal" level, and in the span of two days, hit an RSI approaching 63 again.Last week's decline was needed, but there are still echoes of the dot-com bubble 20-years ago. I remain bullish on earnings and tech sectors such as cloud computing, e-commerce, and fintech for 2021, but please monitor the RSI.The RSI is how I have called the Nasdaq since December. While an overbought or oversold RSI does not automatically mean a trend reversal, it has with the Nasdaq.The Nasdaq pulled back on December 9 after exceeding an RSI of 70 and briefly pulled back again after passing 70 again around Christmas time. We also exceeded a 70 RSI just before the new year, and what happened on the first trading day of 2021? A decline of 1.47%.When I changed my Nasdaq call from a HOLD to a SELL on January 11 after the RSI exceeded 70, the Nasdaq declined again by 1.45%.Before the Nasdaq exceeded an RSI over 73 prior to January 25th, I switched my call back to SELL, and the QQQ promptly declined 4.13% for the week.The Nasdaq is trading in a precise pattern.I still like tech and am bullish for 2021. But for now, I'm going to stay conservative and say HOLD.For an ETF that attempts to directly correlate with the performance of the NASDAQ, the Invesco QQQ ETF (QQQ) is a good option.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were 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 believed to be accurate, Matthew Levy, 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. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’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. Matthew Levy, 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.
Gold & the USDX: Correlations

Bulls on Stock Parade

Finance Press Release Finance Press Release 05.02.2021 15:34
Is this week, dare I say, the first "normal" week of 2021? Let’s take a look at what has happened in January so far in what is supposed to be a more prosperous year than 2020.Six days into 2021, the Capitol saw its first insurrection since 1814.Two weeks later, we inaugurated a new president.A week later, we saw class warfare before our eyes when Redditors from the "WallStreetBets" subreddit took on hedge funds and won.After declining in two of the last four weeks, the indices haven't seen a single down day all week. If Friday (Feb. 5) futures stay the same, we might not have a down day all week.Bulls on parade.Good morning investors, thanks for finally caring about strong earnings and not paying attention to GameStop (GME) (that was fun while it lasted, though).The sentiment is rosey and for good reason. Earnings continue to crush. Some form of President Biden’s aggressive stimulus could also pass within days. Jobless claims fell for the third consecutive week and hit the lowest level since the end of November, labor market data looks strong, vaccines hit a record daily total on Thursday (Feb. 4) and could be distributed at CVS and Walgreens within days, and the 5-to-30 year treasury curve was the highest its been since March 2016.Johnson & Johnson (JNJ) also just applied to the FDA for emergency use authorization for its one-dose vaccine. If approved, it could be game-changing.Happy days.My overheating and trading concerns in an overbought market remain, though, and have returned with a vengeance. I liked where many sectors and indices ended last week for potential BUY opportunities. This blazing win streak, though, is teetering on the edge of mania and overvaluation again.The S&P 500, Nasdaq, and Russell 2000 hit new record closes yet again.Are we in a bubble? Maybe.I worry about complacency and overvaluation.The S&P 500’s forward 12-month P/E ratio is back to nearly 22 and well above the 10-year average of 15.8. The Russell 2000 is also back at a historic high above its 200-day moving average. Tech stock valuations are even approaching dot-com bust levels, once again.According to a recent Bank of America survey of 194 money managers, bullishness on stocks is at a three-year high, and the average share of cash in portfolios, which is usually a sign of protection from market turmoil, is at the lowest level since May 2013.The market needed last week’s pullback, but it was nothing but a minor cooldown period thanks to Reddit in the grand scheme of things.We are long overdue for a correction. Corrections are healthy for markets and more common than most realize. Only twice in the last 38 years have we had years WITHOUT a correction (1995 and 2017).Well, hello, we haven’t seen one since last March!A correction could also be an excellent buying opportunity for what should be a great second half of the year.My goal for these updates is to educate you, give you ideas, and help you manage money like I did when I was pressing the buy and sell buttons for $600+ million in assets. I left that career to pursue one where I could help people who needed help, instead of the ultra-high net worth.With that said, to sum it up:While there is long-term optimism, there are short-term concerns. A short-term correction between now and the end of Q1 2021 is possible. I don't think that a decline above ~20%, leading to a bear market will happen.Hopefully, you find my insights enlightening. I welcome your thoughts and questions and wish you the best of luck. Four Days in a Row and Counting for the S&P 500... Figure 1- S&P 500 Large Cap Index $SPXHave you ever rooted so hard for a team that can frustrate and excite you at the same time? Rip off a 4-day winning streak, followed by a slump of losing 5 out of 6 games, then come back with another winning streak? Does it have you questioning if the team is outstanding or a mirage?If I could compare the S&P 500 to a team, it would probably be the Philadelphia 76ers.This index looks like a winner and seemingly rips off multiple-day winning streaks weekly. Now and then, though, it can show inconsistency, make you scratch your head, and go on a frustrating losing streak.Two weeks ago, the S&P was hovering around a record-high. Its forward P/E ratio was the highest since the dot-com bust, and the RSI consistently approached overbought levels.By the end of last week, it was nearly oversold.Now, this week? Its RSI is back above 60, we’re at another record high, we’re on a four-day winning streak (which could be five if futures remain in the green), and we’re at a forward 12-month P/E ratio at nearly 22 and well above the 10-year average of 15.8.I said before that once the S&P approaches a 3600-level, we can start talking about it as a BUY. Well, the index came pretty darn close to it last week, but it wasn’t enough for me. Despite this week’s rally, short-term concerns remain, with long-term optimism.To me, because of the RSI and how the index has traded, it remains a HOLD. But we’re teetA short-term correction could inevitably occur by the end of Q1 2021, but for now, I am sticking with the S&P as a HOLD.For an ETF that attempts to directly correlate with the performance of the S&P, the SPDR S&P ETF (SPY) is a good option.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were 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 believed to be accurate, Matthew Levy, 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. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’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. Matthew Levy, 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.
Will Stocks Be Brady or Mahomes?

Will Stocks Be Brady or Mahomes?

Finance Press Release Finance Press Release 08.02.2021 15:46
One week, Reddit bandits take on hedge funds and win, pumping up stocks like GameStop and AMC while the broader market sees its worst decline since October.What a difference a week can make.The indices then see their most significant gains the next week since Joe Biden's election victory and don't see a down day all week.Now we're here- still amid a tug of war between sentiments. For now, though, things are looking rosy. That is, of course, unless you're Patrick Mahomes this morning.Can the market keep up it’s winning streak this week? It’s possible. But I’d be surprised if we don’t see at least one sharp pullback before this Friday (Feb. 12).Can the market keep up its winning streak this week? It's possible. But I'd be surprised if we don't see at least one sharp pullback this week.Despite tailwinds moving the markets right now, such as stimulus progress, an ever-improving vaccine delivery, the possibility of an effective one-dose vaccine from Johnson and Johnson (JNJ), falling COVID numbers, and an improving economic outlook based on consistently falling jobless claims and corporate earnings that continue to crush, I want you to be wary of complacency and overvaluation.Yes, I know I keep saying this. I also know that earnings are on pace to rise by over 20% in 2021. Since 1980, only 12 years have earnings increased by 15% or more. Except for 2018, the market gained an average of 12% in all of those years.But consider some valuation metrics that scream “bubble.”As of February 4, 2021, the Buffett Indicator , or the ratio of the total US stock market valuation to the GDP, was at a level not seen since the dotcom bubble. If you take the US stock market cap of $48.7 trillion and the estimated GDP of $21.7 trillion, we're nearly 224% overvalued and 84% above the historical average.With the S&P 500, Nasdaq, and Russell 2000 all currently trading at record closes, fears of a bubble are genuine. The S&P 500’s forward 12-month P/E ratio is back to above 22 and well above the 10-year average of 15.8. The Russell 2000 is also back at a historic high above its 200-day moving average. Tech stock valuations are also approaching dot-com bust levels.Yes, the outlook is healthy and for good reason. According to a recent Bank of America survey of 194 money managers, bullishness on stocks is at a three-year high, and the average share of cash in portfolios, a sign of protection from market turmoil, is at its lowest level since May 2013.But always remember that when the market gets what it expects, and we’re expecting strength by mid-year, it’s usually a time to sell rather than buy.While I don’t foresee a crash like we saw last March, I still maintain that some correction before the end of Q1 could happen.Corrections are healthy and normal market behavior, and we are long overdue for one. They are also way more common than most realize. Only twice in the last 38 years have we had years WITHOUT a correction (1995 and 2017).A correction could also be an excellent buying opportunity for what could be a great second half of the year.My goal for these updates is to educate you, give you ideas, and help you manage money like I did when I was pressing the buy and sell buttons for $600+ million in assets. I left that career to pursue one where I could help people who needed help, instead of the ultra-high net worth.With that said, to sum it up:While there is long-term optimism, there are short-term concerns. A short-term correction between now and the end of Q1 2021 is possible. I don't think that a decline above ~20%, leading to a bear market will happen.Hopefully, you find my insights enlightening. I welcome your thoughts and questions and wish you the best of luck. How Frothy is Tech Again?Figure 1- Nasdaq Composite Index $COMPI remain bullish on tech. Its earnings continue to defy expectations with stocks like Amazon, Alphabet, PayPal, and eBay all crushing estimates last week. I’m also especially bullish on subsectors such as cloud computing, e-commerce, and fintech for 2021.But please monitor the RSI.The Nasdaq is opening the week at another record high and is continuing to show strength. But there are clear echoes of the dotcom bubble 20-years ago, and the index has been trading in an RSI-based pattern.Let’s break down the Nasdaq since December and how it has reacted whenever the RSI has exceeded 70.December 9- exceeded an RSI of 70 and briefly pulled back.January 4- exceeded a 70 RSI just before the new year, and declined 1.47%.January 11- declined by 1.45% after exceeding a 70 RSI.Week of January 25- Exceeded an RSI of over 73 before the week, and declined 4.13% for the week.Every single time the RSI exceeded 70, I switched my Nasdaq call to a SELL.Why?The Nasdaq is trading in a precise pattern.The RSI is at around 67.50 so I’m not ready to switch my call again. But I am a bit concerned. Tech valuations, especially the tech IPO market, terrify me. SPACs don’t help either.The ratio of market value to total revenues has also not been this high since the dotcom bust.I still like tech and am bullish for 2021. But for now, I'm going to stay conservative and say HOLD while monitoring the RSI.For an ETF that attempts to directly correlate with the performance of the NASDAQ, the Invesco QQQ ETF (QQQ) is a good option.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were 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 believed to be accurate, Matthew Levy, 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. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’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. Matthew Levy, 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.
That Wasn’t Much of a Down Day..

That Wasn’t Much of a Down Day..

Finance Press Release Finance Press Release 10.02.2021 15:55
Technically, the Dow and S&P snapped their 7-day winning streak.Technically.I hardly consider a decline of 0.03% and 0.11% for the Dow and S&P, respectively, a down day.Meanwhile, the Nasdaq and Russell saw a record close for who knows how many consecutive days.Can the market keep this up? Who even knows anymore. Everything seems to defy expectations and logic. Yeah, it's possible. But I'd be surprised if we don't see at least one sharp pullback before the end of the week.The sentiment is surely rosy right now. The economic recovery appears to be gaining steam, and the Q1 decline everyone predicted might not be as swift as we anticipated- if at all. President Biden's stimulus could officially pass within days as well and provide much-needed relief to struggling businesses and families.Have you seen the vaccine numbers lately, too? More people in the U.S. have now been vaccinated than total cases. On Monday (Feb. 8), vaccine doses outnumbered new cases 10-1. New daily COVID cases have also reached their lowest levels since October.With Johnson and Johnson's (JNJ) one dose vaccine candidate seemingly days away from FDA approval, the outlook is certainly more positive at this point than many anticipated.But we're not out of the woods yet, and three non-pandemic related factors still concern me- complacency, overvaluation, and inflation.Jim Cramer's "Seven Deadly Sins" from Mad Money Monday night (Feb. 8) reflect many of my concerns too:Source: CNBCYes, I know I keep saying to beware. I also know that earnings are on pace to rise by over 20% in 2021. Since 1980, only 12 years have earnings increased by 15% or more. Except for 2018, the market gained an average of 12% in all of those years.But consider some valuation metrics that scream “bubble.”As of February 4, 2021, the Buffett Indicator , or the ratio of the total US stock market valuation to the GDP, was at a level not seen since the dotcom bubble. If you take the US stock market cap of $48.7 trillion and the estimated GDP of $21.7 trillion, we're nearly 224% overvalued and 84% above the historical average.Keep in mind; this chart was dated February 4. This number has only grown since then. Tuesday (Feb. 9) was hardly a down day. If anything, it was plain dull.Fears of a bubble are genuine. The S&P 500’s forward 12-month P/E ratio is back to above 22 and well above the 10-year average of 15.8. The Russell 2000 is also back at a historic high above its 200-day moving average. Tech stock valuations are again approaching dot-com bust levels.Bank of America also believes that a market correction could be on the horizon due to signs of overheating.While I don’t foresee a crash like we saw last March, I still maintain that some correction before the end of Q1 could happen.Corrections are healthy and normal market behavior, and we are long overdue for one. They are also way more common than most realize. Only twice in the last 38 years have we had years WITHOUT a correction (1995 and 2017).A correction could also be an excellent buying opportunity for what could be a great second half of the year.Bank of America also echoed this statement and said that “We expect a buyable 5-10% Q1 correction as the big ‘unknowns’ coincide with exuberant positioning, record equity supply, and ‘as good as it gets’ earnings revisions.”The key word here- buyable.My goal for these updates is to educate you, give you ideas, and help you manage money like I did when I was pressing the buy and sell buttons for $600+ million in assets. I left that career to pursue one where I could help people who needed help, instead of the ultra-high net worth.With that said, to sum it up:While there is long-term optimism, there are short-term concerns. A short-term correction between now and the end of Q1 2021 is possible. I don't think that a decline above ~20%, leading to a bear market will happen.Hopefully, you find my insights enlightening. I welcome your thoughts and questions and wish you the best of luck. Small-Caps are Officially Overbought Figure 1- iShares Russell 2000 ETF (IWM)This pains me to write this because I love Russell 2000 small-cap index in 2021.But this is getting ridiculous now.As tracked by the iShares Russell 2000 ETF (IWM) , small-cap stocks have been on a rampage since November. Since the close on October 30, the IWM has gained nearly 50% and more than doubled ETFs' returns tracking the larger indices. What happened to the Nasdaq being red hot? This chart makes it look like an igloo.Since the close on January 29, the Russell has done just about the same again and gained 11.10%. It’s outperformed all the other major indices by a minimum of 5% in that period.Not to mention, year-to-date, it’s already up a staggering 18%.Small-caps are funny. They either outperform and underperform and can be swayed easily by the news. I foresaw the pullback two weeks ago coming for over a month, and unfortunately, I see the same thing happening now. But only for the short-term.I remain bullish due to aggressive stimulus, which could be put in motion this week.I also love small-cap stocks for the long-term, especially as the world reopens and this Biden agenda gets put in motion. It seems like things are finally trending in the right direction.For now, though, the index is once again overbought.The RSI is at a scorching 75, and I can't justify calling this a BUY or HOLD right now. It's an excellent time to take profits.SELL and take profits. If and when there is a deeper pullback, BUY for the long-term recovery.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were 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 believed to be accurate, Matthew Levy, 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. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’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. Matthew Levy, 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.
A Sleepy Week for the Indices?

A Sleepy Week for the Indices?

Finance Press Release Finance Press Release 12.02.2021 15:45
For once, we have a week in 2021 where the market really didn't move all that much.Except for weed stocks that whipsawed GameStock-like and Bitcoin and Dogecoin making waves thanks to Lord Elon, it's really been kind of a boring week for the major indices.The S&P and Nasdaq closed at another record high Thursday (Feb. 11), while the Dow barely retreated from its own record high. The red-hot Russell has lagged this week.However, it’s all relative. No index has moved upwards or downwards more than about 0.30% week-to-date.It’s about time we had a week of relative quiet in the market.The sentiment is indeed still rosy right now. The economic recovery appears to be gaining steam, and the Q1 GDP decline everyone predicted might not be as sharp as we anticipated. We could also be days away from trillions of dollars of much-needed stimulus getting pumped into the economy.Earnings continue to impress, too, and are on pace to rise by over 20% in 2021. Since 1980, only 12 years have earnings increased by 15% or more. Except for 2018, the market gained an average of 12% in all of those years.We could also days away from FDA approval of a one-dose vaccine from Johnson and Johnson (JNJ).The COVID numbers and vaccine trend could truly turn the tide of things. More people in the U.S. have now been vaccinated than total cases, and the week kicked off (Feb. 8) with vaccine doses outnumbering new cases 10-1. Dr. Fauci also claims that vaccines could be available to the general public by April.But we're not out of the woods yet. Sure this week has been calm.But it’s almost been “too calm.”I still worry about complacency, valuations, and the return of inflation.“You wouldn’t know it from the sedate action in the averages,” but Wall Street is on “a highway to the danger zone,” CNBC ’s Jim Cramer said.“In a frothy market, stocks will have enormous rallies that are totally disconnected from the underlying fundamentals.”He’s not wrong.Look at the Buffett Indicator as of February 4. Where I track this indicator usually updates once a week and shows the total U.S. stock market valuation to the GDP. If you take the US stock market cap of $48.7 trillion and the estimated GDP of $21.7 trillion, we're nearly 224% overvalued and 84% above the historical average. This ratio has not been at a level like this since the dotcom bubble.Worse? This chart was dated February 4. The market’s only risen since then.This is what I mean by don’t be fooled by the relative calm of this week.The S&P 500’s forward 12-month P/E ratio is also well above its 10-year average of 15.8. The Russell 2000 is also back at a historic high above its 200-day moving average. Tech stock valuations are again approaching dotcom bust levels.Still not sold? Look at Goldman’s non-profitable tech index. It’s approaching an absurd 250% year-over-year performance.Bank of America also believes that a market correction could be on the horizon due to signs of overheating.While I don’t foresee a crash like we saw last March, I still maintain that some correction before the end of Q1 could happen.Corrections are healthy and normal market behavior, and we are long overdue for one. They are also way more common than most realize. Only twice in the last 38 years have we had years WITHOUT a correction (1995 and 2017).A correction could also be an excellent buying opportunity for what could be a great second half of the year.Bank of America also echoed this statement and said that “We expect a buyable 5-10% Q1 correction as the big ‘unknowns’ coincide with exuberant positioning, record equity supply, and ‘as good as it gets’ earnings revisions.”The key word here- buyable.My goal for these updates is to educate you, give you ideas, and help you manage money like I did when I was pressing the buy and sell buttons for $600+ million in assets. I left that career to pursue one where I could help people who needed help, instead of the ultra-high net worth.With that said, to sum it up:While there is long-term optimism, there are short-term concerns. A short-term correction between now and the end of Q1 2021 is possible. I don't think that a decline above ~20%, leading to a bear market will happen.Hopefully, you find my insights enlightening. I welcome your thoughts and questions and wish you the best of luck. The Streaky S&P Is Back at a Record Figure 1- S&P 500 Large Cap Index $SPXThe S&P continues to trade as a streaky index. It seemingly rips off multiple-day winning streaks or losing streaks weekly.After the S&P 500 ripped off a streak of gains in 6 of 7 days, it promptly went on a 3-day losing streak, followed by another record close.I would hardly call that a 3-day losing streak, though. I’d even say it was a boring week for the S&P 500 with muted moves.The outlook is healthy, though, especially when you consider earnings. More than 80% of S&P stocks that have reported earnings thus far have beaten estimates.What could be on tap for next week? Who even knows anymore. But if earnings keep on outperforming, and the sentiment remains stable, it could be another strong week.The S&P’s RSI is ticking up towards overbought. However, because it’s still below 70, and because of the streaky manner in which the index has traded, it remains a HOLD.A short-term correction could inevitably occur by the end of Q1 2021, but for now, I am sticking with the S&P as a HOLD.For an ETF that attempts to directly correlate with the performance of the S&P, the SPDR S&P ETF (SPY) is a good option.For more of my thoughts on the market, such as red-hot small-caps and emerging market opportunities, sign up for my premium analysis today.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were 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 believed to be accurate, Matthew Levy, 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. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’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. Matthew Levy, 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 Correction Delayed Again While Silver Runs

S&P 500 Correction Delayed Again While Silver Runs

Monica Kingsley Monica Kingsley 15.02.2021 14:15
The window of opportunity for the stock bears is slowly but surely closing down as Friday‘s gentle intraday peek higher turned into a buying spree before the closing bell. The sentiment readings and put/call ratio are at the greed, euphoric and compacent end of the spectrum again. I asked on Friday:(…) How long can it last, and what shape the upcoming correction would have? Right now, the warning signs are mounting, yet the bears shouldn‘t put all their eggs into the correction basket really, for it shapes to be a shallow one – one in time, rather than in price.Today, I‘ll say that waiting for a correction is like waiting for Godot. Trust me, I have come to experience quite some absurd and Kafkaesque drama not too long ago. What an understatement.One week ago, I called the dollar as making a local top, and look where we are in the process. Coupled with the steepening pace of rising long-dated Treasury yields, that‘s a great environment for financials (XLF ETF) as they benefit from the widening yield curve.Gold remains a drag on the precious metals performance, with silver and platinum flying. The miners‘ outlook and internal dynamics between various mining indices, provides a much needed proof to those short on patience. Little wonder, after 5+ months of downside correction whose target I called on Aug 07 in the article S&P 500 Bulls Meet Non-Farm Payrolls. Little wonder given the monstrous pace of new money creation beating quite a few prior interventions combined.Yet, the precious metals complex is coming back to life as the economic recovery goes on, and will get new stimulus fuel. Commodity prices are rising steeply across the board, yet inflation as measured by CPI, will have to wait for the job market to start feeling the heat, which it obviously doesn‘t in the current pace of job creation and low participation rate. Until labor gets more powerful in the price discovery mechanism (through market-based dynamics!), the raging inflationary fire will be under control, manifesting only in (financial) asset price inflation. That‘s precisely what you would expect when new money is no longer sitting on banks‘ balance sheets, but flowing into the economy. Again quoting my Friday‘s words:(…) One more note concerning the markets – in our print-and-spend-happy world, where the give or take $1.9T stimulus will sooner or later come in one way or another, we better prepare on repricing downside risk in the precious metals, and also better not to fixate on the premature bubble pop talk too closely. I have been stating repeatedly that things have to get really ridiculous first, and this just doesn‘t qualify yet in my view. All those serious correction calls have to wait – in tech and elsewhere, for we‘re going higher overall – like it or not.Let‘s get right into the charts (all courtesy of www.stockcharts.com).S&P 500 Outlook and Its InternalsThe weekly S&P 500 chart is still one of strength, without a top in sight. And the lower volume, I don‘t view as concerning at all.After a three day sideways consolidation, stock bulls forced a close higher on Friday. Low volume, but still higher prices. The bears missed an opportunity to act, having hesitated for quite a few days. Not that the (big picture) path of least resistance weren‘t higher before that, though.The market breadth indicators got a boost on Friday, but it‘s especially the new highs new lows that have a way to go. One would expect a bigger uptick given Friday‘s price advance, but the overall message is still one of cautious but well grounded optimism.Credit Markets, Treasuries and DollarThe high yield corporate bonds to short-term Treasuries (HYG:SHY) ratio performance is lining up nicely with the S&P 500 one, and definitely isn‘t flashing a warning sign for the days to come.Long-term Treasuries are declining at a faster pace than has been the case in late 2020, which is (not immediately right now, but give it time and it‘ll turn out to be) concerning. Thus far though, the money flows are positive for the stock (and other risk on) markets as the liquidity tide keeps hitting the tape.Who suffers? The dollar. No, it‘s not breaking higher (retracing breakout before a run higher – no) above the 50-day moving average or any way you draw a declining resistance line on higher time frames. The greenback is getting ready for another powerful downleg.Gold and SilverGold bulls have repelled another selling wave, which was however not the strongest one. The fact there was one in the first place even, is more (short-term) concerning for the gold bulls. But please remember that it was first gold that got it right in jumping higher on the unprecedented money printing spree as we entered spring 2020, followed by copper, base metals, agricultural commodities, and also oil now (remember my recent bullish calls for over $80 per barrel in less than 2 years). Gold keeps catching breath, frustrating the bulls who „know“ it can only go higher, but its spark isn‘t there at the moment. A perfect example is Monday‘s session thus far – spot gold 0.25% down, spot silver 1.25% up. It‘s been only on Friday when I touted the gold-silver spread trade idea as not having exhausted its potential yet, not by a long shot:(…) For those inclined so, I am raising the arbitrage trade possibility. Long silver, short gold would be consistent with my prior assessment of the gold-silver ratio going down. Similarly to bullish gold bets, that‘s a longer-term trade, which however wouldn‘t likely take much patience to unfold and stick.Silver keeps acting in a bullish way, tracking commodities ($CRB) performance much better than gold does at the moment. While both are a bullish play with the many factors arrayed behind their upcoming rise, it‘s silver that will reap the greatest rewards – today and in the days and weeks ahead. Gold and Silver MinersBack to the beaten down and underperforming gold. See that the yellow metal still isn‘t following the rising yields all that closely these days. Decoupling from the Treasury yields bodes well for precious metals universally, and it‘s precisely what you would expect given the (commodity) inflation, twin deficits biting, and the dollar balancing on the brink.The miners examination also proves no change in the underlying bullish dynamic that is largely playing out below the surface. We‘re seeing the continued outperformance of junior gold miners vs. the seniors, and also the great burst of life in the silver miners – these are outperforming ever more visibly the rest of the mining companies.This is a long awaited chart to flip bullish. Thus far, we have had one recent bullish divergence only (the GDX refusal to break to new lows when gold broke below its Jan lows) – once gold miners start leading the yellow metal, the sentiment in the precious metals community would get different compared to today really.SummaryThe deterioration in stock market got postponed with the latter half of Friday bringing in fresh buying pressure. Would the bears appear, at least to rock the boat a little? They had a good chance all the prior week, but didn‘t jump at the opportunity. Their window is closing, slowly but surely. The stock bull run is on, and there are no signals thus far pointing to an onset of a deeper correction soon.The gold bulls continue lagging behind their silver counterparts, predictably. That‘s the objective assessment regardless of unprecendented monetary and fiscal policies, unfolding real economy recovery, inflation cascading through the system, and the dollar struggling to keep its head above water. The new upleg keeps knocking on the door, and patience will be richly rewarded (unless you took me up on the gold-silver arbitrage trade, and are popping the champagne already).
Still No S&P 500 Correction, Still No Real Change in the Metals

Still No S&P 500 Correction, Still No Real Change in the Metals

Monica Kingsley Monica Kingsley 16.02.2021 16:11
Yesterday‘s thin volume session didn‘t bring any material changes as the window of opportunity for the stock bears to act, is slowly but surely closing down. Friday‘s intraday move brought increasingly higher prices, and Monday‘s trading extended gains even more. Euphoric, complacent greed as evidenced by the sentiment readings and put/call ratios, is on.I asked on Friday:(…) How long can it last, and what shape the upcoming correction would have? Right now, the warning signs are mounting, yet the bears shouldn‘t put all their eggs into the correction basket really, for it shapes to be a shallow one – one in time, rather than in price.Both on Monday and today, I‘ll say that waiting for a correction is like waiting for Godot. Right from the horse‘s mouth as my personal experience with quite some absurd and Kafkaesque drama got richer recently.The dollar keeps topping out, which I called it to do a week ago – and its losses have been mounting since. Long-dated Treasury yields are rising in tandem, which is a great environment for financials (XLF ETF) and emerging markets (EEM ETF). The former benefit from the widening yield curve, the latter from plain devaluation.Gold performance is still short-term disappointing, and silver and platinum are leading. But it‘s the miners and the moves between various mining indices, that work to soothe the bulls‘ impatience. Understandable as we are in 5+ months of downside correction whose target I called on Aug 07 in the article S&P 500 Bulls Meet Non-Farm Payrolls, witnessing record pace of new money creation.The ongoing economic recovery will get new stimulus support, and that will work to broaden the precious metals advance. Commodity prices are universally rising, and over time, inflation as measured by CPI, will do so too. But not until the current pace of job creation picks up and participation rate turns – we‘re far from that moment. Until then, inflation will be apparent only in (financial) asset prices, which is in line with new money no longer sitting on banks‘ balance sheets, but flowing into the real economy. Again quoting my Friday‘s words:(…) One more note concerning the markets – in our print-and-spend-happy world, where the give or take $1.9T stimulus will sooner or later come in one way or another, we better prepare on repricing downside risk in the precious metals, and also better not to fixate on the premature bubble pop talk too closely. I have been stating repeatedly that things have to get really ridiculous first, and this just doesn‘t qualify yet in my view. All those serious correction calls have to wait – in tech and elsewhere, for we‘re going higher overall – like it or not.Let‘s get right into the charts (all courtesy of www.stockcharts.com).S&P 500 Outlook and Its InternalsThe bulls had an opportunity to act for quite a few days in a row, yet missed it. Their inaction confirms that the path of least resistance for stocks is to still rise.The market breadth indicators have improved on Friday, but especially the new highs new lows has a way to go. It could have ticked upwards more given Friday‘s price advance, but didn‘t. The put/call ratio has moved upwards (see chart below), but the overall message is still one of cautious yet reasonable optimism – not enough to trigger the sizable correction quite some participants are constantly awaiting.Credit Markets, Treasuries and DollarThe high yield corporate bonds to short-term Treasuries (HYG:SHY) ratio performance isn‘t out of whack with the S&P 500, but the investment grade corporate bonds to longer dated Treasuries (LQD:IEI) are not confirming exactly. Before the corona crash, the high yield ones were leading the investment grade ones for countless quarters. From the Mar 2020 bottom, the investment grade ones were in the pool position. And since the end of Dec 2020, the high yield ones are leading again, but investment grade ones aren't going up anymore, but down the way long-term Treasuries do. One more sign of the euphoric stage in stocks we're in.Long-term Treasuries are the chart to watch for the market to throw a fit – or not. They‘re declining at a faster pace than has been the case in late 2020, which can bring about trouble - not immediately right away, but over time it can turn out so. The dynamic of money moving into the stock market is thus far still positive as the many risk on assets are gaining on the fast pace of new money creation. The worry about a sudden, sharp reversal is misplaced for now.The dollar is on the receiving end – there is no breakout verification before a run higher in progress – no. Neither above the 50-day moving average, nor any way you draw a declining resistance line on higher time frames. The greenback is about to test and break below its 2021 lows. Solidly below.Gold and SilverGold bulls stood their ground on Friday, yet their yesterday‘s and today‘s performance is rather weak. Not disastrously so, but still indicative of the headwinds gold bulls face. Gold‘s spark isn‘t there at the moment. Putting it into context, please remember that it was first gold that jumped in the unrivalled money printing era arrival in spring 2020, followed by copper, base metals, agricultural commodities, and also oil now (remember my recent bullish calls for over $80 per barrel in less than 2 years). Silver price action is the bullish one, in line with commodities ($CRB) performance being much stronger now. Silver is definitely better positioned to benefit from the upcoming precious metals rise – today and in the days and weeks ahead. Gold and Silver MinersThe heat gold is taking from rising Treasury yields, is also progressively weaker. The decoupling from rising nominal (real) yields bodes well for precious metals universally, and it‘s precisely what you would expect given the (commodity) inflation, twin deficits, and the dollar on the brink.Gold to all corporate bonds chart reflects the current dillydallying nicely. Gold isn‘t breaking down into a bearish downtrend. The miners examination also proves no change in the underlying bullish dynamic playing out below the surface. Junior gold miners are oputperforming. the seniors, and there is also the great burst of life in the silver miners – these are outperforming ever more visibly the rest of the crowd.Once this chart flips bullish, we have the new upleg clearly visible. Thus far, we have had one recent bullish divergence only (the GDX refusal to break to new lows when gold broke below its Jan lows) – once gold miners start leading the yellow metal, the sentiment in the precious metals community would get different compared to today really.SummaryThe deterioration in stocks got postponed as both Friday and Monday brought new buyers into the market. Would the bears appear, at least to rock the boat a little? I stand by my call that they had a good chance all the prior week, but didn‘t jump at the opportunity – their window is closing, slowly but surely. The stock bull run is on, and there are no signals thus far pointing to an onset of a deeper correction soon.The gold bulls continue lagging behind their silver counterparts, predictably, with both under pressure in Tuesday‘s premarket. Coupled with the miners‘ signals, and unprecendented monetary and fiscal stimulus, unfolding real economy recovery, inflation making its way through the system, and the dollar struggling to keep its head above water, the new PMs upleg is a question of time.
Is That the S&P 500 And Gold Correction Finally?

Is That the S&P 500 And Gold Correction Finally?

Monica Kingsley Monica Kingsley 17.02.2021 16:21
The stock bears finally showed they aren‘t an extinct species – merely a seriously endangered one. Yesterday‘s close though gives them a chance to try again today, but they should be tame in expectations. While there is some chart deterioration, it‘s not nearly enough to help fuel a full on bearish onslaught in the S&P 500. There is no serious correction starting now, nothing to really take down stocks seriously for the time being.The Fed remains active, and monetary policy hasn‘t lost its charm (effect) just yet. Commodities and asset price inflation has been in high gear for quite some time, yet it‘s not a raging problem for the Main Street as evidenced by the CPI. Food price inflation, substitution and hedonistic adjustments in its calculation, are a different cup of tea, but CPI isn‘t biting yet.Meanwhile, the real economy recovery goes on (just check yesterday‘s Empire State Manufacturing figures for proof), even without the $1.9T stimulus and infrastructure plans. Once we see signs of strain in the job market (higher participation rate, hourly earnings and hours worked), then the real, palpable inflation story can unfold. But we‘re talking 2022, or even 2023 to get there – and the Fed will just let it overshoot to compensate for the current and prior era.Meanwhile, the wave of new money creation (we‘re almost at double the early 2020 Fed‘s balance sheet value - $4T give or take then vs. almost $7.5T now – and that‘s before the multiplier in commercial banks loan creation kicks in) keeps hitting the markets, going into the real economy, predictably lifting many boats. It‘s my view that we have to (and will) experience a stock market bubble accompanied by the precious metals and commodities one – to a degree, simultaneously, for the stock market is likely to get under pressure first. Again, I am talking the big picture here – not the coming weeks.Meanwhile, the intense talk of S&P 500 correction any-day-week-now is on, just as outrageous gold, silver and miners‘ drop projections. Let‘s examine the bear market is gold – some say that the late 2015 marked bottom, I‘m of the view that the 2016 steep rally was a first proof of turning tide. But the Fed got serious about tightening (raising rates, shrinking its balance sheet), and gold reached the final bottom in Aug 2018. Seeing through the hawks vs. dove fights at the Fed in the latter half of 2018 (December was a notable moment when Powell refused to the markets‘ bidding, remained hawkish in the face of heavy, indiscriminate selling across the board – before relenting).Since then, gold was slowly but surely gathering steam, and speculation in stocks was on. The repo crisis of autumn 2019 didn‘t have a dampening effect either – the Fed was solidly back to accomodative back then. These have all happened well before corona hit – and it wasn‘t able to push gold down really much. The recovery from the forced selling, this deflationary episode (which I had notably declared back in summer 2020 to be a one-off, not to be repeated event), was swift. Commodities have clearly joined, and the picture of various asset classes taking the baton as inflation is cascading through the system, is very clear.Quoting from my yesterday‘s analysis:(…) The dollar keeps topping out, which I called it to do a week ago – and its losses have been mounting since. Long-dated Treasury yields are rising in tandem, which is a great environment for financials (XLF ETF) and emerging markets (EEM ETF). The former benefit from the widening yield curve, the latter from plain devaluation.Gold performance is still short-term disappointing, and silver and platinum are leading. But it‘s the miners and the moves between various mining indices, that work to soothe the bulls‘ impatience. Understandable as we are in 5+ months of downside correction whose target I called on Aug 07 in the article S&P 500 Bulls Meet Non-Farm Payrolls, witnessing record pace of new money creation.The ongoing economic recovery will get new stimulus support, and that will work to broaden the precious metals advance. Again quoting my Friday‘s words:(…) in our print-and-spend-happy world, where the give or take $1.9T stimulus will sooner or later come in one way or another, we better prepare on repricing downside risk in the precious metals, and also better not to fixate on the premature bubble pop talk too closely. I have been stating repeatedly that things have to get really ridiculous first, and this just doesn‘t qualify yet in my view. All those serious correction calls have to wait – in tech and elsewhere, for we‘re going higher overall – like it or not.Let‘s get right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookFinally, there is a whiff of bearish activity. Will it last or turn out a one day event as thus far in Feb? The chances for a sideways correction to last at least a little longer, are still on, however the short- and medium-term outlook remains bullish.Credit Markets and TreasuriesHigh yield corporate bonds (HYG ETF) wavered yesterday, trading in a sideways pattern during recent days. Encouragingly, yesterday‘s session attracted increasing volume, which I read as willingness to buy the dip. One dip and done?Long-term Treasuries (TLT ETF) are the key chart on my radar screen right now. The rise in yields is accelerating, and if progressing unmitigated, would throw a spanner into many an asset‘s works. Even though it‘s not apparent right now, there is a chance that we‘ll see a slowdown, even a temporary stabilization, over the coming sessions. The larger trend in rates is higher though, and in the dollar to the downside.Gold, Silver and CommoditiesThe heat gold is taking from rising Treasury yields, has gotten weaker recently, with the decoupling from rising nominal (real) yields being a good omen for precious metals universally. The dynamics of commodity price inflation, dollar hardly balancing under the weight of unprecedented economic policy and twin deficits, attests to the gold upleg arriving sooner rather than later.Let‘s step back, and compare the performance of gold, silver, copper and oil. The weekly chart captures the key turns in monetary policy, the plunge into the corona deflationary bottom, and crucially the timing and pace of each asset‘s recovery. Gold and silver were the first to sensitively respond to activist policies, followed by copper, and finally oil. Is their current breather really such a surprise and reversal of fortunes? Absolutely not.SummaryThe bearish push in stocks has a good chance of finally materializing today. How strong will its internals be, will it entice the bulls to step in – or not yet? The stock bull run is firmly on, and there are no signals thus far pointing to an onset of a deeper correction with today‘s price action.The gold bulls continue lagging behind their silver counterparts, predictably, with both under continued pressure. The yields are rising a bit too fast, taking the metals along – temporarily, until they decouple to a greater degree. Combined with the miners‘ signals, and unprecendented monetary and fiscal stimulus, unfolding real economy recovery, inflation making its way through the system, and the dollar struggling to keep its head above water, the new PMs upleg is a question of time.
For stocks, has the “Rational Bubble” Popped?

For stocks, has the “Rational Bubble” Popped?

Finance Press Release Finance Press Release 19.02.2021 15:38
In keeping with last week’s theme, the market has mainly traded sideways this week. However, that correction I’ve been calling for weeks? We have potentially started.While I don’t foresee a crash like we saw last March and feel that the wheels are in motion for a healthy 2021, I still maintain that some correction before the end of Q1 could happen.Bank of America also echoed this statement and said last week that “We expect a buyable 5-10% Q1 correction as the big ‘unknowns’ coincide with exuberant positioning, record equity supply, and as good as it gets’ earnings revisions.”Yes, the sentiment is still positive. That won’t change overnight. Vaccines seem more effective than we thought, especially against other variants of the virus. All that extra stimulus money and record low-interest rates could keep pushing stocks to more records and stimulate pent-up consumer spending. It’s not like the Fed is going to switch this policy up anytime soon, either.They don’t call it a stimulus for nothing.For weeks we’ve likely been in a rational bubble. Dhaval Joshi , the chief European investment strategist for BCA Research, has said that low bond yields meant the rally we’ve seen with stocks made sense.“Rational, because the nosebleed valuations are justified by a fundamental driver. And not just any fundamental driver, but the most fundamental driver of all – the bond yield.”Take a look at this chart comparing a “rational bubble” to an “irrational bubble.”But now? Things have possibly changed. Complacency, valuations, surging bond yields, and inflation concern me.They’re all connected. But look especially into the 10-year yield. It’s hovering around 1.30% for the first time in over a year.Why is this concerning?Rising interest rates=less attractive stocks.Look at this other chart. Forward P/E ratios are continuing to rise along with bond yields. In high-growth sectors, such as tech, this is especially concerning. The chart shows, in fact, that tech earnings yields have now been surpassed by the bond yield plus a fixed amount.The only three ways this can be resolved are for stock prices to decline, bond yields to fall, or earnings to rise and improve stock valuations. Considering earnings season is over, only options 1 or 2 seem feasible in the near-term.You combine this info with the Buffet Indicator (Total US stock market valuation/GDP), and you have a market that could be 228% overvalued.I’ve already correctly called the Russell 2000’s pullback after how much it’s overheated. Since February 9th, when I switched the call to a sell, it’s declined roughly 3.40%.More could follow.Look. Corrections are healthy and normal market behavior, and we are long overdue for one. Only twice in the last 38 years have we had years WITHOUT a correction (1995 and 2017), and we haven’t seen one in a year.A correction could also be an excellent buying opportunity for what could be a great second half of the year.My goal for these updates is to educate you, give you ideas, and help you manage money like I did when I was pressing the buy and sell buttons for $600+ million in assets. I left that career to pursue one to help people who needed help instead of the ultra-high net worth.With that said, to sum it up:While there is long-term optimism, there are short-term concerns. A short-term correction between now and the end of Q1 2021 is possible. I don’t think that a decline above ~20%, leading to a bear market, will happen.Hopefully, you find my insights enlightening. I welcome your thoughts and questions and wish you the best of luck. A Needed Cool Down for the Russell 2000Figure 1- iShares Russell 2000 ETF (IWM)Since February 9, the Russell 2000 small-cap index has lagged behind the other indices after significantly overheating. I switched my call to a SELL then, and it promptly declined by 3.40%.I do love small-caps for 2021, though, and I really like this decline. If it declines about another 1.50%, I’d feel more confident switching the call to a BUY.As tracked by the iShares Russell 2000 ETF (IWM) , small-cap stocks have been on a rampage since November.Since the market’s close on October 30, the IWM has gained nearly 44.5% and more than doubled ETFs’ returns tracking the larger indices. If you thought that the Nasdaq was red hot and frothy, you have no idea about the Russell 2000.Not to mention, year-to-date, it’s already up a staggering 14%.Judging from these types of returns, the IWM’s decline since February 9 is hardly shocking. But for me, it’s still not enough, outside of switching the call to a HOLD.It pains me not to recommend you to BUY the Russell just yet. I love this index’s outlook for 2021. Aggressive stimulus, friendly policies, and a reopening world could bode well for small-caps. Consumer spending, especially for small-caps, could be very pent-up as well.But we need to just hold on and wait for it to cool down just a little bit more for a better entry point.HOLD. If and when there is a deeper pullback, BUY for the long-term recovery.For more of my thoughts on the market, such as the streaky S&P, inflation, and emerging market opportunities, sign up for my premium analysis today.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were 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 believed to be accurate, Matthew Levy, 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. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’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. Matthew Levy, 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 Yield Harbinger for Stocks

The Yield Harbinger for Stocks

Finance Press Release Finance Press Release 22.02.2021 15:32
Indices, for the most part, closed fractionally higher to end the week. But a new headwind for stocks could be more concerning - rising bond yields.That correction I’ve been calling for weeks could have potentially started.While I don’t foresee a crash like we saw last March and feel that the wheels are in motion for a healthy 2021, I still maintain that some correction before the end of Q1 could happen.Bank of America also echoed this statement and said last week that “We expect a buyable 5-10% Q1 correction as the big ‘unknowns’ coincide with exuberant positioning, record equity supply, and as good as it gets’ earnings revisions.”But rather than looking at the past, let’s take a look at what’s on tap this week to get you ready for what could potentially be a volatile week ahead.This coming week, be on the lookout for the January leading indicator index, durable goods orders, and personal income and spending.On Tuesday, we will also receive the February Consumer Confidence Index; on Wednesday, the Census Bureau will release upcoming home sales. On Friday, the University of Michigan will release its Consumer Sentiment Index.Of course, as we’ve seen in weeks past, jobless claims from the previous week will be announced on Thursday too. After outperforming the last few weeks, the jobless claims announced last Thursday (Feb. 18) grossly underperformed and reached their worst levels in nearly a month.Earnings season has been outstanding but is winding down now. Be on the lookout this week for earnings from Royal Caribbean (RCL) on Monday (Feb. 22), Square (SQ) on Tuesday (Feb. 23), Nvidia (NVDA) on Wednesday (Feb. 24), and Virgin Galactic (SPCE) and Moderna (MRNA) on Thursday (Feb. 25).We have the makings of a volatile week, and as I mentioned before, a possible correction.Look. Don’t panic. We have a very market-friendly monetary policy, and corrections are more common than most realize. Corrections are also healthy and normal market behavior, and we are long overdue for one. Only twice in the last 38 years have we had years WITHOUT a correction (1995 and 2017), and we haven’t seen one in a year.While it won’t happen for sure, I feel like it’s inevitable because of how much we have surged over the last few months.A correction could also be an excellent buying opportunity for what could be a great second half of the year.My goal for these updates is to educate you, give you ideas, and help you manage money like I did when I was pressing the buy and sell buttons for $600+ million in assets. I left that career to pursue one to help people who needed help instead of the ultra-high net worth.With that said, to sum it up:While there is long-term optimism, there are short-term concerns. A short-term correction between now and the end of Q1 2021 is possible. I don’t think that a decline above ~20%, leading to a bear market, will happen.Hopefully, you find my insights enlightening. I welcome your thoughts and questions and wish you the best of luck. Will the Russell 2000 Overheat Again?Figure 1- iShares Russell 2000 ETF (IWM)The Russell 2000 popped on Friday (Feb. 19) after seeing a bit of a pullback since February 9. Between February 9 and the close on February 18, the Russell 2000 lagged behind the other indices after significantly overheating. I switched my call to a SELL then on the 9th, and it promptly declined by 3.40% before Friday’s session.I foresaw the pullback but cautiously saw a rally and switched to a HOLD call before it popped over 2% on Friday (Feb. 19).I do love small-caps for 2021, and I liked the decline before Friday. However, I feel like the index needs a minimum decline of 5% from its highs before switching it to a BUY.As tracked by the iShares Russell 2000 ETF (IWM) , small-cap stocks have been on a rampage since November.Since the market’s close on October 30, the IWM has gained nearly 47.56% and more than doubled ETFs’ returns tracking the larger indices. If you thought that the Nasdaq was red hot and frothy, you have no idea about the Russell 2000.Not to mention, year-to-date, it’s already up a staggering 16.38%.It pains me not to recommend you to BUY the Russell just yet. I love this index’s outlook for 2021. Aggressive stimulus, friendly policies, and a reopening world could bode well for small-caps. Consumer spending, especially for small-caps, could be very pent-up as well.But we just need to hold on and wait for it to cool down just a little bit more for a better entry point.HOLD. If and when there is a deeper pullback, BUY for the long-term recovery.For more of my thoughts on the market, such as the streaky S&P, inflation, and emerging market opportunities, sign up for my premium analysis today.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were 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 believed to be accurate, Matthew Levy, 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. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’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. Matthew Levy, 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.
Why Tech Is Giving Me Jeepers – Watch Out, Gold

Why Tech Is Giving Me Jeepers – Watch Out, Gold

Monica Kingsley Monica Kingsley 25.02.2021 16:08
Powell testimony is over, with markets rejoicing the promise of still accomodative Fed. Value keeps surging over growth, and regardless of yesterday‘s great performance, tech has a vulnerable feel to it – semiconductors lead higher, fine, but communications didn‘t confirm, and the healthcare-biotech dynamic isn‘t painting an outperformance picture either. Real estate isn‘t taking as strong a cue while consumer discretionaries recovery could also be stronger. Thus far though, no need to think about taking losses to optimize your gains elsewhere.Just as I wrote yesterday:(…) the financials benefiting from the greater spread, won‘t save the day, as the key chart to watch now is technology and also healthcare. … The sectoral outlook remains mixed, even as value continues greatly outperforming growth this month. … Long-term Treasuries are starting to hold greater sway over the stock market fate now, too. The dollar‘s woes thus far continue playing out largely in the background.Did gold shake off the TLT shackles? I‘m getting increasing doubts that only a strong move to the upside would dispel. As long-term Treasuries were staging an intraday reversal, gold took an intraday plunge before recovering. Not a good sign of internal intraday strength. Could it be a bullish flag? Still possible, but again, gold would have to rally from here. Doing so would result in a bullish divergence in its daily indicators.The precious metals sectoral dynamics remains positive though – silver and platinum are bullishly consolidating, and as I‘ll show you in today‘s final chart, the many mining indices are doing fine as well. The overly strong reflationary (I would call a spade a spade, and say inflationary) efforts are driving commodities higher in a supercycle just starting out.Not to get complacent, GameStop (GME) squeeze has made a comeback yesterday. Will it coincide with broader stock market woes on par with late Jan? Way too early to say – let‘s jump right into the charts for an objective momentary view instead.Here they are, all courtesy of www.stockcharts.com.S&P 500 and Its InternalsStrong S&P 500, everything looks fine on the surface – just as should be, befitting buy the dip mentality. Strong volume, no meaningful intraday setback, so far so good.The equal weight S&P 500 chart is looking better and better day by day. New highs, strong uptrend, broadening leadership. It‘s a mirror reflection of the big names‘ woes, and a testament to value outperforming growth. This bull run is far from making a top.Credit MarketsHigh yield corporate bonds (HYG ETF) had a good day yesterday, and so did the high yield corporate bonds to short-dated Treasuries (HYG:SHY) ratio. Yet it‘s the daily stock market outperformance that is noticeable here – optimistic sign of an all clear signal. I‘m not taking it totally at face value given tech performance – in a short few days, I can easily become more convinced though.TechnologyStrong daily tech (XLK ETF) upswing, yet only half the prior downside erased so far, and the volume could be higher compared to the preceding downswing. Semiconductors (XSD ETF) are leading again, fine. Yet it‘s the heavyweight names that matter the most to me right now – check out yesterday‘s observations:(…) The tech jury is still out, and this heavyweight sector remains vulnerable, with consequences to the S&P 500 if it doesn‘t keep on the muddle through recovery path at the very least.DollarLook how little the Powell tremors achieved – the dollar bulls are still on the run. Upswings are being sold as the greenback remains on the defensive, targeting much lower lows this year. The technical rebound is over, and not even higher yields can help the greenback much.Gold, Silver and MinersFor a second day in a row, gold‘s performance isn‘t convincing – the willingness to clearly and directionally decouple from rising yields, is being questioned. On the other hand, e.g. the 10-year UST yield is approaching the summer 2019 lows – it‘s at 1.38% now. I‘m looking for the rising rates to slow down and possibly even pull back a little from here over the coming weeks. Or would the market just like to slice through that resistance? Inflation isn‘t universally that strong right now yet I think – just look at the velocity of money.Everything silver related is doing fine, silver miners (SIL ETF) rebounded strongly, First Majestic Silver Corp (AG) and Hecla (HL) are in clearly bullish patterns. The white metal‘s every dip is being bought, the silver-to-gold ratio keeps improving, and even gold juniors (GDXJ) started once again outperforming the seniors (GDX). The bullish signals under the surface keep increadingly more coming to the fore, and the miners to gold ratio‘s ($HUI:$GOLD and GDX:GLD) is the final ingredient missing.SummaryStock bulls did great yesterday, but everything isn‘t fine yet in the tech realm. Due to its sheer weight in the S&P 500 index, pulling the cart a bit more enthusiastically is what the 500-strong index needs to take on new highs, because value stocks can‘t do it all.Gold and silver fared mostly well during the Powell testimony part II, yet gold didn‘t convince me really again. I look for the yellow metal bulls to get tested soon. The wildcard is reaction to the rising Treasury yields as they‘re in a key resistance zone of summer 2019 lows overall (10-year approaching it, and as regards 30-year, it‘s been overcome already). Plunging dollar and short-term gold-dollar correlation moving to positive figures, isn‘t a pleasant sight for coming days.
Commission-Free Indices at FBS

Commission-Free Indices at FBS

FXMAG Team FXMAG Team 26.02.2021 13:11
FBS, the leading CySEC licensed broker, expanded the list of its trading instruments in MetaTrader 4, MetaTrader 5, and FBS Trader – trading platform. European traders now can enjoy all the benefits of trading top Cash-based indices like S&P500, NASDAQ, DAX30, and many others. FBS appreciates the traders’ comfort and wants to give anyone access to the global markets in a few clicks. Thus, the company added even more trading instruments in MT4&5 and the all-in-one FBS Trader app. Commission-free Cash-based indices are now available for trading. These indices have no expiration date. It means that once you open a long-term position, all the worries about its early closing may be left behind. Cash-based index orders are timeless and closed at the time a trader finds it appropriate. There is the full list of available Cash-based indices: JP225 - Japan 225 index (Nikkei) US100 - Nasdaq index US30 - Mini-sized DJIA index Dow jones US500 - E-mini SP 500 index AU200 - Australia 200 index EU50 - Euro Stoxx50 Index FR40 - CAC40 index HK50 - Hang Seng Index UK100 - FTSE 100 Index DE30 - DAX index ES35 - Spain 35 index XTIUSD (WTI) XBRUSD (Brent) XNGUSD (Gas) Choose your favourites among Cash-based indices and trade them on the go in functional and simple FBS Trader — Online Forex Trading Platform app or with fundamental MetaTrader. FBS is an acknowledged, CySEC licensed international online Forex broker and the official trading partner of FC Barcelona. FBS is a broker with an international outlook that serves clients in Europe, Asia, Latin America, and the MENA. Its primary focus lies in offering financial products for currencies, stocks, metals, and indexes trading for clients with different goals and backgrounds. The company features a low barrier to entry and top-ranking apps. Over 12 years in the field, the broker won over 60 international awards, including Best International Forex Broker, Best Forex Brand, and Most Progressive Forex Broker Europe.
Dead Cat Bounce? Bears Aren‘t Taking Prisoners Now

Dead Cat Bounce? Bears Aren‘t Taking Prisoners Now

Monica Kingsley Monica Kingsley 26.02.2021 15:30
Right from the open, stocks have been losing altitude yesterday, and value couldn‘t indeed overpower the tech slide. Long-dated Treasuries had a climactic day of incomplete reversal on outrageous volume. Regardless of the evidence of asset price inflation, there is almost universal short-term vulnerability, and yesterday‘s broad based selling spanning precious metals and commodities, confirms that. The dollar has been missing from the party though, only having reversed prior losses to close little changed on the day.Are we seeing a trend change, or a time-limited yet powerful push lower? That depends upon the asset – in stocks, I look for the tech big names and healthcare to do worse than value (the VTV:QQQ ratio jumped up greatly through the week, portending the tech issues). Both silver and gold would be under pressure, and I look for the white metal to be mostly doing better overall. Oil and copper would take a breather while remaining in bull markets.That roughly matches my very short-term idea for where the markets would trade, echoing the expressed, tweeted need to watch oil and copper turn the corner still yesterday (copper didn‘t, not confirming any intraday turnaround notions as valid) – the below being written 7hrs before the U.S. open:(…) As yesterday's session moved to a close, the dollar erased opening losses, and went neutral. TLT's massive volume shows that yields are likely to stabilize here for now, and even decline a bit – HYG absolutely didn't convince me. The oil-copper tandem didn't kick in yesterday. Right now, we're in a weak constellation with both silver, oil, and stocks down. Copper's modest uptick doesn't cut it. So, the outlook for the European session on Fri is more bearish than bullish for stocks really, and gold rather sideways in the coming hours. Would we get a bounce during the U.S. session? It‘s possible to the point of likely. The damage done yesterday though looks to have more than a few brief sessions to run to repair. If you were to be hiding in the not too greatly performing S&P 500 sectors before the uptrend reasserts itself, you would be rather fine. The same for commodities and metals which were solidly trending higher before – oil, platinum, copper. E.g. look at yesterday‘s low platinum volume, or at the modest Freeport McMoRan decline – these charts are not broken while I see silver relegated to sideways trading (with a need to defend against the bears sternly) and silver miners taking their time.Just as I wrote yesterday, technology is the most precarious spot as long-term rates are turning and the dollar hasn‘t moved yet. Should it start coming to life (it did yesterday as the 10-year yield retreated from 1.60% back below 1.50%), overcoming the 91 – 91.5 resistance zone, that would help put into perspective the concerted selling we saw yesterday, especially if it continues in future days in similar fashion.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Its InternalsThe Force Index shows that the bears have the upper edge now, and volume coupled with price action, shows no accumulation yet. The chart is worrying for it could reach the Jan lows fast if the sellers get more determined.Credit MarketsHigh yield corporate bonds (HYG ETF) reveal the damage suffered, underlined by the strong volume. High yields in TLT and LQD are starting to have an effect on stocks.Another stressed bond market chart – long-term Treasuries show a budding reversal to the upside. Given yesterday‘s happenings in the 10-year bond auction with the subsequent retreat from high yields since, and the dollar moving over 90.50 as we speak, the signs are in place for the TLT retracing part of the steep slide as well.TechnologyThe momentum in tech (XLK ETF) is with the bears as the 50-day moving average got easily pierced yesterday again. It‘s still the heavyweights that matter (roughly similar to the healthcare situation here), and the sector remains very vulnerable to further downside.VolatilityThe volatility index rose, but is far below the two serious autumn 2020 and the late Jan 2021 corrections. It even retreated on the day, regardless of the heavy S&P 500 selling. Neither the options traders are taking yesterday‘s move as a true game changer, even though it was (for the bond markets). Would the anticipated stock indices rebound today bring it down really substantially, spilling over into commodities too, and show that this indeed wasn‘t a turning point? Gold, Silver and MinersGold didn‘t rise in spite of the falling long-term Treasuries for too long, as Tue and Wed hesitation (which I view with suspicion on both days) was resolved with a strong decline. This time, I am not calling for the yellow metal to rise the way I did a week ago. It‘s that the many precious metals market signals have become less constructive too. Silver is being taken down a notch or two, and the miners are already reflecting that in yesterday‘s close. Silver miners steeply declining, the bullish outperformance of gold juniors vs. gold seniors was lost yesterday. Given the red ink on Thursday already in copper, and its arrival into oil today, the bears are having the short-term (more than several sessions) upper hand. The miners to gold ratio ($HUI:$GOLD and GDX:GLD) as the final ingredient missing, can keep on waiting.SummaryStock bulls got a harsh reality check, and everything isn‘t very fine yet in the tech arena. By the shape of things thus far, today‘s rebound is more likely than not to turn out a dead cat bounce, and more short-term downside remains likely since Monday, regardless of all the value stocks performance.Gold and silver didn‘t escape the bloodbath either, and aren‘t out of the woods – neither gold, nor silver. Treasury yields are taking a good look around, having a chance to stabilize and retreat to a degree, but gold appears unfazed thus far, and the commodities‘ dynamics doesn‘t bode well. On the other hand, the dollar looks getting ready to move higher over the coming days, and thanks to the short-term correlation between the two turning positive, that would help the embattled yellow metal down the road.
Worst for Stocks Over?

Worst for Stocks Over?

Finance Press Release Finance Press Release 01.03.2021 15:39
Is the worst of what the last few weeks brought over? February started off with so much promise, only to be ruined by surging bond yields.The way that bond yields have popped has weighed heavily on growth stocks. Outside of seeing a minor comeback on Friday (Feb. 26), the Nasdaq dropped almost 7% between February 12 and Friday’s (Feb. 26) close.Other indices didn’t fare much better either.The spike bond yields, however, in my view, are nothing more than a catalyst for stocks to cool off and an indicator of some medium to long-term concerns. But calling them a structural threat is a bit of an overstatement.Rising bond yields are a blessing and a curse. On the one hand, bond investors see the economy reopening and heating up. On the other hand, with the Fed expected to let the GDP heat up without hiking rates, inflation may return.I don’t care what Chairman Powell says about inflation targets this and that. He can’t expect to keep rates this low, buy bonds, permit money to be printed without a care, and have the economy not overheat.He may not have a choice but to hike rates sooner than expected. If not this year, then in 2022. I no longer buy all that talk about keeping rates at 0% through 2023. It just can’t happen if bond yields keep popping like this.So was the second half of February the start of the correction that I’ve been calling for? Or is this “downturn” already over?Time will tell. While I still do not foresee a crash like we saw last March and feel that the wheels are in motion for a healthy 2021, I still maintain that some correction before the end of this month could happen.Corrections are also healthy and normal market behavior, and we are long overdue for one. Only twice in the last 38 years have we had years WITHOUT a correction (1995 and 2017), and we haven’t seen one in almost a year.A correction could also be an excellent buying opportunity for what could be a great second half of the year.Pay attention to several things this week. The PMI composite, jobs data, and consumer credit levels will be announced this week.We have more earnings on tap this week too. Monday (March 1), we have Nio (NIO) and Zoom (ZM), Tuesday (March 2) we have Target (TGT) and Sea Limited (SE), Wednesday (March 3), we have Okta (OKTA) and Snowflake (SNOW), and Thursday (March 3) we haveBroadcom (AVGO).My goal for these updates is to educate you, give you ideas, and help you manage money like I did when I was pressing the buy and sell buttons for $600+ million in assets. I left that career to pursue one to help people who needed help instead of the ultra-high net worth.With that said, to sum it up:The downturn we experienced to close out February could be the start of a short-term correction- or it may be a brief slowdown. A further downturn by the end of the month is very possible, but I don’t think that a decline above ~20%, leading to a bear market, will happen.Hopefully, you find my insights enlightening. I welcome your thoughts and questions and wish you the best of luck. Nasdaq- a Buyable Slowdown?Figure 1- Nasdaq Composite Index $COMPThe Nasdaq’s downturn was so overdue. Even though more pain could be on the horizon, I like the Nasdaq at this level for some buying opportunities.If more losses come and the tech-heavy index dips below support at 13000, then it could be an even better buying opportunity. It can’t hurt to start nibbling now, though. If you waited for that perfect moment to start buying a year ago when it looked like the world was ending, you wouldn’t have gained as much as you could have.Plus, if Cathie Wood, the guru of the ARK ETFs that have continuously outperformed, did a lot of buying the last two weeks, it’s safe to say she knows a thing or two about tech stocks and when to initiate positions. Bloomberg News ’ editor-in-chief emeritus Matthew A. Winkler wouldn’t have just named anyone the best stock picker of 2020.Before February 12, I would always discuss the Nasdaq’s RSI and recommend watching out if it exceeds 70.Now? As tracked by the Invesco QQQ ETF , the Nasdaq has plummeted almost 7% since February 12 and is closer to oversold than overbought. !While rising bond yields are concerning for high-flying tech stocks, I, along with much of the investing world, was somewhat comforted by Chairman Powell’s testimony last week (even if I don’t totally buy into it). Inflation and rate hikes are definitely a long-term concern, but for now, if their inflation target isn’t met, who’s to fight the Fed?Outside of the Russell 2000, the Nasdaq has been consistently the most overheated index. But after its recent slowdown, I feel more confident in the Nasdaq as a SHORT-TERM BUY.The RSI is king for the Nasdaq . Its RSI is now around 40.I follow the RSI for the Nasdaq religiously because the index is merely trading in a precise pattern.In the past few months, when the Nasdaq has exceeded an overbought 70 RSI, it has consistently sold off.December 9- exceeded an RSI of 70 and briefly pulled back.January 4- exceeded a 70 RSI just before the new year and declined 1.47%.January 11- declined by 1.45% after exceeding a 70 RSI.Week of January 25- exceeded an RSI of over 73 before the week and declined 4.13% for the week.I like that the Nasdaq is almost at its support level of 13000, and especially that it’s below its 50-day moving average now.I also remain bullish on tech, especially for sub-sectors such as cloud computing, e-commerce, and fintech.Because of the Nasdaq’s precise trading pattern and its recent decline, I am making this a SHORT-TERM BUY. But follow the RSI literally.For an ETF that attempts to directly correlate with the performance of the NASDAQ, the Invesco QQQ ETF (QQQ) is a good option.For more of my thoughts on the market, such as the streaky S&P, inflation, and emerging market opportunities, sign up for my premium analysis today.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were 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 believed to be accurate, Matthew Levy, 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. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’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. Matthew Levy, 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.
Mixed Start for Stocks in March

Mixed Start for Stocks in March

Finance Press Release Finance Press Release 03.03.2021 15:08
After March kicked off with a session that indicated the worst for stocks may be over (for now), Tuesday saw the indices sell-off towards the close.At least Rocket Mortgage (RKT) had a good day, though! And, at least the 10-year yield didn’t spike either. But that could change. Yields ticked up overnight to 1.433%, after President Biden pledged enough vaccine supply to inoculate every American adult by the end of May.So, where do we go from here? This positive economic and health news is excellent for reopening. But rising bond yields are a blessing and a curse. On the one hand, bond investors see the economy reopening and heating up. On the other hand, with the Fed expected to let the GDP scorch without hiking rates, inflation may return.I don’t care what Chairman Powell says about inflation targets this and that. The price of gas and food is increasing already. In fact, according to Bloomberg, food prices are soaring faster than inflation and incomes.For January, Consumer Price Index data also found that the cost of food eaten at home rose 3.7 percent from a year ago — more than double the 1.4 percent year-over-year increase in the prices of all goods included in the CPI.Can you imagine what this was like for February? Can you imagine what it will be like for March? I’m not trying to sound the alarm - but be very aware. These are just the early warning signs.So about March. Will it be more like Monday or Tuesday? Was the second half of February the start of the correction that I’ve been calling for? Or is the “downturn” already over? Only time will tell. While I still do not foresee a crash like we saw last March and feel that the wheels are in motion for a healthy 2021, I still maintain that some correction before the end of this month could happen.Rising bond yields are concerning. Inflation signs are there. But structurally, I don’t think it will crash the market (yet).Corrections are also healthy and normal market behavior, and we are long overdue for one. It’s been almost a year now. Only twice in the last 38 years have we had years WITHOUT a correction (1995 and 2017).A correction could also be an excellent buying opportunity for what could be a great second half of the year.My goal for these updates is to educate you, give you ideas, and help you manage money like I did when I was pressing the buy and sell buttons for $600+ million in assets. I left that career to pursue one to help people who needed help instead of the ultra-high net worth.With that said, to sum it up:There is optimism but signs of concern. A further downturn by the end of the month is very possible, but I don’t think that a decline above ~20%, leading to a bear market, will happen.Hopefully, you find my insights enlightening. I welcome your thoughts and questions and wish you the best of luck. Nasdaq- a Buyable Slowdown?Figure 1- Nasdaq Composite Index $COMPThe Nasdaq’s slowdown has been long overdue. Even though more pain could be on the horizon, I like the Nasdaq at this level for some buying opportunities.But I’d prefer it drop below support at 13000 for real buying opportunities.But it can’t hurt to start nibbling now. If you waited for that perfect moment to start buying a year ago when it looked like the world was ending, you wouldn’t have gained as much as you could have.Plus, it’s safe to say that Cathie Wood, the guru of the ARK ETFs, is the best growth stock picker of our generation. Bloomberg News ’ editor-in-chief emeritus Matthew A. Winkler seems to think so too. Her ETFs, which have continuously outperformed, focus on the most innovative and disruptive tech companies out there. Not to put a lot of stock in one person. But it’s safe to say she knows a thing or two about tech stocks and when to initiate positions- and she did a lot of buying the last few weeks.I also remain bullish on tech, especially for sub-sectors such as cloud computing, e-commerce, and fintech.Before February 12, I would always discuss the Nasdaq’s RSI and recommend watching out if it exceeds 70.Now? As tracked by the Invesco QQQ ETF , the Nasdaq has plummeted almost 5.5% since February 12 and is closer to oversold than overbought!But it’s still not enough.Outside of the Russell 2000, the Nasdaq has been consistently the most overheated index. But after its recent slowdown, I feel more confident in the Nasdaq as a SHORT-TERM BUY.The RSI is king for the Nasdaq . Its RSI is now around 45.I follow the RSI for the Nasdaq religiously because the index is merely trading in a precise pattern.In the past few months, when the Nasdaq has exceeded an overbought 70 RSI, it has consistently sold off.December 9- exceeded an RSI of 70 and briefly pulled back.January 4- exceeded a 70 RSI just before the new year and declined 1.47%.January 11- declined by 1.45% after exceeding a 70 RSI.Week of January 25- exceeded an RSI of over 73 before the week and declined 4.13% for the week.Again- if the index drops below 13000, and the RSI hits undeniably overbought levels, get on the train.But because we haven’t declined just enough, I am making this a SHORT-TERM BUY. But follow the RSI literally and take profits once you have the chance to.For an ETF that attempts to directly correlate with the performance of the NASDAQ, the Invesco QQQ ETF (QQQ) is a good option.For more of my thoughts on the market, such as the streaky S&P, inflation, and emerging market opportunities, sign up for my premium analysis today.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were 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 believed to be accurate, Matthew Levy, 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. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’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. Matthew Levy, 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.
Correction for Nasdaq- More Indices to Follow?

Correction for Nasdaq- More Indices to Follow?

Finance Press Release Finance Press Release 05.03.2021 15:31
I called Jay Powell's bluff a week ago. Remember when he said last week that we're still far from The Fed's inflation targets?Well, I was right to doubt him. The market didn't like his change in tone Thursday (Mar. 5).You see, when bond yields are rising as fast as they have, and Powell is maintaining that Fed policy won't change while admitting that inflation may " return temporarily ," how are investors supposed to react? On the surface, this may not sound like a big deal. But there are six things to consider here:It's a significant backtrack from saying that inflation isn't a concern. By admitting that inflation "could" return temporarily, that's giving credence to the fact that it's inevitable.The Fed can't expect to let the GDP scorch without hiking rates. If inflation "temporarily returns," who is to say that rates won't hike sooner than anyone imagines?Fool me once, shame on me, fool me twice...you know the rest. If Powell changed his tune now about inflation, what will he do a few weeks or months from now when it really becomes an issue?Does Jay Powell know what he's doing, and does he have control of the bond market?A reopening economy is a blessing and a curse. It's a blessing for value plays and cyclicals that were crushed during COVID and a curse for high-flying tech names who benefitted from "stay-at-home" and low-interest rates.The Senate will be debating President Biden’s $1.9 trillion stimulus plan. If this passes, as I assume it will, could it actually be worse for the economy than better? Could markets sell-off rather than surge? Once this passes, inflation is all but a formality.Look, it's not the fact that bond yields are rising that are freaking out investors. Bond yields are still at a historically low level, and the Fed Funds Rate remains 0%. But it's the speed at which they've risen that are terrifying people.According to Bloomberg , the price of gas and food already appear to be getting a head start on inflation. For January, Consumer Price Index data also found that the cost of food eaten at home rose 3.7 percent from a year ago — more than double the 1.4 percent year-over-year increase in all goods included in the CPI.The month of January. Can you imagine what this was like for February? Can you imagine what it will be like for March?I'm not trying to sound the alarm- but be very aware. These are just the early warning signs.So, where do we go from here? Time will tell. While I still do not foresee a crash like we saw last March and feel that the wheels remain in motion for a healthy 2021, that correction that I've been calling for has already started for the Nasdaq. Other indices could potentially follow.Finally.Corrections are healthy and normal market behavior, and we have been long overdue for one. Only twice in the last 38 years have we had years WITHOUT a correction (1995 and 2017).Most importantly, this correction could be an excellent buying opportunity.It can be a very tricky time for investors right now. But never, ever, trade with emotion. Buy low, sell high, and be a little bit contrarian. There could be some more short-term pain, yes. But if you sat out last March when others bought, you are probably very disappointed in yourself. Be careful, but be a little bold right now too.There's always a bull market somewhere, and valuations, while still somewhat frothy, are at much more buyable levels now.My goal for these updates is to educate you, give you ideas, and help you manage money like I did when I was pressing the buy and sell buttons for $600+ million in assets. I left that career to pursue one to help people who needed help instead of the ultra-high net worth.With that said, to sum it up:There is optimism but signs of concern. A further downturn by the end of the month is very possible, but I don't think that a decline above ~20%, leading to a bear market, will happen.Hopefully, you find my insights enlightening. I welcome your thoughts and questions and wish you the best of luck. Nasdaq- From Overbought to Oversold in 3 Weeks?Figure 1- Nasdaq Composite Index $COMPThe Nasdaq is finally in correction territory! I have been waiting for this. It’s been long overdue and valuations, while still frothy, are much more buyable. While more pain could be on the horizon until we get some clarity on this bond market and inflation, its drop below 13000 is certainly buyable.The Nasdaq has also given up its gains for 2021, its RSI is nearly oversold at about 35, and we’re almost at a 2-month low.It can’t hurt to start nibbling now. There could be some more short-term pain, but if you waited for that perfect moment to start buying a year ago when it looked like the world was ending, you wouldn’t have gained as much as you could have.Plus, it’s safe to say that Cathie Wood, the guru of the ARK ETFs, is the best growth stock picker of our generation. Bloomberg News ’ editor-in-chief emeritus Matthew A. Winkler seems to think so too. Her ETFs, which have continuously outperformed, focus on the most innovative and disruptive tech companies out there. Not to put a lot of stock in one person. But it’s safe to say she knows a thing or two about tech stocks and when to initiate positions- and she did a lot of buying the last few weeks.I think the key here is to “selectively buy.” I remain bullish on tech, especially for sub-sectors such as cloud computing, e-commerce, and fintech.I also think it’s an outstanding buying opportunity for big tech companies with proven businesses and solid balance sheets. Take Apple (AAPL), for example. It’s about 30% off its all-time highs. That is what I call discount shopping.What’s also crazy is the Nasdaq went from overbought 3 weeks ago to nearly oversold this week. The Nasdaq has been trading in a clear RSI-based pattern, and we’re at a very buyable level right now.I like the levels we’re at, and despite the possibility of more losses in the short-run, it’s a good time to start to BUY. But just be mindful of the RSI, and don’t buy risky assets. Find emerging tech sectors or high-quality companies trading at a discount.For an ETF that attempts to directly correlate with the performance of the NASDAQ, the Invesco QQQ ETF (QQQ) is a good option.For more of my thoughts on the market, such as the streaky S&P, inflation, and emerging market opportunities, sign up for my premium analysis today.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were 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 believed to be accurate, Matthew Levy, 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. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’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. Matthew Levy, 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 ADP Figures But Things Can Still Turn Nasty

Great ADP Figures But Things Can Still Turn Nasty

Monica Kingsley Monica Kingsley 05.03.2021 15:48
Powell gave a wait-and-see answer to my yesterday‘s rhetorical question about the bears just starting out, indeed. The S&P 500 plunged, breaking far outside the Bollinger Bands confines, illustrating the extraordinary nature of the move. Rebound would be perfectly natural here (and we‘re getting one as we speak) – but will it be more than a dead cat bounce?Stocks partially recovered from last Friday‘s intraday plunge, and good news about the stimulus clearing House followed after the market close – stock bulls took the opportunity, and Monday‘s session gave signs that the worst is over. Tuesday‘s move partially negated that, but even after Wednesday, the short-term case was undecided (even as tech kept acting relatively weak).Yesterday‘s session though gives the short-term advantage to the bears, and that‘s because of the weak performance I see in other stock market indices and bonds. The Russell 2000 got under pressure, negating what by yesterday still looked like a shallow correction there. So did the emerging markets and their bonds. More downside can materialize either suddenly or slowly over the coming say 1-2 weeks. It depends on the tech and its heavyweight names, where these find support. Corporate credit markets aren‘t weakening as dramatically though – as you‘ll see illustrated later on, both high yield corporate bonds and the HYG:SHY ratio are holding up much better than stocks. While that‘s bullish, the S&P 500 apparently hasn‘t yet learned to live with higher rates – let alone considerably higher ones.The key element playing the markets now, is the Fed‘s approach to inflation, rising long-term Treasuries in the face of central bank inaction and inflation denialism, which translates into the dollar taking the turn higher courtesy of the stresses induced across many asset classes. I asked yesterday:(...) How far is the Fed announcing yield curve control, or at least a twist program? Markets crave more intervention, and those calling for rate hikes to materialize soon, are landing with egg on their faces – mark my words, the Fed is going to stay accommodative longer than generally anticipated – have we learned nothing from the Yellen Fed?The ostrich pose on inflation isn‘t helping – it‘s sending Treasuries down, turning much of the rest red. Does the Fed want to see the market forcing some kind of answer / action the way it did in Dec 2018? The Fed is risking such a development now, this time through inaction, and not thanks to monetary tightening as back then.While some argue that inflation just brings a Fed rate hike closer, I really doubt that this option is treated seriously inside the Eccles building. It would be the right choice if you were serious about fighting inflation before it takes root – but in whose interest is that? Just look at the transitory statements, Fed official beliefs that to see it hit even 3% would be extraordinary, and you understand that their models understating it considerably in the first place, aren‘t even sending them the correct, magnitudinal signals.I see it as more probable that they would just try to suppress its symptoms, and succumb to the markets even more vocally demanding some action, by going the twist route. In effect, they would be then fighting the war on two fronts, as I explained in the middle of Feb already.Food inflation running hot, commodities on fire, and gold is going nowhere still. The bears are vocal, and I‘ve laid down a realistic game plan yesterday, discussing the gold support levels and perspectives. If you‘re disappointed that gold isn‘t doing as well as commodities, consider the mid-Feb described cascading inflation process as it devours more and more of the financial landscape – we still have a weak job market that doesn‘t contribute to the inflationary pressures, relegating the true, undeniable inflation to the 2022-3 timeframe.Let‘s keep the big picture – gold is in a secular bull market that started in 2018 (if not in late 2015), and what we‘re seeing since the Aug 2020 top, is the soft patch I called. The name of the game now, is where the downside stops – I am not capitulating to (hundreds dollars) lower numbers below $1,650 on a sustainable basis. The new precious metals upleg is a question of time even though the waiting is getting longer than comfortable for many, including myself. Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 Outlook and Its InternalsReasonably heavy volume with most of yesterday‘s candle, pushing vigorously to start a new downtrend. Given yesterday‘s move, some kind of retracement is likely today as a minimum, but the bears have the upper hand now.Credit MarketsHigh yield corporate bonds (HYG ETF) haven‘t declined below last week‘s lows, and are still at bullish divergence readings. Will they keep above these? Doing so is essential for the still unfolding S&P 500 correction.High yield corporate bonds to short-dated Treasuries (HYG:SHY) aren‘t as panicky as stocks here, which is more than mildly optimistic.Put/Call Ratio and VolatilityThe put/call ratio is well below the Feb or Jan highs, while the volatility index is much higher relatively to these. While that‘s an opportunity for even more panic, volatily would quickly die down if today‘s S&P 500 upswing sticks. Then, it would be time to evaluate the changes in posture. Either way, this correction appears to have longer to run still.TechnologyTechnology (XLK ETF) compared to the value stocks (VTV ETF) shows where the engine of decline is – and it‘s starting to have an effect on value, high beta plays. Not until tech stabilizes, can the correction be called as really close to over – just check how the equal weighted S&P 500 (RSP ETF) suffers right now.Gold, Silver and MinersAnother bite into the volume profile support zone, and the gold upswing isn‘t here still. Another missed daily opportunity to rebound. The yellow metal is still in a precarious position until it shakes off the rising (nominal, not real) rates albatross.Silver is in a technically stronger position, but signs of deterioration are creeping here too. It‘s painfully obvious when the miners are examined – the silver ones are leading to the downside, and the gold ones, well seniors outperforming juniors isn‘t a sign of strength really. The sky isn‘t definitely clear here.SummaryStock bulls have to once again try to repair the damage, and their success depends on the tech the most. The S&P 500 internals are slightly deteriorating, but the credit market performance remains more solid. New highs remain a question of time (and the stimulus carrot).Gold remains acting weak around the lower border of its support zone, and silver is joining in the deterioration, not to mention the mining indices. The yellow metal is though short-term holding up rather well, when the TLT and USDX pressures are considered.
Is the Pain Over?

Is the Pain Over?

Finance Press Release Finance Press Release 08.03.2021 15:37
The theme of last week was primarily the same as the previous few weeks- rising bond yields and inflation fears caused stocks to crumble.Look, it's not the fact that bond yields are rising that are freaking out investors. Bond yields are still at a historically low level, and the Fed Funds Rate remains 0%. But it's the speed at which they've risen that are terrifying people. So far this year, the 10-year yield has soared 72%Fed Chair Jay Powell's statement that inflation could "temporarily return" did not help matters much last week either. However, despite the fears, the indices really did not perform all that badly the previous week after a Friday (Mar. 5) reversal. The Dow Jones managed to gain 1.8%, the S&P eked out a 0.8% gain, and after briefly touching correction territory and giving up its gains for the year, the Nasdaq managed to decline only -2.1%.So what's on tap for this week? Is the downturn overblown and already over?This is a massive week for market sentiment. The Senate, first and foremost, passed President Biden's $1.9 trillion stimulus plan over the weekend. On the one hand, stocks could pop from this. On the other hand, this makes inflation a foregone conclusion. Remember this, too- when the market gets what it expects, it's usually a sell signal rather than a buy signal. Markets look forward. Not to the past, and not to the present.Important data being released this week also includes inflation data, initial claims, and consumer sentiment.Time will tell where we go from here. While I still do not foresee a crash like we saw last March and feel that the wheels remain in motion for a healthy 2021, inflation is a genuine concern and could be here already.According to Bloomberg , the price of gas and food already appear to be getting a head start on inflation. For January, Consumer Price Index data also found that the cost of food eaten at home rose 3.7 percent from a year ago — more than double the 1.4 percent year-over-year increase in all goods included in the CPI.This could only be the start too. In its 2021 outlook report, the Economic Research Service for the U.S. Department of Agriculture forecast the food cost from grocery stores to rise 1 to 2% this year.Moody's Analytics chief economist Mark Zandi also believes that Wall Street is significantly underestimating inflation's seriousness and warns it could affect every sector in the market — from growth to cyclicals."Inflationary pressures will develop very quickly," he said. "I don't think there's any shelter here."I'm not trying to sound the alarm- but be very aware. These are just the early warning signs.I still feel that a correction of some sort is imminent. The Nasdaq touched it briefly last week and is still about 2% away from one. Other indices could possibly follow. But don't fret. Corrections are healthy and normal market behavior, and we have been long overdue for one. Only twice in the last 38 years have we had years WITHOUT a correction (1995 and 2017).Most importantly, this correction could be an excellent buying opportunity.It can be a very tricky time for investors right now. But never, ever, trade with emotion. Buy low, sell high, and be a little bit contrarian. There could be some more short-term pain, yes. But if you sat out last March when others bought, you are probably very disappointed in yourself. Be cautious, but be a little bold too.There's always a bull market somewhere, and valuations, while still somewhat frothy, are at much more buyable levels now.My goal for these updates is to educate you, give you ideas, and help you manage money like I did when I was pressing the buy and sell buttons for $600+ million in assets. I left that career to pursue one to help people who needed help instead of the ultra-high net worth.With that said, to sum it up:There is optimism but signs of concern. A further downturn by the end of the month is very possible, but I don't think that a decline above ~20%, leading to a bear market, will happen.Hopefully, you find my insights enlightening. I welcome your thoughts and questions and wish you the best of luck. Nasdaq- Buyable but Beware of the RisksFigure 1- Nasdaq Composite Index $COMPThe Nasdaq is no longer in correction territory, nor is it negative for 2021 any longer. But beware- this could change very quickly. More pain could be on the horizon until we get some clarity on this bond market and inflation. However, this Nasdaq downturn is long overdue and starting to be buyable.If you bought at the bottom on Friday before the afternoon reversal and made some quick gains, good on you. It actually didn’t end up being THAT bad of a week for the Nasdaq after Friday’s (Mar. 5) reversal.Be that as it may, Friday’s (Mar. 5) reversal does not mean we’re out of the woods. According to Morgan Stanley’s chief U.S. equity strategist Mike Wilson , “10-year yields finally caught up to other asset markets. This is putting pressure on valuations, especially for the most expensive stocks that had reached nosebleed valuations.”Expensive stocks? Nosebleed valuations? Sounds like tech to me.Wilson also said that once valuation correction and repositioning are finished, then growth stocks can potentially “rejoin the party.”The Nasdaq is now mostly flat for the year, its RSI is closer to oversold than overbought, and we’re at almost a 2-month low.It can’t hurt to start nibbling now. There could be some more short-term pain, but if you waited for that perfect moment to start buying a year ago when it looked like the world was ending, you wouldn’t have gained as much as you could have.I think the key here is to “selectively buy.” I remain bullish on tech, especially for sub-sectors such as cloud computing, e-commerce, and fintech.I also think it’s an outstanding buying opportunity for big tech companies with proven businesses and solid balance sheets. Take Apple (AAPL), for example. It’s about 15% off its January 26th highs. That is what I call discount shopping.I like the levels we’re at, and despite the possibility of more losses in the short-run, it’s a good time to start to BUY. But just be mindful of the RSI, and don’t buy risky assets. Find emerging tech sectors or high-quality companies trading at a discount.For an ETF that attempts to directly correlate with the performance of the NASDAQ, the Invesco QQQ ETF (QQQ) is a good option.For more of my thoughts on the market, such as when small-caps will be buyable, more thoughts on inflation, and emerging market opportunities, sign up for my premium analysis today.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were 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 believed to be accurate, Matthew Levy, 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. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’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. Matthew Levy, 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 Gold Now Replaying 2010-2012?

Is Gold Now Replaying 2010-2012?

Finance Press Release Finance Press Release 09.03.2021 14:57
The 2019-2021 gold chart is disturbingly similar to that of 2010-2012, but it does not have to be the harbinger of a bear market.Many ancient cultures saw history as cyclical. According to this view, society passes through repeated cycles. Can this apply to gold as well? I’m not referring here to the simple fact that we have both bull and bear markets in the precious metals – I refer here to the observation that gold’s price pattern seen in 2019-2021 mirrors that of 2010-2012 . Please take a look at the chart below.As you can see, in both periods, gold was steadily rising to a peak in the third quarter of the second year. A decade ago, the yellow metal gained 29 percent in 2010 and 74 percent as it hit the top. Then, it declined 19 percent by the end of 2011. Fast forward to more recent times. Gold gained 18.4 percent in 2019 and 62 percent at the peak. Afterwards, it declined 9 percent by the end of 2020.So, although the magnitude has now been weaker than in the aftermath of the Great Recession , the pattern is quite similar. The next chart – which presents the normalized gold prices in both periods to indices (when the starting point equals 100) – nicely illustrates how gold in 2019-2021 closely resembles gold from 2010-2012.This similarity may be disturbing. Should the pattern hold, then gold could go down significantly and stay in a sideways trend for years. As a reminder, this is what happened a decade ago. Gold bulls fought until the end of 2012, when they gave up and the yellow metal entered a full bear market, plunging 45 percent from the top to the bottom in December 2015. Then, it stayed generally flat till the end of 2018. If this cycle replays, we could see the price of gold go below $1,200 by the end of 2024.To be clear, there are some arguments to support the bearish case . Just as in the 2010s, the world is recovering now from the global economic crisis . The recession is over and the prospects are only better. Perhaps they’re not rosy, but they’re certainly better than many previously expected, which is what matters for the financial markets. As the worst is behind us, the risk appetite is returning, which could put gold and other safe-haven assets into oblivion. Actually, some could even argue that gold may now plunge even earlier, as a decade ago it was supported by the European sovereign debt crisis , which peaked in 2011-2012.However, there are also important reasons why gold could break the pattern and diverge from the 2010-2012 trend. First, we now have a much more dovish Fed . The U.S. central bank slashed the federal funds rate much quicker and expanded its balance sheet more decisively. Additionally, to avoid a taper tantrum caused by its announcement about tapering asset purchases, this time the Fed will normalize its monetary policy in a very, very gradual way, if at all. It means that interest rates will stay lower for longer. Lastly, the U.S. central bank changed its monetary policy framework, i.e., it prioritized the labor market over price stability and became more tolerant to higher inflation .Second, we also have a much easier fiscal policy . Even before the global pandemic , Trump significantly expanded budget deficits , but the Great Lockdown made them even larger. As pundits believe that the fiscal response in the aftermath of the global financial crisis of 2007-2009 was too small, they now want to go big – indeed, Biden’s $1.9 trillion economic plan is waiting to be passed by Congress.Third, this recovery might be more inflationary than a decade ago . This is because not only did the monetary base increase, but the broad money supply did as well. Last time, the Fed injected a lot of liquidity to the banking sector to bailout the banks. Now, the money has flowed much more through Main Street and the household sector, which could turn out to be more inflationary when all this money will be spent on goods and services. Also, last time we observed some deleveraging in the private sector, while now the supply of loans is continuously increasing at a positive rate. We are also already observing reflation in the form of a commodity boom, so gold may follow suit.To sum up, the patterns seen in the gold market in 2010-2012 and 2019-2021 are remarkably similar. So, the recent gold’s weakness may be really disturbing. However, this resemblance does not have to be a harbinger of further problems coming for gold bulls . After all, as Mark Twain is reputed to have said, “history doesn’t repeat itself, but it often rhymes”. Indeed, the macroeconomic and political environment is now clearly different than a decade ago – it’s more fundamentally positive for the price of gold.Thank you for reading today’s free analysis. We hope you enjoyed it. If so, we would like to invite you to sign up for our free gold newsletter . Once you sign up, you’ll also get 7-day no-obligation trial of all our premium gold services, including our Gold & Silver Trading Alerts. Sign up today!Arkadiusz Sieron, PhD Sunshine Profits: Effective Investment through Diligence & Care.
Stock Bulls Run – Will Gold Ones Too?

Stock Bulls Run – Will Gold Ones Too?

Monica Kingsley Monica Kingsley 16.03.2021 15:37
Resting on Friday, surging on Monday. Feeble downswing attempt defeated right after the open, and then just bullish price action. Retail data today, and another FOMC meeting tomorrow – I view the former as not too likely to spoil today‘s market action. About the latter, remembering the latest reactions to Powell pronouncements, I look for the markets to be affected to a much greater degree.Don‘t look for material surprises, or be spooked by bets on the Fed tightening through dot plot adjustment or other forward guidance tools.I expect no change from what I wrote yesterday:(…) Who could be surprised, given the modern monetary theory ruling the economic landscape? The Fed amply accomodative, one $1.9T stimulus bill just in, and a $2T infrastructure one in the making. That‘s after the prior Trump stimulus, and who would have forgotten how it all started in April 2020? The old congressional saying „a billion here, a billion there, and pretty soon you‘re talking real money“, needs updating.Global liquidity isn‘t retreating exactly, emerging markets are building a solid base regardless of the dollar going higher two days in a row, and emerging market bonds are fighting to recover just as much as long-dated Treasuries. Coupled with the sectoral analysis, this is conducive for the unfolding stock market upswing and for commodities as well. We‘re still in a constructive environment for both, and I look within the latter at especially copper, nickel and iron to do well. Meanwhile, the precious metals upswing is going fine, and the miners keep outperforming – both gold and silver ones. The time for the bulls isn‘t running out, and the real battles will come once the gold bulls conquer the volume profile thin zone around $1,760. Will the bulls reach it on tomorrow‘s Fed underplaying the threat of inflation and showing tolerance to its overshoot? That‘s certainly one of the possibilities.The best course of action is to keep a pretty close eye on the metals – no bullish / bearish change from Thursday‘s words:(…) At the moment, evaluating the strength and internals of precious metals rebound, is the way to go as we might very well have seen the gold bottom, with the timid $1,670 zone test being all the bears could muster. Time and my dutiful reporting will tell.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookThe S&P 500 upswing is ready to proceed further now, and slight volume hint tells me to look for higher prices today. Credit MarketsHigh yield corporate bonds (HYG ETF) continue trading in a weak pattern, which however hasn‘t been able to force the stock market down. And not that I looked at it to have a chance to. I continue to view the junk corporate bond market as under pressure in sympathy with investment grade corporate bonds and long-dated Treasuries, which scored modest gains yesterday too. It‘s a euphoric rush into stocks simply. VolatilityThe volatility index shows no signs of panic returning, and the put/call ratio is getting very complacent again. Doesn‘t look like the boat will capsize today really.Value Stocks and TechValue stocks (VTV ETF) repelled a daily downswing attempt, which is positive considering that technology (XLK ETF) rose more strongly. The leadership in the stock market advance is broadening, and that‘s good news for the bulls.Gold Upswing AnatomyGold added modestly to its recent gains, and would do well to clear the $1,730 area some more really. The low volume is a sign that current prices aren‘t attracting enough interest to step in, and either buy or sell. Given the below chart though, the initiative is still within the bulls.It‘s that the miners keep outperforming gold without really slowing down, and that‘s still what I like to see well before the upswing makes an intermediate top. The daily indicators remain far from extended. Will the bulls take advantage accordingly?Silver, Copper and OilSilver is consolidating and by no means outperforming, as it so often does at the very late stage of precious metals upswings. The deductive conclusion is that the days of the upswing aren‘t likely over just yet.Both copper and oil are consolidating within their bullish patterns, and today‘s downswing taking both down around 1.5% from yesterday‘s prices shown above, is taking them nearer to where I would increase weighting. Yes, I‘m bullish stocks and commodities still, and look for precious metals to be gradually joining in some more.SummaryAfter the brief consolidation of S&P 500 gains, we‘re again in the full upswing mode, and the credit markets aren‘t a show stopper. The stock market bull is alive and well, and deeper correction has been yet again delegated to the dustbin. The top is very far off as this still nascent recovery gets so much stimulus fuel that overheating becomes a very real possibility this year already.Gold keeps turning an important corner on, but the bulls could get more comfortable only with an upswing that clears the $1,730 zone now, given the strong performance mining indices are showing. Adding to that even more decreased sensitivity to rising yields would compound the pleasant sight for the bulls. The runup to tomorrow‘s Fed will be telling.
Stock March Madness - Who you got?

Stock March Madness - Who you got?

Finance Press Release Finance Press Release 17.03.2021 14:42
Prepare yourself. March Madness could be here. No, I’m not talking about the college basketball tourney either.Stocks will be hanging onto Jay Powell’s every word and every breath on Wednesday (Mar. 17) and scrutinize his thoughts on interest rates and inflation.Pretty much, we’re the Fed’s hostages until this thing gets some clarity. Even if Powell says nothing, the markets will move. That’s just how it’s going to work.Rick Rieder, BlackRock’s CIO for global fixed income, echoed this statement. “I think the last press conference, I think I watched with one eye and listened with one ear. This one I’m going to be tuned in to every word and the markets are going to be tuned in to every word. If he says nothing, it will move markets. If he says a lot, it will move markets.”Jay Powell is the biggest market mover in the game now. What’s coronavirus anymore?So far, it’s been a relatively tame week for the indices. The Nasdaq’s continued playing catch-up and has outperformed, while the Dow and S&P are still hovering around record highs.The wheels are in motion for pent-up consumer spending and a strong stock rally. Plus, we have that $1.9 trillion stimulus package heating up the economy and an army of retail traders with an extra $1,400 to play with.Inflation fears and surging bond yields are still a concern and have caused significant volatility for growth stocks. But let’s have a little perspective here. Plus, jobless claims beat estimates again and came in at 712,000. This is nearly the lowest they’ve been in a whole year. Last week’s inflation data also came in more tamer than expected.But bonds yields still remain the market’s biggest wild card. Yes, yields are still at a historically low level, and the Fed Funds Rate remains 0%. But depending on how things go around 2 pm Wednesday (Mar. 17), yields could potentially pop again, reinvigorating the rotation into value and cyclical plays and out of tech and growth plays.Time will tell what happens.My goal for these updates is to educate you, give you ideas, and help you manage money like I did when I was pressing the buy and sell buttons for $600+ million in assets. I left that career to pursue one to help people who needed help instead of the ultra-high net worth.With that said, to sum it up:There is optimism but signs of concern. The market has to figure itself out. A further downturn is possible, but I don’t think that a decline above ~20%, leading to a bear market, will happen any time soon.Hopefully, you find my insights enlightening. I welcome your thoughts and questions and wish you the best of luck. Russell 2000- Lessons LearnedFigure 1- iShares Russell 2000 ETF (IWM)The Russell 2000 was the biggest laggard on Tuesday (Mar. 16). I think I’m starting to figure this index out, though, for a solid entry point.I have been kicking myself for not calling BUY on the Russell after seeing a minor downturn when the markets got rocked in the second half of February. I may have broken my own rule about “not timing the market” also. I’ve wanted to buy the Russell 2000 badly forever but never thought it dipped hard enough (whenever it did). I was waiting for it to at least approach a correction.But I think I figured out a pattern now. Notice what happened with the Russell almost every time it touched or minorly declined below its 50-day moving average. It reversed. Look at the above chart. Excluding the large crash and subsequent recovery in late-March and April 2020, 5 out of the last 6 times the Russell did this with its 50-day, it saw a sharp reversal. The only time it didn’t was in October 2020, when the distance between its 50-day and its 200-day moving average was a lot more narrow.Now, look at the index. As tracked by iShares Russell 2000 ETF (IWM) , its rally since November and year-to-date have been mind-blowing. Pretty much, this is the one reason why I’m more cautious about buying the index.Since the market’s close on October 30, the IWM has gained about 51.04% and more than doubled ETFs’ returns tracking the more major indices.Not to mention, year-to-date, it’s already up 19.12% and around at an all-time high.With that $1.9 trillion stimulus package set to greatly benefit small businesses, the Russell 2000 could pop even more.Unfortunately, I’m keeping this a HOLD. But I am monitoring the Russell 2000 closely.Aggressive stimulus, friendly policies, and a reopening world bode well for small-caps in 2021. I think this is something you have to consider for the Russell 2000 and maybe overpay for. The next time the index approaches its 50-day moving average, I will be a little more aggressive.For more of my thoughts on the market, such as tech, if small-caps are buyable, inflation, and emerging market opportunities, sign up for my premium analysis today.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were 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 believed to be accurate, Matthew Levy, 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. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’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. Matthew Levy, 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.
Gold & the USDX: Correlations

Return of the Rising Yields

Finance Press Release Finance Press Release 19.03.2021 14:47
March Madness started on Thursday (Mar. 18), but stocks got the jump on their own brackets this week. Let’s dive in.Although Wednesday (Mar. 17) saw the indices have a nice St. Patrick’s day green reversal thanks to Jay Powell babying us on inflation thoughts again, Mr. Market isn't stupid. Manic, but not stupid. We saw a return to the strong rotation trend out of growth stocks the day after Powell's testimony (Mar. 18).Thursday (Mar. 18) saw bond yields surge to their highest levels in what seems like forever. The 10-year yield popped 11 basis points to 1.75% for the first time since January 2020, while the 30-year rate climbed 6 basis points and breached 2.5% for the first time since August 2019.Predictably, the Nasdaq tanked by over 3% for its worst session in 3-weeks.Jay Powell and bond yields are the most significant market movers in the game now. Get ready for the market next week when he testifies to Congress. That'll be a beauty. What's coronavirus anymore?So after what's been a relatively tame week for the indices, we can officially say bye-bye to that.Bond yields, though, are still at historically low levels, and the Fed Funds Rate remains at 0%. With the Fed forecasting a successful economic recovery this year, with GDP growth of around 6.5% -- the fastest in nearly four decades -- the wheels could be in motion for another round of the Roaring '20s.The problem, though, is that the Great Depression came right after the first Roaring '20s.Many are sounding the alarm. However, like CNBC's Jim Cramer, others think the current headwinds are overblown, and a mirror of the 2015-2016 downturn is based on similar catalysts.Figure 1: Jim Cramer TwitterCramer argued that Powell is a talented central banker willing to "let the economy continue to gain strength so that everyone has a chance to do well."Nobody can predict the future, and these growth stock jitters from rising bond yields may be overblown. But for now, it's probably best to let the market figure itself out and be mindful of the headwinds.My goal for these updates is to educate you, give you ideas, and help you manage money like I did when I was pressing the buy and sell buttons for $600+ million in assets. I left that career to pursue one to help people who needed help instead of the ultra-high net worth.With that said, to sum it up:There is optimism but signs of concern. The market has to figure itself out. A further downturn is possible, but I don’t think that a decline above ~20%, leading to a bear market, will happen any time soon.Hopefully, you find my insights enlightening. I welcome your thoughts and questions and wish you the best of luck. Nasdaq- Another Buyable Dip?Figure 2- Nasdaq Composite Index $COMPThe last time I switched my Nasdaq call to a BUY on Feb 24 , that worked out very well. I will use the same criteria again for the Nasdaq as the market figures out bond yields: The RSI and the 13000 support level. I need the Nasdaq’s RSI to dip below 40 while also falling below 13000 before buying.We’re not quite there. This is an excellent dip, but it’s really only one down day and its worst down day in weeks. I think we may have some more buying opportunities next week if bond yields pop due to Jay Powell’s testimony. I mean, it seemingly always happens after he speaks.Pay very close attention to the index and its swings.If the tech sector takes another big dip, don’t get scared, don’t time the market, monitor the trends I mentioned and look for selective buying opportunities. If we hit my buying criteria, selectively look into high-quality companies and emerging disruptive sub-sectors such as cloud computing, e-commerce, and fintech.HOLD, and let the RSI and 13000-support level guide your Nasdaq decisions. See what happens over subsequent sessions, research emerging tech sectors and high-quality companies, and consider buying that next big dip.For an ETF that attempts to correlate with the performance of the NASDAQ directly, the Invesco QQQ ETF (QQQ) is a good option.For more of my thoughts on the market, such as a potentially overbought Dow Jones, small-caps, inflation, and emerging market opportunities, sign up for my premium analysis today.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were 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 believed to be accurate, Matthew Levy, 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. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’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. Matthew Levy, 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 Three Pillars for Stocks

The Three Pillars for Stocks

Finance Press Release Finance Press Release 29.03.2021 16:42
We’re officially almost through with the first quarter of 2021. While a broad correction did not happen by now, as I thought, the Nasdaq dipped into correction territory twice.There might also be as much uncertainty for tech stocks today as there was at March’s start.However, let’s look at the big picture almost a week after we hit the 1-year anniversary of the market’s bottom. Three pillars remain in motion as a strong backdrop for stocks:VaccinesDovish monetary policy full of stimulusFinancial aidWhile the major indices are still positive for 2021, every month this year has been marked by hot starts, marred by mid-month uncertainty and downturns. We’re dealing with rising bond yields, inflation scares, volatile Reddit trades, and an improving yet slowing labor market recovery.Plus, although earnings came in strong this past quarter, stock valuations are still at an overly inflated point not seen in years. In fact, Ray Dalio , founder of the world’s largest hedge fund, Bridgewater Associates, says there’s a bubble that’s ‘halfway’ to the magnitude of 1929 or 2000.We could see some more volatility on tap this week as the market continues to figure itself out.Suez Canal- There’s been a gigantic tanker blocking arguably one of the most crucial waterways for global trade for the last 6 days. There are indications that the tanker may be on the way to being freed. But the sooner this happens, the better. The Suez Cana controls about 10% of global trade, so you can only imagine the hundreds of billions of dollars bleeding per day the more this drags on.Economic Data- Consumer Confidence, the March job’s report, the unemployment rate, and the PMI Manufacturing index will be released this week.Earnings- Chewy (CHWY) will report Tuesday (Mar. 30) after market close, and Walgreens Boots Alliance (WBA), Dave & Busters (PLAY), Micron (MU) will all report after market close Wednesday (Mar. 31).My goal for these updates is to educate you, give you ideas, and help you manage money like I did when I was pressing the buy and sell buttons for $600+ million in assets. I left that career to pursue one to help people who needed help instead of the ultra-high net worth.With that said, to sum it up:Over a year after we bottomed, there is optimism but signs of concern.The market has to figure itself out. More volatility is likely, and we could experience more muted gains than what we’ve known over the last year. Inflation and interest-rate worries should be the primary tailwind. However, a decline above ~20%, leading to a bear market, appears unlikely to happen any time soon.Hopefully, you find my insights enlightening. I welcome your thoughts and questions and wish you the best of luck. Russell 2000- Time to Pounce?Figure 1- iShares Russell 2000 ETF (IWM)I kicked myself for not calling BUY on the Russell after seeing a minor downturn during the second half of February. I wasn’t going to make that mistake again.After the iShares Russell 2000 ETF (IWM) went on its latest rally to start March, I checked out the chart. I noticed that almost every time it touched or minorly declined below its 50-day moving average, it reversed.Excluding the recovery in April from last year’s crash, 5 out of the previous 6 times the Russell did this with its 50-day, it saw a sharp reversal. The only time it didn’t was in October 2020, when the distance between its 50-day and its 200-day moving average was a lot more narrow.Fast forward to Tuesday (Mar. 23). The Russell 2000 saw its worst day since February 25, dropped below its 50-day, and I switched the call to a BUY.Now, as we start the final week in March, we may be looking at the 6th reversal after dipping below its 50-day. The IWM has been up about 4.25% since March 24.Aggressive stimulus, friendly policies, and a reopening world bode well for small-caps in 2021. I think this is something you have to consider for the Russell 2000 and maybe overpay for.Based on the RSI and where we are in relation to the 50-day moving average, I still feel that this is a BUY.For more of my thoughts on the market, such as tech, inflation fears, and why I love emerging market opportunities, sign up for my premium analysis today.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were 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 believed to be accurate, Matthew Levy, 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. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’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. Matthew Levy, CFA, Sunshine Profits' employees, and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
What is the target for S&P?

What is the target for S&P?

Kseniya Medik Kseniya Medik 02.04.2021 12:09
S&P 500 is trading just below the key milestone of 4000. It’s likely to hit this level by the end of this week. What is the reason for this growth and what is the forecast? Let’s find out! Biden’s infrastructure plan Stocks were mixed on Wednesday as Biden announced its $2.25 trillion infrastructure plan to offset the corporate tax increase from 21% to 28%. The US President said this tax hike would bring $2 trillion over 15 years. However, some Democrats are still able to cut the increase to less than 28%. Unlike Nasdaq’s big jump, S&P 500’s growth was modest. This huge plan includes $620 billion in spending on transportation, including electric-vehicle incentives, and $500 billion – on growing the domestic manufacturing sector, with a focus on the chip industry and green manufacturing. Thus, it has a greater impact on the tech Nasdaq than S&P 500. However, the overall effect was taken positively by investors as the US economy will recover faster with the government’s help. On the other hand, the tax hike is a negative factor for stocks. Best month since November March was the best month for S&P 500 since November and their fourth positive month in five! It gained more than 4%. Bullish forecasts Sanford C. Bernstein strategists projected S&P 500 at 8000 in 100 months (eight and a half years). Let’s wait and see! Technical analysis S&P 500 (US 500) has been rising and rising without any stops since the coronavirus hit the markets in late February of the last year. It has broken through the key psychological mark of 4000. The way up to 4050 is open now. If it manages to break it, it may jump higher to the next round number of 4100. However, as we can notice, the upper line of Bollinger Bands lies just above the current price, indicating the price is too high. Besides, after the price breaks such significant resistance levels, it usually retraces back. It’s a so-called natural sell-off, after which the price will continue rising. However, if bulls keep momentum the rally up will continue without any stops. Just in case, support levels are 4000 and 3945. Important! The trading of stock indices will be close today at 16:00 MT because of the Easter holidays. Remember that you can trade stocks not only through Metatrader 5 but also through the FBS Trader app!
Stocks are Heating Up

Stocks are Heating Up

Finance Press Release Finance Press Release 09.04.2021 15:40
In keeping with its historical performance, April has started off white-hot. We ended March, and Q1 for that matter, with more questions than answers.But April 2021 started with a blowout jobs report, and the indices haven't looked back since. Right now, the S&P 500 is at yet another record, the Dow is just about at a record, and we've seen a furious comeback for Big Tech and growth stocks.The sentiment is certainly better now than it was just a couple of weeks ago. However, I implore you to remember that every month in 2021 thus far has started off hot and saw a pullback/volatility occur in the second half of the month.Think about it. In January, we had the GameStop trade spooking investors. In February and March, we had surging bond yields, inflation fears, or Jay Powell comments that rubbed people the wrong way. These concerns won't just disappear because we want them to. If we could make things magically disappear, COVID would've been over yesterday.But, as I mentioned before, April historically is a strong month for stocks. According to Ryan Detrick , chief market strategist at LPL Financial, "Other than my Cincinnati Bengals breaking my heart, few things are more consistent than stocks higher in April."During April, the S&P 500 has gained in 14 of the past 15 years. April has also been the strongest month for stocks over the past 20 years.The market concerns, though, are still intact. We still have to worry about inflation, bond yields, and stocks peaking. According to Binky Chadha , Deutsche Bank's chief U.S. equity strategist, we could see a significant pullback between 6% and 10% over the next three months.Another thing I'm a bit concerned about is the $2 trillion infrastructure plan. While this is great for America's crumbling infrastructure, do we really need to spend any more trillions?Plus, how do you think this will be paid for? Hiking taxes- namely corporate taxes . Those gains that high growth stocks saw after Trump cut corporate taxes in 2017 could very well go away. While President Biden has indicated a willingness to negotiate his 28% corporate tax proposal, it's still a tax hike.My goal for these updates is to educate you, give you ideas, and help you manage money like I did when I was pressing the buy and sell buttons for $600+ million in assets. I left that career to pursue one to help people who needed help instead of the ultra-high net worth.With that said, to sum it up:We're hot right now.However, we could see more volatility and more muted gains than what we've come to know over the last year.April is historically strong, but please continue to monitor inflation, yields, and potential tax hikes. Be optimistic but realistic. A decline above ~20%, leading to a bear market, appears unlikely. Yet, we could eventually see a minor pullback by the summer, as Deutsche Bank said.Hopefully, you find my insights enlightening. I welcome your thoughts and questions and wish you the best of luck. Russell 2000- Still Buyable?Figure 1- iShares Russell 2000 ETF (IWM)I proudly switched my call on the iShares Russell 2000 ETF (IWM) to a BUY on March 24. I kicked myself for not calling BUY on the Russell after seeing a minor downturn during the second half of February and swore I wouldn’t make that mistake again.We’re up to over 5% since then.The climate right now supports the Russell 2000. The current economic policy is tailor-made for small-caps. The best part, though? The Russell is still very buyable.The RSI is still hovering around 50. I also checked out the chart and noticed that almost every time the IWM touched or minorly declined below its 50-day moving average, it reversed.Excluding the recovery in April from last year’s crash, 5 out of the previous 6 times the Russell did this with its 50-day, it saw a sharp reversal. The only time it didn’t was in October 2020, when the distance between its 50-day and its 200-day moving average was a lot more narrow.Fast forward to now. The Russell 2000, despite its gains since tanking on March 23, remains right at about its 50-day moving average.Aggressive stimulus, friendly policies, and a reopening world bode well for small-caps in 2021. I think this is something you have to consider for the Russell 2000 and maybe overpay for.According to the chart, we may have found double-bottom support too.Based on the chart and macro-level tailwinds, I feel that you can still BUY this index. In fact, it may be the most buyable of them all.For more of my thoughts on the market, such as tech, inflation fears, and why I love emerging market opportunities, sign up for my premium analysis today.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were 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 believed to be accurate, Matthew Levy, 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. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’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. Matthew Levy, 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.
Still a Bullish Fever in Stocks?

Still a Bullish Fever in Stocks?

Monica Kingsley Monica Kingsley 13.04.2021 15:46
S&P 500 went nowhere yesterday – just like the prior Monday, heavy buying into Friday‘s close met no follow-up the day after. After almost touching 16 to close the week, VIX peeked higher yesterday only to reverse back down. Nice try but if you look at the put/call ratio turning down simulatenously, the alarm bells are far from ringing.The S&P 500 rise of late isn‘t without its good share of non-confirmations though. The ones seen in Russell 2000 and emerging markets got a fresh company in the corporate credit markets. No denying that the stock market is in a strong uptrend, but it got a bit too stretched vs. its 50-day moving average – a consolidation in short order would be a healthy move, but the CPI readings above expectations don‘t favor one today.If you look at the put/call ratio again, its lows throughout Mar and Apr haven‘t been reaching the really exuberant levels of prior months, hinting at a less steep path of S&P 500 gains. And what about the volume print as stocks went about making new highs? Not encouraging either, and it‘s not that rising yields would be causing trouble:(…) The retreat in rising yields is running into headwinds, much sooner than the 10-year one could reach the low 1.50% figure at least. Value stocks and cyclicals such as financials appear calling it out, and both rose on Friday.And financials had a good day yesterday too. Technology welcomed the reprieve, and the heavyweights joined in increasingly more. Again though, more than a little stretched, these $NYFANG generals are rising while the troops (broader tech) are hesitating, which makes a down day / consolidation quite likely, especially should the TLT retreat again. As I wrote yesterday:(…) The rotation simply isn‘t much there, and the TINA trade isn‘t letting much air to come out of the S&P 500 sectors that would be expected to sell off in a more relaxed monetary policy. And that‘s probably what gold is sensing as it grew weak yesterday. The rising yields aren‘t yet at levels causing issue for the S&P 500, but the commodities‘ consolidation coupled with nominal yields about to rise, has been sending gold down yesterday – and miners confirmed that weakness by leading lower. This would likely be a daily occurence only unless and until copper gives in and slides – that‘s because of the inflation expectations having stabilized for now, but Treasury yields not really retreating. Yes, gold misses inflation uptick that would bring real rates down a little again – and is getting one in today‘s CPI as we speak.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookS&P 500 is no longer trading above the upper border of Bollinger Bands, but volume isn‘t picking yet up either. That makes a largely sideways consolidation the more likely scenario here.Credit MarketsBoth high yield corporate bonds (HYG ETF) and the investment grade ones (LQD ETF) declined yesterday while long-dated Treasuries went nowhere – but the bullish spirits in stocks didn‘t evaporate proportionately. This non-confirmation isn‘t too pressing at the moment.Technology and ValueTech (XLK ETF) stumbled yesterday, and it wasn‘t because of $NYFANG (black line) – yet value stocks didn‘t sell off either during these lately turning vapid rotations.Smallcaps and Emerging MarketsThe long underperformance in both indices vs. the S&P 500 goes on, and is actually a stronger watchout than the corporate credit markets at the moment. Inflation ExpectationsInflation expectations as measured by the TIP:TLT ratio are basing, but bond yields are aiming higher again, making higher inflation on the horizon a virtual certainty.Gold, Silver and MinersThe daily underperformance in miners is worrying – this daily leadership to the downside, where gold and silver declined proportionately to each other. Given that commodities didn‘t point to greater weakness, I consider yesterday‘s precious metals downswing as a bit exaggerated. SummaryS&P 500 still appears as entering a consolidation, but I‘m not looking for way too much downside. The Big Tech names would decide, and if you look at Tesla doing well yesterday, the S&P 500 correction would play out rather in time than in price.Gold depends upon the miners‘ path, and nominal yields trajectory. Once more inflation spills over into CPI readings, that would work to negate temporary weakness caused by real rates pressures, which is what we are getting.
Gold: You Can Win a Battle, but Still Lose the War

Gold: You Can Win a Battle, but Still Lose the War

Finance Press Release Finance Press Release 16.04.2021 16:54
Gold had a good day yesterday, but as it hits the $1,770 resistance line, it will be anything but easy for the yellow metal. The real test has begun.And so, it happened. Gold moved right to its target level that seemed to be the max that it could reach, but that didn’t seem to be the most likely outcome. Just because it wasn’t the most likely outcome, doesn’t make it impossible. The “most likely” can happen all the time – after all its only “most likely” not “certain” or “inevitable”.Gold declined right after its triangle-vertex-based reversal, but it appears that the market participants didn’t want to give up on the bullish tone until gold finally reached its previous lows and highs.Just like magnets, the strong support and resistance lines draw investors and traders, and it seems that we saw this play out once again.Gold moved slightly above its upper border of the near-perfect flag (zigzag) pattern and this small breakout is not completed. This particular breakout is not even close to being as important as the fact that the previous very strong resistance held yesterday (Apr. 15).Why? Because the level that was just reached – the $1,770 level – is the level that provided strong resistance in mid-2020 (several times) and it provided strong support in late-2020 and early 2021. These were mostly very important reversals, which make this price level particularly important.Moreover, the current move higher to this level is symmetrical to what we saw in mid-2020. Consequently, even though this week’s rally might seem like a game-changer, it very likely isn’t one.But miners moved higher, and they invalidated the breakdown below the neck level of the broad head-and-shoulders formation!…Did they, though?Mining Stocks: GDX and GDXJThe GDX ETF did indeed close yesterday above the dashed line that I used to mark the neckline of the head and shoulders pattern. One might view this as an invalidation of the breakdown, and thus a bullish sign. This doesn’t add up with gold’s inability to move above its critical resistance at $1,770, and we see that miners moved only to the line that’s symmetrical to the line based on the recent bottoms.In yesterday’s intraday Alert , I wrote the following:Mining stocks are rallying too, but please note that they only reached their upper border of the zig-zag pattern. Back in early January, this was exactly where the rally had ended. The top formed on huge volume and based on the volume that we already see today, it’s almost certain that the volume for today’s session will be huge – just like what we saw at the January top.I realize that waiting for the next big slide is exhausting and discouraging, and it’s not easy to hold on to the current trading position. However, the outlook didn’t change, and the situation continues to fit the bearish narrative despite today’s intraday upswing. Consequently, exiting positions now seems not only pre-mature, but actually opposite to what appears to be a good trading move from my point of view. After all one wants to sell or short at the tops and tops can only form after rallies.The above remains up-to-date. Let’s get back to the reason why this invalidation of the breakdown in the GDX might not really mean the true, meaningful invalidation of the breakdown in miners in general. The reason is that other proxies for the mining stocks sector don’t confirm it.The GDXJ ETF is relatively far from the neck level (which I marked with a thick, black line). On a side note, the breakout that we saw recently (above the short-term declining resistance line) seems similar to the breakout that we saw in January – above the line that was important back then. Just as the January strength turned into declines, I expect to see the same thing this time.Let’s move to the two key indices for the mining stocks sector, the HUI and the XAU indices .In neither of them did we see the invalidation of the breakdown. Consequently, the GDX ETF is the odd one out in the entire pack, not to mention the lack of a breakout in gold. Therefore, it seems prudent not to give particular meaning to what happened in the GDX ETF alone.SilverAnd what about silver’s outlook ?Nothing really changed despite yesterday’s strength. Just as was the case in March 2020, silver is correcting after a visible decline. Back in March 2020, the correction ended between the 200-day (red) and 50-day (blue) moving averages. The same is happening right now. Silver’s 50-day moving average is currently at $26.15 and the white precious metal closed at $25.96.All in all, it seems that quite a lot happened yesterday, but nothing really changed as far as the outlook for gold is concerned.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Intraday Market Analysis – Recovery Momentum

Intraday Market Analysis – Recovery Momentum

John Benjamin John Benjamin 20.04.2021 08:33
EURUSD breaks above key resistanceThe euro recoups last month’s losses as traders reposition themselves for this week’s ECB meeting.After a few days of consolidation under the key level of 1.1990 from the daily chart, the strong momentum above this resistance is a confirmation that buyers are in control of the price action.1.2110 would be the next target as the pair makes its way back.An overbought RSI may lead to a brief pullback. If so, the demand area between 1.1880 and 1.1940 may see strong buying interest.USDJPY faces strong supplyThe market’s expectation of further falls in US Treasury yields keeps sending the greenback lower.The pair’s successive breakouts below the daily moving averages and the critical support at 108.40 have triggered a new round of sell-off.There is a chance of a rebound as traders take profit after the RSI went deeply into the oversold territory. Bears are likely to sell into strength in the supply zone around 108.90.On the downside, 107.80 would be the next target as a continuation of the bearish momentum.SP 500 tests rising trendlineMajor stock indices stay high on hopes that the recovery is firmly on track. The S&P 500 has been grinding up along a rising trendline established earlier this month.However, a double top in the RSI’s overbought area may temper buyers’ willingness to chase bids.The trendline (4150) is the immediate support as the index makes a retreat. 4120 is a key level to keep the uptrend intact in the short term.On the upside, the psychological level of 4200 could be the target as buyers push for a new record high.
Gold & the USDX: Correlations

Gold Miners: Were Upswings Just an Exhausting Sprint?

Finance Press Release Finance Press Release 26.04.2021 16:22
Indicators are pointing to gold and mining ETFs running out of breath. They don’t seem to have what it takes to the move to the finish line.Despite gold, silver and mining stocks’ recent corrective upswings, the precious metals are running out of steam. After bursting off of the lows – while failing to recognize that it’s a marathon and not a sprint – the precious metals’ late-week breather signals that their stamina isn’t what it used to be.Moreover, with false breakouts and sanguine sentiment causing an adrenaline rush that’s likely to fade, the precious metals’ transformation from stalwart to sloth could leave investors feeling increasingly dejected.Case in point: with the HUI Index (a proxy for gold mining stocks ) already verifying the breakdown below the neckline of its bearish H&S pattern – which didn’t occur until later in 2008 – the miners’ outlook is actually more bearish now than it was then.Please see below:To explain, note that the 2007 – 2008 and the 2009 – 2012 head and shoulders patterns didn’t have the right shoulders all the way up to the line that was parallel to the line connecting the bottoms. I marked those lines with green in the above-mentioned formations. In the current case, I marked those lines with orange. Now, in both cases, the final top – the right shoulder – formed close to the price where the left shoulder topped. And in early 2020, the left shoulder topped at 303.02.That’s why I previously wrote that “it wouldn’t be surprising to see a move to about 300 in the HUI Index”. And that’s exactly what we saw – the recent high was slightly above 299.This means that the recent rally is not a game-changer, but rather a part of a long-term pattern that’s not visible when one focuses on the short-term only.The thing is that the vast majority of individual investors and – sadly – quite many analysts focus on the trees while forgetting about the forest. During the walk, this might result in getting lost, and the implications are no different in the investment landscape.From the day-to-day perspective, a weekly – let alone monthly – rally seems like a huge deal. However, once one zooms out and looks at the situation from a broad perspective, it’s clear that:“What has been will be again, what has been done will be done again; there is nothing new under the sun.” (-Ecclesiastes 1:9)The rally is very likely the right shoulder of a broad head and shoulders formation. “Very likely” and not “certainly”, because the HUI Index needs to break to new yearly lows in order to complete the pattern – for now, it’s just potential. However, given the situation in the USD Index (i.a. the positions of futures traders as seen in the CoT report , and the technical situation in it), it seems very likely that this formation will indeed be completed. Especially when (not if) the general stock market tumbles.In addition, three of the biggest declines in the mining stocks (I’m using the HUI Index as a proxy here), all started with broad, multi-month head-and-shoulders patterns. And in all three cases, the size of the decline exceeded the size of the head of the pattern.Can we see gold stocks as low as we saw them last year? Yes.Can we see gold stocks even lower than at their 2020 lows? Again, yes.Of course, it’s far from being a sure bet, but the above chart shows that it’s not irrational to expect these kind of price levels before the final bottom is reached. This means that a $24 target on the GDX ETF is likely conservative.In addition, mining stocks are currently flirting with two bearish scenarios:If things develop as they did in 2000 and 2012-2013, gold stocks are likely to bottom close to their early 2020 high.If things develop like in 2008 (which might be the case, given the extremely high participation of the investment public in the stock market and other markets), gold stocks could re-test (or break slightly below) their 2016 low.I know, I know, this seems too unreal to be true… But wasn’t the same said about silver moving below its 2015 bottom in 2020? And yet, it happened.Keep in mind though: scenario #2 most likely requires equities to participate. In 2008 and 2020, the sharp drawdowns in the HUI Index coincided with significant drawdowns of the S&P 500 . However, with the words ‘all-time high’ becoming commonplace across U.S. equities, the likelihood of a three-peat remains relatively high.Senior Miners: GDX ETFMoving on to the GDX ETF, the senior miners were unable to hold the upper trendline of their corrective zigzag pattern. Similar to the price action in late 2020/early 2021, the GDX ETF rallied slightly above the upper trendline of its roughly one-and-a-half-month channel before eventually rolling over. More importantly, though, the GDX ETF’s failure in early 2021 ended up being a prelude to the senior miners’ severe drawdown.Please see below:Furthermore, with the senior miners likely to peak in the coming days, the GDX ETF is poised to move from the right shoulder of its bearish H&S pattern. Following in the HUI Index’s footsteps, the GDX ETF’s correction back to the high of its left shoulder signals that the upward momentum has likely run its course.If that wasn’t enough, the GDX ETF’s stochastic oscillator is also flashing a clear sell signal. If you analyze the two red arrows positioned at the bottom of the chart above, you can see that the black line has once again crossed the red line from above. As a result, the GDX ETF’s days are likely numbered.Junior Miners: GDXJ ETFAs further evidence on this bearish scenario, let’s take a look at other proxies for the mining stocks. When analyzed through the lens of the GDXJ ETF, the junior miners remain significant underperformers.Please see below:To explain, the GDXJ ETF is now back below its late-Feb. highs - please note how weak it remains relative to other proxies for mining stocks. Unlike the HUI or the GDX, the GDXJ didn’t move visibly above its late-Feb. highs and it had already invalidated this small breakout.Moreover, the GDXJ/GDX ratio has been declining since the beginning of the year, which is remarkable because the general stock market hasn’t plunged yet. This tells us that when stocks finally slide, the ratio is likely to decline in a truly profound manner – perhaps similarly to what we saw last year.So, how low could the GDXJ ETF go?Well, absent an equity rout, the juniors could form an interim bottom in the $34 to $36 range. Conversely, if stocks show strength, juniors could form the interim bottom higher, close to the $42.5 level. For context, the above-mentioned ranges coincide with the 50% and 61.8% Fibonacci retracement levels and the GDXJ ETF’s previous highs (including the late-March/early-April high in case of the lower target area). Thus, the S&P 500 will likely need to roll over for the weakness to persist beyond these levels.Also, contrasting the GDX ETF’s false breakout, both the HUI and the XAU indices ended the week below the necklines of their previous (based on the rising necklines) bearish H&S patterns. Moreover, if you analyze the right side of the charts below, while both the HUI and XAU indices initially bounced above their necklines, investors quickly sold the rallies.Mirroring the GDX ETF, both indices are also eliciting sell signals from their stochastic oscillators. And with the GDX ETF the only wolf still howling at the moon, expect the senior miners to follow the rest of the pack lower in the near future.Also, eliciting bearish undertones, the HUI Index/S&P 500 ratio has recorded a major, confirmed breakdown. And with the ratio nowhere near recapturing its former glory, it’s another sign that the GDX ETF is a significant outlier.Please see below:When the ratio presented on the above chart above is rising, it means that the HUI Index is outperforming the S&P 500. When the line above is falling, it means that the S&P 500 is outperforming the HUI Index. If you analyze the right side of the chart, you can see that the ratio has broken below its rising support line. For context, the last time a breakdown of this magnitude occurred, the ratio plunged from late-2017 to late-2018. Thus, the development is profoundly bearish.Playing out as I expected, a sharp move lower was followed by a corrective upswing back to the now confirmed breakdown level (which is now resistance). Mirroring the behavior that we witnessed in early 2018, after breaking below its rising support line, the HUI Index/S&P 500 ratio rallied back to the initial breakdown level (which then became resistance) before suffering a sharp decline. And with two-thirds of the analogue already complete, the current move lower still has plenty of room to run. Likewise, the early-2018 top in the HUI Index/S&P 500 ratio is precisely when the USD Index began its massive upswing. Thus, with history likely to rhyme, the greenback could spoil the miners’ party once again.In addition, the HUI to S&P 500 ratio broke below the neck level (red, dashed line) of a broad head-and-shoulders pattern and it verified this breakdown by moving temporarily back to it. The target for the ratio based on this formation is at about 0.05 (slightly above it). Consequently, if the S&P 500 doesn’t decline, the ratio at 0.05 would imply the HUI Index at about 196. However, if the S&P 500 declined to about 3,200 or so (its late-2020 lows) and the ratio moved to about 0.05, it would imply the HUI Index at about 160 – very close to its 2020 lows.All in all, the implications of mining stocks’ relative performance to gold and the general stock market are currently bearish.But if we’re headed for a GDX ETF cliff, how far could we fall?Well, there are three reasons why the GDX ETF might form an interim bottom at roughly ~$27.50 (assuming no big decline in the general stock market ):The GDX ETF previously bottomed at the 38.2% and 50.0% Fibonacci retracement levels. And with the 61.8% level next in line, the GDX ETF is likely to garner similar support.The GDX ETFs late-March 2020 high should also elicit buying pressure.If we copy the magnitude of the late-February/early-March decline and add it to the early-March bottom, it corresponds with the GDX ETF bottoming at roughly $27.50.Keep in mind though: if the stock market plunges, all bets are off. Why so? Well, because when the S&P 500 plunged in March 2020, the GDX ETF moved from $29.67 to below $17 in less than two weeks. As a result, U.S. equities have the potential to make the miners’ forthcoming swoon all the more painful.The Gold Miners Bullish Percent Index ($BPGDM)As another reliable indicator (in addition to the myriads of signals coming not only from mining stocks, but from gold, silver, USD Index, stocks, their ratios, and many fundamental observations) the Gold Miners Bullish Percent Index ($BPGDM) isn’t at levels that trigger a major reversal. The Index is now approaching 47. However, far from a medium-term bottom, the latest reading is still more than 37 points above the 2016 and 2020 lows.Back in 2016 (after the top), and in March 2020, the buying opportunity didn’t present itself until the $BPGDM was below 10.Thus, with the sentiment still relatively elevated, it will take more negativity for the index to find the true bottom.The excessive bullishness was present at the 2016 top as well and it didn’t cause the situation to be any less bearish in reality. All markets periodically get ahead of themselves regardless of how bullish the long-term outlook really is. Then, they correct. If the upswing was significant, the correction is also quite often significant.Please note that back in 2016, there was an additional quick upswing before the slide and this additional upswing caused the $BPGDM to move up once again for a few days. It then declined once again. We saw something similar also in the middle of 2020. In this case, the move up took the index once again to the 100 level, while in 2016 this wasn’t the case. But still, the similarity remains present.Back in 2016, when we saw this phenomenon, it was already after the top, and right before the big decline. Based on the decline from above 350 to below 280, we know that a significant decline is definitely taking place.But has it already run its course?Well, in 2016 and early 2020, the HUI Index continued to move lower until it declined below the 61.8% Fibonacci retracement level. The emphasis goes on “below” as this retracement might not trigger the final bottom. Case in point: back in 2020, the HUI Index undershot the 61.8% Fibonacci retracement level and gave back nearly all of its prior rally. And using the 2016 and 2020 analogues as anchors, this time around, the HUI Index is likely to decline below 231. In addition, if the current decline is more similar to the 2020 one, the HUI Index could move to 150 or so, especially if it coincides with a significant drawdown of U.S. equities.The NASDAQCircling back to the NASDAQ Composite, the unwinding of excessive speculation could deliver a fierce blow to the gold miners. Case in point: when the dot-com bubble burst in 2000, the NASDAQ lost nearly 80% of its value, while the gold miners lost more than 50% of their value.Please see below:Right now, the two long-term channels above (the solid blue and red dashed lines) show that the NASDAQ is trading well above both historical trends.Back in 1998, the NASDAQ’s last hurrah occurred after the index declined to its 200-day moving average (which was also slightly above the upper border of the rising trend channel marked with red dashed lines).And what happened in the first half of 2020? Well, we saw an identical formation.The similarity between these two periods is also evident if one looks at the MACD indicator . There has been no other, even remotely similar, situation where this indicator would soar so high.Furthermore, and because the devil is in the details, the gold miners’ 1999 top actually preceded the 2000 NASDAQ bubble bursting. It’s clear that miners (the XAU Index serves as a proxy) are on the left side of the dashed vertical line, while the tech stock top is on its right side. However, it’s important to note that it was stocks’ slide that exacerbated miners’ decline. Right now, the mining stocks are already declining, and the tech stocks continue to rally. Two decades ago, tech stocks topped about 6 months after miners. This might spoil the party of the tech stock bulls, but miners topped about 6 months ago…Also supporting the 2000 analogue, today’s volume trends are eerily similar. If you analyze the red arrows on the chart above, you can see that the abnormal spike in the MACD indicator coincided with an abnormal spike in volume. Thus, mounting pressure implies a cataclysmic reversal could be forthcoming.Interestingly, two decades ago, miners bottomed more or less when the NASDAQ declined to its previous lows, created by the very first slide. We have yet to see the “first slide” this time. But, if the history continues to repeat itself and tech stocks decline sharply and then correct some of the decline, when they finally move lower once again, we might see THE bottom in the mining stocks. Of course, betting on the above scenario based on the XAU-NASDAQ link alone would not be reasonable, but if other factors also confirm this indication, this could really take place.Either way, the above does a great job at illustrating the kind of link between the general stock market and the precious metals market ( gold , silver , and mining stocks) that I expect to see also this time. PMs and miners declined during the first part of the stocks’ (here: tech stocks) decline, but then they bottomed and rallied despite the continuation of stocks’ freefall.Even more ominous, the MACD indicator is now flashing a clear sell signal . And because the current reading is analogous to the one that preceded the dot-com bust, the NASDAQ Composite – and indirectly, the PMs – continues to sail toward the perfect storm.With all of that said: how will we know when a medium-term buying opportunity presents itself?We view price target levels as guidelines and the same goes for the Gold Miners Bullish Percent Index (below 10), but the final confirmation will likely be gold’s strength against the ongoing USDX rally. At many vital bottoms in gold, that’s exactly what happened, including the March bottom.In conclusion, with the gold miners running low on strength, stamina and staying power, their fragile foundation is already crumbling beneath the surface. With the HUI, XAU and GDXJ proxies unable to match wits with the GDX ETF, the lone survivor is unlikely to put up much of a fight going forward. Moreover, with the USD Index poised to bounce off of the 61.8% Fibonacci retracement level (the precious metals have a strong negative correlation with the U.S. dollar), the foursome are likely to huff and puff their way to lower prices. However, after a period of medium-term recovery, the precious metals will be ready to run with the bulls 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, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
SPX Correction Arriving or Not?

SPX Correction Arriving or Not?

Monica Kingsley Monica Kingsley 04.05.2021 16:26
One more day of upside rejection in S&P 500, in what is now quite a long stretch of prices going mostly sideways. As unsteady as VIX seems at the moment, it doesn‘t flash danger of spiking in this data-light week, and neither does the put/call ratio. As I wrote yesterday about the selling pressure, these tight range days accompanied by 30-ish point corrections is as good as it gets when the Fed still has its foot on the accelerate pedal. Yes, you can ignore the Kaplan trial baloon (have you checked when he gets to vote on the FOMC?) that spiked the dollar on Friday but didn‘t put all that a solid floor before long-dated Treasuries as seen in their intraday reversal. Highlighting the key Treasury, inflation and reflation thoughts of yesterday, as these are still here to power stocks higher:(…) the 10-year yield has been quite well behaved lately, closing at 1.65% only on Friday. The April calm seems to be over, and I‘m looking for the instrument to trade at 1.80% at least at the onset of summer. Then, let‘s see how the September price increases telegraphed by Procter & Gamble influence the offtake – will the price leader be followed by its competitors? That‘s one of the key pieces of the inflation stickiness puzzle – and I think others will follow, and P&G sales and profitability won‘t suffer. The company is on par with Coca Cola when it comes to dividends really.Once there, we would progress further in the reflation cycle when inflation is no longer benign and anchored. We‘re though still quite a way from when the Fed tries to sell rising rates as proof of strengthening economic recovery – once the bond market would get to doubt this story though, it would be game over for its recent tame behavior.Gold market enjoyed its fireworks, aided mightily by the silver squeeze run. The inflation theme is getting rightfully increasing attention, and commodities are on the run across the board. Just check yesterday‘s oil analysis or the bullish copper calls of mine. I could just as easily say that copper is the new gold – it has been certainly acting as one over the past many months, yet the yellow metal‘s time in the limelight is about here now. And don‘t forget about silver bring you the best of two worlds – the monetary and industrial applications ones.When it comes to USD/JPY support for the unfolding precious metals upswing, we indeed got the reversal of Friday‘s USD upside:(…) The taper story being revealed for a trial baloon that it is, would quickly reverse Friday‘s sharp USDX gains, where particularly the USDJPY segment is worth watching. Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookThe declining volume tells a story of not enough conviction to go higher or lower – the market remains vulnerable to brief spikes either way such as those seen and covered in both today‘s intraday Stock Trading Signals.Credit MarketsAs inconclusive intraday the corporate credit markets may seem, the pressure to go up is there, regardless of the high yield corporate bonds reversal. Long-dated Treasuries aren‘t standing in the way but it must be noted that these have given up their intraday upswing completely, and opened with no bullish gap.Technology and FinancialsTechnology lost the advantage of higher open, and wasn‘t helped by the poor daily $NYFANG performance. At the same time, value stocks continued higher but gave away a portion of intraday gains. The markets are on edge, and a bigger move this or more likely next week, shouldn‘t come as a surprise.Smallcaps and Emerging MarketsThe Russell 2000 turned higher on Monday, and emerging markets seem waiting for more signs of dollar weakness. Overall, the U.S. indices still continue outperforming the international markets.Gold and Miners Short-TermVolume returned into the gold market, and so did miners‘ outperformance. While these didn‘t close anywhere near their mid-Apr highs unlike gold, they had extremely undeperformed on Friday – what happens over the next few sessions would provide clue as to whether strength genuinely returned yesterday.Gold and Miners Long-TermThe copper to 10-year Treasury yield is edging higher again, and the miners to gold ratio strongly rebounded, proving my yesterday‘s point that the real parallels are the 2018 and 2019 gyrations, not the uniquely deflationary corona crash.SummaryThe S&P 500 remains vulnerable to short-term spikes in both directions, but the medium-term picture remains positive – the strong gains since late Mar are being worked off here before another upswingGold and miners proved themselves yesterday, and scored strong gains in a universally supportive array of signals across commodities, Treasuries, and also the USD/JPY daily move. Well worth not retiring the benefit of the doubt given to the precious metals bulls – more gains are in sight.
When Euphoria Ends, Gold Bulls Enter the Scene

When Euphoria Ends, Gold Bulls Enter the Scene

Finance Press Release Finance Press Release 14.05.2021 16:11
Market participants are very optimistic about an economic recovery, but these positive expectations may be exaggerated. The end of this euphoria should be good for gold.The optimism about the pace of economic recovery from the 2020 recession is growing. The analysts race in upward revisions of GDP growth in the coming quarters. For example, the IMF – in the April 2021 edition of the World Economic Outlook – expects at the moment that the US economic output will increase by 6.4% this year, compared to the 5.1% growth forecasted in January.The euphoric mood has some justification, of course. The vaccination is progressing, entrepreneurs are used to operating under sanitary restrictions, economies are reopening and governments are spending like crazy. At the same time, central banks are maintaining ultra-easy monetary policy , keeping financial conditions loose.Furthermore, some economic data is consistent with strong rebounding, especially in manufacturing. For instance, the IHS Markit U.S. Manufacturing PMI Index posted 59.1 in March, up from 58.6 in February – being the second-highest value on record since May 2007 when data collection began. Services are also recovering vigorously, as the IHS Markit US Services PMI Index registered 60.4 in March, up from 59.8 in February. It’s the fastest rate of growth since July 2014.Now, the question is how strong the current boom is and how long it is going to last. Well, there is no need to argue that we will see a few strong quarters of GDP growth in the US and other countries. But for me, the euphoria is exaggerated. You see, the current recovery is not surprising at all. As the Great Lockdown plunged the world into a deep economic crisis , the Great Unlocking is boosting the global economy.And there is the base effect . There was a low base in 2020, so the seemingly impressive recovery in 2020 is partially merely a statistical phenomenon. Let’s illustrate this effect. In Q2 2020, the real GDP plunged from $19,020 to $17,302 trillion or 9.03%year-over-year, as the chart below shows.However, the rebound to the pre-recession level would imply the jump of 9.93%, almost one percentage higher! This is how the math works: when you divide a numerator by a smaller denominator, you get a greater percentage. So, it would be alarming if the recovery were not strong after one of the deepest crises in history.Another issue that makes me more skeptical than most pundits is the fact that the main reason behind economic growth upgrades is massive fiscal stimulus . Uncle Sam injected more than 13 percent of the GDP in government spending (only in 2020) that ballooned the fiscal deficits . Meanwhile, the Fed widened its balance sheet by almost $4 trillion. So, it would be quite strange if we didn’t see impressive numbers in light of such unprecedented inflows of monetary and fiscal liquidity. But it means that the impressive recovery in statistics is driven, at least partially, by soaring money supply and public debt (see the chart below).And my three last concerns. First, the job recovery is more sluggish than the GDP recovery . The unemployment rate is still above the pre-pandemic level, while the labor force participation stands significantly below the level seen in February 2020. Second, a full return to normal life will occur if vaccines remain effective. But there is a tail risk of new variants of the virus, which could even be vaccine-resistant . Third, history teaches us that when the pandemic ends, social unrest may reemerge. After all, the epidemic left us with deepening inequalities and rising living costs.What does it all mean for the gold market? Well, the market euphoria about the economic rebound is negative for gold. We have already seen how these optimistic expectations freed the risk appetite and boosted economic confidence, sending bond yields higher, but gold prices lower.However, just as the doomsday scenarios created in the midst of the epidemic were excessively negative, the current ones seem to be too optimistic. I expect that with the year progressing, these expectations will soften or shift to the medium-term, which could be more challenging. After all, the low base effect will disappear, and both the monetary and fiscal policies will have declining marginal utility. At the same time, there will be an increased risk of high inflation , debt crisis , stock market correction or even financial crisis . After all, the current levels of stock indices are partially caused not by fundamentals, but by the elevating risk tolerance thanks to the central banks standing behind most asset classes ready to intervene in case of problems.It seems that this process has already begun and the reopening trade is waning. Economic confidence is very high, so the room for further increases is limited. The low-hanging fruits have been collected, and when economies reopen fully, the structural problems will become more important than the cyclical ones. Investors have started to worry about higher inflation, especially because the Fed remains unmoved by rising prices. A jobless recovery would prolong the Fed’s very dovish stance , as the US central bank focuses now on full employment rather than on stable prices. All these factors explain why the price of gold has been rebounding recently, and why it can rise even further later this year , although the fact that the US enjoys a stronger recovery than the EU or Japan could support the interest rates and the greenback , creating some downward pressure on the yellow metal.Thank you for reading today’s free analysis. We hope you enjoyed it. If so, we would like to invite you to sign up for our free gold newsletter . Once you sign up, you’ll also get 7-day no-obligation trial of all our premium gold services, including our Gold & Silver Trading Alerts. Sign up today!Arkadiusz Sieron, PhD Sunshine Profits: Effective Investment through Diligence & Care.
Gold & the USDX: Correlations

Being a Gold Bull Is Now Far Too Easy - Don’t Be Deceived

Finance Press Release Finance Press Release 17.05.2021 15:18
Easy choices lead to a hard life (or at least losses), and because gold’s downside move is delayed, it’s extremely easy to be bullish on gold right now.It’s easy to get carried away by the day-to-day price action, and it’s even easier to feel the emotions that other market participants are feeling while looking at the same short-term price action. Right now, it’s tempting to be bullish on gold. It’s “easy” to be bullish on gold while looking at what happened in the last 1.5 months. But what’s easy is rarely profitable in the long run.“Easy choices – hard life. Hard choices – easy life” – Jerzy GregorekLet’s get beyond the day-to-day price swings. The Fed has been keeping the interest rates at ultra-low levels for many months, and it has just pledged to keep them low for a long time. The world is enduring the pandemic, and the amount of money that entered the system is truly astonishing. The savings available to investors skyrocketed. The USD Index has been beaten down from over 100 to about 90. And yet, gold is not at new highs. In fact, despite the 2020 attempt to rally above its 2011 high, gold’s price collapsed, and it invalidated the breakout above these all-important highs. It’s now trading just a few tens of dollars higher than it had been trading in 2013, right before the biggest slide of the recent years.Something doesn’t add up with regard to gold’s bullish outlook, does it?Exactly. Gold is not yet ready to soar, and if it wasn’t for the pandemic-based events and everything connected to them, it most likely wouldn’t have rallied to, let alone above its 2011 highs before declining profoundly. And what happens if a market is practically forced to rally, but it’s not really ready to do so? Well, it rallies… For a while. Or for a bit longer. But eventually, it slides once again. It does what it was supposed to do anyway - the only thing that changes is the time. Everything gets delayed, and the ultimate downside targets could increase, but overall, the big slide is not avoided.Let’s say that again. Not avoided, but delayed.And this is where we are right now. In the following part of the analysis, I’m going to show you how the situation in the USD Index is currently impacting the precious metals market, and how it’s likely to impact it in the following weeks and months.Riding investors’ emotional roller coaster, the love-hate relationship between financial markets and the USD Index is quite absurd. However, with alternating emotions often changing like the seasons, the greenback’s latest stint in investors’ doghouse could be nearing its end. Case in point: with the most speculative names in the stock market enduring a springtime massacre, beneath the surface laughter has already turned into tears. And while gold, silver and mining stocks have been buoyed by the intense emotional high that’s only visible on the surface, it’s only a matter of time before the veneer is lifted.To that point, while I won’t romanticize the USD Index’s recent underperformance, it’s important to remember that extreme pessimism is often the spark that lights the USD Index’s fire.Please see below:To explain, the bars above track various market participants’ four-week allocations to the U.S. dollar, while the horizontal light blue line above tracks the USD Index. If you analyze the right side of the chart, you can see that fund flows have fallen off of a cliff in recent weeks. However, if you analyze the behavior of the USD Index near Jan-20, Jan-21 and Mar-21, you can see that extremely pessimistic fund flows are often followed by short-term rallies in the USD Index. As a result, with the latest readings already breaching -4 (using the scale on the left side of the chart), USD-Index bears have likely already offloaded their positions.What’s more, not only did the USD Index end last week up by 0.10%, but the greenback invalidated the breakdown below its head & shoulders pattern – which is quite bullish – and also invalidated the breakdown below its rising dashed support line (the black line below). Moreover, while the greenback fell below the latter again on May 14, the short-term weakness is far from a game-changer as the breakdown is not confirmed.Please see below:On top of that, with the USD Index hopping in the time machine and setting the dial on 2016, a similar pattern could be emerging. To explain, I wrote on May 11:While the self-similarity to 2018 in the USD Index is not as clear as it used to be (it did guide the USDX for many weeks, though), there is also another self-similar pattern that seems more applicable now. One of my subscribers noticed that and decided to share it with us (thanks, Maciej!).Here’s the quote, the chart, and my reply:Thank you very much for your comprehensive daily Gold Trading Reports that I am gladly admitting I enjoy a lot. While I was analyzing recent USD performance, (DX) I have spotted one pattern that I would like to validate with you if you see any relevance of it. I have noticed the DX Index performing exactly in the same manner in a time frame between Jan. 1, 2021 and now as the one that started in May 2016 and continued towards Aug. 16. The interesting part is not only that the patterns are almost identical, but also their temporary peeks and bottoms are spotting in the same points. Additionally, 50 daily MA line is almost copied in. Also, 200 MA location versus 50 MA is almost identical too. If the patterns continue to copy themselves in the way they did during the last 4 months, we can expect USD to go sideways in May (and dropping to the area of 90,500 within the next 3 days) and then start growing in June… which in general would be in line with your analysis too.Please note the below indices comparison (the lower represents the period between May-Dec 2016 and higher Jan – May 2021). I am very much interested in your opinion.Thank you in advance.And here’s what I wrote in reply:Thanks, I think that’s an excellent observation! I read it only today (Monday), so I see that the bearish note for the immediate term was already realized more or less in tune with the self-similar pattern. The USDX moved a bit lower, but it doesn’t change that much. The key detail here would be that the USDX is unlikely to decline much lower, and instead, it’s likely to start a massive rally in the next several months - that would be in perfect tune with my other charts/points.I wouldn’t bet on the patterns being identical in the very near term, though, just like the late June 2016 and early March 2021 weren’t that similar.As soon as the USD Index rallies back above the rising support line, the analogy to 2016 will be quite clear once again –the implications will be even more bullish for the USDX and bearish for the precious metals market for the next several months.Please note that back in 2016, there were several re-tests of the rising support line and tiny breakdowns below it before the USD Index rallied. Consequently, the current short-term move lower is not really concerning, and forecasting gold at much higher levels because of it might be misleading. I wouldn’t bet on the silver bullish forecast either. The white metal might outperform at the very end of the rally, but it has already done so recently on a very short-term basis, so we don’t have to see this signal. And given the current situation in the general stock market – which might have already topped – silver and mining stocks might not be able to show strength relative to gold at all.If that wasn’t enough, the USD Index’s long-term breakout remains intact . And when analyzing from a bird’s-eye view, the recent weakness is largely inconsequential.Please see below:Moreover, please note that the correlation between the USD Index and gold is now strongly negative (-0.92 over the last 10 days) and it’s been the case for several weeks now. The same thing happened in early January 2021 and in late July – August 2020. These were major tops in gold.The bottom line?After regaining its composure , ~94.5 is likely the USD Index’s first stop. In the months to follow, 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 doing (and likely to do) better than the Eurozone and Japan, and it’s this relative outperformance that matters , not the strength of just one single country or monetary area. After all, the USD Index is a weighted average of currency exchange rates and the latter move on a relative basis.In conclusion, with investors and the USD Index likely headed toward reconciliation, the greenback’s medium-term prospects remain robust. With macroeconomic headwinds aligning with technical catalysts, investors’ risk-on inertia is already showing cracks in its foundation. And with the USD Index considered a safe-haven currency, a reversal in sentiment will likely catapult the USD Index back into the spotlight. Moreover, with gold, silver and mining stocks often moving inversely to the U.S. dollar, the mood music will likely turn somber across the precious metals market. The bottom line? With the metals’ mettle likely to crack under the forthcoming pressure, their outlook remains profoundly bearish 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, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Russell 2000 Closes Above 50-Day SMA. Reconstitution Play!

Russell 2000 Closes Above 50-Day SMA. Reconstitution Play!

Finance Press Release Finance Press Release 27.05.2021 18:32
Do you have exposure to small-cap equities? How do the small-caps measure up versus the large-caps at this moment?There is always opportunity somewhere, and we do our best to find it. Not only in trading and business, but in life too. So, what can we find today in the markets?Yesterday, the Russell 2000 ($RUT) closed above its 50-day simple moving average, a welcome sign for small-cap bulls. The index has lagged behind its large-cap counterparts as of late and hasn’t closed above its 50-day moving average since May 7th.After taking the pulse of the markets and digesting the opinions of other participants, it can be challenging to get excited about an $SPX at 4200 and with a 44.58 P/E ratio (trailing twelve months). So, more aggressive swing traders tend to look elsewhere in the hunt for return.A quick note on the $SPX P/E ratio (ttm): Figure 1 - S&P 500 PE Ratio 1870 - 2021. Source multpl.comTalk about a long-term chart. Anyway, this does look like a potential head and shoulders setup here, although it looks like current levels have exceeded the neckline. Food for thought. At what point is the S&P 500 fundamentally overvalued?Let's get back to small caps.Figure 2 - IWM iShares Russell 2000 ETF December 10, 2020 - May 26, 2021. Source stockcharts.comAbove, we see the close above the 50-day moving average, the MACD(12,26,9) fast/slow line cross approaching the zero line, and the RSI(14) crossing 50. This, my friends, is visual Mozart to me; a confluence of indicators . Of course, nothing works all of the time, but when multiple technicals can be stacked in your favor, a distinct advantage can be created.Wednesday’s settlements had the SPY up 0.20% on the day, the DIA up 0.03%, the QQQ up 0.35%, and the IWM up 1.87%. A whopping change in tune from the recent large-cap money flow theme. It is certainly worth noting and perhaps utilizing for adjustment and/or speculation.Why Were the Small-caps Up So Much Comparatively on Wednesday?One thing to know is that the Russell indices are reconstituted yearly in June. This reconstitution is designed to remove underperforming stocks from the index and add new stocks to the index. The goal is to have and maintain a more accurate representation. This process begins on June 4, 2021, and ends with the reconstituted index ready on June 25. The new index components take effect after the market closes on June 25, which would be for Monday’s open on June 28.Isn’t this a valuable nugget?Another viable way to play the Russell reconstitution would be to pair it with another index ETF like SPY . If you are overall bearish on the market, this could be a great way to reduce risk, and still participate in the “Russell reconstitution trade” .Take a look:Figure 3 - IWM iShares Russell 2000 ETF / SPY S&P 500 ETF Ratio August 27, 2020 - May 26, 2021. Source stockcharts.comThis chart is the IWM divided by the SPY . The IWM to SPY ratio. You can see that the small-cap index had fallen out of favor versus the large-cap index from March until now. Again here, we see the MACD looking to tilt bullish and the RSI(14) looking to bullishly cross the 50 line.So, this can be a way to take advantage of the Russell Index reconstitution even if you are bearish. This can be achieved by buying IWM and selling SPY , on a dollar-for-dollar basis. It is a way to look for one index to outpace the other (or not decrease as much as the other). Got it?Now, for our premium subscribers, let’s examine some strategy ideas that surround the Russell 2000 reconstitution and review the other markets and key levels that we are covering. Not a Premium subscriber yet? Go Premium and receive my Stock Trading Alerts that include the full analysis and key price levels.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Rafael Zorabedian ContributorSunshine Profits: Effective Investment through Diligence & Care* * * * *This content is for informational and analytical purposes only. All essays, research, and information found above represent analyses and opinions of Rafael Zorabedian, and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. You should not construe any such information or other material as investment, financial, or other advice. Nothing contained in this article constitutes a recommendation, endorsement to buy or sell any security or futures contract. Any references to any particular securities or futures contracts are for example and informational purposes only. Seek a licensed professional for investment advice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Information is from sources believed to be reliable; but its accuracy, completeness, and interpretation are not guaranteed. Although the information provided above is based on careful research and sources that are believed to be accurate, Rafael Zorabedian, and his associates do not guarantee the accuracy or thoroughness of the data or information reported. Mr. Zorabedian is not a Registered Investment Advisor. By reading Rafael Zorabedian’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. Trading, including technical trading, is speculative and high-risk. There is a substantial risk of loss involved in trading, and it is not suitable for everyone. Futures, foreign currency and options trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment when trading futures, foreign currencies, margined securities, shorting securities, and trading options. Risk capital is money that can be lost without jeopardizing one’s financial security or lifestyle. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Rafael Zorabedian, Sunshine Profits' employees, affiliates, as well as members of their families may have a short or long position in any securities, futures contracts, options or other financial instruments including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice. Past performance is not indicative of future results. There is a risk of loss in trading.
Buy the Dip, Again?!

Buy the Dip, Again?!

Monica Kingsley Monica Kingsley 28.05.2021 16:16
S&P 500 attempted a breakout, but retreated. Is that a reversal, or proof of more pressure building up? Much starker move in the high yield corporate bonds would speak in favor of a reversal, but only until the higher end of the debt markets is examined. Or the volume for that matter, as these would put the reversal hypothesis to rest.VIX continues turning lower, and option traders are getting the message – finally, the put/call ratio appears to be on a declining path, meaning that fewer market participants are expecting another shoe to drop. As if one fell in the first place, really. Is that the worst of the inflation scare being over, for now? Probably yes, and the retreating Treasury yields are mollifying – but as explained in ample detail, this calm before the (autumn) storm, is deceptive. Calling the Fed‘s bluff, precious metals (and some commodities) are onto something, really.One more proof why the stock market bears are at a disadvantage, comes from other indices, namely the Russell 2000 (look for value to benefit), and emerging markets. The magic of ample Fed support is making its way through the system, lifting prices in many asset classes amid still rampant speculation. It‘s only the cream of select commodities that has been taken off – in the big scheme of things, nothing but a consolidation within an existing secular bull market, is happening there. While the inflation trades have been dialed back to a degree, they haven‘t been broken as the Fed is in a reactive, not proactive mode. More precisely, it remains in denial of the inflation ahead.Gold is holding up strongly, and has been in little need of miners‘ support lately. Both are consolidating, readying for another push higher that would coincide with further retreat in long-dated Treasury yields – unless these are counterbalanced with the collapse of inflation trades. Once again, I am not looking for that to happen – soft patch, prolonged commodities consolidation yes, turn to deflation no. In such an environment, silver would have a tougher ride and be vulnerable to volatile swings defined by how the inflation, yields, expectations and Fed action bets play out.Crude oil isn‘t offering but token discounts to enter on the buyers‘ side, and remains reasonably well supported by the oil index price action. The lower daily volume isn‘t an issue – the daily chart remains bullish.Bitcoin and Ethereum went through a steep overnight correction, and they would enter the Memorial weekend stormy waters not exactly in a rising mode. While the sellers appear to be in control, odds are that Ethereum would turn around first, followed by Bitcoin moving with less veracity, but still – even later today. The daily indicators are likely to carve out a bullish divergence next. I‘ll discuss it more in the nearest upcoming analysis, which would be on Tuesday – enjoy your long weekend!Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 OutlookS&P 500 daily hesitation goes on, for as long as Nasdaq 100 plays ball and carves out its own modest consolidation pattern.Credit MarketsDaily struggle in high yield corporate bonds needs to be read in the context of high open, and intrasession reallocation to the quality debt instruments. Unless we push lower in earnest, this is a storm in the tea cup for equities as the HYG:SHY ratio confirms.Technology and Value$NYFANG wasn‘t strong enough to drive tech yesterday, but the many sectors forming value such as financials or consumer discretionaries, performed solidly – and the industrials did smashing too. More market breadth is though what the S&P 500 needs.Gold, Silver and MinersGold very modestly declined even as the miners opened threateningly down. The temporary woes might not be over, but illustrate the yesterday mentioned limited scope for gold to decline.Supported by the copper to 10-year Treasury yield ratio, the precious metals sector stood the test yesterday, but we might be at the higher range of the ratio‘s range, which would send especially silver under pressure once the ratio‘s correction occurs.Crude OilCrude oil‘s slow march higher continues, and neither the oil index nor the volume signal weakness ahead today.SummaryS&P 500 is likely to remain choppy with a general upward bias that only a clear break of 4,180 would invalidate, which is unlikely to happen though – especially with the end of month window dressing.Gold and silver might see modest profit taking today, but the upswing remains on solid footing, awaiting the miners to join and lead again.Crude oil offered an even more modest intraday downswing than the day before – one that tellingly didn‘t attract new sellers.Bitcoin and Ethereum are likely to refuse lower prices, but the only open question remains when that would happen – still before the Memorial weekend, or after.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 four publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals and Bitcoin Trading Signals.
USDX: Trick or Treat, Looks Like an Early Halloween

USDX: Trick or Treat, Looks Like an Early Halloween

Finance Press Release Finance Press Release 01.06.2021 16:24
The FED has recently been tricked with its own money. Could the central bank’s scary reverse repos become a treat for the USDX?The USD Index (USDX)With the ghosts of 2015 attempting to scare the U.S. Federal Reserve (FED) into tapering its asset purchases, the latest reverse repo nightmare could be gold, silver and mining stocks version of the boogeyman. Case in point: with the liquidity fright helping the USD Index sleep better at night, the greenback should benefit from the FED’s latest house of horrors: And with the central bank’s daily reverse repos hitting an all-time high of $485 billion on May 27 (with another $479 billion sold on May 28), Halloween may come early this year.Please see below:To explain, the green line above tracks the daily reverse repo transactions executed by the FED, while the red line above tracks the federal funds rate. If you focus your attention on the red line, you can see that after the $400 billion level was breached in December 2015, the FED’s rate-hike cycle began. Thus, with current inflation dwarfing 2015 levels and U.S. banks practically throwing cash at the FED, is this time really different?Likewise, with reduced liquidity poised to bolster the USD Index, not only are the fundamentals trending up but also the technicals. The USD Index jumped above its declining resistance line based on May’s highs, as well as the declining resistance line that started with the late-March high. This is important not only (and not primarily) because of the double-breakout. It’s important and particularly bullish, as it emphasizes that the third – and quite likely the final – short-term bottom in a row is already in.In addition, the USD Index might be in the early innings of forming an inverted head & shoulders pattern. For context, an inverted H&S pattern is a bullish development that if formed, could usher the USD Index well above 94.5 (to about 97-98). However, completing the right shoulder requires an upward breach of 93 (the blue line), so at this point, it’s more of an indication than a confirmation.Please see below:For more context, I wrote previously:This week’s move lower is a continuation, and most likely the final part, of a specific multi-bottom pattern that the USD Index exhibited recently.I marked those situations with green. The thing is that the U.S. currency first declined practically without any corrections , but at some point it started to move back and forth while making new lows. The third distinctive bottom was the final one. Interestingly, the continuous decline took place for about a month, and the back-and-forth declines took another month (approximately). In July 2020, the USDX fell like a rock, and in August it moved back and forth while still declining. In November 2020, the USDX fell like a rock (there was one exception), and in December it moved back and forth while still declining.Ever since the final days of March, we’ve seen the same thing all over again. The USD Index fell like a rock in April, and in May we’ve seen back-and-forth movement with lower lows and lower highs.What we see right now is the third of the distinctive lows that previously marked the end of the declines.And what did gold do when the USD Index rallied then?In August, gold topped without waiting for USD’s final bottom – which is natural, given how extremely overbought it was in the short term.In early January, gold topped (which was much more similar to the current situation given the preceding price action) when the USDX formed its third, final distinctive bottom.I received a few questions recently asking what would need to happen for me to change my mind on the precious metals sector’s outlook. There are multiple reasons, and it’s impossible to list all of them. However, one of the reasons that would make me strongly consider that the outlook has indeed changed (at least for the short term) would be a confirmed breakdown in the USD Index below the 2021 lows to which gold would actually react.As further evidence, the Euro Index might be in the midst of forming a bearish H&S pattern. If you analyze the right side of the chart below, you can see that the symmetrical pattern has the current rally mirroring the summer of 2020. And while we’re still in the early innings of forming the right shoulder, three peaks were recorded during the second half of 2020 before the Euro Index eventually rolled over. Likewise, with a symmetrical setup that seems to already be in motion, the Euro Index may be heading down a similar path of historical ruin. In the second half of 2020, the decline was not that big, but it’s no wonder that this was the case as that was only the left shoulder of the pattern. Completion of the right shoulder, however, would imply another move lower, at least equal to the size of the head – to about the June 2020 lows or lower.Gold and the EuroFurthermore, last week’s decline actually ushered the Euro Index back below the dashed resistance line of its monthly channel. And with its recent triple top mirroring the price action we witnessed in mid-to-late 2020 – before the Euro Index plunged – it won’t take long for confidence to turn into fear.Please see below:More importantly, though, the completion of the masterpiece could have a profound impact on gold, silver and mining stocks. To explain, gold continues to underperform the euro. If you analyze the bottom half of the chart above, you can see that material upswings in the Euro Index have resulted in diminishing marginal returns for the yellow metal. Thus, the relative weakness is an ominous sign, and if the Euro Index reverses, it could weigh heavily on the precious metals over the medium term.If that wasn’t enough, with the USD Index hopping in the time machine and setting the dial to 2016, a bullish pattern is slowly emerging. To explain, I wrote on May 11:While the self-similarity to 2018 in the USD Index is not as clear as it used to be (it did guide the USDX for many weeks, though), there is also another self-similar pattern that seems more applicable now. One of my subscribers noticed that and decided to share it with us (thanks, Maciej!).Here’s the quote, the chart, and my reply:“Thank you very much for your comprehensive daily Gold Trading Reports that I am gladly admitting I enjoy a lot. While I was analyzing recent USD performance, (DX) I have spotted one pattern that I would like to validate with you if you see any relevance of it. I have noticed the DX Index performing exactly in the same manner in a time frame between Jan. 1, 2021 and now as the one that started in May 2016 and continued towards Aug. 16. The interesting part is not only that the patterns are almost identical, but also their temporary peeks and bottoms are spotting in the same points. Additionally, 50 daily MA line is almost copied in. Also, 200 MA location versus 50 MA is almost identical too. If the patterns continue to copy themselves in the way they did during the last 4 months, we can expect USD to go sideways in May (and dropping to the area of 90,500 within the next 3 days) and then start growing in June… which in general would be in line with your analysis too.Please note the below indices comparison (the lower represents the period between May-Dec 2016 and higher Jan – May 2021). I am very much interested in your opinion.Thank you in advance.”And here’s what I wrote in reply:“Thanks, I think that’s an excellent observation! I read it only today (Monday), so I see that the bearish note for the immediate term was already realized more or less in tune with the self-similar pattern. The USDX moved a bit lower, but it doesn’t change that much. The key detail here would be that the USDX is unlikely to decline much lower, and instead, it’s likely to start a massive rally in the next several months - that would be in perfect tune with my other charts/points.I wouldn’t bet on the patterns being identical in the very near term, though, just like the late June 2016 and early March 2021 weren’t that similar.As soon as the USD Index rallies back above the rising support line, the analogy to 2016 will be quite clear once again –the implications will be even more bullish for the USDX and bearish for the precious metals market for the next several months.”Please note that back in 2016, there were several re-tests of the rising support line and tiny breakdowns below it before the USD Index rallied. Consequently, the current short-term move lower is not really concerning, and forecasting gold at much higher levels because of it might be misleading. I wouldn’t bet on the silver bullish forecast either. The white metal might outperform at the very end of the rally, but it has already done so recently on a very short-term basis, so we don’t have to see this signal. And given the current situation in the general stock market – which might have already topped – silver and mining stocks might not be able to show strength relative to gold at all.On top of that, the USD Index’s long-term breakout remains intact . And when analyzing from a bird’s-eye view, the greenback’s recent weakness is largely inconsequential.Please see below:Moreover, please note that the correlation between the USD Index and gold is now strongly negative (-0.90 over the last 30 days) and it’s been the case for several weeks now. The same thing happened in early January 2021 and in late July – August 2020; these were major tops in gold.The bottom line?After regaining its composure , ~94.5 is likely the USD Index’s first stop. In the months to follow, 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 doing (and likely to do) better than the Eurozone and Japan, and it’s this relative outperformance that matters , not the strength of just one single country or monetary area. After all, the USD Index is a weighted average of currency exchange rates and the latter move on a relative basis.In conclusion, ghouls, goblins and ghosts are popping up everywhere, and while the USD Index has been under investors’ negative spell, the curse may have just been broken. Moreover, with plenty of skeletons in the financial markets’ closet and liquidity slowly being drained from the system, the narrative of excessive money printing has become an old wives’ tale. More importantly, though, with the greenback finding technical support at roughly the same time, we could be witnessing a paradigm shift in U.S. dollar sentiment. The bottom line? With gold, silver and mining stocks benefiting from the USD Index’s recent struggles, a coven is gathering, and it will likely torch the precious metals over the medium term.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Inflation and SPX Record Highs. PPI, FOMC Meeting in Focus

Inflation and SPX Record Highs. PPI, FOMC Meeting in Focus

Finance Press Release Finance Press Release 14.06.2021 06:18
Everyone (and I mean everyone) has been talking about inflation. We finally got the CPI print on Thursday: 0.6% vs. 0.4% expected! The S&P 500 didn’t seem to care, though. Record highs! What’s next?Inflation is real, folks. Two monthly prints in a row now, with the most recent June print showing the largest increases in used cars/trucks, transportation services, fuel oil, and apparel. Initially, the CPI data release was sold in futures trading at 8:30 AM on Thursday, but price action quickly reversed to the upside. This price action stuck out to me. Markets do not always react as expected when data releases come out. In a bull market like this, sometimes the data doesn’t matter. This price action tells us a story.Figure 1 - SPDR S&P 500 ETF February 13, 2021, 8:45 PM - June 11, 2021, Daily Candles Source stockcharts.comNotice the long “tail” or “wick” on the 8:30 AM candle above. The initial reaction was to sell the big CPI number, but it was quickly bought and ended up just being liquidity for the long/buy-side to gobble up and take the market higher. The retest that occurred hours later held up, and a new range was established for the remainder of the week.The S&P 500 closed at an all-time closing high level on Friday.What can this tell us? This market wants to move higher. Perhaps the higher inflation trickles into stocks as well; if used trucks cost more, couldn’t shares of stocks cost more too? It is plausible and also somewhat concerning. Higher inflation should not be construed as a bullish event, but as we know, markets can remain irrational - and for extended periods.Drilling down to the intraday candles, we can see the price action that occurred when the CPI data was released. The September S&P 500 Futures quickly moved lower on the release, but within minutes, snapped back and reversed to the upside. The price area was retested hours later (see below), and this area held up very well as support.Figure 2 - September Emini S&P 500 Futures June 9, 2021, 8:45 PM - June 11, 2021, 15-minute Candles Source tradingview.comSo, we have a bit of a conundrum on our hands in the US equity indices, in my opinion. We have the S&P 500 closing at all-time highs on Friday. The breakout (if you want to call it that) is a bit anemic as of now, and the other major indices have yet to close at all-time highs.The Week AheadThe major event this week: the FOMC meeting on June 15-16, with the Fed statement coming out on Wednesday at 2:00 PM ET. Prior to the Fed statement, we do have PPI and Retail Sales data coming out on Tuesday at 8:30 AM ET. The retail sales data will give us some additional insight into the US consumer, and the PPI is known to be a leading indicator of consumer inflation.While Retail Sales and PPI could provide a spat of movement in the indices, I am expecting a quiet week leading up to the Fed decision on Wednesday afternoon. This type of quiet trade has been the prevailing theme lately; last week was quiet leading up to CPI, and the week prior was quiet leading up to Non-Farm Payrolls. Both of those numbers were anything but bullish by the way, but here we are at all-time highs in the S&P 500.What is WorkingWhile a pullback in the S&P 500 to the 50-day moving average would catch my attention for a potential long entry, there seem to be better places to focus on at this moment. The US infrastructure plays have been playing out well, even with the back and forth negotiations by the two parties.ERTH Invesco MSCI Sustainable Future ETF has been working well since we identified it for a long entry near its 200-day moving average in our May 10th publication , and it is still in the middle of its 2021 range.Figure 3 - Invesco MSCI Sustainable Future ETF (ERTH) Daily Candles October 21, 2020 - June 11, 2021. Source stockcharts.comI think that this name has legs over the long run given the current US administration and the fact that ERTH seeks to track the investment results of MSCI Global Environment Select Index. You can read more about ERTH here. If we get a pullback, I will be monitoring the 50-day Moving average level. I do think there is still time to get on board this one, and the holding period could be extended. Remember to monitor the 50-day moving average level, as it changes each day!Now, for our premium subscribers, let's review the eight markets that we are covering, and see if anything changed upon the close of last week. Not a Premium subscriber yet? Go Premium and receive my Stock Trading Alerts that include the full analysis and key price levels.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Rafael Zorabedian Stock Trading StrategistSunshine Profits: Effective Investment through Diligence & Care* * * * *This content is for informational and analytical purposes only. All essays, research, and information found above represent analyses and opinions of Rafael Zorabedian, and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. You should not construe any such information or other material as investment, financial, or other advice. Nothing contained in this article constitutes a recommendation, endorsement to buy or sell any security or futures contract. Any references to any particular securities or futures contracts are for example and informational purposes only. Seek a licensed professional for investment advice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Information is from sources believed to be reliable; but its accuracy, completeness, and interpretation are not guaranteed. Although the information provided above is based on careful research and sources that are believed to be accurate, Rafael Zorabedian, and his associates do not guarantee the accuracy or thoroughness of the data or information reported. Mr. Zorabedian is not a Registered Investment Advisor. By reading Rafael Zorabedian’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. Trading, including technical trading, is speculative and high-risk. There is a substantial risk of loss involved in trading, and it is not suitable for everyone. Futures, foreign currency and options trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment when trading futures, foreign currencies, margined securities, shorting securities, and trading options. Risk capital is money that can be lost without jeopardizing one’s financial security or lifestyle. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Rafael Zorabedian, Sunshine Profits' employees, affiliates, as well as members of their families may have a short or long position in any securities, futures contracts, options or other financial instruments including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice. Past performance is not indicative of future results. There is a risk of loss in trading.
What’s Your Trade Ahead of the Fed? Wooden Opportunity?

What’s Your Trade Ahead of the Fed? Wooden Opportunity?

Finance Press Release Finance Press Release 16.06.2021 11:26
US equity markets sold off a bit in Tuesday’s session ahead of today’s FOMC statement. What is your plan?Major US equity indices traded lower ahead of the Fed meeting, and the debate over growth versus value stocks continues. Is there any magic language or policy stance that can come out of today’s Fed meeting to provide clarity in this market?PPI data came out stronger than expected yesterday. This data adds more fuel to the inflationary theme, while Retail Sales were weak. The markets should have been lower from this data, and they were, albeit slightly.As the anticipation builds to today’s FOMC statement at 2:00 PM ET today and the subsequent press conference at 2:30 PM ET, it seems like a good time to revisit a market that we are following - lumber .If you have been following along and read the June 9th publication , you know that we are eyeballing the lumber markets for an ETF trade possibility. While the lumber market has been just insane to the upside in 2021, it has recently pulled back substantially. The question remains: are these higher lumber prices sustainable? If so, is there a way to participate via an ETF?While this may seem like an obscure sector or at least an underappreciated one, let’s take a look at the front-month lumber futures to get caught up on the most recent price action.Figure 1 - Random Length Lumber Futures Continuous Contract February 21, 2020 - June 15, 2021 Daily Source stooq.comFront-month lumber futures made a pandemic low of 251.50 on April 1, 2020. Its recent and all-time high is 1733.30, which was put in on May 10, 2021. Taking a 50% retracement of this move, we have a value of 992.40. Yesterday’s low in front-month lumber futures was 943.70 and a close of 1009.90. Yesterday’s trading was also on higher than average volume. It is important to note that it traded below the psychologically important level of 1000, through the 50% Fibonacci retracement, and then reversed intraday and closed higher. This kind of price action really gets me going.Let’s also illustrate this price action described above via weekly candlesticks:Figure 2 - LBS1! Random Length Lumber Futures Continuous Contract September 2019 - June 2021 Weekly Candles Source tradingview.comIsn’t that something? I wanted to illustrate this via the weekly candlesticks to add a little more clarity. The weekly candlestick that is being formed this week could be a sign of things to come. Now before we go any further:I strongly suggest against trading in Lumber Futures. They can be illiquid, and experience many limit up and limit down days. You could be stuck in a losing position and not be able to get out. The only traders in Lumber futures should be hedgers that are in the wood business or deep pocket institutional traders that have real money to burn. Futures trading entails unlimited risk. I am sure that many fortunes have been made, and many more have been lost during this insane lumber market. Being on the wrong side of a futures market like Lumber can be brutal.Lumber is a very thin contract and may only trade a few hundred contracts per day. But with such intriguing technicals, I want to circle back to an ETF that we covered in the June 9th publication : WOOD iShares Global Timber & Forestry ETF.Figure 3 - iShares Global Timber & Forestry ETF (WOOD) Daily Candles November 10, 2020 - June 15, 2021. Source stockcharts.comSo, we see some interesting potential weekly candlestick formation in the Lumber futures and an interesting daily candle in WOOD. While the 2 instruments do not trade a perfect or near-perfect correlation, a correlation exists.I like the idea of getting long the WOOD ETF based on the action in the Lumber futures markets.While trying to catch a falling knife can be a precarious proposition, I view this as buying a pullback in a bull market. While we discussed certain levels in the June 9th publication , I would like to explore some different levels and a potential scaling/tranche entry strategy today.And, while the price of gold certainly hasn’t caught an inflation bid (at least not yet), this could be a wooden opportunity. Maybe a wooden opportunity is the new golden opportunity.Now, for our premium subscribers, let's look to pinpoint potential entry levels in WOOD , and recap the eight other markets that we are covering. Not a Premium subscriber yet? Go Premium and receive my Stock Trading Alerts that include the full analysis and key price levels.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Rafael Zorabedian Stock Trading StrategistSunshine Profits: Effective Investment through Diligence & Care* * * * *This content is for informational and analytical purposes only. All essays, research, and information found above represent analyses and opinions of Rafael Zorabedian, and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. You should not construe any such information or other material as investment, financial, or other advice. Nothing contained in this article constitutes a recommendation, endorsement to buy or sell any security or futures contract. Any references to any particular securities or futures contracts are for example and informational purposes only. Seek a licensed professional for investment advice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Information is from sources believed to be reliable; but its accuracy, completeness, and interpretation are not guaranteed. Although the information provided above is based on careful research and sources that are believed to be accurate, Rafael Zorabedian, and his associates do not guarantee the accuracy or thoroughness of the data or information reported. Mr. Zorabedian is not a Registered Investment Advisor. By reading Rafael Zorabedian’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. Trading, including technical trading, is speculative and high-risk. There is a substantial risk of loss involved in trading, and it is not suitable for everyone. Futures, foreign currency and options trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment when trading futures, foreign currencies, margined securities, shorting securities, and trading options. Risk capital is money that can be lost without jeopardizing one’s financial security or lifestyle. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Rafael Zorabedian, Sunshine Profits' employees, affiliates, as well as members of their families may have a short or long position in any securities, futures contracts, options or other financial instruments including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice. Past performance is not indicative of future results. There is a risk of loss in trading.
Fed Dot Plot Changes. US Equities Lower Post-FOMC Statement

Fed Dot Plot Changes. US Equities Lower Post-FOMC Statement

Finance Press Release Finance Press Release 17.06.2021 03:47
Is the Fed moving too quickly? Can the equity markets handle a Fed taper without the tantrum? What about inflation? Yesterday’s FOMC statement creates more questions than answers.So, we now know that the Fed expects to hike interest rates in 2023.That could be ok. However, there was some contradictory language yesterday surrounding inflation. Is it transitory in the eyes of the Fed, or is it something more? Yesterday’s press conference seemed to play both sides of this coin, and stocks sold off on the uncertainty.That’s ok too.In reality, the selloff wasn’t too bad, with the $SPX losing 0.54%; and the $VIX rising by 6.64% on Wednesday. The benchmark 10-year yield $TNX tacked on 4.67% and finished yesterday’s session at a 1.568% yield. There was a pocket of strength in financial names and a few select market sectors. However, it makes me wonder, will asset managers be taking a different view on equities going forward? 2023 is a long time from now, but the idea of the punch bowl being taken away combined with an uncertain inflationary environment could paint a different picture going forward. We just don’t know yet.Fortunately, some of the ETFs that we have been following fared well on Wednesday. Strength surfaced in solar and green names, which shows that we are on the right path, as capital had to make its way into something other than cash, financials, and volatility yesterday.Figure 1 - SPDR S&P 500 ETF February 17, 2021 - June 16, 2021, Daily Source stockcharts.comSo, even though it seemed like the sky was falling if you were watching business news coverage after the Fed statement, it was just a pedestrian down day on decent down volume. For SPY traders that have been waiting for a pullback, there could be an opportunity in the cards soon; if we get some follow-through selling. However, I personally favor the IWM at this time, as discussed thoroughly in the May 27th publication.Turning bearish of an event like today usually turns out to be the wrong move, in my experience. So what, rates will go up in 2023. They have to go up at some point; there is plenty of warning and plenty of time between now and then. Buying the pullback would still be the prudent move based on probabilities (it is still a bull market).Speaking of the IWM , it fared better than the SPY in Tuesday’s session, giving up only 0.21%. It could be due to the reconstitution theme that we have been discussing.Figure 2 - iShares Russell 2000 ETF December 29, 2020 - June 16, 2021, Daily Candles Source stockcharts.comThat is a pretty healthy daily candle for the type of session that the major indices experienced on Wednesday.So, keeping the above in mind, is it really prudent to suddenly get bearish on the indices based on the Fed guidance towards rate hikes in 2023? Probably not. At least not today, anyway. Bull markets like this don’t just go out with a whimper on most occasions. Let’s see how things transpire across the major indices once the new Fed guidance is digested by market participants.Now, for more bearish folks, I’d like to turn our attention to the IWM/SPY ratio that we discussed in our May 27th publication surrounding the Russell 2000 reconstitution trade.Figure 3 - IWM iShares Russell 2000 ETF / SPY S&P 500 ETF Ratio August 27, 2020 - May 26, 2021. Source tradingview.comWhile the spread hasn’t moved too much to the upside since May 26th, it has tacked on a penny, moving from 0.53 to 0.54. Percentage-wise, there is nothing wrong with that, and this is a theme that could continue to work through June 28th. This trade is long the IWM and short the SPY .While it may be too early to tell how the broader markets will react to the Fed’s change in stance, it is also not necessarily a time to make rash decisions. Looking for pullbacks when more emotional traders decide to short the market could be a good idea. For now, we will see how Asia and Europe digest the message of the Fed in the overnight session followed by another US trading session. Time will give us more clues regarding the market’s interpretation of the Fed.Now, for our premium subscribers, let's look at what was working, even in yesterday’s down session ( a few of the ETFs we have been analyzing were green on the day ). There are also more buy idea levels that could be triggered soon. Not a Premium subscriber yet? Go Premium and receive my Stock Trading Alerts that include the full analysis and key price levels.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Rafael Zorabedian Stock Trading StrategistSunshine Profits: Effective Investment through Diligence & Care* * * * *This content is for informational and analytical purposes only. All essays, research, and information found above represent analyses and opinions of Rafael Zorabedian, and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. You should not construe any such information or other material as investment, financial, or other advice. Nothing contained in this article constitutes a recommendation, endorsement to buy or sell any security or futures contract. Any references to any particular securities or futures contracts are for example and informational purposes only. Seek a licensed professional for investment advice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Information is from sources believed to be reliable; but its accuracy, completeness, and interpretation are not guaranteed. Although the information provided above is based on careful research and sources that are believed to be accurate, Rafael Zorabedian, and his associates do not guarantee the accuracy or thoroughness of the data or information reported. Mr. Zorabedian is not a Registered Investment Advisor. By reading Rafael Zorabedian’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. Trading, including technical trading, is speculative and high-risk. There is a substantial risk of loss involved in trading, and it is not suitable for everyone. Futures, foreign currency and options trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment when trading futures, foreign currencies, margined securities, shorting securities, and trading options. Risk capital is money that can be lost without jeopardizing one’s financial security or lifestyle. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Rafael Zorabedian, Sunshine Profits' employees, affiliates, as well as members of their families may have a short or long position in any securities, futures contracts, options or other financial instruments including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice. Past performance is not indicative of future results. There is a risk of loss in trading.
Gold Asks: Will the Economic Boom Continue?

Gold Asks: Will the Economic Boom Continue?

Finance Press Release Finance Press Release 17.06.2021 15:59
The US GDP has already recovered from the pandemic recession. What’s next for the economy and the gold market?Ladies and Gentlemen, the economic crisis has ended. Actually, not only is the recession over but so is the recovery! This is at least what the recent GDP readings are indicating. As the chart below shows, the US nominal GDP has already jumped above the pre-pandemic level . The real GDP, which takes inflation into account, remained in the first quarter of 2021 below the size of the economy seen at the end of 2019, but it will likely surpass this level in the second quarter of the year.As one can see in the chart below, in terms of GDP growth, the situation is a bit worse, as the annual percentage changes are still below the pre-epidemic level . However, this should change in the second quarter of 2021 when the growth pace is likely to peak amid base effect and reopening of the economy.So, the question is: what’s next? Will the economic boom become well-established or will we see a lot of volatility or even new slumps? Given the recent flux of disappointing high-frequency indicators that fell considerably short of expectations (just think about April’s nonfarm payrolls ), the question is very relevant.Well, there are many threats to growth , that’s for sure. The first is, of course, the ever-evolving coronavirus and its new variants. However, judging by preliminary evidence, the vaccines should remain effective, allowing economies to function freely.The second obvious danger is clearly the economy overheating and higher inflation . The Fed and the Congress injected a lot of liquidity into the economy although it would recover if it was left to its own devices thanks to the rollout of vaccinations and easing lockdowns. So, much of government funds arrived just when the economy practically recovered, which is a recipe for higher prices and inflation-related turbulences in the financial markets.Third, the increase in debt – both private and public – makes the global economy more fragile. Given the level of indebtedness, even small increases in real interest rates would be dangerous. They would increase the costs of servicing debts for the governments and could hit the asset prices. The fact that the Fed will be under great pressure to remain very dovish is, of course, positive for gold prices . Even if we see some effort to normalize the monetary policy , interest rates and the Fed’s balance sheet will never return to the pre-recession levels.Last but not least, there is a threat of financial crisis . Many people are worried that there is a bubble in the stock market (and in other markets as well, such as the cryptocurrency market). Indeed, the equities have been reaching new peaks and the valuations are elevated. The margin debt has also jumped. Not surprisingly, the relative frequency of Google searches for the “stock market bubble” has recently risen (just as for the word “inflation”).Even the Fed in its latest Financial Stability Report expressed some concerns. This is what the Fed Governor Lael Brainard said in a statement linked to the report :Vulnerabilities associated with elevated risk appetite are rising. Valuations across a range of asset classes have continued to rise from levels that were already elevated late last year. Equity indices are setting new highs, equity prices relative to forecasts of earnings are near the top of their historical distribution, and the appetite for risk has increased broadly, as the "meme stock" episode demonstrated. Corporate bond markets are also seeing elevated risk appetite, and the spreads of lower quality speculative-grade bonds relative to Treasury yields are among the tightest we have seen historically. The combination of stretched valuations with very high levels of corporate indebtedness bear watching because of the potential to amplify the effects of a re-pricing event.To sum up, the US economy has already recovered from the coronavirus recession, which is bad for safe-haven assets such as gold , as the yellow metal doesn’t like economic expansions. However, there are important threats to sustainable economic growth, which should support the price of gold.Actually, there is still room for gold to rally further . This is because we are in an inflationary phase of the economic expansion (this boom will be more inflationary than the post- Great Recession period), and all the money created during the pandemic has flowed into the asset markets, pushing their prices into elevated levels not necessarily justified by fundamentals (just think about Dogecoin). Gold could benefit from such a bubble, as well as from an inflationary and hot environment. Thank you for reading today’s free analysis. We hope you enjoyed it. If so, we would like to invite you to sign up for our free gold newsletter . Once you sign up, you’ll also get 7-day no-obligation trial of all our premium gold services, including our Gold & Silver Trading Alerts. Sign up today!Arkadiusz Sieron, PhD Sunshine Profits: Effective Investment through Diligence & Care.
What a Welcome US Equity Market Pullback! Fading Emotion

What a Welcome US Equity Market Pullback! Fading Emotion

Finance Press Release Finance Press Release 21.06.2021 13:51
Are you as glad to see the pullback in the US equity indices as I am? Yes, rates are going up faster. Inflation has been acknowledged at a higher rate by the Fed. So what?!It was no secret that rates could not remain near-zero forever. It also is no secret that inflation has been real in the US . If you live in the US, you already know this from your day-to-day life. So, why the big fuss? Did you need someone to tell you?I know it is painful when long positions move against a trader quickly. Nobody expected the Fed to come out with the language that appeared this week, at least not anybody that I know. I also realize that it may seem logical to sell equities as a result. But, since when does the obviously logical approach win?So, the overnight Fed Fund rate is scheduled to begin increasing in 2023 (potentially late 2022 if you listened to Bullard on Friday). This news must mean that the Ten-year note yield had to go up, right? Nope. Down she went on Thursday and Friday; after catching a bid on Wednesday off the news.Figure 1 - $TNX Ten-year note treasury yield February 10, 2021 - June 18, 2021, Daily Source stockcharts.comPerhaps taking a trade like that is just too obvious; too logical. Now, will $TNX increase over time? Most likely it will, but 2023 is a long time from now. We have to wait and see how the new information is digested by the market and go from there.Can we look to apply similar logic to the S&P 500? For that question, I would like to refer back to the May 12th publication where we discussed $SPX pullbacks to the 50-day simple moving average.From May 12th:$SPX found support around the 50-day moving average on 2 of its last 3 attempts.When $SPX broke the 50-day on 1 of the last 3 attempts, it traded below it for 2 sessions.When $SPX broke the 50-day in September 2020 & October 2020, it closed below it between 7 - 9 sessions.Let’s keep in mind that the $SPX traded to the 50-day SMA on May 12th and May 19th, and is now below the 50-day SMA as I write this.Today, for the SPY ETF traders out there, let’s take a fresh look at recent pullbacks.Figure 2 - SPDR S&P 500 ETF December 04, 2020 - June 18, 2021, Daily Candles Source stockcharts.comCan the previous price action near the 50-day SMA give us any clues about what could happen this time? Well, we have the 50-day SMA, and we also have the 414.15 50% Fibonacci retracement level and the 411.79 key 61.8% retracement level. We have been waiting for such a pullback and I don’t think the recent Fedspeak is any reason to negate consideration of buying pullbacks. I know it seems somewhat illogical; that’s why I like it even more.Keep in mind that such pullbacks to certain price levels could take place in the overnight futures sessions. In that case, ETF traders may not get the exact price they are looking for if markets reverse to the upside during NY trading hours. At least this gives us some levels to consider.Why I Welcome this Pullback So MuchIf you have been following along and are a premium subscriber, you know that I have been waiting for pullback opportunities across many markets. In fact, out of the eight markets that I am covering, I have been waiting for pullback opportunities in six of them . The current price action and additional downside momentum could give us the opportunities that we have been patiently waiting for in several ETFs.Now, for our premium subscribers, we have a lot to cover. As we approach potentially key levels that we have been waiting for with patience and discipline, a plan is required. There are buy idea levels that could be triggered soon and were very close to triggering on Friday. Not a Premium subscriber yet? Go Premium and receive my Stock Trading Alerts that include the full analysis and key price levels.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Rafael Zorabedian Stock Trading StrategistSunshine Profits: Effective Investment through Diligence & Care* * * * *This content is for informational and analytical purposes only. All essays, research, and information found above represent analyses and opinions of Rafael Zorabedian, and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. You should not construe any such information or other material as investment, financial, or other advice. Nothing contained in this article constitutes a recommendation, endorsement to buy or sell any security or futures contract. Any references to any particular securities or futures contracts are for example and informational purposes only. Seek a licensed professional for investment advice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Information is from sources believed to be reliable; but its accuracy, completeness, and interpretation are not guaranteed. Although the information provided above is based on careful research and sources that are believed to be accurate, Rafael Zorabedian, and his associates do not guarantee the accuracy or thoroughness of the data or information reported. Mr. Zorabedian is not a Registered Investment Advisor. By reading Rafael Zorabedian’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. Trading, including technical trading, is speculative and high-risk. There is a substantial risk of loss involved in trading, and it is not suitable for everyone. Futures, foreign currency and options trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment when trading futures, foreign currencies, margined securities, shorting securities, and trading options. Risk capital is money that can be lost without jeopardizing one’s financial security or lifestyle. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Rafael Zorabedian, Sunshine Profits' employees, affiliates, as well as members of their families may have a short or long position in any securities, futures contracts, options or other financial instruments including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice. Past performance is not indicative of future results. There is a risk of loss in trading.
S&P 500 Snapback, USD Strength. What’s Next for US Equities?

S&P 500 Snapback, USD Strength. What’s Next for US Equities?

Finance Press Release Finance Press Release 22.06.2021 14:18
Monday gave us a fast snapback rally in the major US indices, with the S&P 500 adding 1.40% and erasing Friday’s losses. What’s on tap for the remainder of this week?Good morning folks. Today we hear from Fed Chair Jerome Powell again at 2:00 PM, as he provides testimony on the Fed’s lending programs and policies. I am sure the market will be hanging on every word . However, what else could be said at this moment to either spook or encourage market participants? On Friday, the Fed’s Bullard talked about Q4 2022 for an initial hike and said that Chair Powell has already opened up talks of tapering. This commentary spooked the markets on Friday and led to the decline. But, we have already regained those losses (on Monday at least).All of this hawkishness sure has moved the US Dollar to the upside. As I discussed in the May 19th publication, the $DXY had been approaching a key long-term Fibonacci retracement level before all of this hawkish talk even began. It never actually traded to it ($88.36); however, it got very close: around $89.60, and found support. Time will tell if the US dollar strength is sustainable. By looking at the technicals, it looks like it could be.Figure 1 - US Dollar Index December 20, 2019 - June 21, 2021, Daily Candles Source stockcharts.comWe can see the breakout about the 50 and 200-day Simple Moving Averages. In addition, we have the MACD crossing the zero line to the upside. The next test of strength will be to see if the $DXY can hold its 200-day moving average on a test, which sits at 91.58 as of the close on June 21st.Commodities, however, have broadly held their strength with the $DXY increasing. The big exception being interest-rate-sensitive precious metals. The general inflationary theme seems to be sticking right now.Figure 2 - $CRB Reuters/Jefferies CRB Index February 3, 2021 - June 21, 2021, Daily Candles Source stockcharts.comCommodities are still firmly entrenched in an uptrend. It is an interesting phenomenon to see the US Dollar moving higher and commodities moving higher simultaneously. That could portend things to come in the future. Combined with higher rates, the overall market picture could change significantly over time in the long run. However, that’s a story for another time.Instead of getting caught up in the longer-term picture for the markets, we want to stay focused and dialed in on the short and medium-term to capture potential opportunities. Based on the snapback that our subscribers were prepared for in the broader markets, we start to get a sense of how the market may react to the more hawkish Fed rhetoric in the short term .Until things appear differently, buying the dips is still the higher probability move, in my opinion, especially in select names and themes.Figure 3 - S&P 500 Index February 3, 2021 - June 21, 2021, Daily Candles Source stockcharts.comI want to emphasize the aforementioned select names and themes . A broader market rally like we saw yesterday is fantastic and was something that we were looking for based on a 50-day moving average pattern repetition. I think we can look to further stack the odds in our favor by drilling down to specific names, sectors, and stories .Market Themes Change Over TimeLet’s not discount the fact that the Fed has changed its stance. Rates will most likely increase in the future. There should be some tapering coming soon, and tapering will not be instant; it is a process that occurs over many months or even over a year. These things will certainly impact overall market sentiment . Trading the S&P 500 via the ES, SPY, or $SPX (for equity options) is a solid strategy. However, I am beginning to realize the importance of individual names and themes in what could very soon be more of a stock pickers market versus a broader market story.This is one reason I am currently covering nine markets for premium subscribers (S&P 500 and eight others). We just got great pullback action at the end of last week, and we were ready for it. Yesterday’s broader market action was just what we wanted to see.Now, for our premium subscribers, let’s recap the nine markets that we are covering to see if anything has changed since yesterday. Not a Premium subscriber yet? Go Premium and receive my Stock Trading Alerts that include the full analysis and key price levels.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Rafael Zorabedian Stock Trading StrategistSunshine Profits: Effective Investment through Diligence & Care* * * * *This content is for informational and analytical purposes only. All essays, research, and information found above represent analyses and opinions of Rafael Zorabedian, and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. You should not construe any such information or other material as investment, financial, or other advice. Nothing contained in this article constitutes a recommendation, endorsement to buy or sell any security or futures contract. Any references to any particular securities or futures contracts are for example and informational purposes only. Seek a licensed professional for investment advice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Information is from sources believed to be reliable; but its accuracy, completeness, and interpretation are not guaranteed. Although the information provided above is based on careful research and sources that are believed to be accurate, Rafael Zorabedian, and his associates do not guarantee the accuracy or thoroughness of the data or information reported. Mr. Zorabedian is not a Registered Investment Advisor. By reading Rafael Zorabedian’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. Trading, including technical trading, is speculative and high-risk. There is a substantial risk of loss involved in trading, and it is not suitable for everyone. Futures, foreign currency and options trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment when trading futures, foreign currencies, margined securities, shorting securities, and trading options. Risk capital is money that can be lost without jeopardizing one’s financial security or lifestyle. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Rafael Zorabedian, Sunshine Profits' employees, affiliates, as well as members of their families may have a short or long position in any securities, futures contracts, options or other financial instruments including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice. Past performance is not indicative of future results. There is a risk of loss in trading.
S&P 500 Near All Time Highs and What We Got Right

S&P 500 Near All Time Highs and What We Got Right

Finance Press Release Finance Press Release 23.06.2021 18:01
It was a thunderous day for equity indices yesterday, with the S&P 500 approaching all-time highs. Our analysis has worked well. What comes next for the benchmark US index?Greetings! What a move in the $SPX from its 50-day moving average touched on Friday and Monday. In fact, the S&P 500 had its best two days since May 14th!We heard from Chair Powell yesterday during his testimony at the House of Representatives. It was a politically fueled discussion , with Republicans highlighting the lack of desire of many workers to return to work in some states. The market moved higher off the testimony, with Chair Powell reiterating that inflation was indeed transitory and very sector-specific. Is this correct? I suppose time will tell. What matters for us is that the broader markets moved higher during and after the testimony; while beginning to retreat in the final 30 minutes of the NY session.If you have been following along or are a Premium subscriber, you know that we had been waiting for an entry into the S&P 500 at or near the 50-day simple moving average for quite some time. After waiting with patience and discipline, we got our signal on Friday and Monday with the $SPX briefly trading below this key level and ultimately reversing to the upside on Monday.Figure 1 - S&P 500 Index March 19, 2021 - June 23, 2021, Daily Candles Source stockcharts.comWhat a wonderful move for us. It takes patience and discipline to wait and execute . Now, if you are a Premium subscriber , you received an email alert at approximately 3:38 ET yesterday, suggesting to consider exiting long S&P 500 positions. There were several reasons for this:I realized this was the best two-day period in five weeks .Hourly RSI(14) was approaching the 70 level - indicating short-term overbought conditions.Being greedy is never a good thing.S&P 500 was within 10 handles of all-time highs.So, around 3:30 PM ET yesterday, all of this came together in my mind and indicated that it may be a good time to sell. What if it keeps going up? Who cares. Nobody catches exact tops and bottoms in trading. The idea is to catch the meat of the move before the market takes it away. And with everything going on including inflation, higher rate environment digestion, and numerous other factors, it was a good time to take chips off the table.Figure 2 - S&P 500 Index June 22, 2021 - June 23, 2021, 10:58 AM, 15 Minute Candles Source stooq.comI have been in and around the S&P 500 long enough to know when the index throws you a bone; you take it.In addition, trading the $SPX around and near all-time highs can be tricky business. What would be the catalyst to break out above the old high? This morning, we got a mixed bag of mostly bearish economic data including New Home Sales, and PMI metrics. Courtesy of our friends at FX Empire :Figure 3 - Certain US Economic Data Releases for June 23, 2021 Source fxempire.comAs we can see from the above table, this morning's economic data was nothing to write home about. However, markets can remain illogical for extended periods. For the moment, my attention turns away from the indices and goes back to select names and themes until more time passes. You have to know when to stay away, too.Now, for our premium subscribers, let’s recap the markets that we are covering to see if any key levels have changed or new opportunities have been found. Not a Premium subscriber yet? Go Premium and receive my Stock Trading Alerts that include the full analysis and key price levels.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Rafael Zorabedian Stock Trading StrategistSunshine Profits: Effective Investment through Diligence & Care* * * * *This content is for informational and analytical purposes only. All essays, research, and information found above represent analyses and opinions of Rafael Zorabedian, and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. You should not construe any such information or other material as investment, financial, or other advice. Nothing contained in this article constitutes a recommendation, endorsement to buy or sell any security or futures contract. Any references to any particular securities or futures contracts are for example and informational purposes only. Seek a licensed professional for investment advice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Information is from sources believed to be reliable; but its accuracy, completeness, and interpretation are not guaranteed. Although the information provided above is based on careful research and sources that are believed to be accurate, Rafael Zorabedian, and his associates do not guarantee the accuracy or thoroughness of the data or information reported. Mr. Zorabedian is not a Registered Investment Advisor. By reading Rafael Zorabedian’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. Trading, including technical trading, is speculative and high-risk. There is a substantial risk of loss involved in trading, and it is not suitable for everyone. Futures, foreign currency and options trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment when trading futures, foreign currencies, margined securities, shorting securities, and trading options. Risk capital is money that can be lost without jeopardizing one’s financial security or lifestyle. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Rafael Zorabedian, Sunshine Profits' employees, affiliates, as well as members of their families may have a short or long position in any securities, futures contracts, options or other financial instruments including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice. Past performance is not indicative of future results. There is a risk of loss in trading.
Is There a Next Housing Bubble That Will Make Gold Shine?

Is There a Next Housing Bubble That Will Make Gold Shine?

Finance Press Release Finance Press Release 25.06.2021 16:33
Home prices are surging, making some investors worry about the housing market. These fears seem to be exaggerated, but bubble-like conditions are widespread.House prices are surging. As the chart below shows, the S&P/Case-Shiller U.S. National Home Price Index has reached 239 in February 2021, the highest number in history and about 30% higher than during the 2006 peak.What’s more, the National Home Price Index has jumped 12% year-over-year in February , which is the highest annualized gain since January 2006 when the housing bubble started deflating as can be seen in the chart below. At the same time, inventory in many regions has hit record lows.Not surprisingly, some analysts started to worry about the formation of the next housing bubble . The previous one led to the global financial crisis . However, at least some part of the recent increases can be explained by other factors than mere expectations of price increases, which characterizes a bubble.The mortgage rates plunged thanks to the Fed’s zero-interest-rate policy and accommodative monetary policy . The easy fiscal policy with stimulus checks also added fuel to the fire, especially given that people couldn’t spend money on services, so they spent more on housing.The demographic factors also helped to move prices up. Many Millennials have just entered the prime home-buying age, and the pandemic made a lot of people demand more space as they work remotely.In other words, the recent surge in prices is likely a result of an imbalance between tight supply (that rises too slowly to meet booming demand fueled by low interest rates ) and income growth rather than an irrational exuberance. Furthermore, lending standards are also tighter now. Please take a look at the chart below, which shows the home price index vis-à-vis the GDP (presented also as an index).As one can see, in the 2000s there was a clear, huge divergence between the pace of GDP growth and the pace of home prices’ appreciation that lasted a few years before the bubble burst. But since the end of the Great Recession , the growth in house prices was below the GDP growth. Therefore, I would say that there is no bubble in the housing market. Not yet, at least – house prices started to diverge from GDP growth during the pandemic recession …Hence, it would be smart to monitor the housing market carefully. However, so far, gold bulls shouldn’t count on the housing bubble and its burst as important factor that could support the price of the yellow metal. Nevertheless, the recent ultra-low real interest rates and high inflation should support both: gold and houses . After all, they are both hard assets sensitive to interest rates and are being eagerly bought during inflationary periods.More importantly, despite the fact that it’s maybe too early to call the national bubble in the housing market (although some locations are really hot), in many markets there are bubble-like conditions. Just think about soaring stock market indices reaching one record after another. Or negative-yielding bonds worth about $18 trillion. Or surging used car prices that have just hit an all-time high. Or lumber that has become America’s hottest commodity.Or Dogecoin, a cryptocurrency that was created as a joke. It has gained about 8,500% this year, despite the recent sell-off in the cryptocurrency market. As a popular tweet commented on this, “Moderna created a lifesaving vaccine in record time and is worth $70 billion. Dogecoin became a meme and is worth $87 Billion.”The widespread character of these price increases is the reason why some analysts refer to the “everything bubble”. It might be an exaggeration, but the scope of bubble-like conditions clearly shows that markets are awash in liquidity. All this new money supply and excess liquidity simply entered the economy, exerting inflationary pressure across the board and boosting mainly risk assets.Indeed, there is inflation, but still mainly in the asset markets, not in the consumer sphere. However, this is changing, as the April CPI reading has clearly indicated. Producer/commodity inflation could advance into the next stage in which consumer prices are also generally increasing. Inflated asset valuations and rising prices of goods suggest that caution is warranted, and it would be smart to allocate some portion of the investment portfolio toward gold.The bottom line is that the global expansion will continue, which is bad for gold. However, the growth is fueled by excessive liquidity and ultra-low interest rates, which also creates inflationary pressure and bubble-like conditions. Gold could be supported by all this – it may even thrive if inflation turns out to be higher and more lasting than it’s widely believed.Thank you for reading today’s free analysis. We hope you enjoyed it. If so, we would like to invite you to sign up for our free gold newsletter . Once you sign up, you’ll also get 7-day no-obligation trial of all our premium gold services, including our Gold & Silver Trading Alerts. Sign up today!Arkadiusz Sieron, PhD Sunshine Profits: Effective Investment through Diligence & Care.
Stalling Signs? Taking a Look Under the Hood of US Equities

Stalling Signs? Taking a Look Under the Hood of US Equities

Finance Press Release Finance Press Release 23.07.2021 07:04
Equities traded quietly higher in Thursday's NY session. Simultaneously, bonds were bid rather firmly, sending interest rates even lower. What is going on beneath the surface?Greetings. I hope this article finds you and yours well. Today, we are taking a look at some additional market indicators and internals to get an unbiased perspective on things.First, I want to preface things by mentioning that I am not suggesting that I am fully bearish on the S&P 500 or stocks right now. However, I am taking more of a cautious stance at the moment.Figure 1 - S&P 500 Index April 15, 2021 - July 21, 2021, Daily Candles Source stockcharts.comNothing new to see here. Just another pedestrian pullback to the 50-day SMA and a bounce back. This pattern has repeated itself several times since the pandemic lows in the $SPX. It won't repeat itself forever - that would be too easy.Since it is earnings season, let’s talk earnings multiples.Feeling bullish? It can be challenging to get excited about an $SPX at 4400 with an estimated 46.40 P/E ratio (trailing twelve months). We are in the middle of earnings season, so we will have a clearer figure soon.Figure 2 - S&P 500 PE Ratio 1870 - July 22, 2021. Source multpl.comStocks are not cheap by any measure, folks. However, with easy monetary policy and low rates, this is to be expected. What could be the catalyst to derail this freight train?How about the Dow Transports? This index used to be talked about much more frequently and is followed closely by students of Dow Theory. We just don’t hear much analysis about it on Fox Business, CNBC, or Bloomberg these days.The Dow Transports (Dow Jones Transportation Average) $TRAN is an index comprised of 20 companies.Here are the index components and weighting as of December 2020:Alaska Air Group, Inc. 2.55%American Airlines Group Inc. 0.76%Avis Budget Group, Inc. 1.80%C.H. Robinson Worldwide, Inc. 4.61%CSX Corporation 4.39%Delta Air Lines, Inc. 1.94%Expeditors International of Washington, Inc. 4.61%FedEx Corporation 13.10%J.B. Hunt Transport Services, Inc. 6.70%JetBlue Airways Corporation 0.70%Kansas City Southern 9.73%Kirby Corporation 2.51%Landstar System, Inc. 6.60%Matson, Inc. 2.79%Norfolk Southern Corporation 11.42%Ryder System, Inc. 3.12%Southwest Airlines Co. 2.26%Union Pacific Corporation 9.91%United Airlines Holdings, Inc. 2.11%United Parcel Service, Inc. 8.39%Figure 3- Dow Jones Transportation Index January 4, 2021 - July 21, 2021, Daily Candles Source stockcharts.comHere, and in contrast to the Dow Jones Industrial Average, we can see that the Transports topped back on May 10, 2021. Proponents of Dow Theory would argue that this creates a lack of confirmation and that the subsequent highs in the Dow Jones Industrial Average are not valid due to this lack of confirmation.What could be the reason for the stall in the Transports? Input Costs? While fuel costs have risen, what about the rise in retail spending? Is the stimulus-powered consumer pocket not enough to counterbalance the rising input costs?If input costs are the reason for the stalling, what about the other companies that rely on raw materials to make their products? Recent inflationary data has not affected these companies' stock prices yet (for the most part).What if the Fed eases off the gas pedal?While it is very difficult (if not impossible) to pick market tops (and I don't advocate trying to do that), it is wise to look at certain market indicators to get an understanding of what is going on beneath the surface.It is easy to look at the chart of the $SPX and see that it is moving higher, from the bottom left-hand corner of the chart to the top right-hand corner. However, that does not tell the whole story of what is happening in the US equity markets.We will be monitoring the above and previously mentioned market internals and indicators for more clues in the coming days, weeks, and months. I think it is critical to be aware of metrics such as the above as the broader indices trade near all-time highs.Now, let’s cover the markets we are monitoring for Premium Subscribers.Not a Premium subscriber yet? Go Premium and receive my Stock Trading Alerts that include the full analysis and key price levels.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Rafael ZorabedianStock Trading StrategistSunshine Profits: Effective Investment through Diligence & Care* * * * *This content is for informational and analytical purposes only. All essays, research, and information found above represent analyses and opinions of Rafael Zorabedian, and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. You should not construe any such information or other material as investment, financial, or other advice. Nothing contained in this article constitutes a recommendation, endorsement to buy or sell any security or futures contract. Any references to any particular securities or futures contracts are for example and informational purposes only. Seek a licensed professional for investment advice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Information is from sources believed to be reliable; but its accuracy, completeness, and interpretation are not guaranteed. Although the information provided above is based on careful research and sources that are believed to be accurate, Rafael Zorabedian, and his associates do not guarantee the accuracy or thoroughness of the data or information reported. Mr. Zorabedian is not a Registered Investment Advisor. By reading Rafael Zorabedian’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. Trading, including technical trading, is speculative and high-risk. There is a substantial risk of loss involved in trading, and it is not suitable for everyone. Futures, foreign currency and options trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment when trading futures, foreign currencies, margined securities, shorting securities, and trading options. Risk capital is money that can be lost without jeopardizing one’s financial security or lifestyle. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Rafael Zorabedian, Sunshine Profits' employees, affiliates, as well as members of their families may have a short or long position in any securities, futures contracts, options or other financial instruments including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice. Past performance is not indicative of future results. There is a risk of loss in trading.
Gold & the USDX: Correlations

All Eyes on Big Tech Earnings this Week. Contrarian Play?

Finance Press Release Finance Press Release 26.07.2021 20:43
Another day, another all-time large-cap equity index high, right? Today, let’s take a look at an ETF that could interest traders looking for a contrarian strategy.The bull market has continued, albeit with some warning signs beneath the surface of the market.Last week, markets flexed their resiliency muscles by quickly erasing a 700 + point Dow Jones Industrial Average on Monday and ending the week at all-time highs. Easy monetary policy has continued, and liquidity is high. There was no shortage of buyers that were ready, willing, and able to buy that dip.Even though the Fed has telegraphed its message of increasing rates in the future, Fed bond purchases have continued for the time being. The purchasing of these bonds helps to keep rates lower and create liquidity across markets.Since June of 2020, the Fed has been buying $80 billion a month in Treasury bonds and $40 billion in MBS (Mortgage Backed Securities).There is quite a lot happening this week. Consumer Confidence is set for release tomorrow. We will hear from Fed Chair Powell on Wednesday with the FOMC statement and the subsequent conference call. Advance GDP and Core PCE are on the table for later in the week.All of the above happens during earnings week for the tech giants, namely Apple, Facebook, Google, Tesla, Amazon, and Microsoft.What can we do on a week like this when the S&P 500 is at or near an all-time high?Last week, we examined the divergence of the Dow Jones Transports and the Dow Jones Industrial Average.The Transports:Figure 1 - Dow Jones Transportation Average March 8, 2021 - July 26, 2021, Daily Candles Source stockcharts.comTransports have been weak, and today the index traded up to and touched the 78.6% Fibonacci retracement level from its July 1, 2021, high to its July 19, 2021 low. What is going on with the transports?We can see lower highs and higher lows that have been occurring since May. Today is providing a nice bounce and intraday reversal so far.As we can see, there is a downtrend in place in an otherwise sector uptrend dominant marketplace, let’s go with what is working here.Looking for an ETF to take advantage of this downtrend is no easy task. Currently, I do not see a liquid way to take the inverse side of the transportation, so we will examine a short position in IYT.Figure 2 - iShares Transportation Average ETF March 18, 2021 - July 26, 2021, Daily Candles Source stockcharts.comWe see IYT doing its job rather well, seeking to track the investment results of an index composed of U.S. equities in the transportation sector.Considering this downtrend could be a way to gain some alternative exposure in today’s market.We are in a big earnings and economic data release week. There could be volatility in either direction in the major indices.Since I am cautious on the indices in the current landscape per previous Stock Trading Alert publications, a trade in the transports could be a way to take advantage of an existing countertrend, while the major market indices have been trading at highs.Now, for our premium subscribers, let's look to pinpoint potential entry levels in IYT, and recap the other markets that we are covering. Not a Premium subscriber yet? Go Premium and receive my Stock Trading Alerts that include the full analysis and key price levels.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Rafael ZorabedianStock Trading StrategistSunshine Profits: Effective Investment through Diligence & Care* * * * *This content is for informational and analytical purposes only. All essays, research, and information found above represent analyses and opinions of Rafael Zorabedian, and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. You should not construe any such information or other material as investment, financial, or other advice. Nothing contained in this article constitutes a recommendation, endorsement to buy or sell any security or futures contract. Any references to any particular securities or futures contracts are for example and informational purposes only. Seek a licensed professional for investment advice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Information is from sources believed to be reliable; but its accuracy, completeness, and interpretation are not guaranteed. Although the information provided above is based on careful research and sources that are believed to be accurate, Rafael Zorabedian, and his associates do not guarantee the accuracy or thoroughness of the data or information reported. Mr. Zorabedian is not a Registered Investment Advisor. By reading Rafael Zorabedian’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. Trading, including technical trading, is speculative and high-risk. There is a substantial risk of loss involved in trading, and it is not suitable for everyone. Futures, foreign currency and options trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment when trading futures, foreign currencies, margined securities, shorting securities, and trading options. Risk capital is money that can be lost without jeopardizing one’s financial security or lifestyle. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Rafael Zorabedian, Sunshine Profits' employees, affiliates, as well as members of their families may have a short or long position in any securities, futures contracts, options or other financial instruments including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice. Past performance is not indicative of future results. There is a risk of loss in trading.
China Soft Ahead of Fed, Big Tech Earnings. Transports Lower

China Soft Ahead of Fed, Big Tech Earnings. Transports Lower

Finance Press Release Finance Press Release 27.07.2021 21:16
Markets are lower in afternoon trading in New York today. China fears have created uncertainty, and why we looked to short the Transports yesterday.It seems like rough markets have a way of originating in China.Thinking back to 2007, I remember watching the China markets meltdown. This process began well ahead of the US financial crisis of 2008.Looking back at markets that you have lived and traded through, you amass a mental library of history and look to learn from it. Before 2007, I spent years as a Real Estate Agent and remember the days of people being approved for home purchases on variable ARMs and very low-income requirements. You just knew the music would have to stop at some point as banks loaded up subprime borrowers with debt that logic would dictate as unpayable.The China markets started to crack ahead of the US markets back then.Figure 1 - Shanghai Stock Exchange Composite Index March 24, 2007 - May 2, 2008, Daily Candles Source stockcharts.comI do remember watching this market at the time. Other China indices fared even worse. Around this time, the $SPX experienced a pullback too, but one of a much lesser magnitude.Figure 2 - S&P 500 Index August 1, 2007 - December 7, 2007 Daily Candles Source stockcharts.comAs we can see, the $SPX also pulled back around this time, but in more of a pedestrian manner, with a 5.4% pullback over an 11 day period versus 10.8% for China around the same time period.It is important to note that the $SPX had pulled back prior to this time and rebounded to all-time highs. I am mentioning all of this as markets have memories and accelerated moves in China catch my attention. Let’s also mention the obvious here: the Covid meltdown in Feb - March 2020.As China is grabbing all of the headlines today, let’s see how the Shanghai Stock Exchange Composite has fared yesterday and today.Figure 3 - Shanghai Stock Exchange Composite Index March 17, 2021 - July 27, 2021, Daily Candles Source stockcharts.comYes, the Shanghai Composite is lower over the last two days. However, the sky isn’t falling, at least not yet. It is lower by 2.9% or so over the past two sessions. Note the support that was found around its 200-day moving average.What All of This Means for UsI believe it is smart to avoid getting too caught up in the daily headlines, for the most part. Price and divergences can tell better stories than any news headlines, which often come out much too late.This is the reason that it made sense to target the Transports to the downside yesterday. We had a pattern of lower highs and lower lows, with clear divergence from the direction of the broader markets since May 1st. In case you missed it, you can read about the analysis of the Transports in the July 23rd publication and in yesterday’s July 26th publication.As we targeted the short side of the IYT yesterday afternoon around $258.00, let’s see how the transports are faring in today’s market down day.Figure 4 - iShares Transportation Average ETF March 1, 2021 - July 27, 2021, Daily Candles Source stockcharts.comThe IYT is lower by 2.54% as of the time of this writing. As discussed, the Transports were already trading lower versus the broader indices.Right now, we see the RSI(14) at 40 and daily MACD crossover brewing to the downside with the fast line crossing the slow line.We will hear from the Fed tomorrow.The FOMC statement and subsequent press conference is slated for tomorrow. Those kinds of days can be tough to trade, and depending on the Fed’s tone, anything could happen.Now, for our premium subscribers, let's look cover some potential take profit levels and strategies in IYT, and recap the other markets that we are covering. Not a Premium subscriber yet? Go Premium and receive my Stock Trading Alerts that include the full analysis and key price levels.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Rafael ZorabedianStock Trading StrategistSunshine Profits: Effective Investment through Diligence & Care* * * * *This content is for informational and analytical purposes only. All essays, research, and information found above represent analyses and opinions of Rafael Zorabedian, and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. You should not construe any such information or other material as investment, financial, or other advice. Nothing contained in this article constitutes a recommendation, endorsement to buy or sell any security or futures contract. Any references to any particular securities or futures contracts are for example and informational purposes only. Seek a licensed professional for investment advice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Information is from sources believed to be reliable; but its accuracy, completeness, and interpretation are not guaranteed. Although the information provided above is based on careful research and sources that are believed to be accurate, Rafael Zorabedian, and his associates do not guarantee the accuracy or thoroughness of the data or information reported. Mr. Zorabedian is not a Registered Investment Advisor. By reading Rafael Zorabedian’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. Trading, including technical trading, is speculative and high-risk. There is a substantial risk of loss involved in trading, and it is not suitable for everyone. Futures, foreign currency and options trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment when trading futures, foreign currencies, margined securities, shorting securities, and trading options. Risk capital is money that can be lost without jeopardizing one’s financial security or lifestyle. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Rafael Zorabedian, Sunshine Profits' employees, affiliates, as well as members of their families may have a short or long position in any securities, futures contracts, options or other financial instruments including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice. Past performance is not indicative of future results. There is a risk of loss in trading.
Gold & the USDX: Correlations

Intraday Market Analysis – USD Sees Few Bids

FXMAG Team FXMAG Team 30.07.2021 09:00
USDJPY tests key supportThe Japanese yen finds support as June’s unemployment rate fell below 3%.A bearish MA cross on the daily chart is likely to cloud buyers’ mood. The pair has met stiff selling pressure near 110.60.The FOMC whipsaw was a sign that sellers still retain control since the downturn started earlier this month. 109.40 is a key support and its breach would invalidate last week’s rebound. Sellers would then be eager to push below 109.00.On the upside, a bounce will need to clear 110.20 to make the mood turn around.USDCHF in a deeper correctionThe US dollar tumbled as US GDP growth in Q2 came out below market expectation.The breakout below 0.9120 was a confirmation that the bears have gained the upper hand following a three-week-long consolidation. Bearish sentiment accrued as momentum traders jumped in aggressively.The price is heading towards the psychological level of 0.9000, right above the critical support (0.8930) on the daily chart.An oversold RSI may cause a limited rebound which is likely to be capped by 0.9165.US 30 breaks to new highsThe Dow Jones index found support from the prospect of continuous stimulus in the US.The index consolidated its gains after it rallied above the peak at 35100. 34800 is a fresh support as buyers have a stake in after the breakout confirmation.US indices lately have been exhibiting a volatility pattern in which a sharp drop is followed by strong bidding.While sentiment remains generally positive, a deeper pullback here may test 34500. As the rally resumes, 35500 would be the next target.
Slope Dope? S&P 500 Monthly Candles Aim for Asteroids

Slope Dope? S&P 500 Monthly Candles Aim for Asteroids

Finance Press Release Finance Press Release 03.08.2021 21:58
It’s no secret that the S&P 500 has been leaving all bears in the dust. How does the recent rate of change measure up to previous bull runs?After seeing many bull and bear markets over the years, I have never quite seen a slope of this magnitude. Of course, a picture is worth a thousand words, so:Figure 1 - S&P 500 Index June 1988 - August 2021, Monthly Candles Linear Chart Source stooq.comThe angle of the ascent has dwarfed previous bull markets by far. Of course, there is more than one way to skin a cat. The above chart is a linear chart (most traders, especially short-term traders use linear charts).However, looking at the recent rally in a logarithmic chart, the ascent does not seem quite as steep.Figure 2 - S&P 500 Index June 1988 - August 2021 Monthly Candles Logarithmic Chart Source stooq.comOn a regular (or linear) price chart, each value change is expressed in the same way. This means that a change of $2 to $4 looks identical to a change of $28 to $30.On a logarithmic chart, the amount of percentage change is what is treated identically.Knowing the difference between the two chart types can be beneficial for traders, and keep price moves in perspective. As we can see in the first chart, the upward move in the S&P 500 looks extreme, while shown in the logarithmic price chart, its angle doesn’t look as sharp.Expressing the runup as a percentage of the S&P 500 since the pandemic lows, we are higher by approximately 103% in eighteen months.In comparison, I would like to take a look at the runup from the tech bubble selloff in 2002 to the highs that were made in 2007.Figure 3 - S&P 500 Index January 1995 - April 2010 Monthly Candles Linear Chart Source stooq.comFrom trough to peak (October 2002 - October 2007), it took the S&P 500 five years to move 105%. Let’s keep in mind that the sell-off from the March 2000 peak to the October 2002 lows was over a 2 year and 7-month period.This is more reminiscent of how bear markets used to be in US equities; there were lower prices over longer time periods.In comparison, the coronavirus meltdown in 2020 was a two-month affair, and we have now been moving higher for 17 months since the lows. Was the coronavirus meltdown a flash crash or indeed a bear market?The meltdown was so short-lived and was obviously nothing that we have ever experienced before.What Do I Emphasize Long Term Charts?Markets do have memories. In fact, I find that longer-term charts are more valuable than short-term charts in almost all timeframe comparisons. Since we are in uncharted territory in the US stock indices, we could gain some kind of insight into the previous trough to peak bull runs.In Summary:From pandemic low to current highs in the S&P 500: 103% in eighteen monthsFrom dotcom low to highs before US Financial Crisis: 105% in five yearsIt can be challenging to get a read on where the US equity markets are trading as a whole these days, given that there is no more chart resistance. In addition, market participants are now accustomed to higher highs, and every dip seems like it is bought more quickly than the last. Although using comparisons like this will not provide insight into exact entry and exit levels, such analysis can provide some long-term comparisons in an otherwise incomparable market. I do hope you find value in this perspective.Now, for our premium subscribers, let's review the markets that we are covering (IYT, UDN, ERTH, & TAN). Not a Premium subscriber yet? Go Premium and receive my Stock Trading Alerts that include the full analysis and key price levels.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Rafael ZorabedianStock Trading StrategistSunshine Profits: Effective Investment through Diligence & Care* * * * *This content is for informational and analytical purposes only. All essays, research, and information found above represent analyses and opinions of Rafael Zorabedian, and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. You should not construe any such information or other material as investment, financial, or other advice. Nothing contained in this article constitutes a recommendation, endorsement to buy or sell any security or futures contract. Any references to any particular securities or futures contracts are for example and informational purposes only. Seek a licensed professional for investment advice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Information is from sources believed to be reliable; but its accuracy, completeness, and interpretation are not guaranteed. Although the information provided above is based on careful research and sources that are believed to be accurate, Rafael Zorabedian, and his associates do not guarantee the accuracy or thoroughness of the data or information reported. Mr. Zorabedian is not a Registered Investment Advisor. By reading Rafael Zorabedian’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. Trading, including technical trading, is speculative and high-risk. There is a substantial risk of loss involved in trading, and it is not suitable for everyone. Futures, foreign currency and options trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment when trading futures, foreign currencies, margined securities, shorting securities, and trading options. Risk capital is money that can be lost without jeopardizing one’s financial security or lifestyle. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Rafael Zorabedian, Sunshine Profits' employees, affiliates, as well as members of their families may have a short or long position in any securities, futures contracts, options or other financial instruments including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice. Past performance is not indicative of future results. There is a risk of loss in trading.
Gold and Silver Massacre to Continue?

Gold and Silver Massacre to Continue?

Monica Kingsley Monica Kingsley 09.08.2021 15:59
Again, today’s report will be way shorter than usual, and focus only on select charts so as to drive position details of all the five publications.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookThe tightly tracking each other indices – S&P 500 and Nasdaq – are likely to part ways to a degree soon. As Treasury yields made a double bottom, look for more tech to give way to cyclicals as they come back. Inflation, reopening trades and interest-rate sensitive spreads (e.g. financials over utilities) should start doing better.Credit MarketsHigh yield corporate bonds resilience is a good sign, and credit spreads likely to start widening again would confirm the continued albeit questioned economic expansion. Not hiccup-free but still continuing – unless the Fed tightens prematurely and too much. The market isn‘t worried about that though at the moment.Gold, Silver and MinersGrim price action in the metals, and more be yet to come (looking at overnight price action, in all likehood we‘re done with shakeouts) – gold and silver usually do better once the waiting for taper is over. The Bernanke experience is the right one to compare taper prospects to, but the Fed will have a much harder time mopping up the excess liquidity than it did in 2018 – commercial bank credit creation isn‘t still there to make up for lost central bank purchases. Gold is getting inordinarily scared even as inflation isn‘t showing signs of retreating and real rates remain deeply negative – only inflation expectations have been jawboned. As neither miners to gold ratio nor TIPS signal panic, the only question is when the metals would stabilize and whether a fresh washout would occur or not. My view is that we‘re way closer to the pain‘s end than to its June beginning.Crude OilOil staged another reversal, and it was intraday to the downside. How credible is that? Again trading within the $60-$80 range, I‘m of the opinion that prices are interesting to the buyers here, as black gold got caught in the taper fears selloff just as gold with silver or copper did. Oil demand may be also coming under pressure through all the restrictions even though APT doesn‘t signal its sharply rising odds (yet).CopperCopper retreated from promising upswing, but its indicators are slowly turning positive. While it has mirrored the yields compression (signs of weakening growth / growth worries), it looks ready to gradually come back to life and play catch up with the commodity index.Bitcoin and EthereumResolute downswing rejection of Sunday‘s retracement in both Ethereum and Bitcoin – the bulls are on the march still. Cryptos have turned the corner very evidently indeed. With so much bearish sentiment out there, the dips might be short-lasting and shallow.SummaryIn place of summary today, please see the above chart descriptions for my take.Thank you for having read today‘s free analysis, which is available in full here at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
As Pressure on the Fed to Act Grows..

As Pressure on the Fed to Act Grows..

Monica Kingsley Monica Kingsley 12.08.2021 16:13
CPI banished the specter of rising inflation to the markets, coming in not too hot, not too cold. Still, the signs pointing to broadening the base of price increases are hard to miss, which today‘s PPI would likely and did illustrate. The other key headline event was the Dallas Fed calling for taper announcement in September, and its actual start in October – and given how the overnight rally in commodities fizzled out, the decision to tighten many open trades‘ parameters earlier today, was a good one in lightening overall risk.Again, today’s report will be shorter than usual, and focus on select charts so as to drive position details of all the five publications.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookThe infrastructure bill achieved only so much in driving value and risk appetite within S&P 500 yesterday – the Monday announced upcoming divergence of the two leading indices clearly shows in the Nasdaq underperformance driven by tech behemoths yesterday.Credit MarketsCredit markets made a modest turn, but the white candle‘s credibility is taken down a notch by the weak volume. It isn‘t fully balanced by the relative strength in LQD vs. TLT – Treasury yields are indeed about to start widening again as I‘ve written yesterday and before. We‘re still in an economic expansion that got a fresh boost, and financials to utilities are likely to keep doing well.Gold, Silver and MinersNice rebound in gold, but coupled with poor miners performance, it remains suspect. Look for any hawkish Fed utterances to hit here in the metals harder than in commodities. Funny, taper is hawkish in today‘s environment, I know, but still. The dust hasn‘t yet settled in spite of repeated inflation expectations upticks and strong TIPS performance. The market is obviously giving the Fed the benefit of the (inflation fighter) doubt, which though looks like a losing proposition medium-term.Crude OilOil has staged another intraday rebound, and in spite of the oil sector resilience, isn‘t out of the woods just yet. While the daily indicators are improving, I would like to see a bit more price resilience first.CopperCopper has likewise turned higher, trailing behind the sharply recovering commodity index. More back and forth movement is to be expected at least today, which mirrors the prior oil very short-term outlook.Bitcoin and EthereumThe slow motion crypto upswing has paused, and I would prefer to see signs of the bullish strength returning first. SummaryIn place of summary today, please see the above chart descriptions for my take.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.
USDX Resurgence: Don’t Let It Catch You Flat-Footed!

USDX Resurgence: Don’t Let It Catch You Flat-Footed!

Finance Press Release Finance Press Release 23.08.2021 15:45
With its negative correlation to the metals, the USDX rally weighed heavily on gold, silver and stocks. Stop and think: what would be if it continued?While the overwhelming majority of investors entered 2021 with a bearish outlook for the U.S. dollar, our optimism has proved quite prescient. The USDX bottomed at the beginning of the year. With the USD Index hitting a new 2021 high last week – combined with the EUR/USD, the GDX ETF, the GDXJ ETF, and the price of silver (in terms of the closing prices) hitting new 2021 lows – the ‘pain trade’ has caught many market participants flat-footed. Even silver stocks (the SIL ETF) closed at new yearly lows.Moreover, after the USD Index surged above the neckline of its inverse (bullish) head & shoulders pattern and confirmed the breakout above its cup and handle pattern, the combination of new daily and weekly highs is quite a bullish cocktail. Given all that, even if a short-term pullback materializes, the USDX remains poised to challenge ~97.5 - 98 over the medium term — perhaps even over the short term (next several weeks).Please see below:Furthermore, as the USD Index seeks higher ground, the euro has fallen off a cliff. For context, the EUR/USD accounts for nearly 58% of the movement of the USD Index, and that’s why the currency pair’s performance is so important. If you analyze the chart below, you can see that the Euro Index has confirmed the breakdown below its bearish head & shoulders pattern, and the ominous event was further validated after the back-test of the breakdown failed and the Euro Index hit a new 2021 low.Please see below:Eye In the Sky Doesn’t LieWhat is signaling trouble for dollar bears as well, 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).What’s more, 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.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 here is likely not a good idea.Ok, but didn’t we just see strength in gold – the one that you just wrote about? The USD Index soared last week by a full index point, and yet gold didn’t decline…That’s a good question, but the context is very important when analyzing specific price moves and their relative strengths. As I wrote earlier, we saw new yearly lows in practically every other important asset used for determining next moves in the precious metals sector: the EUR/USD, silver, and mining stocks (including practically all noteworthy ETFs and indices). So, did gold really show strength by not declining despite the USD’s strength, or was gold’s performance just a small, local deviation from the ongoing trend? Since practically everything else points to lower PM prices in the next weeks, the latter is more probable.Besides, there are both: technical and fundamental reasons for gold to behave in this way right now.The technical reason comes from the looming triangle-vertex-based turning point in gold, which is due today.The rising black support line starts at the 2020 low, which is not visible on the chart.Since these points work on a near-to basis, we might see a turnaround today or within the next few days.Seen Anything on the News Recently?Fundamentally, did anything important from the geopolitical point of view happen recently? Like, for example, the U.S. withdrawing from Afghanistan? Exactly…Geopolitical events tend to impact gold much more than they impact other parts of the precious metals sector, which serves as a perfect explanation of why gold didn’t decline along with the rest of the PMs. As a reminder, geopolitical events usually have a visible but temporary impact on the gold price. They change its short-term price moves, but they don’t change the forecast for gold in general.Consequently, it was not really the strength in gold vs. the USD Index that took place last week. It was a mix of the above and gold’s weakness relative to what happened in a geopolitical arena sprinkled with technicals. All in all, it’s not bullish for the PMs.On top of that, the eye in the sky doesn’t lie. And with the USDX’s long-term breakout clearly visible, the smart money is already backing the greenback.Please see below:Finally, while short covering helped propel the USD Index higher last week, speculators’ positioning still has room to run. For example, while the latest Commitments of Traders (COT) report shows that net-positioning (long 19,211 contracts) by non-commercial (speculative) futures traders is near its 2021 highs, enthusiasm for the U.S. dollar is still well below the highs witnessed in previous years.Source: COTThe bottom line?Once the momentum unfolds, ~94.5 is likely the USD Index’s first stop, ~98 is likely the next stop, 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 U.S. dollar’s resurgence has weighed heavily on gold, silver and mining stocks. And with the technicals, fundamentals and shifting sentiment supporting a higher USD Index over the medium term, the metals’ strong negative correlation with the U.S. dollar should give investors a cause for pause. To that point, while we’re bullish on gold, silver and mining stocks’ long-term prospects, sharp declines will likely materialize over the medium term before they continue their secular uptrends.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.
Gold & the USDX: Correlations

Best Real Assets to Catch Fire Now

Monica Kingsley Monica Kingsley 24.08.2021 16:37
Friday‘s optimism carried over to Monday, and far from only in stocks. Pendulum swinging the taper tough talk being just talk, worked powerfully to lift the beaten commodities – and unlike on Friday, oil joined in. The celebrations were a little too powerful, and I‘m looking for at least a modest daily consolidation in yesterday‘s star performers today.What was most powerful though, was the daily reversal in the dollar while yields remained pretty much unchanged. The dialing back of taper didn‘t lift the dollar exactly – the repo market being fixed through meager 5 basis points rate, served it better. Anyway:(…) As I had been writing thoughout the week and well before, mathematics of growing deficits doesn‘t favor decreasing asset purchases. On top, the economy appears a little slowing down – while no recession this year or next is likely – we‘re midpoint in the expansion cycle as per my credit spread indicators – the slowdown looks inevitable, and the only question is the extent and seriousness of any Fed tapering.And with much of the tapering done through the repo market in a way already, the focus will shift to the balooning deficits and debt ceiling so as to confront the disappointment creeping in through Monday‘s PMIs and more. I‘m not looking though for a deterioration strong enough to derail the stock market and commodities bull runs. Let alone the precious metals one. A good signal thereof would be widening credit spreads on the long end as the short end has been flattened already.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookReversal continuation on still strong volume – the 500-strong index is likely to consolidate the sharp 2-day gains, and so is Nasdaq, the more so if a slight risk-off whiff appears again. All it takes is one less than dovish Fed pronouncement.Credit MarketsHigh yield corporate bonds gapped higher, and closed on a strong note – daily consolidation wouldn‘t be out of the question. Overall positive turn in credit markets – one that is able to carry the stock indices during the coming days.Gold, Silver and MinersMiners joined in the gold upswing, in what reflects more than a daily weakness in the dollar. Silver is catching fire too, and yesterday‘s summary about the PMs upswing being the tamest thus far, might need revisiting once the fiscal and monetary realities sink in.Crude OilEnergy stocks stabilization facilitated the oil rebound, and black gold mustered strength seen last in mid Jul. The local bottom is in, and too much of a retracement would be a gift to the bulls.CopperCopper rebound continues, and stabilization at around 4.25 would be very constructive for the bulls so as to take on the 50-day moving average next. The copper chart retains strongly bullish flavor even if we might go a little sideways first still.Bitcoin and EthereumCryptos are still short-term undecided – backing and filling before another upswing wouldn‘t be at all surprising.SummaryFollowing Monday‘s gains, consolidation in the risk-on sentiment is likely for today, except for the most beaten down commodities and precious metals (these can continue extending gains). Thereafter, look for more short-term trigger happiness as the markets strive to decipher the upcoming Jackson Hole statements, and preposition themselves accordingly.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.
Stock Market Drops. Will Correction Continues?

Stock Market Drops. Will Correction Continues?

Kseniya Medik Kseniya Medik 20.09.2021 13:22
The US broad-market index, S&P 500, has been pressed below the 50-day moving average for the first time since March! Why?Investors are waiting for the Federal Reserve to hold a meeting on Wednesday. The central bank isn’t likely to take some hawkish actions, but it may hint at tapering this year. This will be good news for the US dollar and negative for the stock market. The anticipation of this decision is already setting the market in motion. The overall sentiment is pressing not only the US stock indices but also the Hang Seng index and an Australian one. Besides, most of the risk-on assets are losing their value while the US dollar is getting stronger. Quadruple witching is adding to the increased volatility as well. It is the simultaneous expiration of four kinds of options and futures contracts.Tech outlookThe S&P 500 index (US500) has dropped below the lower line of Bollinger Bands, which means that the price is at extreme lows and it’s going to reverse up soon. However, the correction may continue if the index breaks below the support line of 4380. The stock index may reach the 100-day moving average of 4335. Not to miss the reversal, we highly recommend you add the MACD indicator to your chart and monitor the breakout above the zero line. When it occurs, it would signal the upcoming reversal up. Resistance levels are the 50-day moving average of 4430 and the middle line of Bollinger Bands at 4500. Download the FBS Trader app to trade anytime anywhere! For personal computer or laptop, use MetaTrader 5!
Stocks Extend Their Consolidation Ahead of Friday’s NFP Data

Stocks Extend Their Consolidation Ahead of Friday’s NFP Data

Finance Press Release Finance Press Release 06.10.2021 15:55
Stocks extended their consolidation yesterday as the index gained over 1%. But today it is expected to open lower again. Is this a bottoming pattern?The S&P 500 index gained 1.05% on Tuesday, as it bounced from the 4,300 level again. For now, it looks like a consolidation following a month-long decline. The market will be waiting for Friday’s Nonfarm Payrolls number release and the coming quarterly corporate earnings season. Today’s ADP Non-Farm Employment Change release has been better than expected at +568,000, but it only brought more uncertainty ahead of the Friday’s data. And we will likely see some further short-term fluctuations. The main indices are expected to open around 0.8% lower this morning.The support level remains at 4,290-4,300. On the other hand, the resistance level is at 4,375-4,400, marked by the recent local highs. The S&P 500 continues to trade below its month-long downward trend line, as we can see on the daily chart (chart by courtesy of http://stockcharts.com):Dow Jones Is Also Going SidewaysLet’s take a look at the Dow Jones Industrial Average chart. In early September the blue-chip index broke below a two-month-long rising wedge downward reversal pattern. Last week it got back closer to the mid-September local low. However, unlike the broad stock market’s gauge, it managed to stay above that support level. The nearest important resistance level remains at around 34,500, as we can see on the daily chart:Apple Broke Below Its Support LevelApple stock weighs around 6.1% in the S&P 500 index, so it is important for the whole broad stock market picture. Since early September it has been declining from the record high. Recently the stock broke below the support level of around $142, marked by the previous local lows. The $142 price level is acting as a resistance level right now.ConclusionThe S&P 500 index has been trading within a short-term consolidation since last Thursday. On Monday the broad stock market retraced its Friday’s advance and the S&P 500 index fell to the 4,300 level again but yesterday it came back higher. There have been no confirmed positive signals so far. However, the risk/reward perspective seems less favorable right now and no positions are currently justified.Here’s the breakdown:The S&P 500 trades within a short-term consolidation that looks like a flat correction within a month-long downtrend.Our speculative short position has been closed right before the opening of Friday’s cash market’s trading session.However, we are still expecting more downward pressure and a correction to 4,200-4,250 level.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.
Stocks’ Breakout May Be Short-Lived, NFP Release Leaves Question Marks

Stocks’ Breakout May Be Short-Lived, NFP Release Leaves Question Marks

Finance Press Release Finance Press Release 08.10.2021 15:51
Stocks broke above their consolidation yesterday. Is this an upward reversal or just another upward correction? The NFP release leaves question marks.The S&P 500 index gained 0.83% on Thursday following breaking above the recent local highs and the 4,400 price level. The market retraced most of its late September’s decline yesterday as investors awaited today’s monthly jobs data release, among other factors. The Nonfarm Payrolls release has been worse than expected at +194,000. However, the main indices are expected to open 0.1-0.5% higher this morning.The support level is now at 4,365-4,385, marked by yesterday’s daily gap up of 4,365.57-4,383.73. On the other hand, the resistance level is at 4,430-4,450. The S&P 500 broke above its month-long downward trend line, as we can see on the daily chart (chart by courtesy of http://stockcharts.com):S&P 500 Remains Above Medium-Term Support LevelThe S&P 500 index is trading below its almost year-long upward trend line. The nearest important medium-term support level remains at 4,200-4,300, as we can see on the weekly chart:Dow Jones Got Back to Its Downward Trend LineLet’s take a look at the Dow Jones Industrial Average chart. The blue-chip index also broke above its short-term consolidation yesterday. However, it remained below a month-long downward trend line. The nearest important resistance level is at 35,000, as we can see on the daily chart:Apple Is Back Above $142 Price Level AgainApple stock weighs around 6.1% in the S&P 500 index, so it is important for the whole broad stock market picture. The stock broke above $142 price level yesterday but for now it looks like a correction within a downtrend or a consolidation following the September’s decline. The resistance level is now at $144, marked by the previous local highs.ConclusionThe S&P 500 index has been trading within a short-term consolidation since last Thursday. Yesterday the index broke above that consolidation and it got back above the 4,400 level. For now it looks like an upward correction following the late September’s declines.The risk/reward perspective seems less favorable right now and no positions are currently justified.Here’s the breakdown:The S&P 500 broke above its week-long consolidation, but bulls are not out of the woods yet, as the worse-than-expected jobs data release may lead to some more uncertainty.Our speculative short position has been closed last Friday at a much lower level.We are still expecting more downward pressure and a correction to 4,200-4,250 level.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.
Stocks Are Going Sideways, Is This a Month-Long Bear Flag Pattern?

Stocks Are Going Sideways, Is This a Month-Long Bear Flag Pattern?

Finance Press Release Finance Press Release 13.10.2021 15:55
The S&P 500 index extended its short-term decline yesterday. Is this a new downtrend or still just a correction following last week’s breakout?Stocks went slightly lower yesterday, as the S&P 500 index lost 0.24%. The broad stock market index got back to the 4,350 level. Investors were taking short-term profits off the table following last Thursday’s rally. It looks like a downward correction so far, as the index remains above the late Sep. - early Oct. consolidation. This morning the main indices are expected to open between -0.1% and +0.2% vs. their yesterday’s closing prices. So we may see a consolidation along the mentioned support level of 4,350 following today’s mixed Consumer Price Index number release.The support level is now at around 4,350 and the next support level is at 4,300-4,320, marked by the recent local lows. On the other hand, the resistance level is at 4,400-4,420. The S&P 500 remains slightly above its month-long downward trend line, as we can see on the daily chart (chart by courtesy of http://stockcharts.com):Dow Jones Remains Relatively WeakerLet’s take a look at the Dow Jones Industrial Average chart. The blue-chip index remains below its month-long downward trend line. So it is relatively weaker than the broad stock market. The nearest important resistance level is at 35,000 and the support level is at 33,800, among others, as we can see on the daily chart:Apple Is Still At the Crucial $142 Price LevelApple stock weighs around 6.1% in the S&P 500 index, so it is important for the whole broad stock market picture. The stock continues to trade along the $142 price level. And on Monday it bounced from the resistance level of $144.Is It Better to Stay Out Of the Market Right Now?Let’s take a look at the hourly chart of the S&P 500 futures contract. The market bounced back from the 4,400 level on Monday and now it is trading within a consolidation along the 4,350 level. The support level is at 4,260-4,300, and the downward trend line is at 4,400. In our opinion no positions are currently justified from the risk/reward point of view. (chart by courtesy of http://tradingview.com):ConclusionThe S&P 500 index slightly extended its short-term downtrend on Tuesday, as investors awaited today’s CPI number release, among other factors. It came back to the 4,350 level after bouncing from the 4,400 level once again on Monday. We may see some more short-term uncertainty and the market will most likely extend its almost a month-long consolidation here.The risk/reward perspective seems less favorable right now and no positions are currently justified.Here’s the breakdown:The S&P 500 broke above its consolidation last week, but for now it looks like an upward correction within an over month-long downtrend.We are still expecting more downward pressure and a correction to 4,200-4,250 level.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.
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.
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.
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.
Oil holds steady as Biden considers releasing SPR

Oil holds steady as Biden considers releasing SPR

Walid Koudmani Walid Koudmani 15.11.2021 11:41
 Oil holds steady as Biden considers releasing SPR While oil prices have become exceedingly volatile in recent times after rising supply concerns and various production issues, prices have managed to stabilise with WTI hovering in the $80 range after retreating from a high of almost $85 reached last week. Meanwhile, calls on president Biden to release the country's strategic petroleum reserves (SPR) have mounted, as concerns for the rising price of gasoline has led many US politicians, including senate majority leader Schumer to pressure the president. This comes after OPEC decided once again to leave the rate of increase in production unchanged, despite oil prices having a significant impact on consumer activity and playing a significant part in the recent inflation discussions. While there is a lack of major data releases today, traders will be looking for any news relating to the supply of oil as an announcement by the US president could cause a short term immediate reaction for prices, while it's long term impact could ultimately be less significant.  Stock markets on edge after mixed Chinese data European indices have managed to start the day almost unchanged after a mostly positive Asian session, which saw the majority of stocks in the region gain slightly despite the mixed Chinese data. While Chinese industrial production increased 3.5% YoY in October (exp. 3.0% YoY) and retail sales were 4.9% YoY higher (exp. 3.5% YoY), urban investments increased only by 6.1% YoY (exp. 6.3% YoY) and showed the lowest daily steel output since December 2017 along with an alarming 17% drop in cement output, which is an important indicator for construction activity in the world's second largest economy. Investors could be more cautious heading into this week as several central bankers are expected to share their outlook on economic growth and as Wall Street earnings season nears its conclusion. Download our Mobile Trading App:   Google Play   App Store  
OVERVIEW OF COVESTING

OVERVIEW OF COVESTING

Prime XBT Prime XBT 17.11.2021 09:37
Nearly everyone familiar with the world of cryptocurrency knows about the successful platform called ChainLink. Also called LINK, ChainLink is the fifth global cryptocurrency platform in terms of market capitalization.  The mission of this decentralized union is to enhance real-world data in connecting smart contacts. This platform has grown its worth by 100% since January 2020. If you are wondering what cryptocurrency platform to invest in gain as much as 100% returns, this article holds the answer. In this article, we will introduce you to Covesting, provide vital information about the platform, and guide you as to whether or not you should get involved in Covesting. What you need to know about Covesting Covesting is a financial technology (fintech company) operating globally and registered in Gibraltar.  The company handles a vast range of software needs and offers solutions to individual customers and institutions globally. Covesting is one of the international firms that received the Distributed Ledger Technology License by the Gibraltar regulatory authorities, which gives it a boost and assurance of great achievements in 2020. Traders and new users can connect on Covesting through the Copy trading or social trading feature. The copy trading or social trading feature allows users to identify expert traders on the platform. After selecting experienced traders, they can automatically copy their trading patterns. Copy-trading or social trading is a smart tactic for both traders and their followers to earn a profit. In practice, when a trade is profitable, the expert trader receives a share of the profit from their followers. Likewise, the followers can trade with fewer fees and greater ease even if they are a novice in trading crypto. Covesting also has a unique token called COV that traders on the platform can use for their activities. Read on to learn more about COV and other features in Covesting. PrimeXBT's partnership with Covesting Covesting is in partnership with a renowned and award-winning trading platform PrimeXBT. The firm won the 2020 ADVFN International Financial Awards as the Best Bitcoin Margin Trading Platform.  PrimeXBT offers Bitcoin trade, forex, indices, stocks, commodities, etc. on a global scale and has over 1 billion USD trading volumes. Other features on PrimeXBT 1: 100 cryptocurrency leverage Accumulated assets from different asset providers. A safe and secure platform for trade. Vast range of trading tools. How to use Covesting through PrimeXBT Users and traders can assess Covesting through PrimeXBT and create strategies for funding and trading in a transparent environment. Tracking records will be made visible to potential traders who can monitor the trade records of expert traders. The followers will see their capital investment and returns, and then decide whether or not to copy the trade. You can search traders through the Covesting area. From the search results, you can decide on a successful trader to follow and copy. Following a trade and copying the trading pattern helps you to earn passive income with little or no knowledge. The traders-followers pattern is also an avenue for the traders to build their reputation. It will earn them more profit if they know what to do. Is COV Likely to Skyrocket? Investors can use the Covesting token (COV) to invest in the platform. Investing with the token is very profitable when the value appreciates.  Those interested in serious investment and profits can avail themselves of the supply of token available on the platform. 18,000,000 tokens are in circulation out of a total of 20,000,000 tokens. Top investors referred to as 'strong hands' control 50% of the total token in circulation. Covesting differentiates its utilities into core and secondary token utilities. With an ambitious business goal and direction, Covesting is out to expand its frontiers in business and fintech. The firm aspires to obtain more partnership deals with other third-party trading platforms asides from PrimeXBT through the white-label licensing agreements. With its current partnership with PrimeXBT, the two companies want to integrate the COV token into PrimeXBT. The purpose of this integration is to reduce the trading fee, expand the success fee, and increase followers' limits. Reduced Trading Fee A reduced trading fee is achievable for strategy managers who hold COV. The deduction in trading fees will cover about 10%-100% of the COV token, although, the particular COV discount level has not been ascertained. Higher Success Fee Percentage Followers can earn a higher percentage of profits on their success fee when they stake with COV tokens. Presently, profits from closed trades on Covesting are shared between the platform, traders, and followers. The percentage distribution of profit is calculated depending on the current rates and market conditions, of which traders and followers will receive a greater percentage profit than the platform. Limits on Follower Numbers Covesting plans to enforce a limit on followers to keep their utility high. However, a trader can increase follower numbers when they start staking COV tokens. Token Burns Covesting will calculate and burn a specific amount from its monthly or quarterly generated fees. The token burn will exclude affiliate earnings, fee discounts, and other costs.  Covesting has an admirable customer base, and the COV has a strong medium-term potential. Traders can also trade COV on other platforms, including onKuCoin. Benefits of Covesting and its COV-token In summary, these are what you can benefit from trading on Covesting and using the COV token. Team of trustworthy holders. Higher token value. Reliable partnerships with other renowned platforms. Possibilities of utility and token burns. Recommended by analysts on TradingView. A community of dedicated followers. Legitimate, registered, and regulated platform Token is still under the radar Our Verdict Our review has shown that investing and trading on Covesting has many benefits. However, this should not be your final research before investing your funds in this platform.  Find out more about Covesting and COV before you invest and trade. To learn more about the COV token and trading, you can visit their website. Also, follow traders to learn about their trading strategy.  In all, our verdict is that Covesting is a very promising platform for investment and trading, but make sure you do not invest until you are convinced that it is the best platform for you.
Covesting

Covesting

Prime XBT Prime XBT 15.11.2021 09:47
The decentralised oracle network ChainLink works by connecting contracts with data from around the world. Now one of the most popular cryptocurrencies, it can make you wonder where the next big cryptocurrency will be coming from and, more importantly, how to get on board before it explodes in popularity. It is time to introduce you to Coversting. What Is Covesting? Covesting is an international fintech corporation which offers an array of software solutions for customers across the world. Recognising the importance of being based in a country where the government fully supports what the company is about, Covesting is based in Gibraltar. Quickly becoming one of the first companies in the world to receive a Distributed Ledger Technology License, also referred to as DLT, from the authorities in the British Overseas Territory, Covesting has its own token; COV. Developing their own platform, Covesting connects traders with a variety of followers, a little similar to social media, allowing for both the follower and the trader to make profitable gains. Traders earn a small fee from the equity of their followers, while the followers benefit from hassle free trading by following the trader’s most successful strategies. This process is known as ‘copy trading’. Partnership with PrimeXBT Now available to everyone via PrimeXBT, the Covesting platform allows traders to make profit from each other as well as their own followers. To make capital, transparency is key. Traders create funds with their best strategies which users can then easily verify, along with the track record of the trader and how much money has been invested into each fund. If traders are able to build and maintain a good reputation, they will be able to generate a second income by attracting new followers. Users can view traders objectively, looking at their results and only invest when they are comfortable they have selected the right trader for them. This way, capital can be generated passively without knowledge of the market or any trading skills. PrimeXBT Offering services such as foreign exchange and stock indices, PrimeXBT is a Bitcoin based trading platform. With trading volumes over $1 billion (USD), in 2020 the company won ‘Best Bitcoin Margin Trading Platform’ at the International Financial Awards. As a platform, PrimeXBT can provide up to one hundred times leverage for cryptocurrencies, a wide range of technical analysis tools and extra security for efficient and safe trading. Why Will COV Be Popular? With a limited supply of tokens, only 18 million COV tokens are in circulation and half of these are held in ‘strong hands’. Holders of the tokens gain access to benefits and COV utilities will be divided up between Secondary and Core token utilities. Moving forward, Covesting plans to partner with other third parties to increase the utilities offered to token holders. So what will a COV token be used for? Well, it will be integrated into PrimeXBT and will be used for a number of functions. These include: Trading Fee Reduction Fee reduction tiers will range from between 10% and 100%, and the level of reduction permitted will depend on the amount of COV tokens held. The number of tokens required for each level reduction will be announced at a later date though there are a variety of options and benefits available. Improving Success Fee Percentage Followers can favourably increase the percentage of success fees by staking tokens and taking advantage of its utility. At the moment, Covesting takes a percentage of success fees on closed profitable trades. Determined by the corresponding offer, Covesting then distributes the remaining percentage between the follower, the strategy manager and the platform. Offers are subject to change depending on the current market conditions. By staking a certain amount of COV tokens, Covesting has a smaller percentage, with a larger share going to the follower on profits made by the strategy manager. Increasing Following Limits In order to keep token utility levels high, Covesting implements limitations on the maximum number of unique followers permitted, in addition to imposing limitations on capital. Staking COV tokens unlocks followers and raises capital limits. Token Burns Covesting will burn a portion of fees generated at regular intervals throughout the year. Calculated fees will exclude affiliate earnings, fee discounts and various other revenue impacts. COV tokens have a lot of potential in a relatively short time frame, being traded on KuCoin and Inter Alia. Covesting is surrounded by a very supportive community with the price reaction to Covesting’s module launch on PrimeXBT being extremely positive. In Summary The best piece of advice you can get is to visit the Covesting website and carry out your own research about the token before deciding whether or not to invest. You may also wish to try your hand at trading cryptocurrency on PrimeXBT. If you follow this link, you will receive a welcome bonus of $50 when you sign up. When you start to follow traders, it is important to remember that their past results are not a guarantee of any future results. You should also look at how long a certain strategy has been live on the platform. For example, the newer the strategy the more risk it involves and following some strategies can result in financial losses. This said, if you cannot afford to lose capital, do not invest until you are prepared to accept the risk of loss. Reasons for Holding COV Main reasons for holding COV tokens include: Trusted, licensed company Limited token supply Under the radar at the moment Future utility plans Top TradingView analyst recommendations Token burns Strong sense of community
A Guide To PrimeXBT V2.0

A Guide To PrimeXBT V2.0

Prime XBT Prime XBT 15.11.2021 09:43
PrimeXBT, your award-winning trading platform, has been upgraded to deliver even more value to the trading community. This upgrade includes several improvements to the platform's appearance and interface. But the biggest reason for the upgrade is the addition of Ethereum and stablecoin based margin accounts. In this guide, you will find all you need to know about the introduction of ETH, USDT, and USDC margin accounts, as well as other features of PrimeXBT's upgrade to version 2.0. Welcome To Version 2.0 When you first log into your account (since the upgrade), you’ll be greeted with a message introducing the updates. There are a few slides that also inform you of all the new features that have been added. You’ll notice that the dashboard has been reorganized and now includes a Main account section. This section provides you with the information you need regarding your margin accounts, wallet, followings or Covesting accounts, and more. The New Main Page Shows You All You Need In One Glance You can execute several operations from the Main page because it provides you everything you need at a glance. Some of these tasks include initiating withdrawals, making deposits, viewing your balances, creating margin accounts, and more. No matter the cryptocurrency (BTC, ETH, USDC, and USDT), you can create a separate margin account for each. You can also deposit COV tokens, but these are not for your margin accounts. Their use will be explained further in this guide. To fund any account from your PrimeXBT’s Main page, you have to deposit funds into the secure cryptocurrency address for that account. You can find the address within your PrimeXBT account dashboard. Once funded, you will need to move the crypto into the margin account from your wallet. New Accounts In ETH, USDC, and USDT With the Bitcoin-based margin trading, PrimeXBT earned many awards. Now there’s more! PrimeXBT has added Ethereum, Tether, and USD Coin. This is one of the Version 2.0 upgrade's most significant features and has been merged into the same account system and internal trading engine. You can use these currencies beyond Bitcoin-based margin trading. Get a free account with PrimeXBT and start trading with a small minimum deposit. You can sign up in less than 59 seconds, so do so now if you haven't registered with PrimeXBT. There are more than 50 CFDs for you to trade on PrimeXBT, and they cut across stock indices, commodities, crypto, Forex, and more. You can trade all of these within each individual currency type. You will find isolated account details within each dedicated margin account. Your All-New Reports Section PrimeXBT has also added a Reports section which contains detailed vital account information. You can find information such as a log of all your transactions in this section. This makes tax reporting and bookkeeping very easy. The Updated Referral Section As a result of the inclusion of these new currencies, the referral section has also been upgraded. This section of the website now lists commissions in whichever currencies new users trade in. In order words, if a user trades in Ethereum, commissions are generated and paid out in Ethereum. So, when you refer anyone to PrimeXBT, you will get your commissions in the currencies the user trades in. The referral system includes simple referral links you can use on different media, including forums and social media. You can share it with friends and loved ones too. Depending on where you are on PrimeXBT’s four-level referral system, you can get as much as 20% commissions per referral. Enhancements To The Covesting Copy Trading The Covesting Trading Module has been an innovative copy trading system connecting followers to strategy managers. The system makes it possible for both parties to earn and profit. With the addition of ETH, USDC, and USDT, this module has also been upgraded to support these cryptos and given a facelift. How Covesting Copy Trading Works Strategy managers post their trades for followers to copy. When they close their positions, both parties earn. These more skilled traders earn a commission (success fees) off of followers’ capital commissions. These commissions can add up quickly, and the top Covesting traders have already earned millions in commissions, as well as generated millions for their followers. Traders are reviewed by a five-star system that spurs everyone to be at their best. They are then ranked accordingly and displayed on global leaderboards, with different success factors, including their wins, total profits, and even losses, highlighted. With the inclusion of other currencies in version 2.0 of PrimeXBT, followers can only follow strategy managers in like-currencies, thus encouraging a diversified Covesting community. Followers with ETH-based margin accounts can now only follow strategy managers with the same currency accounts. We mentioned the COV utility token earlier. It is at the heart of the Covesting copy trading module and can be used to unlock many other benefits within the module. More PrimeXBT Features PrimeXBT has so many incredible features for traders. Some of these include responsive customer service, Turbo, an official blog containing lots of trading tips, educational guides, and more. Turbo With Turbo, you (all traders) have access to unique ways to position yourself in the market. It also includes an analysis section that that seamlessly integrates with TradingView for an incredible technical analysis and risk management experience, and more. Blog & News The company's blog and news tabs keep you updated with news and market information and content to help you become your better version of the trader you are and make the most of your trades. Security PrimeXBT prioritizes security. The platform is highly secure and built on bank-grade security infrastructure. With the help of a distinctive wallet structure that involves cold storage, the platform has never been hack. Each account is secured with address white-listing and two-factor authentication. PrimeXBT also boasts a 99.9% uptime. 24/7 Responsive Customer Support Besides all the fantastic features of PrimeXBT, one of its best is its 24/7 live customer support staff. They are trained and ever-ready to assist you with whatever issues you might have. There’s also a help center containing tutorials to help you with anything. Advanced Trading Tools PrimeXBT’s upgrade to version 2.0 offers traders an all-in-one platform for the complete trading experience. It contains all the advanced trading tools necessary to become the successful trader you always dreamed of while also minimizing risks. It has the best slippage in the industry with stop-loss orders to ensure capital preservation. It also offers you excellent opportunities with its leverages and diverse ways to access the markets. Stable Coins For Added Risk Protection Bitcoin and Ethereum are known to be subject to base currency account volatility. This type of volatility spurred many users to request the addition of stablecoins. With the inclusion of USDT and USDC, traders can now eliminate all risks associated with such volatility. This is one of the fundamental reasons for the upgrade to version 2.0. Today Is Your Best Time To Trade CFDs On An Award-Winning Platform With PrimeXBT's upgrade to version 2.0, you can now use BTC, ETH, USDT, and USDC for margin accounts. You can trade any combination of the most popular markets, including the S&P 500, Bitcoin, Forex, oil, and gold. And you can do this anywhere you are, digitally. All you need is our award-winning platform that has all the basic and advanced tools to help you reach your trading and financial dreams. Use PrimeXBT’s V2.0 Today!
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. Below are some of the unique qualities and benefits that PrimeXBT offers. · Registration is easy and speedy on the platform. · Hassle-free withdrawals are based on bank-grade and address whitelisting. · Reliable, technical software · Leverage up to 100 times on commodities, crypto, and stock indices. · Gold, Forex, Silver has about 1000 times leverage. · Secured and fantastic trading engine · PrimeXBT has the option to stop loss and take profit. · A demo account is available for free. · Customer service is open for all live chats 24 hours, 7 days a week. · Learning materials are also available. · The trading platform has updated and new tools for crypto trade. The above-mentioned characteristics and factors make PrimeXBT a highly recommendable trading platform for new crypto traders. All these benefits also make the PrimeXBT attractive, satisfactory, reliable, and remarkable for experienced crypto traders. HOW TO GET STARTED PrimeXBT has the simplest registration process. Registration on PrimeXBT is easy and fast. You will be required only to give a valid email address and your country of residence. From there, you would be asked to proceed to confirm your email address. You will need to have a username and a secret code to enable you to log in another time. Once you have completed the registration process, you can proceed to make your initial deposit. HOW TO MAKE DEPOSITS PrimeXBT only allows payments to a BTC address. Bitcoin is the only cryptocurrency for all registered accounts. The minimum deposit fee is 0.01 Bitcoin. Another means of the deposit is through a third-party channel called Changelly. All BTC deposits are immediately confirmed and converted to funds. You must transfer funds to your trading account upon deposit. Funds in the trading account will help you to save some capital separately for trading purposes. This is different from what you have in the trading account for margin. HOW TO MAKE WITHDRAWALS All withdrawals on PrimeXBT are processed once daily. Making withdrawal on PrimeXBT is also a simple process like the deposit. The system converts the Bitcoins to funds before you cash out. After that, the funds go to another BTC address. You may lose funds if you send them to other cryptocurrency exchange different from Bitcoin. The withdrawal window processes all withdrawals at once in a day on PrimeXBT. So, all pending withdrawals will wait until the rollover period. They will join the queue until the next rollover. All the payments from the platform are also officially addressed to the BTC addresses. TRADING ON PRIMEXBT Trading on PrimeXBT is subject to customers' preferences. The trading terminals are developed with excellent built-in software. They have a good number of trading indicators that include SAR, RSI, Ichimoku, and Parabolic, among others. All trading terminals are customized to suit the traders' satisfaction. The trading terminal has a good number of widgets like watch lists and charts. The reliability of the trading engine accounts to about 99.9%, which is known to be fast and error-free. Traders are positioned to enjoy maximum profit irrespective of market turnout. Traders can increase their profits and reduce all risks with the stop loss and take profit orders available on the platform. ASSETS There are about 50 distinctive traditional and digital assets that PrimeXBT offers. These assets create several means of making a profit on PrimeXBT, unlike other rival trading platforms. They include: · Different cryptocurrencies. For example, Bitcoin, Ripple, and Etherum. · Valuable metals. Gold and Silver. · Commodities. WTI Crude Oil, Natural gas, Brent. · Stock Indices and CFDs. Examples are ASX 200, S&P 500, and DAX 30. · Forex currencies. Like AUD, USD, JPY, etc. Considering the cryptocurrency trading market, PrimeXBT has the most attractive and exceptional value assets. REFERRAL Referrals on the platform also generate commissions for traders. Traders who refer customers to the site can generate up to 50 BTC. Traders who are on the leaderboard of the referral chain can even generate over 50 BTC. As the referral increases, the commission increases as well. The referral level and commission grow as each referred trader refer to other traders the platform. The trader who makes the first referral can benefit up to four levels of commission based on the growth of the chain. PrimeXBT also uses CPA offers for its traders. A trader can also enjoy ambassador relationships and personal customer agents as they continue to refer more clients to the platform. CUSTOMER CARE Through an online chat on a daily and weekly basis, customer service agents are available on PrimeXBT. They also give other help center guides, regular updates, and information through their blog. PrimeXBT also has social media platforms that are open to receiving customers' complaints and requests. The customer care representatives are trained and prepared to give any assistance needed to use the platform. SECURITY A secured transaction is one priority of PrimeXBT, which is why they take extensive measures to prevent the security threat of any trading account. PrimeXBT uses Cloudflare technology to ensure the security of all trading on its platforms. All withdrawal accounts are whitelisted and encrypted. The accounts are protected with two-step authentication. One way to test the security level of PrimeXBT is that no personal information is required. The simple step to register is to supply a valid email address, country of residence, create a username, and create a password. TURBO The company recently introduced a new and fantastic trading tool called Turbo. It is also a BTC trading platform with a slight difference from Prime XBT. Turbo works for short-term and synthetic Bitcoin transactions. Traders can select and book for any contract from 30 seconds, a minute or five minutes UP, and DOWN contract. They also order either a profit or loss contract with the new Turbo tool. This new tool is an innovative and exciting trend that makes PrimeXBT unrivaled. CONCLUSION PrimeXBT has won several awards like the ADVFN as the Best Bitcoin Margin Trading Platform. The platform also provides highly competitive features for its traders.  All these are summed in the extremely-fast registration process, rewarding tools, and a wide selection of modern and conventional assets.  If you are keen and concerned about secured and reliable cryptocurrency trade, PrimeXBT is a recommendation for you. PrimeXBT has the best, fast, and profitable assets and cryptocurrency trading. Study all the training tools available and register a free trading account on PrimeXBT to get started.
Agriculture rally resumes led by coffee, wheat and sugar

Agriculture rally resumes led by coffee, wheat and sugar

Ole Hansen Ole Hansen 18.11.2021 16:35
Summary:  The cost of your breakfast and food in general continues to rise, and following a few months of sideways trading, the Bloomberg Agriculture index, which tracks a basket of major food commodity futures, reached a fresh five-year high this week. Apart from troubled weather reducing available supply there are several other reasons playing a their part and in this update we take a look at some of those, including the reasons why coffee and wheat are two of the hottest food commodities this year. The cost of your breakfast and food in general continues to rise, and following a few months of sideways trading, the Bloomberg Agriculture index, which tracks a basket of major food commodity futures, reached a fresh five-year high this week. The table below shows the commodities with the biggest impact this year has been led by coffee, edible oils, wheat and sugar. There are individual reasons behind the strong gains, but what they all have in common has been a troubled weather year, a post pandemic jump in demand leading to widespread supply chains disruptions and more recently rising production costs via surging fertilizer prices and rising cost of fuels, such as diesel. The La Ninã weather pattern which can lead to floods, drought and cooler temperatures around the world returned to haunt producers this year, and recent forecasts say it will prevail through the coming northern hemisphere winter. In large swathes of South America and parts of North America a La Ninã is normally accompanied by drought, whereas in Australia and parts of Southeast Asia it is often resulting in heavy rainfall. Fertilizer prices have skyrocketed during the past few months as a result of soaring natural gas prices which have forced some European production plants to halt or reduce production. Fertilizer indices tracking prices in North America and Western Europe both trades more than 200% above their five-year averages. The surge has raised concerns farmers may reduce their usage of fertilizers or shift more acres into crops that require less nutrients. A drop in yields could drive prices even higher, thereby worsening already strong food inflation. Supply chain problems/disruptions: We are all familiar with stories about port congestion, lack of containers and surging prices on all the major routes around the world, especially from the production hub in Asia to major ports in Europe and the U.S. These problems began as a result of the pandemic which initially drove a major amount of order cancellations before the world a few months later went on a massive spending spree for consumer goods as the service sector grinded to a halt. These developments together with port disruptions due to continued Covid outbreaks helped trigger disruptions that to this day continue to cause problems for shippers of goods, including many of the food commodities that are transported in special containers. Arabica coffee trades at a nine-year high at $2.38 per pound with the supply outlook looking increasingly tight following an annus horribilis in Brazil where frost and drought dealt a blow to the 2021 crop. In addition to weather, the market also had to deal with lack of shipments and high container rates, surging fertilizer prices and roasters in Europe struggling to source supplies from alternative producers in Columbia and Vietnam. If that wasn’t enough, there is now also a growing risk of civil war in Ethiopia, the world’s third biggest grower of the Arabica bean. What may prove to be even worse over the coming months is that the flowering, or lack of, for the 2022 on-season crop is pointing to another low production year. The break above $2.25, the 2014 high may signal a market running towards $3, a record level that was last seen in 2011. Wheat: From a global food security perspective, the ongoing rally in global wheat prices is an even bigger concern. This week we have seen Chicago wheat futures climb to their highest level in nine years, while here in Europe, the benchmark Paris Milling Wheat contract trades just below €300 per tons, its highest price ever. Just like coffee, weather worries are the main driver, following a poor harvest in North America together with a year-on-year decline in exports from Russia, the world’s largest shipper. These developments have triggered increased demand for European sourced wheat, and with the prospect of another potentially challenging crop year in 2022 caused by weather and high fertilizer costs, some of the major importers have recently been stepping up their pace of purchase in order to cool local food prices, and to secure supplies ahead of winter. With buyers increasingly competing for supplies the market will look for some relief from the upcoming and promise-looking harvests in Argentina and Australia, taking place from now until January. One of the most actively traded ETF tracking the agriculture sector, the Invesco DB Agriculture Fund, broke higher last week to reach a four-year high. The index tracks the performance of 11 major futures markets spread across grains, softs and livestock. Source: Saxo Group
A GUIDE TO PRIMEXBT VERSION 2.0

A GUIDE TO PRIMEXBT VERSION 2.0

Prime XBT Prime XBT 18.11.2021 17:27
 Just recently, PrimeXBT released an upgraded version, called the V2.0. This version brought about nothing short of a revolution to the trading platform, including greater access to the platform, improved interface, and enhanced visuals. V2.0 also supports Ethereum (ETH) and digital currency-based margin accounts. This is a guide to everything you should know about PrimeXBT V2.0, and all the upgrades you find on this trading platform, including the USDT, USDC, and ETH margin accounts. INTRODUCTION TO PRIMEXBT V2.0 When you visit PrimeXBT's website, you will get a welcome message if it is your first visit since the upgrade. Do a quick read of the new additions and features noted in the text. The dashboard, which has been upgraded and reorganized, consists of the main account from where you can view your margin accounts, Covesting details, available wallets, account followings, and other relevant details. VERSION 2.O MAIN PAGE AT A GLANCE You have all relevant information immediately you hit the main page, including how to make a withdrawal, deposit, or check your balance.  From the main page, you can deposit funds, make withdrawals, monitor your balance, and do so much more. You can also set up a different account for ETH, USDT, and BTC right from the main page. Funding your account is swift and easy; it starts by depositing funds to all your crypto addresses connected to your dashboard. The next step is to move your crypto deposit from your wallet to all the margin accounts you want to send it. INTRODUCING NEW FEATURES: USDT, USDC, AND ETH ACCOUNTS AND CURRENCIES Do you know what's hot? It is a fact that users now have more options apart from the Bitcoin margin trading that makes PrimeXBT famous. Once you're logged in, you can trade using new currencies like USD Coin, Ethereum, or Tether. PrimeXBT has everything in place for smooth operations as the upgrades and additions are well integrated into the accounts, site infrastructure, and trading engine. New Signings to PrimeXBT can enjoy all these features when they set up a free account and begin trading with little deposit. A GUIDE TO TRADING WITHIN MARGIN ACCOUNTS ON PRIMEXBT V2.0 With V2.0, you can trade with separate account details for each of your margin accounts. You can also trade with any CFD available on PrimeXBT V2.0., including stock indices, forex, commodities, crypto, and about 46 others.   BREEZE THROUGH ACCOUNTING AND TAX REPORTING WITH THE NEWLY-ADDED REPORTS SECTION A visit to the report section newly added to the V2.0 PrimeXBT website holds in-depth account information, including transaction history, basic account details, and movement of funds. All these features will make it easier to keep up with tax and other accounting activities. GET NEW USERS TO PRIMEXBT AND GET REFERRAL BONUSES WITH NEW CURRENCIES  If you have been referring users to PrimeXBT or you have plans of starting, there's a currency tweak you should know. The referral site has undergone some updates, particularly the addition of those new currencies. When you refer a person to PrimeXBT, you will receive your commission in the trading currency that the new user chooses to use in their trade. You can share PrimeXBT referral links on social media groups and amongst friends and family. If you leverage these links, you can get more revenue apart from your trading profit. You can get as much as 20% on commission when you leverage PrimeXBT's referral system. V 2.0 COVESTING COPY TRADING GOT REALLY SMOOTH If any section was left out of the upgrade, it wasn't the covesting module, which got upgraded to support USDT, ETH, and USDC, alongside the exiting Bitcoin trading currencies. PrimeXBT's copy trading system brings strategy managers and followers together for a profitable trading operation and mutual profitability. Followers can copy the trades of strategy managers, helping them to earn more. In return, followers will give a percentage of their earnings to the strategy managers that helped them trade successfully. This interaction has helped both followers and top traders to earn millions trading on PrimeXBT. The platform's ranking system showcases every trader and their rankings on the global leaderboard, alongside their trade profits, losses, wins, and other relevant information. You will also find a 5-star rating system for trades. With the introduction of PrimeXBT V2.0, followers and strategy managers can carry out their interactions with any of the new and existing currencies (USDC, ETH, USDT, and BTC).  Finally, on Covesting copy trading, we find the COV utility token that traders can explore to get more benefits from the copy trading module. BLOG, TURBO, CUSTOMER SUPPORT, AND MORE FROM PRIMEXBT  On PrimeXBT you can leverage Turbo for better positioning in the trade market, and access market information, news, and the company offers on the official blog. Many guides and articles exist on the company blog to guide traders, offer trading tips, and answer relevant questions. TradingView integration offers an analysis of trading strategies, risk assessment, and management, etc. PrimeXBT has 24-hour live customer support with helpful staff available to answer your questions and offer their help. The help center also has a lot of tutorials and helpful materials. PrimeXBT is solid and secure; with bank-level security and infrastructure, accounts have address whitelisting and two-factor verification. Since its creation, the platform has not been a victim of hacking, thanks to the secure wall structure. With a near 100% uptime, there's little wonder why PrimeXBT keeps receiving excellence awards. 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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.
Shiba Inu, Dogecoin, Cardano, and More Crypto in FBS Trader

Shiba Inu, Dogecoin, Cardano, and More Crypto in FBS Trader

Finance Press Release Finance Press Release 24.11.2021 08:39
Shiba Inu, Dogecoin, Cardano, and More Crypto in FBS Trader The international trading broker FBS keeps up with the latest trends and adds new crypto assets to its product. Now Shiba Inu, Dogecoin, Cardano, and ten more crypto assets are available for traders in the FBS Trader app. The crypto market hits new heights Crypto trading has gained popularity all over the world and seems to be even more widespread. Thus, being among the financial market leaders, FBS Trader provides its clients a Crypto account to trade crypto efficiently. By opening this account, traders open the door to unlimited trading any day and any time. Also, for convenience and ease of use, the deposits are converted into USD. A Crypto account gives traders access to more than a hundred crypto assets, from top currencies, like Bitcoin, to the rare crypto to metal pairs. And now, the list of crypto in FBS Trader has become even bigger to unleash the full crypto potential. Hyped-up crypto assets FBS dares to give the best trading opportunities to its clients. That is why the broker is constantly growing the functionality and variety of its products. This time, the most trendy and promising crypto assets were added for trading via FBS Trader: Shiba Inu Cardano Dogecoin Solana Polkadot Chainlink Polygon Uniswap Algorand Filecoin Maker Avalanche VeChain Currently, most of these crypto assets are under the traders’ community discussion. And now everyone can trade these and more instruments safely with a credible FBS Trader app. Reliable and safe choice More than 18 million traders already trust FBS. The broker’s reliability is proven by 12 years of experience and multiple awards. Also, the solid partnership with FC Barcelona and Leicester City is another evidence of FBS services’ security and high-quality products. FBS is always by the side of clients and thinks about novices in crypto trading. Specially for those confused about crypto trading, FBS Trader offers a Demo Crypto account to taste digital currencies with no risk. A Demo Crypto account replicates the real market and all crypto assets, including thirteen new ones. Thus, everyone can use a virtual $10K to practice skills and feel more confident in crypto trading. New crypto assets are already waiting for traders in the app. This time, Shiba Inu, Dogecoin, and other coins were added to the crypto list. Stay tuned for more popular instruments in FBS Trader since this is not over. More about FBS FBS is an international Forex broker that has been on the market since 2009. Millions of clients from over 150 countries choose FBS broker for its strong reputation and constantly developed products. The company provides financial services for currencies, stocks, metals, energies, indices, and crypto trading. FBS is a licensed broker regulated by CySEC, IFSC, and ASIC, winning over 60 international awards and taking care of those in need.
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)
European markets start the day higher ahead of ECB minutes

European markets start the day higher ahead of ECB minutes

Walid Koudmani Walid Koudmani 25.11.2021 13:34
While US markets remain closed today as traders celebrate thanksgiving holiday, we are seeing a positive performance from European indices across the board as they attempt to return to their recent highs. The German Dax is hovering in the 15880 points area after several major companies in the index reacted favourably to the plans announced by the new coalition and are driving general sentiment higher. Despite the lack of events from the US and limited trading hours, traders will be keeping an eye on ECB meeting minutes as there are expectations that it will announce the winding down of the PEPP programme in March 2022 along with clarifying the central bank's outlook moving forward and hint to any upcoming fiscal and monetary policy changes as inflation continues to be a significant issue economies contend with. Gold attempts to rebound after tumbling below $1800 Despite a solid performance seen from gold for about a week, the precious metal experienced some increased volatility and dropped significantly after the nomination of Jerome Powell as head of the Federal reserve for a second term by president Biden. While gold continues to be considered a hedge against inflation by many, some have opted to look for alternatives which has also increased pressure on the price as it hovers in a key reaction area of $1790 after dropping around 5% from recent highs. A key thing to keep in mind is that while central banks have played a large role in the performance of this asset, stock markets have experienced a somewhat significant correction and a change in the current trend could have a noticeable effect on precious metal prices.  
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
Stock markets worry as Omicron uncertainty increases

Stock markets worry as Omicron uncertainty increases

Walid Koudmani Walid Koudmani 30.11.2021 15:12
Investors received contrasting views relating to the new variant of the coronavirus which caused a significant pullback at the end of last week and was followed by an attempted recovery during Monday's session. However, the situation has changed again today with the majority of stock indices pulling back from yesterday’s close and dropping to new lows as moods worsened following comments from Moderna’s CEO stating that the new variant could be more resistant to currently available vaccines. While most consider widespread total lockdown an unlikely scenario, any major disruption to the post pandemic recovery caused by restrictions or supply chain issues could have disastrous consequences on markets and could potentially lead to central bank interventions once again. Easyjet upbeat yearly results unable to boost share price While today's yearly results may provide some reassurance thanks to better than expected figures, showing a headline loss before tax of £1,136 million and a commitment to continue the company's cost saving policy as well as expanding it in the future, they were unable to boost share price with the stock continuing to trade below yesterday's close and despite a brief attempt to recover, reaching the lowest level since the beginning of November. Investors will be closely following the ongoing pandemic situation as any major lockdowns or restrictions could have far reaching effects for the company and airline industry as a whole heading towards the end of 2021
European markets start week higher after Wall street records

European markets start week higher after Wall street records

Walid Koudmani Walid Koudmani 02.11.2021 11:03
European markets start week higher after Wall street records Markets started Monday's session higher after last week's excellent performance from US indices, which managed to reach new all time highs despite disappointing earning reports from the highly anticipated mega-caps (Apple, Amazon). The German Dax opened with an upward gap and after rising 0,8% is now trading at the highest level since early September as investors await this week's central bank decisions and key macroeconomic data along with more earnings reports. Focus remains on policy, data and monitoring the ongoing economic recovery, which is being potentially hindered by rising inflation, supply chain issues and labour shortages and any significant shift in approach could lead to larger than expected effects across markets.  Oil nears recent highs ahead of OPEC+ meeting  Oil prices have been attempting to recover from the recent pullback which saw WTI drop over 5% and reach a low of $80,65 before rebounding slightly. Prices are once again heading higher and after breaking above the $84 level, are closing in on the multi-year highs reached last week while traders follow news of potential supply constraints indicated by OPEC. The Oil producing group is expected to meet this week and could give a further indication of the situation in the highly volatile energy market along with their near term projections, while addressing current supply concerns and the ongoing issue of rising oil prices. This is an important week for oil prices as both the OPEC meeting and inventory reports could potentially push prices past recent highs or alternatively, cause another pullback in the event of an unexpected production increase. Download our Mobile Trading App:   Google Play   App Store
Stock markets uncertain ahead of US unemployment figures

Stock markets uncertain ahead of US unemployment figures

Walid Koudmani Walid Koudmani 18.11.2021 12:36
Stock markets uncertain ahead of US unemployment figures European stock markets started today's session mixed after a mostly negative asian trading session which saw Nikkei, Kospi and Chinese indices trade lower. Sentiment was also impacted in Europe after new data showed a 29% YoY drop in European new car registrations in October, to 798,693 vehicles, a record low reading for the month. Sales of Volkswagen (VOW1.DE) dropped almost 42% YoY, sales of BMW (BMW.DE) dropped 22% YoY while sales of Daimler (DAI.DE) were 34% YoY lower. Furthermore, rising inflation continues to be a key topic of discussion and investors await more information from central bank members who have mostly downplayed the matter as "transitory" despite data showing a sustained increase. Finally, today's US unemployment figures could be significant since the Fed has stressed the importance of the job market and said it would predominantly use it as a measure of when to potentially implement monetary and fiscal policy changes.  Jet2 mixed results highlight struggles of travel sector Jet2 posted mixed results today, highlighting the somewhat improving conditions of the travel sector after what has been a very challenging time due to lockdowns, restrictions and overall economic instability. While the company managed to increase its liquidity, the group's operating loss also increased and despite some reassurance from the board, rising fuel prices and the competitive pricing environment continue to be worrying factors for the company and industry as a whole heading into the final part of 2021. Download our Mobile Trading App:   Google Play   App Store  
Ahead Of The US CPI, Speaking Of Crude Oil And Metals - Saxo Market Call

Market Quick Take - December 6, 2021

Saxo Bank Saxo Bank 06.12.2021 09:31
Macro 2021-12-06 08:45 6 minutes to read Summary:  Friday saw global markets weakening again in another violent direction change from the action of the prior day. With futures for the broader US indices up this morning, the damage is somewhat contained, even if nerves are ragged. At the weekend, cryptocurrencies suffered a major setback in what looked like a run on leveraged positions that erased 20 percent or more of the market cap of many coins before a bit more than half of the plunge was erased with a subsequent bounce. What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) - despite the US 10-year yield pushed lower on Friday on the string of strong macro numbers, Nasdaq 100 futures are oddly weak in early European trading hours sitting around the 15,700 price level. The 100-day moving average down at 15,400 is the key price level to watch should the weakness in US technology and bubble stocks continue today. We see clear exposure overlap between cryptocurrencies and growth stocks, and with the steep plunge in Bitcoin over the weekend the risk-off might not be over. Stoxx 50 (EU50.I) - Stoxx 50 futures continue to be in a tight trading range sitting just above the 4,100 level this morning with little direction as traders are still digesting the US labour market report and Omicron news which at the margin seems to be improving somewhat, although expectations are still that jet fuel demand will be impacted. The weaker EUR is also short-term helping some of the exporters in Europe and generally leading to positive sentiment in early trading with European equities up 1%. USDJPY and JPY crosses – USDJPY closed the week near 112.50-75 support that was tested multiple times last week, but is once again rebounding overnight, while JPY crosses elsewhere continue to trade heavily, with the likes of AUDJPY, a traditional risk proxy, cementing the reversal back lower and GBPJPY closing the week near a significant zone of support into 148.50-149.00. Safe haven seeking in US treasuries at the long end of the curve are the key coincident indicator driving the JPY higher, with Friday’s weak risk sentiment driving fresh local lows in US long yields, with the 30-year T-bond yield at its lowest since January, below 1.75%. AUDUSD – the AUDUSD slide accelerated Friday in what looks like a capitulation ahead of tonight’s RBA meeting, where the feeling may be that there is a high bar for a surprise, given that the RBA has declared it would like to wait for the February meeting before providing guidance on its ongoing QE. Weak risk sentiment and uninspiring price action in commodities (with the partial exception of the very important iron ore price for the Aussie recently) are weighing and the price action has taken the AUDUSD pair to the pivotal 0.7000 level, an important zone of support and resistance both before and after the pandemic outbreak early last year. Crude oil (OILUKFEB22 & OILUSJAN21) trades higher following its longest stretch of weekly declines since 2018. Today’s rise apart from a general positive risk sentiment in Asia has been supported by Saudi Arabia’s decision to hike their official selling prices (OSP) to Asia and US next month. Thereby signaling confidence demand will be strong enough to absorb last week's OPEC+ production increase at a time when mobility is challenged by the omicron virus. For now, both WTI and Brent continue to find resistance at their 200-day moving averages, currently at $69.50 and $72.88 respectively. Speculators cut bullish oil bets to a one-year low in the week to November 30, potentially setting the market up for a speculative-driven recovery once the technical outlook turns more friendly. US natural gas (NATGASUSJAN22) extended a dramatic collapse on Monday with the price down by 7% to a three-month low at $3.84 per MMBtu, a loss of 31% in just six trading day. Forecasts for warmer weather across the country have reduced the outlook for demand at a time where production is up 6.3% on the year. A far cry from the tight situation witnessed in Europe where the equivalent Dutch TTF one-month benchmark on Friday closed at $29.50 while in Asia the Japan Korea LNG benchmark closed at $34. Gold (XAUUSD) received a small bid on Friday following the mixed US labor market report, but overall, it continues to lack the momentum needed to challenge an area of resistance just above $1790 where both the 50- and 200-day moving averages meet. Focus on Friday’s US CPI data with the gold market struggling to respond to rising inflation as it could speed up rate hike expectations, leading to rising real yields. A full 25 basis point rate hike has now been priced in for July and the short-term direction will likely be determined by the ebb and flow of future rate hike expectations. US Treasuries (IEF, TLT). This week traders’ focus is going to be on the US CPI numbers coming out on Friday, which could put pressure on the Federal Reserve to accelerate tapering as the YoY inflation is expected to rise to 6.7%. Yet, breakeven rates started to fall amid a drop in commodity prices, indicating that the market believes that inflation is near peaking despite we are just entering winter. It is likely we will continue to see the yield curve bear flattening, as the short part for the yield curve is adjusting to the expectations of more aggressive monetary policies, and long-term yields are dropping as economic growth is expected to slow down amid a decrease in monetary stimulus and the omicron variant. Last week, the 2s10s spread suffered the largest drop since 2012 falling to 74bps. The 5s30s spread dropped to 53bps. What is going on? COT on commodities in week to November 30. Hedge funds responded to heightened growth and demand concerns related to the omicron virus, and the potential faster pace of US tapering, by cutting their net long across 24 major commodity futures by 17% to a 15-month low. This the biggest one-week reduction since the first round of Covid-19 panic in February last year helped send the Bloomberg Commodity index down by 7%. The hardest hit was the energy sector with the net long in WTI and Brent crude oil falling to a one year low. Following weeks of strong buying, the agriculture sector also ended up in the firing line with broad selling being led by corn, soybeans, sugar and cocoa. Evergrande plunges 16% to new low for the cycle. The situation among Chinese real estate developers is getting more tense with Evergrande’s chairman being summoned by Guangdong government on Friday as the company is planning a larger restructuring with its offshore creditors. The PBOC has said that they are working with the local government to defuse risk from a restructuring and the regulator CSRC said over the weekend that risks into capital markets are manageable. This week another real estate developer Kaisa Group is facing a deadline on debt which will be critical for the Chinese credit market. US Friday data recap: Services sector on fire, November jobs report stronger than headlines suggest. The November ISM Services report showed the strongest reading in the history of the survey (dating back to 1997) at 69.1, suggesting a red-hot US services sector, with the Business Activity at a record 74.6, while the employment sub-index improved to 56.5, the highest since April. The November employment data, on the other hand, was somewhat confusing. Payrolls only grew 235k vs. >500k expected, but the “household survey” used to calculate the unemployment rate saw a huge growth in estimated employment, taking the overall employment rate down to 4.2% vs 4.5% expected and 4.6% in October. The Average Hourly Earnings figure rose only 0.3% month-on-month and 4.8% year-on-year, lower than the 0.4%/5.0% expected, though the Average Weekly Hours data point ticked up to 34.8 from 34.7, increasing the denominator. Twitter sees exodus of leaders. Part of Jack Dorsey stepping down as CEO at Twitter is a restructuring of the leadership group which has seen two significant technology leaders at engineering and design & research steeping down. The new CEO Agrawal is setting up his own team for Twitter which if done right could make a big positive impact on the product going forward. What are we watching next? Study of omicron variant and its virulence, new covid treatment options. Discovery of omicron cases is rising rapidly, with some anecdotal hopes that the virulence of the new variant is not high, but with significant more data needed for a clearer picture to emerge. Meanwhile, a new covid treatment pill from Merck (molnupiravir) may be available in coming weeks in some countries as it nears full approval. Next week’s earnings: The earnings season is running on fumes now few fewer important earnings left to watch. The Q3 earnings season has shown that US equities remain the strongest part of the market driven by its high growth technology sector. Today’s focus is on MongoDB which is expected to deliver 36% y/y revenue growth in Q3 (ending 31 October). Monday: Sino Pharmaceutical, Acciona Energias, MongoDB, Coupa Software, Gitlab Tuesday: SentinelOne, AutoZone, Ashtead Group Wednesday: Huali Industrial Group, GalaxyCore, Kabel Deutschland, Dollarama, Brown-Forman, UiPath, GameStop, RH, Campbell Soup Thursday: Sekisui House, Hormel Foods, Costco Wholesale, Oracle, Broadcom, Lululemon Athletica, Chewy, Vail Resorts Friday: Carl Zeiss Meditec Economic calendar highlights for today (times GMT) 0830 – Sweden Riksbank Meeting Minutes 0900 – Switzerland Weekly Sight Deposits 1130 – UK Bank of England’s Broadbent to speak 0330 – Australia RBA Cash Rate Target   Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple Spotify Soundcloud Sticher
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.
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.
The stock market switches to a new idea

The stock market switches to a new idea

Alex Kuptsikevich Alex Kuptsikevich 07.12.2021 16:20
About 13 months ago, in early November 2020, we saw a shift in the previous months’ investment idea thanks to Biden’s presidential election victory and the emergence of effective and affordable vaccines. Then we saw a investors’ shift from so-called “work from home” companies to the broader market and a strong recovery in energy and financial sector stocks. But the technology sector, which had initially stalled, did not find itself on the margins of the markets either. The trade wore off early this November, and the leading sectors retreated from their peaks. Initially, news of the new omicron strain scared the markets. Still, in recent days some of the fear has dissipated, and there are hopes that the new variant is acting as a light at the end of the tunnel, offering hope that the mutation of the virus has made it less deadly, though many times more infectious. Most importantly, existing vaccines mainly protect people, if not from the disease, then from the severe course of the disease. If the first observations are confirmed, this could prove to be a welcome sigh of relief for the tourism industry, as it dramatically reduces fears of stricter lockdowns. As early as next spring, the coronavirus will not restrict people’s travel and leisure activities in the most optimistic scenario. If so, the following investment idea for the markets could be airline and tourism stocks, which have been at annual lows recently, as the surge of optimism from November last year to March this year quickly deflated. In addition, the markets could finally switch from outperforming growth stocks to value stocks due to the monetary policy reversal in response to inflation. Growth equities have been pulling the market up in all recent years when the Fed has been in a position to stimulate inflation rather than suppress it. Investors favour stocks of companies with a sustainable business model and regular dividends during such periods. These could be the Consumer Staples and Utilities. These sectors lagged last year, adding 2% and 7%, respectively. Possibly, the ‘switch’ we suggest will not be harmful to the Financial sector, which is benefiting from increased lending and rising interest rates. In terms of indices, we see an increased chance that the Nasdaq/Dow ratio, which repeated the highs of the 2000 peak at 0.47, will correct in the coming months. We are not saying that the ratio will return to 0.11, meaning it will lose ¾ of its current values. More sensible at the moment is to expect this ratio to correct to 0.30 in 2022-2023, assuming a 35% fall in the Nasdaq with the Dow Jones unchanged.
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.
Market Digest Friday 10 Dec; hold your breath, big elements to watch inflation, volatility and iron ore

Market Digest Friday 10 Dec; hold your breath, big elements to watch inflation, volatility and iron ore

Jessica Amir Jessica Amir 10.12.2021 10:34
Equities 2021-12-10 00:00 4 minutes to read Summary:  Markets are facing speed bumps again as investors await key inflationary numbers and the Feds meeting outcome, key catalyst that will ultimately change market dynamics, with fiscal stimulus being taking away. The US benchmark the top 500 stocks fell from record high territory, falling for the first time in 4 days, while the ASX200 fell for the second day, dipping below its 50 day moving average. Growth names are being sold down and safe haven assets, bonds, the USD, the JPY, are gaining appeal. It is for three important reasons. Here is what you need to know and consider, plus the five elements to watch today. Firstly, investors are holding their breath ahead of key events: Friday’s US inflation data (tipped to show inflation rose 6.8% YOY in November), plus we are also seeing investors pre-empt that the Federal Reserve next week, will map out tapering and interest rate hikes for 2022. A poll by Reuters showed that 30 of the 36 economists expect the Fed to hike rates sooner than thought, rising rates four times from the third quarter of the year 2022 to the second quarter of 2023 (expecting rates to be 1.25-1.50%). This explains why investors took profits from nine of the major 11 US sectors overnight. So growth stocks and sectors that thrive in low interest rates; consumer discretionary, real estate and information technology, saw the most selling as a result. From a stock perspective Tesla fell 6%, Semiconductor giant Advanced Micro Devices, and Etsy-the e-commerce vintage store, both fell 5%, and chip maker Nvidia fell 4%. If you look at Saxo Markets themes that we track, you can also see the most money on a month-on-month basis, has come out of semiconductors, while the other themes we track are posting monthly gains. Secondly, it’s critical to be aware, the UK Prime Minister announced restrictions to curb Omicron’s spread -  so the UK entered new work-from-home guidance, that could cost the UK economy $2.6 billion a month (according to Bloomberg). Meanwhile, a study by a Japanese scientist found the new variant to be 4.2 times more transmissible in its early stage than delta. As such some companies are responding like Lyft saying their workforce can work remotely in 2022, while Jefferies asked staffers to WFH. This means, travel and tourism stocks could see short term pressure, Australian and US stocks that are exposed to the UK could also see pressure, while oil could see demand weakness here. Plus, it could be time to again rethink exposure to the office property sector, as it’s a likely to remain squeezed, while industrial and logistics real estate remain supported given the likely new shift to WFH. Thirdly – be aware of volatility. A measure of this, VIX CBOE Volatility Index rose for the first time in four days, rising back above the 50 day average. Volatility has fallen from its 12-month high and remains contained right now as Pfizer said its vaccine can neutralize the new COVID strain Omicron after three doses (two doses offer protection again severe disease). However, keep your ears to the ground. If tomorrow’s inflation data from the US is worse than expected, expect volatility to spike, and growth stocks to see further selling and expect safe haven assets (USD, bonds, USDJPY) to gain more attraction. Aside from the above – here’s 5 things to watch today; Firstly - let's go over Fortescue Metals (FMG) 1.FMG’s CEO, Elizabeth Gains just announced she is standing down, right in the thick of iron ore having a murky outlook. It’s not been an easy 12 month for FMG holders. FMG trades 7% lower this year, but it’s a far cry from its all-time high, down 30% from its peak as iron ore price remains in a bear market (down 40% from May). 2. FMG’s trading range has been restricted for two weeks as the world holds its breath to learn more about China’s property sector. FMG shares have broken out above their 50 day moving average but its trading has been even more so restricted over the last three days as its stock hit a key resistance level awaiting news from China. If good news comes, FMG could break out higher. But it looks murky. Majority of FMG revenue (94%) comes from iron ore, and its majority sold to China (90%) (unlike BHP that now diversifies its sales to other countries). And now… we are getting mixed signals from China, making iron ore’s outlook look hazy. 3. On the positive side; week-on-week Australian iron ore exports are up. China has increased its monthly imports of Australian iron ore in November, more than expected. This has supported the iron ore price rising 8.9% this week. 3. But on the negative side - Evergrande, one of China’s biggest property developers was just officially downgraded -labelled a defaulter by Fitch Ratings after failing to meet two coupon payments after a grace period expired Monday. This may now trigger cross defaults on Evergrande’s $19.2 billion of dollar debt. Also at the same time JP Morgan downgraded its outlook for iron ore expecting the iron ore to fall 7% to $92, while Citi expects seaborne iron ore prices to fall 60-$80/t in 2022 on Chinese policy changes. 4. However, Fortescue has been in the news this week, for its shift to a green future. Was this a tactic? A smoke Bomb? Yesterday FMG announced its Future Industries department signed a pact with the Indonesia to explore hydrogen projects. The day before Fortescue Future Industries (FFI) and AGL Energy (AGL) teamed up to explore repurposing NSW coal-fired power plants and turning them into green hydrogen production facilities – to hopefully create renewable electricity production, 250 megawatts (which will generate 30,000 tonnes of green hydrogen per year). AGL and FMG will undertake a feasibility study to repurpose AGL’s Liddell and Bayswater power stations, that both accounted for 40% of NSW’s carbon dioxide emissions. Sheesh. Secondly  – Australian analyst rating changes to consider ANZ AU: Reiterated as a Bell Potter BUY, PT $30.00, RRL AU: Regis Resources Raised to Outperform at RBC; PT A$2.50 EBO NZ: EBOS Raised to Outperform at Credit Suisse; PT NZ$43.14 FMG AU: JPMorgan downgrades FMG from Overweight to Neutral, dropping its PT from $22 to $20. RIO AU: JPMorgan downgrades RIO from Overweight to Neutral, dropping its PT from 113.00 to 102. MIN AU:  Reiterated as JPMorgan hold/neutral, dropping its PT from $47 to $40 Thirdly  - what else to watch today Annual General Meetings: HMC AU, PDL AU, PH2 AU, SOL AU Other Shareholder Events: AOF AU, HMC AU THL NZ: Tourism Holdings Halted in NZ Pending Proposed Transaction ADPZ NA: APG Buys 16.8% Stake in Ausgrid from AustralianSuper EBO NZ: Ebos Successfully Raises A$642m From Share Placement Fourthly - Economic news out 8:30am: (NZ) Nov. Business NZ Manufacturing PMI, prior 54.3 8:45am: (NZ) Nov. Card Spending Total MoM, prior 9.5% 8:45am: (NZ) Nov. Card Spending Retail MoM, prior 10.1% Fifthly - Other news to keep in mind: Australia Seen Facing Steeper Borrowing Costs If Slow on Climate RBA Likely to Stick With QE Until Election Over, BofA Says      ---   Markets - the numbersUS Major indices fell: S&P 500 -0.7% Nasdaq -1.7% Europe indices closed lower: Euro Stoxx 50 lost 0.6%,London’s FTSE 100 lost 0.2% flat, Germany’s DAX fell 0.3%Asian markets closed mixed: Japan’s Nikkei fell 0.5%, Hong Kong’s Hang Seng rose 1.1%, China’s CSI 300 rose 1.7%. Yesterday Australia’s ASX200 fell 0.3% Futures: ASX200 hints of a 0.14% fall today Commodities: Iron ore rose 1.3% to $110.50. Gold fell 0.4%, WTI crude fell 2% to  $70.94 per barrel. Copper fell 1.4% Currencies: Aussie dollar trades 0.4% lower at 0.7146 US. Kiwi down 0.3% to 0.6788 per US$ Bonds: U.S. 10-year yield fell 3.5bps to 1.4871%,Australia 3-year bond yield fell 0.8bps to 0.95%, Australia 10-year bond yield rose 6bps to 1.68%
TSLA Stock Price and Forecast: Why Tesla will break $1,200 on Wednesday

TSLA Stock Price and Forecast: Why Tesla will break $1,200 on Wednesday

FXStreet News FXStreet News 01.12.2021 16:20
Tesla emerges unscathed from another equity sell-off on Tuesday. TSLA is likely to break higher on Wednesday as buyers return. Tesla CEO Elon Musk takes a bite out of Apple. Tesla (TSLA) stock can do no wrong in 2021, and it avoided another market meltdown on Tuesday. While panic ensued following Powell's remarks about the taper and inflation, TSLA held firmly in the green. Equity indices finished nearly 2% lower on Tuesday, but Tesla shares closed at $1,144.76 for a gain of 0.7%. This was another strong outperformance for a stock that is up 62% year to date. Contrast that with the Nasdaq, up 25 % for 2021, and the S&P 500, up a similar amount. 2021 has been the year of the electric vehicle, and Tesla paved the way for others to follow, notably Rivian (RIVN) and Lucid (LCID). Our chart above shows the strong correlation between Tesla and Lucid with both stocks putting in a stellar second half for 2021. Tesla (TSLA) stock news Elon Musk is nothing if not entertaining, and on a slow news day for Tesla he livened things up by taking a pop on Twitter toward Apple. Don’t waste your money on that silly Apple Cloth, buy our whistle instead! — Elon Musk (@elonmusk) December 1, 2021 The Apple cloth he is referring to is a polishing cloth available from Apple for $19. Tesla recently launched a Cyberwhistle for what reason? Who knows, but it is currently sold out. At $50 for a whistle, it is not exactly cheap. It seems people just love a Tesla product. Apple was no slouch either on Tuesday as the stock set all-time highs. Tesla (TSLA) stock forecast The triangle formation still holds and a breakout is awaited. A triangle pattern is usually a continuation pattern, and Wednesday could provide the catalyst to break higher. The stock has consolidated well despite some strong headwinds: notably, Elon Musk selling a Cybertruck load of stock, and Tesla not performing well in a recent reliability test. It did however score highly on customer satisfaction, and investor satisfaction is also high given the strong performance. We expect more all-time highs this week even with the surrounding Omicron volatility. Our view will change if Tesla cracked below key support at $1,063. TSLA 1-day chart
Eyes on US consumer data and CPI inflation

Eyes on US consumer data and CPI inflation

Walid Koudmani Walid Koudmani 10.12.2021 12:17
While stock markets started the day trading lower, with several indices down between 1-2%, many traders will be awaiting today’s key data releases from the US which include preliminary university of michigan consumer confidence as well as CPI inflation. Both these reports could have a noticeable impact on stocks, particularly in the US, as fears of rising inflation have pushed the FED to announce it’s tapering recently and could lead to further action taken by the US central bank while consumer sentiment has been on a steady decline for several months. A better than expected outcome from today’s data could reassure markets that despite growing fears related to the new variant the economy continues to recover which in turn could encourage the FED to change its approach in the near term. On the other hand, worse than expected reports could further incentivize the central bank to take action, something which may be closely followed by its peers around the world. UK GDP report leaves investors concerned Today’s GDP report showed an estimated growth of 0.1% in October 2021 and a return to 0.5% below its pre-pandemic levels. Services seem to be outperforming with an increase of 0.4% and a return to pre-covid levels while production output decreased by 0.6% in October 2021 and construction contracted output dropped by 1.8%, the largest fall since April 2020, partly due to rising costs and supply concerns. Overall today’s report could be considered positive by some, while on the other hand it may raise some concerns regarding the state of the economic recovery as we await the upcoming Bank of England decision.
TSLA Stock Price and Forecast: Why is Tesla is going to break below $1,000?

TSLA Stock Price and Forecast: Why is Tesla is going to break below $1,000?

FXStreet News FXStreet News 10.12.2021 16:09
Tesla stock underperforms strongly on Thursday as continued profit-taking strikes blow. Equity markets remain nervous as VIX inches up again on Thursday and indices lose ground. TSLA also feels pressure from more sales by CEO Elon Musk. Tesla (TSLA) shares lost a lot of ground on Thursday as investors cashed in recent gains ahead of the year end. TSLA has to be included in practically all indices, passive and active funds, and the temptation to book some strong profits ahead of the new year is just too tempting. Added to this is the strong retail investor base who will also be much more inclined to sell out before the holiday season, and the stock has been coming under heavy selling pressure. Call options have been a strong feature of the rise in Tesla this year, especially the last six months. Call option volumes have been steadily decreasing. Tesla (TSLA) stock chart, 15-minute As we can see from the chart above, December has not been kind to Tesla stock so far, and we see this continuing. Tesla (TSLA) stock news Added to profit-taking and Elon Musk selling stock was news yesterday that the National Highway Traffic Safety Administration (NHTSA) is scrutinizing a feature in some Tesla versions that allow users to play video games in the car. Obviously, this would be a distraction to the driver. We are assuming it is a passenger feature but nonetheless still distracting. Elon Musk sold another $963 million worth of Tesla this week, and Cathie Wood of ARK is still selling small amounts. Tesla (TSLA) stock forecast Somehow $1,000 is still holding in there as support, but surely today is the day when that will finally break. Then it is a pretty clear path in terms of support straight to $910. $1,000 is psychological, but it has been tested quite a few times and the more a level is tested the weaker it becomes. Tesla is putting in a series of lower highs and knocking on the door of $1,000 each time. So the bounce from $1,000 can be said to be weaker each time. We also have a falling Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) confirming the price action. Tesla (TSLA) stock chart, daily
On a Knife-Edge

On a Knife-Edge

Monica Kingsley Monica Kingsley 13.12.2021 15:04
S&P 500 recaptured 4,700s on little change in market breadth and ever so slowly coming back to life HYG. Credit markets made a risk-on move, but HYG isn‘t leading the charge on a medium-term basis in the least – it‘s improving, but the stiff headwinds in bonds are being felt. Given the CPI discussed at length on Friday, it‘s still a relative success. Make no mistake though, time is running short in this topping process, and trouble is going to strike earliest after the winter Olympics. Global economic activity might be peaking here, and liquidity around the world is shrinking already – copper isn‘t too fond of that. The Fed might attempt to double the monthly pace of tapering to $30bn next, but I doubt how far they would be able to get at such a pace. Inflation and contraction in economic growth are going to be midterms‘ hot potatoes, and monetary policy change might be attempted. Tough choices for the Fed missed the boat in tapering by more than a few months. 2022 is going to be tough as we‘ll see more tapering, market-forced rate hikes (perhaps as many as 2-3 – how much closer would yield curve control get then?), higher taxes and higher oil prices. Stocks are still likely to deliver more gains in spite of all the negative divergences to bonds or other indices (hello, Russell 2000). Copper would be my indicator as to how far further we have to go before GDP growth around the world peaks. Oil is ready for strong medium-term gains, and I‘m not looking for precious metals to yield much ground. Silver though is more vulnerable unless inflation returns to the spotlight. Cryptos do likewise have issues extending gains sharply. All in all, volatility is making a return, and it isn‘t a good news for the bulls. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 advance continues, and I‘m looking for ATHs to give in. It will take a while, but the balancing on a tightrope act continues. Credit Markets HYG strength didn‘t convince, but it didn‘t disappoint either – the constellation remains conducive to further stock market gains. So far and still conducive. Gold, Silver and Miners Precious metals are stronger than miners, and the lackluster, sideways performance is likely to continue for now – fresh Fed policy mistake is awaited, and it‘s actually bullish that gold and silver aren‘t facing more trouble when the consensus expectation is faster taper. Crude Oil Crude oil upswing is still struggligh at $72, and remains favored to go higher with passage of time as excess production capacity keeps shrinking while demand isn‘t being hit (no, the world isn‘t going the lockdowns route this time). Copper High time copper stopped hesitating, for its sideways trading is sending a signal about future GDP growth. The jury is still out in the red metal‘s long basing pattern – a battle of positive fundamentals against shrinking liquidity and possibly slowing growth. Bitcoin and Ethereum Bitcoin and Ethereum bottom searching goes on, and I suspect at least a test of Friday‘s lows is coming. I don‘t see too many signs of exuberance returning right away as Ethereum hasn‘t yet started to outperform. Summary S&P 500 bulls continue climbing a wall of worry even if credit markets don‘t confirm entirely. Risk-on and real assets rally is likely to continue, and the road would be getting bumpier over time. The Fed won‘t overcome market expectations, and the last week of Nov (first week of balance sheet contraction) pace wouldn‘t be consistently beaten without consequences down the road. Select commodities and precious metals are already feeling the pinch, but there is no sending them to bear markets. Get ready for the twin scourge of persistent inflation and slowdown in growth to start biting increasingly more. 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.
Tesla (TSLA) Stock Price and Forecast: Will Tesla break $1,000

Tesla (TSLA) Stock Price and Forecast: Will Tesla break $1,000

FXStreet News FXStreet News 13.12.2021 16:09
Tesla (TSLA) just cannot break below key support at $1,000. Equity markets remain supportive with more all-time highs for the indices. Tesla (TSLA) is still seeing selling from CEO Elon Musk. Tesla shares are still holding above the key $1,000 level as we approach the final lap of the year. Tesla (TSLA) is up an impressive 44% so far this year in what has been the year of the mega tech names. Indeed Goldman Sachs notes this morning that five stocks account for more than half of the S&P's return since the end of April. Those names are all familiar big tech, Tesla, Microsoft, Alphabet, Nvidia, and Apple. This so-called narrowing of the returns or a lack of market breadth is often cited as a bearish factor. Goldman adds that the market cap of the top 10 stocks in the S&P make up 31% of the total S&P 500 market cap. That is the highest since 1980. While all this is beginning to sound increasingly alarmist fear not Goldman said. They estimate that this narrowing trend is set to continue and to stick with growth stocks into 2022. Tesla (TSLA) should see more benefits if that strategy is maintained, adding further to the large headache the stock gives value to investors. Price/earnings multiples are out the window with Tesla. It is pure momentum. Tesla (TSLA) chart, 15 minute Tesla (TSLA) stock news Not exactly stock specific but Elon Musk is Time magazine Person of the Year for 2021. Time CEO said, "Person of the Year is a marker of influence, and few individuals have had more influence than Musk on life on Earth, and potentially life off Earth too.".In relation to EV's the CEO added: "a market that Musk almost single-handedly created, seeing long before others the demand for clean-energy transportation that the world’s climate crisis would eventually propel." In other more specific news, Tesla has had to stop accepting orders for new Model S and Model x orders outside North America, according to electrek. Tesla is rumored to have a large backlog of orders. Demand obviously remains strong as more and more countries offer incentives for electric vehicle purchases. Tesla (TSLA) stock forecast We are still forecasting Tesla to return to the gap at $910 before year-end. $1,000 held again on Friday but the level is seeing increasing bombardment. The more a level is tested the weaker it becomes. We fear the next time it will go and that will signal a sharp move to $910. The stock is already well capped by the 9 and 21-day moving averages and only a break above $1063 will change our bearish stance. Tesla, daily chart
We Might Say Next FED Moves Are Not Obvious As Some Factors Differentiate Circumstances

Will Inflation Look Different in 2022?

Przemysław Radomski Przemysław Radomski 13.12.2021 17:04
One swallow doesn't make a summer, but when it comes to slower inflation pressure, there have been several. Will the narrative change soon? While Fed Chairman Jerome Powell had been preaching his “transitory” doctrine for months, the thesis was obliterated once again after the headline Consumer Price Index (CPI) surged by 6.8% year-over-year (YoY) on Dec. 10. Additionally, while the Commodity Producer Price Index (PPI) – which will be released on Dec. 14 – is likely provide a roadmap for inflation’s next move, signs of deceleration are already upon us.  For example, supply bottlenecks, port congestion, and rapidly rising commodity prices helped underwrite inflation’s ascent. However, with those factors now stagnant or reversing, inflationary pressures should decelerate in 2022. To explain, Deutsche Bank presented several charts that highlight 2021’s inflationary problems. However, whether it’s suppliers’ delivery times, backlogs of work, port congestion, bottleneck indices, or the cost of shipping and trucking, several inflationary indicators (excluding air cargo rates) have already peaked and rolled over.  Please see below: To that point, global manufacturing PMIs also signal a deceleration in input price pressures. With input prices leading output prices (like the headline CPI), the latter will likely showcase a similar slowdown if the former’s downtrend holds. Please see below: Source: IIF/Robin Brooks To explain, the colored lines above track the z-scores for prices paid within global manufacturing PMI reports. In a nutshell: regions were experiencing input inflation that was ~2 and ~4 standard deviations above their historical averages. However, if you analyze the right side of the chart, you can see that all of them have consolidated or come down (the U.S. is in light blue). As a result, it’s another sign that peak input inflation could elicit peak output inflation. As mentioned, though, the commodity PPI is the most important indicator and if the data comes in hot on Dec. 14, all bets are off. However, the monthly weakness should be present since the S&P Goldman Sachs Commodity Index (S&P GSCI) declined by 11.2% in November.   Also noteworthy, Morgan Stanley’s Chief U.S. Economist, Ellen Zentner, also sees signs of a deceleration. She wrote: “We are seeing nascent signs that pipeline inflation pressures are easing – based on evidence from company earnings transcripts, ISM comments, Korea trade data, China's inflation data, the Fed's Beige Book, a department huddle with our equity analysts, and our own survey.” To explain, the green, gold, and blue lines above track Morgan Stanley’s core inflation estimates for emerging markets, developed markets, and global markets. If the predictions prove prescient, the 2022 inflation narrative could look a lot different than in 2021. However, please remember that inflation doesn’t abate without direct action from the Fed, and with a hawkish Fed known to upend the PMs (at least in the short- or medium run), the fundamental environment has turned against them. For example, when the Fed turns hawkish, commodities retreat, and with U.S. President Joe Biden showcasing heightened anxiety over inflation, more of the same should materialize over the medium term. To explain, Morgan Stanley initially projected no rate hikes in 2022. Now, Zentner expects “2 hikes in 2022, followed by 3 hikes plus a halt in reinvestments in 2023.” She wrote: “Before investors close out the year, we need to get past the FOMC's final meeting next week, and it comes with every opportunity for surprise. On Wednesday, we expect the Fed to move to a hawkish stance by announcing that it is doubling the pace of taper, highlighting continued inflation risks and no longer labeling high inflation as transitory, and showing a hawkish shift in the dot plot. We think this shift will shake out in a 2-hike median in 2022, followed by 3.5 hikes in 2023 and 3 hikes in 2024.” Furthermore, upping the hawkish ante, Goldman Sachs initially projected no rate hikes in 2022. Then, the team moved to three rate hikes in 2022 (June, September, and December 2022). Now, Goldman Sachs expects the FOMC to hike rates in May, July, and November 2022 – with another four hikes per year in 2023 and 2024.   The Fed’s Time to Shine “The FOMC is very likely to double the pace of tapering to $30bn per month at its December meeting next week, putting it on track to announce the last two tapers at the January FOMC meeting and to implement the last taper in March,” wrote Chief Economist Jan Hatzius. “We expect the Summary of Economic Projections to show somewhat higher inflation and lower unemployment. Our best guess is that the dots will show 2 hikes in 2022, 3 in 2023, and 4 in 2024, for a total of 9 (vs. 0.5 / 3 / 3 and a total of 6.5 in September). We think the leadership will prefer to show only 2 hikes in 2022 for now to avoid making a more dramatic change in one step, especially at a meeting when the FOMC is already doubling the taper pace. But if Powell is comfortable showing 3 hikes next year, then we would expect others to join him in a decisive shift in the dots in that direction.” Speaking of three hikes, the market-implied probability of three FOMC rate hikes in 2022 has risen to 96%. Please see below: For context, I’ve been warning for months that surging inflation would force the Fed’s hand. I wrote on Oct. 26: Originally, the Fed forecasted that it wouldn’t have to taper its asset purchases until well into 2022. However, surging inflation pulled that forecast forward. Now, the Fed forecasts that it won’t have to raise interest rates until well into 2023. However, surging inflation will likely pull that forecast forward as well. More importantly, though, while the PMs have remained upbeat in recent weeks, the forthcoming liquidity drain will likely shift the narrative over the medium term. The bottom line? While inflation shows signs of peaking, there is a vast difference between peak inflation and the Fed’s 2% annual target. As a result, even if a 6.8% YoY headline CPI was the precipice, it’s nothing to celebrate. Thus, the Fed needs to tighten monetary policy to control inflation, and anything less will likely re-accelerate the cost-push inflationary spiral.  To that point, with the precious metals extremely allergic to a hawkish Fed, I’ve highlighted on numerous occasions how the GDXJ ETF suffered following the 2013 taper. With 2022 Fed policy looking even more hawkish than in mid-2014, the latter’s downtrend should have plenty of room to run. In conclusion, the PMs were mixed on Nov. 10, and the scorching inflation print was largely ignored by investors. However, with the Fed poised to provide another dose of reality on Dec. 15, the recent volatility should persist. To that point, it’s important to remember that the S&P 500’s volatility increased materially after the Fed tapered in 2013. With stock market drawdowns bullish for the USD Index and bearish for the PMs, there are plenty of technical, fundamental, and sentiment factors brewing that favor the theme of ‘USD Index up, PMs down’ 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.
Another Inflation Twist

Another Inflation Twist

Monica Kingsley Monica Kingsley 14.12.2021 15:45
S&P 500 gave up premarket gains, and closed on a weak note – driven by tech while value pared the intraday downswing somewhat. Market breadth still deteriorated, though – but credit markets didn‘t crater. Stocks look more cautious than bonds awaiting tomorrow‘s Fed, which is a good sign for the bulls across the paper and real assets. Sure, the ride is increasingly getting bumpy (and will get so even more over the coming weeks), but we haven‘t topped in spite of the negative shifts mentioned yesterday. The signs appear to be in place, pointing to a limited downside in the pre-FOMC positioning, but when the dust settles, more than a few markets are likely to shake off the Fed blues. I continue doubting the Fed would be able to keep delivering on its own hyped inflation fighting projections – be it in faster taper or rate raising. Crude oil is likewise just hanging in there and ready – the Fed must be aware of real economy‘s fragility, which is what Treasuries are in my view signalling with their relative serenity. We‘ve travelled a long journey from the Fed risk of letting inflation run unattented, to the Fed making a policy mistake in tightening the screws too much. For now, there‘s no evidence of the latter, of serious intentions to force that outcome. Lip service (intention to act and keep reassessing along the way) would paid to the inflation threat tomorrow, harsh words delivered, and the question is when would the markets see through that, and through the necessity to bring the punch bowl back a few short months down the road. As stated yesterday: (…) Global economic activity might be peaking here, and liquidity around the world is shrinking already – copper isn‘t too fond of that. The Fed might attempt to double the monthly pace of tapering to $30bn next, but I doubt how far they would be able to get at such a pace. Inflation and contraction in economic growth are going to be midterms‘ hot potatoes, and monetary policy change might be attempted. Tough choices for the Fed missed the boat in tapering by more than a few months. 2022 is going to be tough as we‘ll see more tapering, market-forced rate hikes (perhaps as many as 2-3 – how much closer would yield curve control get then?), higher taxes and higher oil prices. Stocks are still likely to deliver more gains in spite of all the negative divergences to bonds or other indices (hello, Russell 2000). Copper would be my indicator as to how far further we have to go before GDP growth around the world peaks. Oil is ready for strong medium-term gains, and I‘m not looking for precious metals to yield much ground. Silver though is more vulnerable unless inflation returns to the spotlight. Cryptos do likewise have issues extending gains sharply. All in all, volatility is making a return, and it isn‘t a good news for the bulls. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 ran into headwinds, and fresh ATHs will really take a while to happen, but we‘re likely to get there still. Credit Markets HYG didn‘t have a really bad day – just a cautious one. Interestingly, lower yields didn‘t help tech, and that means a sectoral rebalancing in favor of value is coming, and that the current bond market strength will be sold into. Gold, Silver and Miners Precious metals held up fine yesterday, but some weakness into tomorrow shouldn‘t be surprising. I look for it to turn out only temporary, and not as a start of a serious downswing. Crude Oil Crude oil continues struggling at $72, but the downside looks limited – I‘m not looking for a flush into the low or mid $60s. Copper In spite of the red candle(s), copper looks to be stopping hesitating, and is readying an upswing. I look for broader participation in it, and that includes commodities and silver. The run up to tomorrow‘s announcement would be telling. Bitcoin and Ethereum Bitcoin and Ethereum bottom searching goes on, yesterday‘s downside target was hit, and the bulls are meekly responding today. I don‘t think the bottom is in at $46K BTC or $3700s ETH. Summary Risk-off mood is prevailing in going for tomorrow‘s FOMC – the expectations seem leaning towards making a tapering / tightening mistake. While headwinds are stiffening, we haven‘t topped yet in stocks or commodities, but the road would be getting bumpier as stated yesterday. Select commodities and precious metals are already feeling the pinch late in today‘s premarket trading, but there is no sending them to bear markets. Get ready for the twin scourge of persistent inflation and slowdown in growth to start biting increasingly more – just-in producer price index (9.6% YoY, largest ever) confirms much more inflation is in the pipeline, and the Fed would still remain behind the curve in its actions. 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.
No Turnaround Tuesday for Equities?

No Turnaround Tuesday for Equities?

Marc Chandler Marc Chandler 14.12.2021 15:01
December 14, 2021  $USD, Canada, Chile, Currency Movement, EMU, Hungary, Japan, Mexico, UK Overview:  Activity in the capital markets is subdued today, ahead of tomorrow's FOMC meeting conclusion and the ECB meeting on Thursday.  The MSCI Asia Pacific equity index fell for the third consecutive session.  European bourses are heavy after the Stoxx 600 posted an outside down day yesterday. Today would be the fifth consecutive decline. Selling pressure on the US futures indices continues after yesterday's losses.  Australia and New Zealand bonds played catch-up to the large drop in US Treasury yields yesterday, while European benchmark yields are edging higher.  The 10-year US Treasury yield is around 1.43%.  The dollar is mixed against the major currencies.  The Canadian and Australian dollars and Norway are softer, while the Swiss franc and euro lead with around a 0.25%-0.35% gain.  Most emerging market currencies are little changed, though the Turkish lira is paring yesterday's intervention-fueled gains.  Led by the Hungarian forint ahead of the outcome of the central meeting, and helped by a firm euro, central European currencies lead the emerging markets.  The JP Morgan Emerging Market Currency Index is off for a second session after breaking a four-week slide last week.  Gold continues to consolidate and is within yesterday's range ($1782-$1791).  Oil is also trading quietly, with the January WTI contract in a $70.50-$72.00 range.  European (Dutch) natural gas is rising for the sixth session of the past seven, during which time it has increased by nearly a third.  US natgas has fallen by almost 30% in the past two weeks and is off for about 4.4% this week already.  Iron ore is paring yesterday's 6.5% gain, while copper is drifting lower and is extending its loss into the fourth consecutive session.   Asia Pacific Year-end pressures are evident in Japan's money markets, and the BOJ responded by arranging an unscheduled repo operation for the second consecutive session.  Yesterday's overnight operation was for JPY2 trillion (~$17.5 bln) after the repo rate rose to two-year highs.  The repo appeared to have been lifted by dealers securing funding for bill purchases.  Today the BOJ offered to buy JPY9 trillion of bonds under the repo agreement.   The US has offered to lift the steel and aluminum tariffs on Japan on similar terms as the deal struck with the EU.   A certain amount, based on some historical market share, can be shipped to the US duty-free, but over that threshold, a levy will be imposed.  Unlike the EU, Tokyo did not impose retaliatory tariffs.  Estimates suggest that Japan shipped around 5% of its steel to the US, though some might have made its way through Mexico.   The regional highlights for the week still lie ahead.  Tomorrow, China reports November retail sales, industrial production, new home prices, investment, and the surveyed jobless rate.  Retail sales are expected to have slowed, while industrial output may have firmed.  Investment in property and fixed assets may have stalled.  Japan has its tertiary index (October) tomorrow, a November trade balance on Thursday (it nearly always deteriorates from October), and the Friday BOJ meeting.  The BOJ is expected to extend some of its emergency facilities.  Australia reports its November jobs data first thing Thursday morning in Canberra.  After three months of job losses, a strong report is expected as social restrictions were lifted.   Today, the dollar is confined to about a quarter of a yen range above JPY113.50.  It has not traded above JPY114.00 this month so far.  Nor has it traded below JPY113.20 since last Monday.  An option for $760 mln at JPY1113.85 rolls off today.  The Australian dollar tested the session high near $0.7135 in the European morning but met a wall of sellers, perhaps, related to the nearly A$600 mln option at $0.7130 that expires today. It has traded down to a five-day low around $0.7090, which is the halfway point of last week's rally.  The next retracement (61.8%) is near $0.7065. The dollar continues to struggle to sustain upticks against the Chinese yuan. It is trading heavily today, its seventh loss in the past eight sessions.   Still, the greenback held above yesterday's low (~CNY6.3580).  It was unable to poke above CNY6.37.   The PBOC's dollar fixing was set at CNY6.3675, while the market (Bloomberg survey) anticipated CNY6.3666.   Europe The UK reported solid employment data.  The November claimant count rate eased to 4.9% from a revised 5.0% (initially 5.1%), representing a nearly 50k decline after the October decline was revised to 58.5k from -14.9k.  The pace of earnings growth slowed to 4.9% from 5.9% (three-month, year-over-year).  Employment rose by nearly 150k (three months) after a 247k increase previously.  Tomorrow, the UK sees November CPI and PPI.  Both are expected to have quickened from October.  Nevertheless, the BOE is now seen on hold until February.   Hungary's central bank is set to hike the base rate today.  A 40 bp increase would follow last month's 30 bp hike.  Today's move would be the sixth in a row.  The base rate began the year at 60 bp, and today's hike would lift it to 2.50%.  On Thursday, Hungary likely hiked the one-week deposit rate.  It has been hiked for the last four weeks.  It had been at 75 bp until June, when it was hiked by 15 bp.  It was lifted by 30 bp in July and again in August.  It reverted to 15 bp increases in September and October.  The one-week deposit rate was raised several times last month to 2.90%.  It is up another 40 bp so far this month, and it is expected to be lifted by another 20 bp this week.   In October, industrial output in the euro area rose 1.1% after a 0.2% decline in September.  The preliminary PMI will be reported on Thursday, ahead of the ECB meeting.  Activity likely slowed. The focus of the ECB meeting is on the guidance about bond-buying next year.  The emergency facility is expected to wind down at the end of Q1, but given that it will still be buying bonds, tapering may not be as necessary or pronounced as, say, with the Federal Reserve.  The ECB staff will also update forecasts, including a sharp upward revision to next year's while extending the projections to 2024.  There is also interest in what the ECB will do about its long-term loans (TLTRO).    The euro has firmed in the European morning but remains mired in a narrow range.  Indeed, the range over the past five sessions is a little less than a cent (~$1.1260-$1.1355). There is an option for nearly 500 mln euros at $1.1330 that expires today.  For the past month, the euro has been in a $1.12-$1.14 trading range, with the notable exception on November 24, when the low for the year was recorded (~$1.1185).   Sterling slipped below $1.32 in late Asian turnover but found bids lurking there, and Europe has extended its recovery toward $1.3235.  Resistance is seen in the $1.3260-$1.3275 area. Sterling has not traded above $1.33 since December 3, yet a move above there is necessary to lift the technical tone.   America The US reports November producer prices today.  The headline rate is expected to push above 9%, while the core rate pokes through 7%.  The market is understandably more sensitive to consumer prices than producer prices.  Tomorrow, ahead of the FOMC statement, the November retail sales (softer than the 1.7% headline increase in October) and the December Empire manufacturing survey will be released.   Although the Senate is expected to maneuver to lift the debt ceiling today, the Treasury is planning a large bill pay down (~$175 bln) to ensure it would have the space to settle the coupon auctions.  That said, the supply of bills is likely to improve through Q1 22, according to estimates.  By most accounts, the Treasury has overfunded itself, and this will allow it to cut back further on new supply, just as the Federal Reserve is expected to accelerate its tapering.   The Bank of Canada was told its inflation target remains 2% but that it can overshoot to support "maximum sustainable employment."  The central bank's language is important.  It said it would "continue" to support the labor market objective, suggesting that yesterday's adjustment to the mandate will have a minor operational impact.  In fact, with inflation (October CPI 4.7%, an 18-year high), Governor Macklem quickly indicated that this was not the situation when it could probe for the maximum sustainable employment.  Still, the new mandate requires that the central bank explain when it is using its new flexibility and how labor market outcomes are incorporated into monetary decisions.  Separately, Canada is proposing alternatives to the US proposed tax incentives for electric vehicles in the Build Back Better initiative.  Canada and Mexico claim that it violated the USMCA and throws a wrench in the 30-year auto integration.  The EU trade commissioner has also expressed concerns about whether the legislation would break the WTO rules too.   Late today, Chile's central bank is expected to deliver a 125 bp rate hike, the same as in October.  The overnight target rate began the year at 50 bp.  It was hiked by 25 bp in July and 75 bp in August.  With today's hike, it will stand at 4%.  More work is needed as November CPI was at 6.7%.  Chile holds the run-off presidential election this weekend.  In the first round last month, the conservative Kast drew 28% support while the left candidate Boris garnered 26%.  Chile's innovation during Covid was to allow people to withdraw funds from their pensions (yes, like a farmer eating their corn seed).  Three withdrawals were granted, but a fourth effort was rebuffed earlier this month.  The World Bank and the IMF expressed concern about the pension fund industry, which had been among the best in the region.  The Chilean peso is among the worst-performing emerging market currencies this year.  It has fallen nearly 15.5% and has only been "bested" by the Argentine peso (~17.3%) and the Turkish lira (-48%).   The Canadian dollar's retreat is being extended for the fifth consecutive session.  The greenback has largely held above CAD1.2800 and is drawing near the high seen after the employment reports on December 3 (~CAD1.2855).  We usually see the exchange rate is driven by 1) general risk appetite, 2) commodity prices, and 3) rate differential.  Here we note that Canada's 2-year premium has fallen from about 60 basis points at the start of last month to around 27 bp now.  Over the same time, the 10-year premium has wholly disappeared.  It was almost 20 bp on November 1 and currently is trading at a four basis point discount.  Meanwhile, the greenback is consolidating against the Mexican peso. For the fifth consecutive session, it has been mainly chopping in a MXN20.85-MXN21.08 range.   On Thursday, Banxico is expected to hike its overnight rate by 25 bp.  We continue to think it is more likely to hike by 50 bp than standpat.  Since June, it has lifted the target rate by 100 bp to 5%.   November CPI stood at 7.37%.     Disclaimer
Emini S&P and NASDAQ – check the latest video by Jason Sen

Emini S&P and NASDAQ – check the latest video by Jason Sen

Jason Sen Jason Sen 17.12.2021 09:56
US markets Emini S&P MARCH gains could not be sustained as we tried to retest the all time high & prices collapsed in a straight line to 4650. The negative candle on the daily chart increases risks that we have formed a negative double top for a sell signal. Nasdaq MARCH unexpectedly shot higher on the Powell minutes as far as strong resistance at 16400/450. Shorts here worked perfectly with a high for the day. Emini Dow Jones MARCH could be building a very large head & shoulders reversal pattern over the past 5 months (despite the mid week bounce) but it could take a few weeks to complete the right shoulder. Update daily at 07:00 GMT. Today's Analysis. Emini S&P risks are increasing to the downside as selling pressure emerges on a retest of the all time high. I am seeing potential head & shoulders patterns in other indices so I am increasingly concerned about a significant move to the downside. First support at 4650/40. Be ready to sell a break below here targeting 4620/10, perhaps as far as 4590/80. Further losses perhaps next week are likely to target 4550/40. If you want to but the dip then look for longs at first support at 4650/40 to target 4680/85. I think gains are likely to be limited but above here we can look for 4700, perhaps as far as 4720/25. Bulls need a weekly close above 4745 to kill the negative signals. Nasdaq shorts at strong resistance at 16400/450 work on the slide as far as support at 16850/750. I think longs are risky but if you try, stop below 16725. (Small risk). A break lower is a sell signal targeting 15560/530. This is the best chance of a low for the day but a weekly close below here is a sell signal for the start of next week. Gains are likely to be limited with first resistance at 16180/220. Unlikely but if we continue higher expect strong resistance again at 16400/450. A break higher is a buy signal targeting 16600/650 before a retest of the all time high at 16767. Emini Dow Jones first support at 35600/550, second support at 35300/35200, although the outlook is quite negative so be careful if you are buying the dip. A break lower is a sell signal targeting 35000, perhaps as far as 34700. Holding first support at 35600/550 allows a recovery to 35800, perhaps as far as the 36000/100 high for this week. An unexpected break higher targets 36150 before a retest of the March high at 36330. 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.
Santa rally begins

Santa rally begins

Alex Kuptsikevich Alex Kuptsikevich 21.12.2021 12:34
Most stock indices seem to have managed to get that much-needed support from buyers yesterday, which opens the possibility of a Santa rally in the coming days. Earlier this year, some commentators, including us, have repeatedly pointed out that this year, the bottom of the month is very often near the 20th. Often there are expirations of monthly and quarterly futures and options around that date. And around the last ten days of the month, we regularly see capital inflows into the markets. We saw exceptions in January and November, but then the S&P500 index was near all-time highs, and there was profit-taking in the last few days of the month. September was also an exception, when the bounce in the indices lasted only two days, finding support only with the start of the new month. The current momentum looks like this year’s typical case: Indices were well away from the highs by Monday, and we saw buyers interest at the end of the day yesterday. The positive sentiment also extended into the Asian session and the start of the European session. Although the European indexes lost much of their early day gains and traded near opening levels, they are still clinging to growth territory. In addition, Bitcoin and Ether, meaningful indicators of risk demand, are up 4%, indicating that bullish sentiment prevails in the markets. A moderately weaker dollar also helps, showing year-end risk traction. These sentiments may well persist until the end of the year. 2021 was not a quiet or particularly delightful year for US equity markets, but they managed to add around 20% on the Nasdaq100 and S&P500 indices, putting it in the top 10 best years since the turn of the twentieth century. History suggests that a strong year comes with a strong ending. Beyond that, it is worth looking at the performance of the various sectors in these final days of the year. In the last two weeks, the list of leaders and outsiders can shed light on the year’s trends ahead.
Gold Price Forecast: XAU/USD struggles at $1795 amid a mixed-market mood

Gold Price Forecast: XAU/USD struggles at $1795 amid a mixed-market mood

FXStreet News FXStreet News 22.12.2021 16:07
Gold advances during the New York session, some 0.19%. A mixed market mood and broad US dollar weakness keep investors using gold to hedge higher inflation as US PCE data looms. XAU/USD Technical Outlook: Neutral-bearish, unless gold bulls reclaim $1,793. Gold (XAU/USD) edged higher during the New York session, trading at $1,791.63 at the time of writing. The market sentiment is upbeat, though US equity indices fluctuate between gainers and losers. Additionally, the US dollar weakened across the board, while US T-bond yields, with the 10-year benchmark note, retreats after testing the 1.50% threshold in the overnight session. Factors like investors assessing the economic impact of the Omicron variant and the delay of the US President Joe Biden Build Back Better agenda dented market participants’ mood. That said, the US Dollar Index, which measures the greenback’s value against a basket of six currencies, edges lower 0.27%, down to 96.25. Furthermore, as previously mentioned, the 10-year Treasury yield is down some three basis points, at 1.457%, from 1.487% reached on Tuesday’s session. Before Wall Street opened, the US economic docket featured one of the last waves of data of 2021. The US Bureau of Economic Analysis reported that the US economy in the third-quarters grew at an annualized pace of 2.3%, higher than the 2.1% estimated. Moreover, the Personal Consumption Expenditures Prices rose by 5.3%, according to expectations. In the overnight session, gold remained subdued in a narrow range, between $1,785-$1,795. In the mid-European session, the non-yielding metal trended up, though faced strong resistance at the 100-hour simple moving average (SMA), retreating at press time to current levels. That said, unless XAU/USD decisively breaks above $1,793, the precious metal would remain bearish biased. XAU/USD Price Forecast: Technical outlook The XAU/USD daily chart depicts indecision, as shown by the daily moving averages (DMAs) almost “horizontally” contained in the $1,787-$1,800 range. From a market structure perspective, unless gold bulls reclaim $1,792.95, the bias is bearish, though to resume the trend, USD bulls would need a daily close below the December 16 pivot low at $1,775.40. On the way south, the first support would be the December 16 low at $1,775.40. A break beneath that level would exert downward pressure on the precious metal, exposing crucial support areas. The next one would be the December 2 low at $1,761.72, followed by the December 15 cycle low at $1,752.44 To the upside, the first resistance would be the December 8 cycle high at $1,792.95. A clear break of that level would immediately expose $1,800, followed by the September 3 swing high at $1,834.
Bitcoin (BTC), Fed, US Jobs Data, OPEC and EURUSD. What they all have in common? They’re mentioned in Swissquote’s video!

Bitcoin (BTC), Fed, US Jobs Data, OPEC and EURUSD. What they all have in common? They’re mentioned in Swissquote’s video!

Swissquote Bank Swissquote Bank 05.01.2022 14:25
Market mood turned sour in the US trading yesterday, and the latest data showed that 4.5 million Americans quit their jobs in November. 4.5 million is a lot of job departures, but there is nothing the Federal Reserve (Fed) could do about it, as the root cause of the problem is not the lack of job openings. Today’s ADP data is expected to reveal that the US economy added 400’000 private jobs in December. That would be less than a tenth of what has been lost in November. So the question is, does the jobs data even matter anymore? US equity indices retreated yesterday, and yesterday’s price action is mostly driven by higher interest rate expectations. In the forex, the US dollar remains strong, and that strength is pushing the EURUSD below the 1.13 mark. The sterling bulls, however, defend well their territory against a broadly stronger US dollar and a push above the 100-DMA, near the 1.3560 mark, should throw a basis to a medium term bullish reversal in Cable. In cryptocurrencies, appetite in Bitcoin remains contained near the 200-dma and the coin is testing the low end of the December horizontal channel base, which is near $45K level. One explanation for the lack of appetite is the rising US yields, which are applying a visible downside pressure on the pricing of cryptocurrencies. And gold is now trading above both its 50, 100 and 200-DMA, but the positive attempt to the $1830 level remained short-lived. It will be interesting to see how the rising US yields, which increases the opportunity cost of holding the non-interest-bearing gold, will play out in the coming months for gold investors. Watch the full episode to find out more!
Will 2022~23 Require A Different Strategy For Traders/Investors? Part III

Will 2022~23 Require A Different Strategy For Traders/Investors? Part III

Chris Vermeulen Chris Vermeulen 08.01.2022 13:50
Is The Lazy-Bull Strategy Worth Considering? - Part IIIThis last part of our multi-part article compares trading styles amidst the increasing price volatility and extended hyperbolic trending. We'll explore what we've witnessed in the US markets over the past 5+ years and highlight what to expect throughout 2022. Additionally, we'll highlight and feature the strategic advantages of our advanced Lazy-Bull strategies.Lazy-Bull Rides Big Trends & Avoids Excessive RisksMany people are inherently opposed to the Lazy-Bull strategy because they've been conditioned to think trading requires actively seeking various opportunities every week. We don't quite see it that way. Instead, we see the opportunity for growth and consistency existing in taking 4 to 12+ strategic trades per year while the markets set up broad momentum moves/trends. Our objective is not to trade excessively just for the sake of trading. Instead, we want to take advantage of when the markets enter opportunistic periods of trending and ride those trends as far as they go.Sign up for my free trading newsletter so you don’t miss the next opportunity!This example Weekly SPY chart showing our TTI trading strategy highlights the growth phases in various trend stages. Notice the GREEN and RED sections on this chart where our system has identified directional changes in the major price trends. Over the past 11+ years, there have been numerous bullish price trend phases resulting in 12 months to 36+ months bullish price trend trends. These major price cycles make up part of the advantage of the Lazy-Bull strategy.We are not actively seeking the strongest stock symbols throughout these trends. Instead, we are simply relying on the strength of the US major indexes to carry our trades further into profits as the market's trend. The TTI strategy is a "set it – and forget it" type of strategy until the strategy generates a new entry or exit trigger.Volatility & Price Rotation Make 2022 More Dangerous Than 2021 – What Next?Our research shows 2022 will likely continue to exhibit increased price volatility and bigger price rotation. Meaning 2022 could be very dangerous for shorter-term strategy traders as volatility levels may disrupt traditional stop boundaries or other aspects of their defined strategies.It is important to understand how and when these issues creep into a strategy and attempt to move above these issues.Looking at the Q1 through Q4 data using our proprietary Data mining utility, I'll give you my insight related to the data and what I believe is likely to happen in 2022. Remember, this data consolidated the past 28-29 years of trends in the SPY to present these results – going back to 1993. That means that this data is compiled through several various price trends, major market peaks, major market bottoms, and various volatility levels along the way.Q:2022 AnalysisQ1 data suggests an overall positive/upward price trend is likely in 2022, with the Total Monthly Sum across 29 years totaling 37.94. Broken into annual gains, that translates into an expected $1.30 gain in the SPY in Q1:2022.The Total Monthly NEG (negative) range appears to be more than double the Total Monthly POS (positive) range. However, we may see some price volatility in Q1:2022 that surprises the markets. For example, maybe the US Fed makes surprise rate increases? Perhaps it relates to some other foreign market event disrupting the US markets? I don't know what it will be, but I feel some market event in Q1 is likely, and this event may prompt a fairly large downward price rotation in the SPY.Overall, I believe Q1:2022 will end slightly higher than the end of Q4:2021 levels and may see the SPY attempt to break above $490~500 on stronger earnings and continue the market's bullish price phase.Q2:2022 AnalysisThe second quarter seems a bit more stable in overall price appreciation trends. The data shows a shallow NEG value compared to a moderately strong POS value for Q2. Because of this, I believe the second quarter of 2022 will slide into a relatively strong upward Melt-Up type of trend after a potentially volatile Q1:2022.The Total Monthly Sum value is higher in Q2 than in Q1, suggesting Q2 may exhibit a stronger upward momentum as a more apparent trend direction sets up after the Q1 volatility.The US Fed will likely attempt to aggressively reduce its balance sheet throughout Q2 and into Q3:2022 if my expectations are accurate. This may create some additional market volatility in Q2 and Q3:2022 – but I suspect the US Fed will attempt to conduct a lot of this activity relatively quietly – almost behind the market strength/trends.Q3:2022 AnalysisQ3 shows data that is somewhat similar to Q1 overall. I interpret this data as showing moderate bullish trend strength within the typical mid-Summer US market stagnation in trend. Mid-Summer trends tend to be a bit more sideways in nature. Many traders are vacationing, enjoying the Summer weather, and/or not paying attention to market trends and dynamics. Because of this, I expect the July through September months of 2022 to be relatively quiet and mundane.Additionally, we have the mid-term US elections set up in November 2022. The July through September months will be packed with political posturing, campaigning, and various events filled with antics to distract the markets from focusing on real issues. As a result, election years tend to be somewhat quiet – especially in the 2 to 5 months leading up to the actual election date.The end of Q3:2022 and the start of Q4:2022 could see some bigger, more aggressive price trending. The elections, ramping up of the early holiday/Christmas seasons, and the end of Summer may prompt traders to move into undervalued assets or other opportunist trades seeking to ride out an end-of-year trend. Right now may be a great time to identify strong swing/position trades to close out 2022 with some nice profits.Q4:2022 AnalysisQ4:2022 shows a very strong bullish trend potential, with the POS results greatly surpassing the NEG results. Historically, this is because of the traditional Santa Rally phase of the US markets and may play a big role in 2022 if the US economy stays strong throughout 2022.Overall, I expect the US Fed to act in a manner that supports the "transitioning" of the global markets away from excessive risks while attempting to nudge inflationary trends lower. There is talk that the US Fed may take aggressive action to combat inflation, but I see the Fed's actions are more subtle than brutal at this stage.I believe the US Federal Reserve is keenly aware of the fragility of the global markets after many years of excessive easy-money policies. In my opinion, the current market environment is more similar to the late 1960s and 1970s than the 1990s and early 2000 time frame. We've seen a massive influx of capital in the global markets – push all traditional economic metrics "off the charts" after the COVID event. That capital will work itself throughout the global economy, disrupting more at-risk companies and nations' capabilities, but still prompt a moderate growth component for many years to come.Volatility, Trading, And Profiting From Bigger TrendsThe entire point was to discuss the opportunities of moving above the current excessive price volatility and adopting a trading strategy that is more suited to bigger, broader market price trends. In 2019, I warned that 2020 was likely to be very volatile.In February 2021, I warned that 2021 was likely to be very volatile for certain market sectors: WILL 2021 PROMPT A BIG ROTATION IN SECTOR TRENDS? – PART IIIn early January 2020, I warned the US markets may be set up for a "Waterfall Selloff": ARE WE SETTING UP FOR A WATERFALL SELLOFF?Today, I'm suggesting that price volatility will likely peak sometime in 2022 or 2023 and begin to subside as the excesses of the past 8+ years continue to process through what I'm calling the "transitioning phase" of the markets. This market phase is more of a deleveraging and revaluation phase which started in February 2020 – in various sectors. It has now extended into many global economies where excess risk factors are being addressed and revalued (think China, Asia, and other areas).This transitioning process will likely continue in 2022 and 2023, meaning traders need to be prepared for the increased price volatility and adopt a style of trading that will allow them to profit from these bigger trends. This is why I'm suggesting taking a higher-level approach to trade over the next 24 to 36+ months.Certain market trends will still allow traders to pick up some fantastic profits as sectors and various undervalued symbols gain momentum. Overall, though, I feel that 2022 and 2023 will be moderately difficult for shorter-term trading strategies and that a higher-level, longer-term approach may be a much more beneficial approach.Want To Learn More About My Long-Term Investing Strategy?My Technical Investor strategy is uniquely suited toward this type of trading style. It is simple, longer-term, and rises above the moderate price volatility that disrupts many shorter-term trading strategies.Get ready; 2022 will be an excellent year for traders with big trends and bigger volatility. We have to stay ahead of these trends to protect our capital and allow it to grow more efficiently. The risks of more traditionally moderate volatility systems getting chewed up in this extreme environment will continue. So be prepared to move towards a more protective trading style to survive the next 12 to 24 months.If you are interested in learning more about how my Technical Investor (and other trading strategies) can help you protect and grow your wealth in any type of market condition, I invite you to visit  www.TheTechnicalTraders.com 
Looking for stability in EU, awaiting next moves of FED

Looking for stability in EU, awaiting next moves of FED

Walid Koudmani Walid Koudmani 10.01.2022 14:46
After what appeared to be a mixed Asian session, European indices started Monday's trading session attempting to regain some ground after significant fluctuations seen last week. While there is a lack of major data releases today, this week could be very important for investors as the US earning season begins and as we await Powell’s testimony related to his renomination as FED chair which has proven to be quite positive for markets this far. In addition, news regarding the ongoing spread of the Omicron variant could continue to significantly impact both stocks and commodities, which as of late have been increasingly uncertain assets. Oil traders focus on OPEC production as prices fluctuate As mentioned previously, oil prices have been increasingly volatile as uncertainty grows regarding the balance between supply and demand with OPEC on one side determining the production and rate of increase, while we’ve seen a situation of significant fluctuation in demand in the short term as news continues to noticeably impact prospects for oil. On the other hand, traders await reassurance from oil producing countries as some doubts have emerged regarding their ability to maintain an adequate supply as demand continues to rebound as a result of the post pandemic recovery. While there is also the possibility that the Iran nuclear talks could bring an increase of oil supply to the market, most traders are focusing on whether or not there could be actual shortages which could cause significant increases in price volatility and ultimately lead to a domino effect across various sectors.
GOLD might be boosted with some factors

GOLD might be boosted with some factors

Alex Kuptsikevich Alex Kuptsikevich 11.01.2022 09:56
An active reassessment of the outlook for monetary policy continues in the financial markets, but these changes have so far not moved gold from its position near $1800. The latest gold performance shows that it remains a portfolio diversification instrument, with little correlation to stock indices. Gold has gained for the third consecutive day, almost hitting the $1810 level. Last week the price came under pressure along with stocks, as US government bond yields rose as investors preferred them over precious metals paying no dividends or coupons. Gold also decreased intraday on Monday on a sharp fall in equities. However, buying on declines towards $1785 is well notable in gold. This is another jump around sustained buying. Previously, the areas of notable buying were $1760 in November and December and $1720 in August and September. Even earlier, in March 2021, gold got strong demand on dips to $1680. It is important to note that the higher support levels in gold at the end of last year occurred at the same time as the bond yields were rising, so the correlation between these assets is not direct. Historically, gold is vulnerable to rising long-term government bond yields only in case of a massive risk-off in the markets, which we witnessed in the epicentre of the last two global crises in 2008 right after the Lehman bankruptcy and in 2020 in the first weeks of the official pandemic. If the Fed and other central bankers manage to rein in inflation without causing major market turbulence during the policy normalization period, it could be a good springboard for gold. We have seen a similar example in the last tightening cycle. The first rate hike at the end of 2015 ended a corrective pullback in gold, becoming the starting point for a new six-month-long growth wave. Now the approach of a rate hike could draw attention to gold as a hedge against declines in growth stocks, which have a high sensitivity to interest rate movements. On the technical analysis side, if a new upside momentum in gold forms, it will lead the path to the $2500-2600 area after a 61.8% Fibonacci retracement from the August 2018 to August 2020 growth wave.
Moderna (MRNA) Stock Price and Forecast: Why do dead cats bounce?

Moderna (MRNA) Stock Price and Forecast: Why do dead cats bounce?

FXStreet News FXStreet News 12.01.2022 15:58
MRNA shares slump on Tuesday after a strong bounce on Monday. FXStreet had called the Monday bounce as likely to fail. Moderna needs to find a new revenue source as covid likely to fade. Moderna (MRNA) shares failed to rally on Tuesday despite Fed Chair Powell talking calmly to Capitol Hill and soothing most equities in the process. Risk was back on and rate hikes are also likely on, this time in March. Powell has carefully mapped out the strategy so as not to surprise markets, and despite yields rising slightly, tech continued to bounce on Tuesday. However, Moderna shares slumped. Moderna (MRNA) stock news Shares in Moderna closed over 5% lower at $221.39 on Tuesday. Many traders are asking why, when all major indices closed higher. Mainstream media have been trotting out the rotation line, which is a neat excuse for, "We don't really know why that happened, so let us just compare it to something else." The fact as always is to do with momentum and trends. Moderna has been falling, and this latest fall is symptomatic of waning investor interest as covid looks to fade. Moderna is hugely over-reliant on its covid vaccine for income. Yes, it has a decent pipeline, but nothing else can come close to matching the revenue generation of its covid vaccine. This is the big problem. Pfizer is much more diversified and a larger company with multiple revenue streams. Moderna (MRNA) is not in this league. It may get there one day, but in the meantime it will face revenue generation challenges. Take a look at the Moderna development pipeline here. It is impressive but nothing that looks either imminent or significant in terms of replacing covid vaccine revenue. Covid is/was a once-in-a-century event (fingers crossed). Moderna (MRNA) stock forecast There is nothing significant in Monday's move despite MRNA shares closing 9% higher. We outlined this in our article earlier in the week and remain bearish on Moderna. The trend is in place as Monday failed to break above $259, so we remain with lower lows and lower highs. $259 is the pivot for the short term. $188.41 is the first target with $200 a big psychological level along the way. There is a pattern here: declining Relative Strength Index (RSI), declining Moving Average Convergence Divergence (MACD) and declining stock price. We have a volume gap from $200 until $180. There is more downside in our view unless MRNA shares close above $259. Moderna (MRNA) chart, daily
Tesla Stock Price and Forecast: Despite market sell-off, TSLA finished Thursday in the green

Tesla Stock Price and Forecast: Despite market sell-off, TSLA finished Thursday in the green

FXStreet News FXStreet News 21.01.2022 16:06
TSLA finished Thursday in the green, gaining 0.06% to $996.27. Equities had gyrated sharply but fell as the close approached. Tesla stock outperforms as Nasdaq and S&P 500 both fall sharply. Tesla (TSLA) managed to hold onto intraday gains but only just barely on Thursday. Stocks (https://www.fxstreet.com/markets/equities) had opened well and were up some 1% for the main indices at the halfway stage of Thursday, but jitters resurfaced as the finish line approached. Investors began dumping positions, and the main indices closed in the red. The S&P 500 shed 1.1%, the Dow closed 0.89% lower and the Nasdaq closed down the most at 1.34% in the red. Tesla however just held onto a green day, up 0.06%. Given that it is a volatile name and a high beta one, this was a strong outperformance. Tesla Stock News: bearish Bank of America forecast a worrying sign Tesla (TSLA) stock may have held its ground in anticipation of its Q4 earnings, which are due out next week. Bank of America and Piper Sandler fought it out with conflicting analyst reports. Bank of America took a dim view of Tesla's market share forecasts, saying it would drop from 69% to 19% of the EV market due to legacy automakers ramping up EV production. However, Piper Sandler noted that it sees Tesla beating delivery estimates for the year due to factories in Texas and Berlin ramping up production. For now, it appears investors are putting more focus on those delivery numbers and anticipating a strong earnings report. The Bank of America report is more alarming, but it does have a longer term outlook with the market share fall predicted for 2024. Tesla Stock Forecast: $886 is a futher downside target Yesterday's move has kept Tesla above the key short-term pivot at $980, but note that yesterday's high price was stuck at the 9-day moving average and Tesla failed to break through. This gives us more belief in an imminent break of $980. If this level does go, then the move to $886 will likely be quick due to a lack of volume. Tesla (TSLA) chart, daily
Emini S&P, Nasdaq And Emini Dow Jones Update – 24.01.2022

Emini S&P, Nasdaq And Emini Dow Jones Update – 24.01.2022

Jason Sen Jason Sen 24.01.2022 13:21
Video analysis -  Emini S&P MARCH completed the right should of a small head & shoulders pattern breaking the neck line is at 4590/4580 for a medium term sell signal. A bounce to this level was a perfect sell opportunity last week & as predicted we dropped 200 points is from here. Not a bad week! Nasdaq MARCH lower as expected to the only support for the day at 14430/14380, with a low for the day exactly here. Emini Dow Jones MARCH broke the 200 day moving average at 34900/850 as expected to hit the next target of 34560/540 & was expected to hit first support at 34050/33950 on Friday. A low for the day just 50 ticks above here. Update daily at 07:00 GMT. Today's Analysis. Emini S&P break of the neck line at 4590/80 was a significant sell signal with the break of the 200 day moving average at 4430/20 another important medium term sell signal. First target would be 4360/50. However 4200 is definitely not out of the question. Gains are likely to be limited with very strong resistance at 4425/35. Shorts need stops above 4450. A break higher however can target 4480/85. Nasdaq lower again as expected targeting the only support for the day at 14430/14380. A low for the day exactly here so obviously this is key to direction now. A break below here is an important sell signal of course & we could easily drop another 500 points. A bounce from the only support for the day at 14430/14380 is likely as trading starts this week. We could reach 14600/650, perhaps as far as strong resistance at 14800/900. Emini Dow Jones currently holding first support at 34050/33950. First resistance at 34450/500. Strong resistance at 34750/800 should we make it that far. A break below 33900 eventually this week is a sell signal eventually targeting 33200. 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.
Price of Gold Chart seems to Feel Good Despite The General Investors' Situation

Price of Gold Chart seems to Feel Good Despite The General Investors' Situation

Alex Kuptsikevich Alex Kuptsikevich 25.01.2022 08:59
Gold is trading near $1840, adding 3.2% from the Jan 7 lows, as a hedge against increased financial market volatility. By comparison, the S&P500 has experienced its worst start to a year in history, losing more than 12% in that time in response to the harsh tone of US monetary policy comments. At a point like this, we often see a divergence in the dynamics of gold and equities, which revives talk of a safe haven. However, investors should not forget that increased equity market volatility, if it lasts long enough, at some point triggers a capitulation of gold buyers. The critical question for investors now is when there is a switch between a favourable decline for gold and a real fear triggering a circular sell-off in all assets. We are looking at the performance of the yen and the franc. Both currencies are relatively protected from geopolitical risks on the Eurozone sidelines. So far, these currencies have moderately slid against the dollar, which suggests that we have not yet reached the point of reducing leverage. This means that a relatively positive background also remains for gold, which allows us to talk about a continuation of the positive trend of the last two months for the time being. The next central resistance area looks at $1870-1905, between the last two peaks. Among other factors, gold may be hampered by further declines in the stock indices if yesterday's bounce attempt does not materialize today. A move above $1900 would signal the end of a long-term correction in gold and start a new momentum of growth above $2500, which would last for up to two years. The opposite is also true. A pullback under $1800 would end the long upside attempt and the long consolidation. The main near-term unknown is the outcome of Wednesday evening's Fed meeting. The central bank's statements and comments could determine the other trend of gold, supporting or, conversely, reversing the latest upside attempts.
GME Is Plunging Recently, GameStop Stock Price Is Currently ca. $94

GME Is Plunging Recently, GameStop Stock Price Is Currently ca. $94

FXStreet News FXStreet News 24.01.2022 16:27
GameStop stock stages a dead cat bounce on Friday. GME stock closes up nearly 4% on Friday as market freefalls. More losses are likely on Monday as momentum fades and meme is massacred. GameStop (GME) managed to outperform the market significantly on Friday. The meme stock king closed nearly 4% higher at $106.36 despite the main indices closing sharply in the red. However, this was merely a dead cat bounce, and we will outline our reasoning below. GameStop Stock News Nothing too significant behind Friday's outperformance. GameStop (GME) shares had suffered eight consecutive days of losses. Statistically, an up day was becoming more and more likely. GameStop passed a few milestones without much fanfare or reaction from the stock price. Social media traders attempted to play up the one-year anniversary of the GameStop pop, and CEO Ryan Cohen joined in. However, the stock slid. An announcement of a pivot into the NFT space was also met by indifference after a quick surge from the share price. Despite GME spending much of last week near the top of social media mentions, it failed to hook any buyers. The market has little time for risk at present, and speculative meme stocks are getting hit hard so far this year. As we have mentioned, this may be a good thing and avert a full-blown bubble bursting, akin to 2000. The NFT announcement did see a brief pop, but that merely presented a fresh selling opportunity. Year to date, GME is now down nearly 30% and is likely to get worse. The main trading lesson of momentum trading is to get out quickly when momentum stops or stalls. This is not investing or buy-and-hold. This is the realm of quick scalping and risk control. Momentum has collapsed in retail names. Witness falling volumes, falling single share volumes, lower retail sentiment, and drastically lower call option volume: all signs of falling momentum. GameStop Stock Forecast $100 will be broken soon, possibly today or Tuesday. That will lead to some stop-loss triggering as people are herd animals and love round numbers. There will be plenty of stops sitting just below $100. $86 is the target thereafter. The Relative Strength Index (RSI) still has more room to run before being overbought. Breaking $86 is big. That was the retest following the power surge higher back in February pf last year. Below $86 volume thins out, and there is a volume gap until $50. GameStop (GME) chart, daily
Considering Portfolios In Times Of, Among Others, Inflation...

EUR To GBP and EURUSD Will Go Down If Dollar Strengthens?

Alex Kuptsikevich Alex Kuptsikevich 26.01.2022 09:39
The US dollar has been gaining steadily against the developed countries' currencies since the beginning of the year. By the way, the yen was an exception: it has been adding 1.8% over the past 11 days after the stock market entered the turbulence zone due to a reassessment of the monetary policy outlook. According to historical data, the Fed often finds itself at the forefront of the monetary policy cycle. That is used to be translating into a stronger USD in the months before and after the first tightening. So the question is in what currency pairs it is most profitable to buy the dollar now. Among the developed and liquid currencies, three scenarios can be considered. The first way is to sell EURUSD. The euro is weaker than the dollar due to the ECB being on several steps behind the Fed. That means that the EU rates will remain lower for a longer period of time, and the balance of bond yields will be shifted towards the dollar. Given the pace the Fed intends to take in tightening monetary policy, this yield gap promises to widen further. Another way is to bet that monetary tightening is stressing the declining markets drag the pound down. We should keep in mind that the Bank of England has already approved its first tightening policy step, and in this case it's not far behind the Fed. At the same time, it's closely correlated with falling market indices. Need to mention that GBPUSD is still far from being oversold with a wide room for further decline. The third way is often more obvious. Traders may consider selling the currencies of developing countries, which are much more sensitive to the Fed monetary policy changes. However, EMs have been raising rates for almost a year, so selling them now is a bet on market volatility in the near term. For the longer perspective, higher interest rates promise to level out short-term gains. In this case, the dollar's down turn may be faster than in the euro.
Wednesday (26.01.2022): BTC -0.6%, ETH +0.2%, LUNA decreases -6.6%

Wednesday (26.01.2022): BTC -0.6%, ETH +0.2%, LUNA decreases -6.6%

Alex Kuptsikevich Alex Kuptsikevich 27.01.2022 09:46
Bitcoin decreased by 0.6% on Wednesday, ending the day at around $36,400. Ethereum added 0.2%, while other top-ten altcoins mostly saw declines from 3.1% (Binance Coin) to 6.6% (Terra, an outsider of the day). According to CoinGecko, the total capitalization of the crypto market sank by 0.5%, to $1.73 trillion. Bitcoin showed positive dynamics all day against the backdrop of growing stock indices. Up until the Fed meeting, the first cryptocurrency was gaining over 6%, hitting 5-day highs above $38,800. However, BTC began to fall almost immediately after the announcement of the results of the Fed's two-day meeting. The regulator announced a curtailment of bond purchases in early March, as well as an imminent rate hike, followed by a reduction in the Fed's balance sheet. The fall of bitcoin accelerated along with stock indices in half an hour when the head of the Fed, Jerome Powell, started his press conference. He noted that rising inflation could force the regulator to raise interest rates more aggressively. The first cryptocurrency may finally complete its upward correction if risky assets resume and intensify the fall after the Fed meeting. In Russia, buyers are now engaged in the withdrawal of capital and deprive the country's economy of financing, as announced by the Bank of Russia. Last week, the regulator proposed to ban the circulation and mining of cryptocurrencies in the territory of the Russian Federation. The State Duma and the Ministry of Finance, on the contrary, are in favour of regulation, not a ban on the industry. Russian President Vladimir Putin on Wednesday urged the government and the Central Bank to come to a consensus on the regulation of cryptocurrencies. Meanwhile, Turkish President Erdogan instructed the ruling party to study the impact of cryptocurrencies on the economy. At the same time, the US Internal Revenue Service said that non-fungible tokens (NFTs) are used for illegal activities, and celebrities are spreading this by promoting NFTs.
XRP (-0.9%), LUNA (-8.3%), ETH (-2.5%). Bitcoin decrased by 0.4%

XRP (-0.9%), LUNA (-8.3%), ETH (-2.5%). Bitcoin decrased by 0.4%

Alex Kuptsikevich Alex Kuptsikevich 28.01.2022 09:07
On Thursday, Bitcoin lost 0.4%, ending the day around $36,200, and Ethereum fell 2.5%. The other leading altcoins in the top ten also mostly saw declines, from XRP down 0.9% to Terra with -8.3%. According to CoinGecko, the total capitalization of the crypto market sank by 2.3% per day, to $1.72 trillion. Bitcoin tried to strengthen on Thursday morning but began to decline in the American session along with US stock indices. The US stock market fell following the results of trading on Thursday, although it opened with growth. The high-tech Nasdaq suffered particularly heavy losses. Investors continue to withdraw from US stocks amid the expected tightening of the US Federal Reserve's monetary policy. The day before, the central bank, following its meeting, signalled that it would start raising interest rates in March, curtailing the entire stimulus program at the beginning of the month. In the future, the regulator will begin to reduce the Fed's balance sheet. In such circumstances, investors will continue to reduce their positions on risky assets, and Cryptocurrencies may be hit first. Meanwhile, bitcoin is trying to stay above the $35,000 mark, taking advantage of some slowdown in the fall of the stock markets. However, if the fall in stocks accelerates, the crypto market will also accelerate its decline. The US Securities and Exchange Commission (SEC) has rejected Fidelity's application to launch a bitcoin ETF. Fidelity itself warned investors that bitcoin was in a “liquidity storm” due to high volatility in the stock market.
APPL (Apple) After Release of The Reports. How Will It Affect The Market?

APPL (Apple) After Release of The Reports. How Will It Affect The Market?

FXStreet News FXStreet News 28.01.2022 16:11
Apple stock surges after a strong earnings release. AAPL popped 2% on the numbers, and this move has continued. Apple could turn the entire market sentiment around. Apple (AAPL) dropped earnings after the close last night, and they amounted to a blow out. There had been some talk of record numbers and iPhone sales prior to the release, but this set of earnings surprised even the most bullish previews. The stock immediately popped 2% and stabilized but has since added another 2% to its after-market gains and is currently at $165.79 in Friday's premarket. This marks a 4% gain on the regular session close from Thursday. This big question is whether Apple (AAPL) can turn the entire market sentiment around. It is after all the biggest company in the world with the highest weighting in the main S&P 500 and NASDAQ indices. It certainly has the potential to call a bottom to this miserable start to 2022. Apple Stock News Earnings per share (EPS) came in at $2.10 versus the average estimate of $1.88. Revenue also beat estimates, hitting $123.9 billion versus $118.28 billion. The closely watched iPhone revenue number hit $71.63 billion and represents just under 58% of Apple's total revenue. Gross margins increased from 39.8% to 43.8% yearly. On the conference call post earnings, CEO Tim Cook said he sees this margin remaining strong in Q2 2022 to 43% at the midpoint of projections. However, the March quarter is traditionally the slowest of the year earnings wise due to the post-holiday season lull in sales activity. CFO Luca Maestri addressed the key question of supply chain issues, saying chip issues are only a problem for mostly older models and that problems have eased. Tim Cook said the supply chain is doing well. Overall, this was exactly what the market needed: blowout earnings with a significant beat. The earnings call offered strong revenue and most importantly positive commentary around the supply chain and semiconductor chip issues. We will likely see multiple analyst upgrades as the day progresses. Apple Stock Forecast This now becomes a key barometer for the broad market. AAPL should stabilize and appreciate further from here based on these results. If this current rally fails and fades, then truly we are entering a correction phase. For now, $157 remains key support. This is the high from September and also the 100-day moving average. Hold here and we can then target $167.63 and then onto record highs. Also note how the Relative Strength Index (RSI) is oversold by traditional metrics at 30 (we prefer to use 20) and how the Moving Average Convergence Divergence (MACD) is also at lows with the histogram at the widest we have seen for some time. All of these are indicators of oversold conditions. Everything looks set up for a turnaround. The only caveat is the overall market sentiment. Apple (AAPL) chart, daily
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BTC +7.3% (ca. $37k), ETH +7%, LUNA -25% - Last Week On Cryptomarket

Alex Kuptsikevich Alex Kuptsikevich 31.01.2022 09:48
Bitcoin gained 7.3% over the past week, ending last week near $37,700. Ethereum added 7%, while other leading altcoins in the top 10 showed mixed dynamics: from a decline of 25% over the week (Terra) to a rise of 4.6% (Binance Coin). Terra's collapse is linked to the scandal surrounding the Wonderland DeFi protocol. The total capitalisation of the crypto market, according to CoinGecko, rose 1.7% to $1.79 trillion for the week. The week didn't start encouragingly for bitcoin. The first cryptocurrency updated six-month lows below $33,000, but BTC sharply redeemed the short-term fall amid an equally sharp rebound in US stock indices. The US stock market interrupted last week's decline and rose for the first time after three weeks of decline. Apple's stock price jumped on Friday after a positive quarterly report and on Tim Cook's statements about the great potential of the metaverse. The rise in the stock market also contributed to the rebound in the cryptocurrency market, which again points to the strong correlation of stock and digital assets in recent times. This trend could continue at least until the end of this year. Despite stabilisation, the situation in the crypto market remains very fragile. Bitcoin could end up falling for the third month in a row. The decline in January is over 17%, and the first cryptocurrency has already lost 45% since the highs in November. The US Treasury Department plans to revisit the controversial FinCEN proposal for mandatory verification of bitcoin wallet users in 2022. If adopted, the proposal would require cryptocurrency exchanges to collect personal data from their users.
Tesla (TSLA) Price Also Has Its Ups and Downs. It's Below $920 Currently

Tesla (TSLA) Price Also Has Its Ups and Downs. It's Below $920 Currently

FXStreet News FXStreet News 31.01.2022 15:49
Tesla stock tumbles after beating earnings estimates TSLA shares hit by concerns over supply chain issues. Apple and big tech could turn the market next week. Tesla (TSLA) staged a modest recovery on Friday, but the real damage was done on Thursday when the stock shed nearly 12%. Friday's move was not even that impressive given Tesla's high beta, a fact that would usually see it bounce significantly more than the major indices. As we know well by now high, growth is not the sector of choice this year, and Tesla does straddle this space. Investors are moving back to more traditional sectors and metrics for their portfolios, and the era of high flying growth is coming to an end, for now at least. We view this as a positive event, stretching too far would have resulted in an ugly snapback or bubble popping most likely. This stabilisation should continue for the year with one or two speculative dead cat bounces along the way. We may just get one of those next week as the remainder of big tech gets a chance to continue on from where Apple led. Amazon (AMZN), Google (GOOGL) and Facebook (FB) are all reporting earnings this week. Positive earnings should steady sentiment, and this would then also likely spread to some high growth names. However, in the longer term, we expect balance sheets rather than growth to outperform this year. Tesla Stock News Tesla is not just pure growth, although it is managing to do that rather impressively if the latest results are anything to go by. It will stay with the pace, while other start-up EV manufacturers are more likely to fade away. Tesla created the EV space and remains the brand leader. This will likely not change since it has positioned itself as a premium brand. It will likely face more competition, but we do not see it losing quite as much market share as that forecast by Bank of America. Forecasting a drop from 69% to 19% market share in the space of two years does seem a bit headline-grabbing. The problem for Tesla is its valuation got too ahead of itself, so it is likely to underperform in this new environment despite continued strong earnings and revenue growth. Tesla Stock Forecast The bearish trend is now well-established. Thursday's losses only followed on from what we identified back in early January. The spike higher failed, and then it created a lower low, which confirmed the mid-December low. Even Friday's price action set a lower low than Thursday before the bounce set in. Resistance at $987 is last week's high and is first up. A close above that is significant and a new bar above that will signify a small short-term uptrend. Otherwise, the medium-term downtrend remains in control with support at the 200-day moving average, which sits at $814 currently. Tesla (TSLA) chart, daily
SolScan - Many Of Investors Probably Don't Know This Term

(SOL) Solana Price Is Quite Far From End of 2021 Tops

FXStreet News FXStreet News 31.01.2022 15:49
Solana price keeps hovering above the monthly S2 support. SOL price sees RSI slowly climbing out of the oversold area on the RSI. Expect a pickup in bullish sentiment once Nasdaq confirms risk-on will be the central theme for this week. Solana (SOL) price saw its bullish reversal stop short on Sunday and is now nearing the monthly S2 support level again at $89.28. Although ASIA PAC equity and European indices are firmly in the green, the sentiment has not spilled over to US futures and cryptocurrencies yet. Expect a bounce off the monthly S2 support level and look for a first test at $100 to the upside before continuation this week towards $130.70. Solana bulls are pushing the RSI away from the oversold area Solana price action saw bulls in good shape on Friday and Saturday, erasing a part of the games and trying to reach $100 to the upside. Instead, the sharp uptick stopped on Sunday as cryptocurrencies again looked heavy, with trading starting on Monday. Strangely enough, the most critical Asian indices and European indices are firmly in the green, where US futures are somewhat mixed and relatively flat during the European trading session. Expect for SOL price to stay hovering around this S2 level as the Relative Strength Index (RSI) is still at or in an oversold area, limiting any potential downside for bears. This should help bulls to use this window of opportunity to go long and make a bounce off the S2 level at $89.28. Once US futures kick into gear and take over the sentiment from Europe, expect some bullish uptick again, targeting $100 intraday and $130.70 for this week. SOL/USD daily chart On the downside, a break below the S2 support level would see a dip towards the low from last week, around $82. If European indices give up their gains and turn red, together with US futures firmly in the red, expect to see another wave of selling, with a possible nosedive threat towards $58.84. With that move, the RSI would overshoot firmly into being oversold.
GBP To USD Chart - A Small Step For GBP As It Strenghtens And Reaches Ca. 1.3500

GBP To USD Chart - A Small Step For GBP As It Strenghtens And Reaches Ca. 1.3500

FXStreet News FXStreet News 01.02.2022 15:49
The British pound climbs in the North American session, 0.34%. The market sentiment is mixed as European stocks rise while US futures point towards a lower open. BoE’s 25 basis points rate hike is fully priced in by investors. The GBP/USD remains downward biased, as it failed to breach above the 100-DMA. After ending January with losses of 0.65%, the British pound snaps three-day losses, climbing 0.31%. At the time of writing, the GBP/USD is trading at 1.3495, though retreating from the 100-day moving average (DMA) lying at 1.3514. As depicted by European stock indices rising, the market sentiment is mixed, but US equity futures underpins the cash market towards a lower open. Bank of England (BoE) expected to post back-to-back rate hikes In the meantime, money market futures, as shown per the CME Group BOEWATCH tool, 100% of market participants expect an increase of 25 basis points, from 0.25% to 0.50%. Sources cited by CNBC said that “With the Bank Rate reaching 0.5%, we expect the MPC to confirm that all APF (asset purchase facility) reinvestments will cease following the February decision.” Source: CME Group Meanwhile, the Philadelphia Fed President Harker crossed the wires. He commented that the Fed is not behind the curve, and he expects a rate hike of 25 basis points, four in the year. Concerning the balance sheet reduction, he said that the US central bank could begin the Quantitative Tightening (QT) once the Federal Funds Rates (FFR) hit 1% to 1.25%. The UK economic docket featured the BoE Consumer Credit, Mortgage Approvals for December. The former came at £0.8B in line with expectations, while the latter rose to 71.051K, higher than the 66K foreseen. Concerning the Market Manufacturing PMI Final for January, increased to 57.3, a tick more elevated than the 56.9 estimated, though trailed the previous month 57.9, showing some slowing, due to the Omicron hit. Across the pond, Manufacturing PMI released by IHS Markit and the ISM for January will be closely watched by GBP/USD traders. That alongside the JOLTs Job Opening for December could shed some light, in anticipation of Thursday’s Jobless Claims and Friday’s Nonfarm Payrolls report. GBP/USD Price Forecast: Technical outlook The GBP/USD is downward biased. During the European session, the pair retreated at the 100-day moving average (DMA) at 1.3514, but any downward moves might be capped by the 50-DMA lying at 1.3418. To the upside, the GBP/USD will face resistance at 1.3500, followed by the 100-DMA at 1.3514 and an eight-month-old downslope trendline around the 1.3530-40 region. On the flip side, the 50-DMA at 1.3418 is the first support level, followed by the 1.3400 figure, and then the YTD low at 1.3357.
Solana (SOL), Polkadot (DOT), Terra (LUNA), Cardano (ADA), BTC And ETH - They All Lost On Wednesday

Solana (SOL), Polkadot (DOT), Terra (LUNA), Cardano (ADA), BTC And ETH - They All Lost On Wednesday

Alex Kuptsikevich Alex Kuptsikevich 03.02.2022 08:33
Bitcoin fell 4.8% on Wednesday, ending the day around $37.0K. Ethereum lost 3.9%, while other top-ten altcoins fell between 4.4% (Cardano and Polkadot) and 7.8% (Solana and Terra). The total capitalisation of the crypto market, according to CoinGecko, overnight fell by 3.4% to $1.8 trillion, while Bitcoin's dominance index fell 0.2% to 39.2%. Bitcoin began a sharp decline on Wednesday as the US session opened, along with US stock index futures. After several hours of falling, stock indices reversed and regained momentum. BTC, meanwhile, broke its previous strong correlation with equity indices and did not show a meaningful rebound. The benchmark cryptocurrency came under pressure from reports of a severe snowstorm coming to Texas. A year ago, a similar weather anomaly disrupted the power supply to a quarter of households and caused loss of life, forcing authorities to impose a state of emergency. The state's association of miners, the Texas Blockchain Council, decided to de-energise mining farms on Wednesday. Texas is home to the main bitcoin network computing capacity in the US. The states themselves are the world's number one miner of the significant digital asset (around 49% of hash rate). Bitcoin again proved that it remains in a downward channel, as the recovery bounce lost strength at the upper end of the range. In theory, a bearish reversal of bitcoin opens up the possibility of updating the January lows with potential targets near 30K.
European Central Bank and Amazon (AMZN) And Its Earnings

European Central Bank and Amazon (AMZN) And Its Earnings

Walid Koudmani Walid Koudmani 03.02.2022 11:57
Central bank decisions tend to be significant events in normal circumstances, but today’s decision could prove to be quite interesting for markets as different decisions are expected from each of today’s banks. While the Bank of England is set to raise its rate for the second time and signal further unwinding of its pandemic stimulus, the European central bank is expected to maintain it’s wait and see approach despite record inflation of 5,1% announced in January. According to these predictions, we could be seeing a strengthening of the pound thanks to the 0,5% interest rate, while we could sese a mixed reaction of the Euro as markets remain uncertain about the fragile economic recovery, especially given recent escalations on the Russia-Ukraine border which could destabilize the entire continent. Despite this, any surprises in today’s decisions or announcements could have far reaching effects on both the FX market and equities across Europe and the UK as central bankers struggle to balance record inflation with the post pandemic recovery. Can Amazon’s earnings support US indices? While we have seen a noticeable recovery of global indices over the past several days, yesterday’s disappointing earnings report from Meta (Facebook) saw the stock price drop and weigh on US markets as well as general sentiment. Meta’s results came one day after Alphabet announced it’s positive results and optimistic outlook and despite this mixed sentiment, we are seeing a slight pullback of stock markets as they await another mega-cap report. Amazon’s results could prove to be a significant catalyst for potential movements in the markets as a better than expected result could further boost the recent recovery while a disappointing one could drag markets further down. The company benefited greatly from the recent global situation as demand for its products and services increased noticeably thanks to a solid strategy and cost optimization. On the other hand, like many other companies that benefited from the stay-at-home lifestyle, it remains to be seen if that positive performance has carried over into this new phase.  
SEC Rejects Valkyrie, Kryptoin Spot Bitcoin ETF Applications

Bitcoin Hovered Around Ca. $44k Yesterday, Ether (ETH) Gains 5%, Solana Increases by 4%, Ripple by 18.5%

Alex Kuptsikevich Alex Kuptsikevich 08.02.2022 08:31
On Monday, Bitcoin rose 5.5%, ending the day around $44,100. Ethereum added 5%, and other leading altcoins from the top ten also showed growing dynamics: from 4% (Solana) to 18.5% (XRP). The total capitalization of the crypto market increased by 5.5% over the day to $2.10 trillion. The Bitcoin dominance index has not changed, remaining at 39.2%. The Bitcoin chart continues to paint a bullish picture. With the price at $45K on Tuesday morning, BTCUSD is trading above the 50-day moving average just above the mid-January pivot area and above the down channel resistance level. At the same time, the RSI on the daily charts has not yet entered the overbought area, leaving room for further growth.  The same can be said about the entire cryptocurrency market, where the fear and greed index has reached a neutral point of 48 and is still far from the greed area. The next target for the bulls looks to be $48K, the December support area in December. Further targets are $49-50K, where the 200-day moving average and significant round level are concentrated. The XRP token soared amid reports of a significant approach to the resolution of Ripple's legal dispute with the US Securities and Exchange Commission (SEC).Cryptocurrencies briefly stopped responding to movements in US stock indices, which started the week with a decline. The purchases probably included retail investors, who were driven by the desire not to miss the beginning of the market growth (FOMO). However, their buying potential is unlikely to be enough if stock indicators intensify their decline and large institutional investors come into play, wishing to resume profit-taking. KPMG, one of the world's largest auditors, has added Bitcoin and Ethereum to its Canadian division's corporate reserves. This is the firm's first direct investment in cryptocurrencies. Meanwhile, at the end of 2021, Tesla received a loss of $ 101 million from a decrease in the cost of previously purchased bitcoins, which it spent $ 1.5 billion on. Previously, Elon Musk called the decision to acquire BTC as a reserve asset quite risky. 
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Did Cryptocurrencies Need A Rest Yesterday? Bitcoin Increased By 0.3%, ETH Lost 1.3%

Alex Kuptsikevich Alex Kuptsikevich 09.02.2022 08:27
On Tuesday, Bitcoin showed a growing momentum at the beginning of the day and reached five-week highs above $45,000. After a short-term rise above this level, a corrective decline began in the middle of the day. The benchmark cryptocurrency was losing more than $2,000 despite the rise in stock indices. There was a sharp rebound towards the end of the day and closed the day almost unchanged as a result. Recovery in institutional demand for stocks late in the day on Tuesday helped Bitcoin stay above the 50-day moving average as well. Continued buying on the decline to this level will keep the technical picture bullish as upside momentum develops to $49-50K. A sharp dip lower today or tomorrow will raise the issue of a false break and bring the sellers back into play, heading for $37-38K. It became known that at the end of last week, the Canadian exchange fund Purpose Bitcoin ETF bought 1.75 thousand BTC in two days, which could lead to a sharp increase in prices. In addition, Valkyrie Investments has received approval from the SEC to launch an exchange-traded fund (ETF) based on the shares of companies that receive at least 50% of their profits through mining. At the same time, the US authorities confiscated bitcoins stolen from the Bitfinex crypto exchange in 2016 for $3.6 billion and detained those involved in the hack. The Russian Federation government approved the concept of the Ministry of Finance for the regulation of cryptocurrencies: a joint bill should be ready by February 18. Overall, Bitcoin gained 0.3% on Tuesday, ending the day around $44,200. Ethereum was down 1.3%, while the other leading altcoins in the top ten were mixed from a 5.7% decline (Binance Coin) to an increase of 5.4% (XRP). The total capitalization of the crypto market decreased by 1.2% over the day to $2.09 trillion. The Bitcoin dominance index increased by 0.8% over the day, to 40%.  
DJI (Dow Jones) And SPX (S&P 500) Are Likely To Recover Slowly

DJI (Dow Jones) And SPX (S&P 500) Are Likely To Recover Slowly

Alex Kuptsikevich Alex Kuptsikevich 09.02.2022 09:26
Stock markets continue their shaky recovery. On Tuesday, intraday trading patterns in US equities point to a buying trend on declines. The S&P500 and Dow Jones indices rebounded from their 200-day simple moving average. Both indices were below those levels in the second half of January. Still, by the beginning of February, they managed to get back above them on the substantial buying activity of the retail investors. Yesterday's stock market dynamics slightly reduced the tension. Increased buying at the end of the session indicates a buying mood for professional market participants. There have been increasing reports from US investment banks that markets have already priced in a tight monetary policy scenario and will not press equity prices further. Moreover, BlackRock recently noted that markets had priced in overly hawkish expectations. The bond market also looks oversold, declining in previous weeks at the fastest pace since 2008. This is a good reason, at least for a technical rebound. In addition, buyers are supported by strong economic and wage growth, promising corporate earnings stability for the foreseeable future. The switch to a monetary tightening phase turns the market into a more frequent and deeper corrective pullback mode but does not trigger a bear market before a rate hike even begins. Strong fundamentals support a bullish technical picture, with a recovery from the strongest oversold S&P500 RSI and the ability to pop above the 200-day average. From this perspective, the January drawdown has cleared the way for growth, recharging buyers. On an equity level, we can see stabilisation and sharp upward moves in stocks that have been weak since June and shone in the pandemic before that: Peloton, Netflix, GameStop. In theory, this could be a dead cat bounce, but it reduces the selling pressure in blue-chip stocks such as Apple, Amazon, Microsoft, Google and straightens out the overall market sentiment.
Brent (Crude Oil) Has Gained 20% Since The Beginning Of The Year. The Brent Price For Today  - The 7-year High

Brent (Crude Oil) Has Gained 20% Since The Beginning Of The Year. The Brent Price For Today - The 7-year High

Walid Koudmani Walid Koudmani 09.02.2022 12:30
While Oil prices have seen significant movements in recent times, with Brent gaining over 20% from the start of 2022 and reaching the highest level since october 2014, we are beginning to see a slight pullback despite an unexpected inventory drop shown in yesterday's API report. Talks surrounding the Iran nuclear deal, which could bring around 2 mpd supply into the markets, have helped prices retreat while easing of tensions surrounding the Russia-Ukraine situation have also boosted sentiment. On the other hand, while these are positive signs the situation remains uncertain as any further escalation could see supply significantly disrupted and as the Iran deal remains slightly out of reach for the time being. OPEC appears to be nearing production capacity and optimistic forecasts point to a rise in demand throughout the year so unless some progress is made among other producers, those supply concerns could translate into record prices and subsequent impacts on a variety of sectors. Today’s EIA inventory report could prove to be important for short term price action as a confirmation of the API report could potentially increase concerns regarding short term price stability.   Stock markets continue to recover as investors await earning reports from Uber and Disney European stock markets are extending the upward move after a positive Asian session and following a higher close of US indices despite some general uncertainty seen across markets. Stock prices have been increasingly volatile on the back of recent geopolitical tensions and some surprising earnings reports released during this earning season. Fiscal and monetary policy has also greatly impacted investor sentiment but many appear to be reassured for the time being as we see a continuation of the recent rebound across global markets while investors await today’s key earnings announcements from major companies like Uber technologies and Disney among others. While it remains to be seen whether these will manage to meet expectations, the situation remains quite fragile with many markets experiencing significant volatility and as several central bankers are also due to speak today.   Barratt Developments strong results boost investor confidence Barratt Developments report exceeded expectations and pointed to a stronger recovery from covid levels with over 18,000 home constructions and strong revenue figures. The company expects this positive performance to continue throughout 2022 and despite some uncertainty surrounding the global economic environment, the general market situation appears to favor such optimistic performance. It remains to be seen if the company will manage to successfully implement its strategy or if it will encounter issues driven by record inflation and potential supply chain disruptions.
Bitcoin (BTC), S&P 500, Nasdaq Increased. Ether Gained 3.8%, Terra (LUNA) (+0.2%) And XRP (+5.2%) Went Up

Bitcoin (BTC), S&P 500, Nasdaq Increased. Ether Gained 3.8%, Terra (LUNA) (+0.2%) And XRP (+5.2%) Went Up

Alex Kuptsikevich Alex Kuptsikevich 10.02.2022 08:30
On Wednesday, the cryptocurrency market decided to push and grow amid the rise of US stock indices. The S&P 500 gained 1.5%, while the high-tech Nasdaq gained 2.1%. All this helped Bitcoin shrug off the profit-taking sentiment at the start of the day and close in a slight plus. On the intraday chart, you can see purchases at the close of the American session, which clearly demonstrate the interest of the institutionalists in this region. The benchmark cryptocurrency continues to be in demand after strengthening above the 50-day moving average, which confirms the breaking of the downtrend of the previous three months. The RSI indicator on the daily charts is now at 61, still far from the overbought zone, confirming that the market is still far from overheating.   For the third week in a row, institutional participants have been investing in crypto funds, according to CoinShare. Why did they start doing this before the January meeting of the Fed, when no one believed in the BTC reversal. Crypto-whales also bought bitcoin on the fall. According to Santiment, they have purchased 220,000 BTC in the last seven weeks. On Thursday, US inflation data will be released, which will shed light on how quickly the Fed will raise rates. If inflation accelerates, all risky assets, including cryptocurrencies, may suffer significantly. Overall, Bitcoin added 0.5% on Wednesday, ending the day around $44,500. Ethereum rose 3.8%, other leading altcoins from the top ten also showed growing dynamics from 0.2% (Terra) to 5.2% ( XRP). The total capitalization of the crypto market grew by 2.2% over the day, to $2.14 trillion. Altcoins showed outpacing growth, which led to a decrease in the Bitcoin dominance index by 0.4%, to 39.6%.
Bank of America Doesn't Approve Bitcoin, Which By The Way Decreased By 1.3% Yesterday

Bank of America Doesn't Approve Bitcoin, Which By The Way Decreased By 1.3% Yesterday

Alex Kuptsikevich Alex Kuptsikevich 11.02.2022 08:53
Cryptocurrencies were under the pressure of strong data on inflation in the United States on Thursday, which has updated 40-year highs. Such values can force the Fed to raise interest rates faster, which is negative for all risky assets, including cryptocurrencies. Bitcoin showed high volatility during trading, updating early January highs above $45,800 under the influence of a weakening dollar. However, towards the end of the day, the first cryptocurrency began to decline along with stock indices: the S&P500 lost 1.8%, the high-tech Nasdaq fell 2.1%. The crypto-currency index of fear and greed for the second day is exactly in the middle of the scale, at around 50 (neutral). However, now the stock markets are having an increased impact on the dynamics of Bitcoin and Ethereum, in which the prospects for monetary policy are being reassessed. The corresponding index is now in the fear territory, near the 37 mark. Meanwhile, Bitcoin is being bought back on dips towards the 50-day average, which keeps the picture bullish. However, in the event of a prolonged sale of shares, the first cryptocurrency will not hold and risks pulling the entire market with it. Fitch has downgraded El Salvador due to its acceptance of bitcoin as legal tender. In March, the country will issue the first $1 billion bitcoin bonds. There is interesting news from America as well. The largest investment company BlackRock is going to launch a cryptocurrency trading service. Bank Of America refuses to recognize Bitcoin as a safe-haven asset, pointing to the strengthening of the correlation between BTC and the S&P500 stock index. And at JPMorgan, they currently consider the “fair” quote for bitcoin to be $38,000. In Russia, the government has completed the drafting of a bill on the circulation of digital currencies. The Ministry of Finance proposed establishing a transitional period for individuals before introducing a tax on income from crypto assets. Overall, Bitcoin lost 1.3% on Thursday, ending the day around $44,100. Ethereum fell 4.3%, while other top ten altcoins declined from 0.5% (Avalanche) to 6.2% (Solana and Polkadot). The total capitalization of the crypto market sank by 2.8% over the day, to $2.08 trillion. Altcoins showed a leading decline, which led to an increase in the Bitcoin dominance index by 0.5%, to 40.1%
Crypto Market News: Hungary And Russia Take Crypto Into Consideration, ETH Decreased By 5.1%

Crypto Market News: Hungary And Russia Take Crypto Into Consideration, ETH Decreased By 5.1%

Alex Kuptsikevich Alex Kuptsikevich 14.02.2022 08:48
Bitcoin strengthened in the first half of the week and the middle, having managed to test the highs of early January above $45,800. The situation changed on Thursday after the release of US inflation data, which updated the maximum levels for 40 years, and US stock indices fell. This had a negative impact, among other things, on cryptocurrencies, which showed a significant correlation with other risky assets. Late last week, the Fed announced an unscheduled meeting to be held today, February 14th. As a result of the meeting, the regulator may well raise rates without waiting til March. Moreover, even a double increase is possible, by 0.50%. Tightening monetary policy can hit all risky assets, including cryptocurrencies. On February 12th, the bitcoin network hashrate updated all-time highs above 248 EH/s. The indicator indicates the strengthening of the position of the blockchain and the development of its infrastructure. Kathy Wood, head of investment company ARK Invest, actively sold shares of the Grayscale Bitcoin Trust backed by bitcoin throughout February. Note that these securities were purchased in July last year, at the time of the BTC reversal upwards. The Central Bank of Hungary has now called on EU countries to ban cryptocurrency trading and mining. The Bank of Russia announced its desire to reduce the involvement of citizens in the crypto market. For example, the Ministry of Finance proposed limiting the list of cryptocurrencies traded in Russia. In general, Bitcoin rose by 1.6% over the past week, ending it at around $42,200. Ethereum lost 5.1%, other leading altcoins from the top ten also mostly sank: from 4.3% (Binance Coin) to 19% (Solana) for a week. The exception was the XRP token, which showed a 20% increase. The total capitalization of the crypto market, according to CoinGecko, decreased by 1.5% over the week to $1.96 trillion. The Bitcoin Dominance Index rose by 1% to 40.7% due to the weakening of altcoins.
The Swing Overview - Week 6 2022

The Swing Overview - Week 6 2022

Purple Trading Purple Trading 13.02.2022 23:00
The Swing Overview - Week 6 The record inflation rate in the US over the past 40 years sparked another wave of volatility in the markets on fears of more aggressive Fed action against an overheated economy. Unexpectedly strong US labour market data also came as a shock to markets. As a consequence, yields in the US 10-year bonds rose and broke the 2% mark. Equity indices, on the other hand, weakened towards the end of the week and we will see whether strong supports will be tested again under the influence of these fundamentals. Rising bond yields are not good news for gold either, which has so far responded to the strengthening dollar and rising yields by weakening. The macroeconomic data from the US Inflation and labour market data were clearly among the most anticipated macroeconomic events last week. Year-on-year inflation in the US rose to 7.5% in January 2022. This is the highest reading since February 1982 and is also higher than analysts' estimates, that had expected inflation to be around 7.3%. The reasons for the higher inflation are rising energy costs, a tight labor market and disruptions in supply chains, which are multiplied by strong demand in a recovering economy. The biggest contributors to rising inflation were energy prices, which rose by 27%, and fuel prices, which rose by 40%. Figure 1: The inflation in the US In terms of the labour market, the US economy created 467,000 new jobs in January. This was much more than the analysts' forecast, who estimated that, given the spread of the Omicron variant, only 150 thousand new jobs would be created in the US in January. Figure 2: The US jobs growth (NFP) This very strong data means one thing. The Fed will tighten the economy and probably at a much faster pace than the market expects. And this is also the reason for the further rise in the US 10-year bond yields, which have surpassed the 2% mark and reached their highest level since August 2019. Along with this, the dollar index, which had made a correction last week, has also started to strengthen.   Figure 3: 10-year government bond yield on the 4H chart and the USD index on the daily chart A strong dollar, rising yields and the economy tightening at a faster pace than the market expects are clearly negative news for equity indices and also gold.   The NASDAQ and the SP500 Earnings season continues in the US. Of the well-known companies, Pfizer (NYSE:PFE) reported results last week. While the company's earnings were higher than expectations, the pharmaceutical giant also reported that it expects revenue for 2022 to be USD 32 billion, below analysts' expectations, who were hoping for growth of around USD 33.8 billion.  Facebook continues to lose ground after last week's washout, causing the share price to drop from USD 320 to USD 220 in one week.   Figure 4: The NASDAQ index on H4 and D1 chart The NASDAQ started last week with a rise and the price approached the resistance according to the H4 chart. The information about record inflation had a strong negative impact on technology stocks and the price was moving near the support at the end of the week, which is in the range near 14,392 - 14,530 according to the H4 chart. Significant support is in the area at 13,750-13,950 according to the daily chart. The nearest resistance according to the H4 chart is at 15,050 - 15,080.   Figure 5: The SP 500 on H4 and D1 chart   There has been a very similar pattern on the SP 500 index to the NASDAQ. The price got to the resistance which is defined by the horizontal resistance area at 4,580 - 4,600. At the same time, there is a confluence with the broken trend line of the rising channel below which the index is moving. Support according to the H4 chart is at 4440 - 4454. According to the daily chart, significant support is at 4,225 - 4,300.   German DAX index Figure 6: The DAX on H4 and daily chart There is no clear direction on this index recently. We can probably say that the index is moving in a sideways trend which according to the daily chart is defined by the strong resistance at 16,300 (all-time high) and the support which has already been tested several times in the area between 14,850 - 15,000. The current move shows that the rising channel has been broken to the downside and also that the moving averages on the H4 chart EMA 50 and SMA 100 are in a bearish constellation. This together with the higher inflation data and also the recently announced hawkish ECB policy would suggest more of a move down to the aforementioned support. The nearest horizontal resistance according to the H4 chart is at 15,532 - 15,620. The next resistance according to the H4 chart is at 15,727 - 15,757.   The EUR/USD near strong resistance The EURUSD approached the strong 1.15 level but after the US inflation data was announced, the pair started to fall strongly. Thus, according to the H4 chart, a false break of the resistance arose, which is in the band around 1.1480 which tends to be a strong signal for further weakening. Figure 7: EURUSD on H4 and daily chart The possibility of a weakening is also indicated by the development of the interest rate differential that is present in the yields between the 10-year bonds of Germany and the US. This has recently been very strongly correlated with developments on the EURUSD. Figure 8: Correlation of the interest rate differential between German and US 10-year bonds with the EURUSD currency pair on H4   The interest rate differential is starting to decline and this should suggest that the EURUSD might weaken. The nearest resistance is at the 1.1460 - 1.1480 band. The nearest support according to the H4 chart is at 1.1360 - 1.1370. The next one is at 1.1270 - 1.1280.   Gold Gold is taken by many investors as a hedge against inflation. But lately, gold seems to be losing in the battle for inflation protection to US Treasuries, which carry some yield, while gold does not deliver any yield. Gold is most responsive to the value of the US dollar. If the dollar rises, gold tends to depreciate and vice versa. Recent developments in the USD index suggest that the dollar could strengthen again this week, which should mean a test of support for gold. Figure 9: Gold on H4 and D1 charts   The nearest resistance according to the H4 chart is in the area of 1,835 - 1,841. Then the next resistance according to the daily chart is at 1,847 - 1,852. The nearest support is at 1 788 - 1 795 and then 1 780 - 1 784 USD per troy ounce of gold.  
Decentralized Autonomous Organisation - Another Addition To Our Personal Dictionaries

BTC Wants To Let Us Forget About January's Lows. On Monday: BTC Decreased By 0.2%, ETH And LUNA Gained

Alex Kuptsikevich Alex Kuptsikevich 15.02.2022 09:28
The first cryptocurrency returned to growth on Tuesday morning, adding 3.3% and rising to 43,500. Technically, BTCUSD held above the 50-day moving average and received support from buyers after another touch of this level. At the same time, however, this average is directed downwards, emphasizing the general downward trend. Cryptocurrencies seem to be once again trying on the role of a safe-haven asset, becoming a little more like gold and a little less like stocks. Although US stock indices were under pressure on Monday, they decided to stop the sharp decline at the end of last week. However, the high-tech Nasdaq ended the day unchanged. European stock indicators showed a noticeable drop under the influence of tensions around Ukraine. On the same background, gold shot up 3% to highs since June last year. It should be understood that in the event of a massive sale of shares, only short-term government bonds will be the protective asset of last resort. Institutions invested $75 million in crypto funds last week, according to CoinShares. Over the past four weeks, net inflows to crypto funds amounted to $209 million. The head of Uber said that the company would definitely start accepting cryptocurrencies in the future. A British crypto investor has announced the creation of a city for crypto investors in the Pacific and expects thousands of supporters from around the world to join soon. The Ministry of Finance of the Russian Federation proposed to limit the investments of unqualified Russian investors in cryptocurrencies to 50 thousand rubles. The agency estimates tax revenues to the budget from the legalization of the cryptocurrency market at 10-15 billion rubles, and the main amount of payments will fall on the miners. Overall, Bitcoin was down 0.2% on Monday, ending the day at around $42,200. Ethereum added 0.1%, while other leading altcoins from the top ten showed mixed dynamics: from a decrease of 1.6% (XRP) to a rise of 2 .2% (Terra). The total capitalization of the crypto market, according to CoinGecko, grew by 0.5% per day, to $1.97 trillion. The BTC dominance index did not change during the day, remaining at the level of 40.7%. The Fear and Greed Index is up 2 points to 46 and is in a state of fear.
Crypto Airdrop - Explanation - How Does It Work?

Ripple (XRP) Increases By 1.7%, AVAX By 12%, (BTC) Bitcoin Gains 4.4%

Alex Kuptsikevich Alex Kuptsikevich 16.02.2022 08:40
Cryptocurrencies rose on Tuesday on the back of strengthening stock indices and falling protective assets like gold, the yen, and treasuries. Bitcoin started its rise before the news about Russia and Ukraine hit the wires and sparked risk-on sentiments. Technical factors may have influenced the first cryptocurrency's strengthening, with BTC pushing back from its 50-day moving average, which has been acting as a support level for the past week. Russia has proposed allowing cryptocurrency mining in specific regions and imposing taxes on the conversion of crypto assets into fiat and is making progress in testing the digital rouble with the first interbank transfers. Bitcoin rose on Tuesday to its highest level in the past week (+4.4%), ending the day around $44,100, where it is trading on Wednesday morning. Ethereum jumped 7.3% on Tuesday, settling at $3100, while other leading altcoins from the top 10 also added: from 1.7% (XRP) to 12% (Avalanche). Overnight, crypto market capitalisation rose 2% to $1.98 trillion, according to CoinMarketCap estimates. Since early January, the market has not been consistently above the 2 trillion mark, and consolidation above could be an essential signal for bulls to move from observation to active buying. Since the end of January, there has been a notable uptrend support line that can be drawn through the local lows, which sets up optimism in the short term. The two largest cryptocurrencies, BTC and ETH, are attempting to consolidate above their 50-day averages, which previously signalled the end of a bearish phase. This was primarily made possible by optimism on Wall Street, where investors continue to buy out drawdowns. Altcoins showed outperformance, which led to a 0.3 percentage point decline in the Bitcoin Dominance Index to 40.4%. The Fear & Greed Index climbed from 46 to 51, moving into the Neutral from the Fear territory.
Tesla Stock News and Forecast: TSLA, RIVN or LCID stock, which is the best buy?

Tesla Stock News and Forecast: TSLA, RIVN or LCID stock, which is the best buy?

FXStreet News FXStreet News 16.02.2022 16:18
Tesla bounces strongly on Tuesday as risk assets surge. TSLA stock gains just over 5% on Tuesday. Geopolitical tensions falling help risk appetites return. Tesla (TSLA) shares bounced strongly on Tuesday, eventually closing up over 5% in a strong day for equities. The stock market was buoyed by news of some Russian deployments returning to their bases. Russia then appeared to confirm this as hopes grew for a diplomatic solution. This saw an obvious bounce in equities (https://www.fxstreet.com/markets/equities) with the strongest names being those that were previously the weakest. Understandable, but is this gain sustainable? NATO this morning has said it sees no sign of Russian troops pulling back from the Ukraine border. NATO has said it sees Russian troop numbers still growing along the Russian-Ukraine border. This news (https://www.fxstreet.com/news) still has legs. Volatility has been high as a result and will likely continue that way. Tesla Stock News The latest quarterly SEC filings have provided much information to pore over. In particular, Tesla, they do note some hedge fund selling. This is not too surprising given the record highs TSLA stock pushed on to before Elon Musk sold a stake. Benzinga reports that the latest filing shows Ray D'Alio's Bridgewater cutting its stake in Tesla. Cathie Wood of ARK Invest was regularly top-slicing her firm's stake in Tesla recently. CNBC also reported yesterday that hedge fund Greenlight Capital had made a bearish bet on Tesla shares. Greenlight, according to the report, has been a long time Tesla bear. Apart from those snippets though, macroeconomic factors are the main driver of the Tesla stock price currently. Electric vehicle stocks have not been a strong sector so far in 2022 as growth, in general, is out of favor with investors. This has led to steep falls in other names such as Rivian (RIVN) and Lucid (LCID). Both are at a much earlier stage of development than Tesla (TSLA) and on that basis, we would favor Tesla (TSLA) over them. But we must stress we would ideally avoid the sector entirely until perhaps the second quarter. Once markets have adjusted to the prospect of higher rates, some high-growth stocks may benefit. historical in a Fed (https://www.fxstreet.com/macroeconomics/central-banks/fed) hiking cycle the main indices do advance but growth sectors struggle. Rivian so far is down 36% year to date, Lucid is down 24% while Tesla is the outperformer, down 12% for 2022. Tesla Stock Forecast We remain in the chop zone between the two key levels of $945 and $886. Breaking $945 should lead to a move toward $1,063. That would still be consistent with the longer-term bearish trend. Nothing goes down or up in a straight line. TSLA is unlikely to be able to fight the current overpowering macroeconomic backdrop of rising rates (https://www.fxstreet.com/rates-charts/rates) hitting high growth stocks. But breaking $945 is still significant in the short term and should see some fresh momentum. While $886 is significant, the 200-day moving average at $826 should have our real attention on the downside. Tesla has not closed below this level in over 6 months, so that would be significant and again lead to a fresh influx of momentum. Just this time though, it would be selling momentum. Tesla (TSLA) chart, daily Short-term swing traders should note the volume momentum behind moves. Once volume dries up, Tesla tends to fall off intraday. From the 15-minute chart below, we have an opening gap from Tuesday down to $880. This is short-term support, but a break will see the bottom of Monday's range at $840 tested. Tesla (TSLA) 15-minute chart
Still Taking The Conflict Into Consideration, What's Not A Big Surprise

Still Taking The Conflict Into Consideration, What's Not A Big Surprise

Walid Koudmani Walid Koudmani 18.02.2022 12:48
While US indices plunged yesterday as the situation near the Ukraine-Russia border remained tense with the S & P 500 dropping 2.12%, Nasdaq falling 2.88% and Dow Jones pulling back 1.78%, reports of shelling in Luhansk and Donetsk Oblasts in eastern Ukraine continue. However, the US President will host a meeting with leaders of Canada, France, Germany, Poland, Italy, Romania, UK, EU and NATO today which along with an announced meeting between US secretary Blinken and Russia's Lavrov next week has helped moods stabilize slightly. Oil prices pulled back noticeably with Brent dropping below $90 and gold gave up some gains after benefiting from the significant risk-off moods seen this week which saw it reach the highest level since mid 2021. With a lack of data releases and with a long weekend ahead in the US, we could be seeing significant volatility across markets as investors and traders adjust their positions to limit risk exposure and in anticipation of a potential escalation of the conflict. On the other hand, any sign of easing of tensions has been received positively from markets and further indication could lead to a return of risk appetite across asset classes, which could favor stocks as well as the cryptocurrency market, which have struggled to maintain gains lately. UK retail sales point to continued post pandemic recovery Today's retail sales figures continue to provide encouraging signs as the economy recovers from the pandemic and as businesses as well as consumers begin to adjust to rising inflation. While these figures indicated a rise of retail sales volumes by 1.9% in January 2022 following a fall of 4.0% in December 2021, an interesting thing to note is that the proportion of retail sales online fell to 25.3% in January 2022, its lowest level since March 2020 (22.7%). Ultimately, it remains to be seen how the Bank of England's policy will facilitate this trend moving forward in order to avoid a stagnation situation and as rising prices across sectors continue to add pressure.
Decentralized Autonomous Organisation - Another Addition To Our Personal Dictionaries

Summing Up The Previous Week: Cardano (ADA), Ether And The First Cryptocurrency Decreased By Ca. 10%

Alex Kuptsikevich Alex Kuptsikevich 21.02.2022 08:24
Last week, BTC repeated the dynamics of the first ten days of February. The rate strengthened on Monday-Tuesday, and on Wednesday, it exceeded the level of $44,800. Then on Thursday, the price began to fall sharply in unison with stock indices. The decrease in risky assets was caused by the growing tension around Ukraine, where the situation is becoming tenser. On Friday, Bitcoin continued to fall, briefly dropping below the round level of $40,000. This mark was broken on Sunday, and BTC tested the next support level at $38,000. The situation is aggravated by the increase in cryptocurrency sales by miners. As a result, the bears may try to push the price to $36,000 and even $33,000. Today, on hopes of a political de-escalation, BTCUSD is up 2.5%, trying to cling to levels above $39,000. I must say that bitcoin has lost all the growth of February over the past week. In addition to the upcoming Fed rate hike, BTC has been hit by growing geopolitical risks. In addition to this, the founder of Ethereum, Vitalik Buterin, noted that he sees early signs of the onset of crypto winter. This spurred crypto sales among retail investors over the weekend. However, ETHUSD is up 5.3% on Monday, recouping Sunday's decline and continuing to struggle to close the third month in the red. Overall, Bitcoin was down 9.2% over the past week, ending it at around $38,300. Ethereum lost 9.7%, other leading altcoins from the top ten also sank: from 3.3% (Avalanche) to 11% (Cardano). The total capitalization of the crypto market fell by 7% in a week, to $1.82 trillion. The Bitcoin dominance index fell 0.7% to 40%, due to less weakening of altcoins. The Bitcoin Fear and Greed Index lost another 2 points to 25 on Monday, returning to the extreme fear territory.
Kind Of A Small Downtrend Visible On DAX Chart

Kind Of A Small Downtrend Visible On DAX Chart

Alex Kuptsikevich Alex Kuptsikevich 21.02.2022 10:43
The geopolitical momentum of the escalation/truce situation around Ukraine strikingly has its weekly cycles. Harsh rhetoric seems to peak at the end of the week, followed by the weekend’s relief when the sides look for ways to negotiate, giving a breath of air to global markets early in the week. This week, the same pattern applies with demand for EM currencies and European indices returning to their starting positions before Friday’s collapse. The announced talks between the Russian and US foreign ministers and the chances of a summit between Biden and Putin bring back hopes of a peaceful resolution. However, it is worth realising that the situation remains fragile, and so far, with each new cycle of this momentum, the present situation has become more dramatic. And this is visible in the dynamics of the European indices, where the DAX formed a double top in January and in February began to churn in line with the geopolitical background, maintaining a downward bias and approaching a critical support level that has been in place since last May. The pressure on the DAX to consolidate under the 15,000 mark is occurring on two fronts at once. Firstly, geopolitical tensions are reducing the traction in risky assets of the European region. In addition, fears of energy supply disruptions in the EU due to Russia form the background, with high oil and gas prices holding back the economic recovery. Secondly, the monetary policy outlook continues to be reassessed. ECB officials are talking more and more confidently about a rate hike this year and leaving the door open for such a move as early as September. If the bears manage to push the DAX below the nine-month support, we might see an acceleration of the corrective pullback that could take the index down to 14000 within the next couple of weeks. If the politicians’ rhetoric doesn’t seem to be easing, the next target for a retracement might be the 13000-area, a 61.8% Fibonacci retracement of the extremes of March 2020 and November 2021.
Markets News: Crude Oil, Gold, EuroStoxx 600, Copper

Analysing Macro, The Conflict In Eastern Europe, Standard And Poor 500 And US100

Purple Trading Purple Trading 21.02.2022 12:53
The Swing Overview – Week 7 Macroeconomic events last week had a secondary impact on market volatility. The "big story" that is currently moving the markets is the situation in Ukraine. Equity indices weakened and retested their strong supports. Last week's winner, on the other hand, is the gold, which, due to these geopolitical uncertainties, surprisingly strengthened to USD 1,900 per ounce, where it last traded in June 2021.   Macroeconomic data from the US  US industrial inflation on an annual basis came in at 9.7%, up from 9.8% in the previous month. This is the first decline in industrial inflation since April 2020. Retail sales reported very strong data, rising 3.8% in January (previous month was down 2.5%).  In the labor market, there was an unexpected increase in initial jobless claims of 248k (expectations were for a 219k increase). FOMC meeting minutes released on Wednesday did not indicate that the Fed was seriously considering a 0.50% rate hike in March. This gave the markets and risk currencies a temporary boost, but the main driver of the markets last week was the situation in Ukraine. Geopolitical tensions in Ukraine Last week Friday, when Jake Sullivan, the White House national security adviser, warned that Russia could attack Ukraine "any day now", sent stock indices into the red and investors focused on so-called "save havens" such as the US bonds and the gold, which rallied strongly. In contrast, commodity currencies, stock indices and cryptocurrencies, which are seen as risky assets, weakened. This suggests what might happen if an invasion actually took place. At the moment, however, both sides seem to be open to diplomatic solution of the crisis. This brings some relief and cautious optimism even though further developments are unclear.  Let’s have a look at how the US bond yields are reacting to the situation: Figure 1: 10 year government bond yield on the 4H chart and the USD index on the daily chart Demand for these bonds has been rising as investors view the US government bonds as a "save haven" in times of uncertainty. This increases the price of these bonds. Since there is an inverse relationship between the price of bonds and their interest yield, a rise in the price of bonds then pushes down their yields. This explains why the yield on these bonds fell on Friday last week as a result of the news of a possible Russian attack.   Overall, however, yields on these bonds continue to rise as investors anticipate a rise in the US interest rates. This in turn has had a negative effect on the technology stocks in the NASDAQ index in particular.   NASDAQ a SP500 Figure 2: The US NASDAQ index on H4 and D1 chart The NASDAQ started last week on Friday with a significant decline as the other indices.  Then there was a correction of this decline as news emerged that Russia was withdrawing some of its troops from the Ukrainian border and that military exercises were over. However, the next report was that the US was not seeing any change at the border with Ukraine and the NASDAQ index fell again. The current situation is that both sides have agreed to further negotiations.  It can be seen from this how sensitive the indices are to such news. We therefore recommend that our clients keep an eye on any breaking news that emerges in relation to the situation in Ukraine.  The nearest resistance according to the H4 chart is at 14,606 - 14,673. The next resistance is then 15050 - 15100.  Support according to the H4 chart is at 14,050 - 14,100.  Significant support according to the daily chart is at 13,750-13,950.  As for the US SP 500 index, the situation is similar here.   Figure 3: SP 500 on H4 and D1 chart The nearest resistance is at 4,471 – 4,491. The next strong resistance is in the area at 4,580 - 4,600.  Support according to the H4 chart is at 4,357 – 4,367. According to the daily chart, significant support is at 4,225 - 4,300.   German DAX index Germany reported ZEW economic sentiment, which came in at 54.3 (previous month 51.7). This indicates an improving outlook for the German economy over the next six months. However, this index was under pressure last week as were the US indices.  Figure 4: The DAX on H4 and daily chart  On February 14, the index fell to 14,841, where the previous support is. The zone of this strong support according to the daily chart is quite wide: 14,800 - 15,000. The nearest resistance according to the H4 chart is 15,440 - 15,530. The next resistance then immediately follows this zone and is in the 15 534 - 15 617 range.   The EUR/USD under pressure The EURUSD has shown that in times of political uncertainty, this pair tends to weaken. The decline was justified in terms of technical analysis by the false break of the resistance, which is in the area of 1.1465 - 1.1480. Figure 5: EURUSD on H4 and daily chart The nearest resistance according to the H4 chart is in the area of 1.1380 - 1.1400. Support according to the H4 chart is at 1.1280 - 1.1300. Very strong support according to the daily chart is then at 1.1120 - 1.1140.   The Gold The gold surprised last week with unexpected strength based on the situation around Ukraine. News that Russia may attack Ukraine any day has caused the gold price to rise. It eventually reached $1,900 per troy ounce, where it last traded in June 2021.  Figure 6: The gold on the H4 and D1 chart The nearest resistance according to the daily chart is USD 1,900 - 1,916 per troy ounce of gold.  The nearest support is 1,872 - 1,878. The most significant support is then at 1 845 - 1 852 USD per troy ounce. Once geopolitical tensions calm down and US government bond yields continue to rise, this should be negative news for gold. 
Positions of large speculators according to the COT report as at 15/2/2022

Positions of large speculators according to the COT report as at 15/2/2022

Purple Trading Purple Trading 22.02.2022 11:48
Positions of large speculators according to the COT report as at 15/2/2022 Total net speculator positions in the USD index rose by 1,621 contracts last week. This change is the result of an increase in long positions by 1,979 contracts and an increase in short positions by 358 contracts. Growth in total net speculator positions occurred last week in the euro, the British pound and the New Zealand dollar. Decrease in total net positions occurred in the Australian dollar, the Japanese yen, the Canadian dollar, and the Swiss franc. In the event of a Russian invasion to Ukraine, markets would move into risk-off sentiment. This means that investors would sell risk assets, which include stock indices, and shift their resources into assets that are considered as safe havens in such situations, which include US government bonds and gold. In currency terms, this means that the US dollar, the Japanese yen and the Swiss franc in particular could then appreciate in such a situation. Commodity currencies (especially AUD, NZD) might weaken. The positions of speculators in individual currencies The total net positions of large speculators are shown in table 1: If the value is positive then the large speculators are net long. If the value is negative, the large speculators are net short. Table 1: Total net positions of large speculators Date USD Index EUR GBP AUD NZD JPY CAD CHF Feb 15, 2022 35386 47581 2237 -86694 -9333 -66162 12170 -9715 Feb 08, 2022 33765 38842 -8545 -85741 -10366 -59148 14886 -9399 Feb 01, 2022 34571 29716 -23605 -79829 -11698 -60640 18264 -8239 Jan 25, 2022 36861 31560 -7763 -83273 -10773 -68273 12317 -8796 Jan 18, 2022 36434 24584 -247 -88454 -8331 -80879 7492 -10810 Jan 11, 2022 37892 6005 -29166 -91486 -8604 -87525 -7376 -7660 Note: The explanation of COT methodolody is at the end of this report. Notes: Large speculators are traders who trade large volumes of futures contracts, which, if the set limits are met, must be reported to the Commodity Futures Trading Commission. Typically, this includes traders such as funds or large banks. These traders mostly focus on trading long-term trends and their goal is to make money on speculation with the instrument. ​The total net positions of large speculators are the difference between the number of long contracts and the number of short contracts of large speculators. Positive value shows that large speculators are net long. Negative value shows that large speculators are net short. The data is published every Friday and is delayed because it shows the status on Tuesday of the week. The total net positions of large speculators show the sentiment this group has in the market. A positive value of the total net positions of speculators indicates bullish sentiment, a negative value of total net positions indicates bearish sentiment. When interpreting charts and values, it is important to follow the overall trend of total net positions. The turning points are also very important, i.e. the moments when the total net positions go from a positive value to a negative one and vice versa. Important are also extreme values ​​of total net positions as they often serve as signals of a trend reversal. Sentiment according to the reported positions of large players in futures markets is not immediately reflected in the movement of currency pairs. Therefore, information on sentiment is more likely to be used by traders who take longer trades and are willing to hold their positions for several weeks or even months.   Detailed analysis of selected currencies   Explanations:   Purple line and histogram: this is information on the total net position of large speculators. This information shows the strength and sentiment of an ongoing trend. It is the indicator r_COT Large Speculators (by Kramsken) in www.tradingview.com. Information on the positions of so-called hedgers is not shown in the chart, due to the fact that their main goal is not speculation, but hedging. Therefore, this group usually takes the opposite positions than the large speculators. For this reason, the positions of hedgers are inversely correlated with the movement of the price of the underlying asset. However, this inverse correlation shows the ongoing trend less clearly than the position of large speculators.​ We show moving average SMA 100 (blue line) and EMA 50 (orange line) on daily charts. ​Charts are made with the use of www.tradingview.com. The source of numerical data is www.myfxbook.com Euro   date Open Interest Specs Long Specs Short Specs Net positions change Open Interest change Long change Short change Net Positions Sentiment Feb 15, 2022 702047 217899 170318 47581 1949 -1074 -9813 8739 Bullish Feb 08, 2022 700098 218973 180131 38842 14667 5410 -3716 9126 Bullish Feb 01, 2022 685431 213563 183847 29716 2479 155 1999 -1844 Weak bullish Jan 25, 2022 682952 213408 181848 31560 -8930 1507 -5469 6976 Bullish Jan 18, 2022 691882 211901 187317 24584 9589 7540 -11039 18579 Bullish Jan 11, 2022 682293 204361 198356 6005 4075 5288 -2271 7559 Bullish         Total change 23829 18826 -30309 49135     Figure 1: The euro and COT positions of large speculators on a weekly chart and the EURUSD on D1 The total net positions of speculators reached 47,581 contracts last week, up by 8,739 contracts compared to the previous week. This change is due to a decrease in long positions by 1,074 contracts and a decrease in short positions by 9,813 contracts. Total net speculators positions have increased by 49,135 contracts over the past 6 weeks. This change is due to speculators closing 30,309 short positions and adding 18,826 long positions. This data suggests continued bullish sentiment for the euro. However, the rising open interest, which increased by 1,949 contracts in the last week, shows the opposite, as the euro fell down last week and this decline is supported by the rising number of open interest contracts. So more bearish traders were in the market. So we have conflicting information here. The euro weakened slightly last week on fears of an escalation of the conflict between Russia and Ukraine. Long-term resistance: 1.1461 – 1.15 Support: 1.1280 - 1.1300. Next support is near 1.1220 - 1.1240. A strong support is in 1.1120-1.1140. The British Pound   date Open Interest Specs Long Specs Short Specs Net positions change Open Interest change Long change Short change Net Positions Sentiment Feb 15, 2022 195302 50151 47914 2237 -2646 5442 -5340 10782 Bullish Feb 08, 2022 197948 44709 53254 -8545 13941 15112 52 15060 Weak bearish Feb 01, 2022 184007 29597 53202 -23605 1967 -7069 8773 -15842 Bearish Jan 25, 2022 182040 36666 44429 -7763 -1194 -3094 4422 -7516 Bearish Jan 18, 2022 183234 39760 40007 -247 -17259 9254 -19665 28919 Weak bearish Jan 11, 2022 200493 30506 59672 -29166 486 4526 -5479 10005 Weak bearish         Total change -4705 24171 -17237 41408     Figure 2: The GBP and COT positions of large speculators on a weekly chart and the GBPUSD on D1 The total net positions of speculators reached 2,237 contracts last week, up by 10,782 contracts compared to the previous week. This change is due to an increase in long positions of 5,442 contracts and a decrease in short positions of 5,340 contracts. Total net positions have increased by 41,408 contracts over the past 6 weeks. This change is due to speculators exiting 17,237 short positions and adding 24,171 long positions. This data suggests bullish sentiment for the pound. Open interest, which fell by 2,646 contracts last week, is indicating that the bullish price action that occurred in the pound last week was not supported by volume and therefore it is weak. Risk off sentiment in US equities could have a negative effect on the Pound as well as the Euro, which could then send the Pound towards support which is at 1.3380. Long-term resistance: 1.3620-1.3640. Next resistance is near 1.3680 – 1.3750. Support: 1.3490 – 1.3520. A next support is near 1.3320 – 1.3380 and then mainly in the zone near 1.3200. The Australian dollar   Date Open Interest Specs Long Specs Short Specs Net positions change Open Interest change Long change Short change Net Positions Sentiment Feb 15, 2022 192578 11692 98386 -86694 -3825 -5631 -4678 -953 Bearish Feb 08, 2022 196403 17323 103064 -85741 -510 -1512 4400 -5912 Bearish Feb 01, 2022 196913 18835 98664 -79829 6893 3714 270 3444 Weak bearish Jan 25, 2022 190020 15121 98394 -83273 8884 6070 889 5181 Weak bearish Jan 18, 2022 181136 9051 97505 -88454 -4317 -3332 -6364 3032 Weak bearish Jan 11, 2022 185453 12383 103869 -91486 5346 -249 1871 -2120 Bearish         Total change 12471 -940 -3612 2672     Figure 3: The AUD and COT positions of large speculators on a weekly chart and the AUDUSD on D1 Total net speculator positions last week reached -86,694 contracts, down 953 contracts from the previous week. This change is due to a decrease in long positions of 5,631 contracts and a decrease in short positions of 4,678 contracts. This data suggests continued bearish sentiment on the Australian dollar, which is confirmed by the downtrend. Total net positions have increased by 2,672 contracts over the past 6 weeks. This change is due to speculators exit of 3,612 short contracts while exiting 940 long contracts at the same time. However, last week saw a decrease in open interest of 3,825 contracts. This means that the upward price action that occurred last week was weak in terms of volume because new money did not flow into the market. The Australian dollar is very sensitive to the international geopolitical situation. If the conflict between Russia and Ukraine escalates, we can expect it to weaken especially on the AUDUSD pair and also the AUDJPY. Long-term resistance: 0.7200-0.7250 and especially near 0.7270-0.7310. Long-term support: 0.7085-0.7120. A strong support is near 0.6960 – 0.6990. The New Zealand dollar   Date Open Interest Specs Long Specs Short Specs Net positions Change Open Interest Change Long Change Short Change Net Positions Sentiment Feb 15, 2022 64105 24923 34256 -9333 9228 7755 6722 1033 Weak bearish Feb 08, 2022 54877 17168 27534 -10366 -3590 -2037 -3369 1332 Weak bearish Feb 01, 2022 58467 19205 30903 -11698 5151 3257 4182 -925 Bearish Jan 25, 2022 53316 15948 26721 -10773 8589 4336 6778 -2442 Bearish Jan 18, 2022 44727 11612 19943 -8331 2661 652 379 273 Weak bearish Jan 11, 2022 42066 10960 19564 -8604 1764 1543 1302 241 Weak bearish         Celková změna 23803 15506 15994 -488     Figure 4: The NZD and the position of large speculators on a weekly chart and the NZDUSD on D1 The total net positions of speculators reached a negative value last week - 9,333 contracts, having increased by 1,033 contracts compared to the previous week. This change is due to an increase in long positions by 7,755 contracts and an increase in short positions by 6,722 contracts. This data suggests that the bearish sentiment for the New Zealand Dollar continues, but has started to weaken over the past week. Total net positions have declined by 488 contracts over the past 6 weeks. This change is due to speculators adding 15,994 short positions and adding 15,506 long positions. Open interest rose significantly last week, increasing by 9,228 contracts. The rise in the NZDUSD price action that occurred last week is therefore supported by volume and therefore the move was strong. The reason for the NZD strengthening last week is that the Reserve Bank of New Zealand is likely to raise interest rates to 1% on Feb 23, 2022. However, if the conflict in Ukraine escalates further, the NZDUSD could more likely weaken. The reason for the NZDUSD's decline from a technical analysis perspective could also be that the NZDUSD price has reached horizontal resistance and also the upper downtrend line from the daily chart. Long-term resistance: 0.6700 – 0.6740 and then 0.6850 – 0.6890. Long-term support: 0.6590-0.6600 and the next support is at 0.6500 – 0.6530. Explanation to the COT report The COT report shows the positions of major participants in the futures markets. Futures contracts are derivatives and are essentially agreements between two parties to exchange an underlying asset for a predetermined price on a predetermined date. They are standardised, specifying the quality and quantity of the underlying asset. They are traded on an exchange so that the total volume of these contracts traded is known.   Open interest: open in