investment decisions

Implementation guidelines continue to arrive, though uncertainties remain The key to the smooth implementation of the IRA is clear rules on who is eligible to get what amount of tax credits or other types of funding. To address uncertainties, the Internal Revenue Service (IRS) and the Treasury Department have been working to publish detailed guidance throughout the past year. Some of the guidelines include   RA guidance examples   These rules – despite the need for more refining – are useful for project developers and investors to determine tax credit eligibility, estimate revenue streams, evaluate project outlook, and advance investment decisions and project development. They are also reshaping the structure and components of the US clean energy supply chain, which will be discussed further below. Nevertheless, the guideline setting remains a work in progress, and market players in certain clean energy areas are still waiting tentatively for new guidelines. For instance, the IRS and Treasury have not yet released guidance on hydrogen tax credits. For now, two major uncertainties remain: how renewable electricity (used to produce green hydrogen) is measured and how the carbon intensity of hydrogen delivery is calculated. This determines how clean a hydrogen project is and consequently how many tax credits the project can get. The more quickly guidance rules are out, the faster the projects will be expected to move to their next stages.   Clean energy supply chain set for drastic changes With decade-long tax credits and funding, the IRA is set to have a profound, long-term impact on the US. This means more clean energy will be produced, and supply chains will look significantly different than they do now. Through strict eligibility rules for the highest levels of tax credits, the IRA aims to strengthen the US domestic supply chain of raw materials used for low-carbon technologies, with EV and renewable energy tax credit guidelines incentivising at least parts of the supply chain to reside in North America (originated, manufactured, assembled, or recycled). This move is to counter China’s dominance in the clean energy industry, as the country now accounts for 77% of the global battery cell manufacturing capacity, 88% of solar PV manufacturing capacity, and an average of 50% of wind and electrolyser manufacturing capacity. These requirements are already leading EV manufacturers to explore vertically along the EV value chain. In January this year, General Motors (GM) announced a joint venture with mining company Lithium Americas to gain exclusive access to lithium from a mining site in Nevada, US. Ford will receive a $9.2bn loan from the DoE, the largest single loan in the DoE Loan Programs Office history, to develop battery plants in Tennessee and Kentucky in collaboration with battery company SK Innovations. Tesla, BMW, VW, Hyundai, Honda, and others are also investing in battery manufacturing. The renewable power industry is not yet officially affected by the domestic component Notice of Intent, but partnerships are nevertheless emerging to build assembly capacity in the US. In May, US solar company Invenergy and Chinese solar panel manufacturer Longi collectively announced the plan to build the US’s largest solar factory in Ohio, at a capacity of 5 GW. Similar moves are also being made by other international companies like Hanwha Q Cells, Vikram Solar, Jinko Solar, etc. One risk to note is the additional cost of geopolitical complexities. The US has restrictive tariffs in place against Chinese solar cells and might impose tariffs on Southeast Asian countries to discourage China from rerouting exports. In the long term, these provisions will create a more mature domestic clean energy supply chain. However, it would take time and be expensive. It is estimated that the US will need to invest almost $120bn in lithium-ion, solar PV, electrolysers, and metal refining to meet domestic demand by 2030.   Upfront investment needed in the US to meet domestic clean energy manufacturing demand in 2030 $bn

Tesla fuels market rally By Ipek Ozkardeskaya, Senior Analyst | Swissquote Bank    Tesla jumped 10% yesterday and reversed morose mood due to the Apple-led selloff. Tesla shares flirted with the $275 per share on Monday, thanks to Morgan Stanley analysts who said that its Dojo supercomputer may add as much as $500bn to its market value, as it would mean a faster adoption of robotaxis and network services. As a result, MS raised its price target from $250 to $400 a share.   Tesla rally helped the S&P500 make a return above its 50-DMA, as Nasdaq 100 jumped more than 1%. Apple recorded a second day of steady trading after shedding almost $200bn in market value last week because of Chinese bans on its devices in government offices, and Qualcomm, which was impacted by the waves of the same quake, recovered nearly 4%, after Apple announced an extension to its chip deal with the company for 3 more years. Making chips in house to power Apple devices would take longer than thought.   Speaking of chips and their makers, ARM which prepares to announce its IPO price tomorrow, has been oversubscribed by 10 times already and bankers will stop taking orders by today. The promising demand could also encourage an upward revision to the IPO price, and we could eventually see the kind of market debut that we like!    Today, at 10am local time, Apple will show off its new products to reverse the Chinese-muddied headlines to its favour before the crucial holiday selling season. The Chinese ban of Apple devices in government offices sounds more terrible than it really is, as the real impact on sales will likely remain limited at around 1%.   In the bonds market, the US 2-year yield is steady around the 5% mark before tomorrow's much-expected US inflation data. The major fear is a stronger-than-expected uptick in headline inflation, or lower-than-expected easing in core inflation. The Federal Reserve (Fed) is torn between further tightening or wait-and-see as focus shifts to melting US savings, which fell significantly faster than the rest of the DM, and which could explain the resilience in US spending and growth, but which also warns that the US consumers are now running out of money, and they will have to stop spending. So, are we finally going to have that Wile E Coyote moment? Janet Yellen doesn't think so, she is on the contrary confident that the US will manage a soft landing, that the Fed will break inflation's back without pushing economy into recession. Wishful thinking?   But everyone comes to agree on the fact that the Eurozone is not looking good. The EU Commission itself cut the outlook for the euro-area economy. It now expects GDP to rise only 0.8% this year, and not 1.1% as it forecasted earlier, as Germany will probably contract 0.4% this year. The slowing euro-area economy has already softened the European Central Bank (ECB) doves' hands over the past weeks. Consequently, the EURUSD gained marginally yesterday despite the fresh EU commission outlook cut and should continue gently drifting higher into Thursday's ECB meeting. There is no clarity regarding what the ECB will decide this week. The economy is slowing but inflation will unlikely to continue its journey south, giving the ECB a reason to opt for a 'hawkish' pause, or a 'normal' 25bp hike. 

The bearish trend, a significant aspect of Forex trading, plays a crucial role in shaping investment decisions. This article aims to elucidate the characteristics of the bear market and its implications for traders. Understanding the Downtrend As discussed in our previous articles, a trend represents the direction in which the price of a currency pair is moving. A fundamental trading principle is to align investments with the trend rather than against it. Therefore, comprehending the downtrend is essential. The identification of a downtrend can be facilitated by analyzing charts that reflect past price values. Analyzing the Downtrend In the chart, the descending peaks and troughs, marked in red, signify a downtrend. Connecting the peaks forms a clear trend line. The strength of the trend is proportional to the distance between the peaks, with a larger gap indicating a more robust trend. While charts may not always vividly display trend lines, recognizing a general downward price trend can serve as a signal to temporarily exit the market. Bear Market Dynamics A bear market, synonymous with a downtrend, occurs when prices consistently decline. In the long term, it signifies a bearish market. Adhering to the popular adage "the trend is your friend," in such scenarios, traders usually contemplate selling. Bear markets often exhibit greater volatility compared to bullish trends, attributed to the accompanying unease amid declining prices. Support and Resistance Lines Support and resistance lines denote potential reversal points in the price movement of a currency pair. In a downtrend, support comprises the successive troughs, each lower than the previous one. These levels represent the depths of prior downward movements, acting as points where the price resisted further decline. Conversely, resistance surfaces when there is a visible level at which the price resisted further upward movement. Referring to the "change of poles" principle, if a resistance level is breached, it transforms into a support level. This pivotal moment often prompts seasoned traders to enter the market. Understanding the dynamics of a bear market is crucial for Forex traders. By recognizing the signs of a downtrend, interpreting charts, and comprehending the roles of support and resistance lines, traders can navigate the complexities of bearish markets more adeptly.

Pivot points, an often overlooked technical analysis tool, can be a game-changer in daily Forex trading. Let's delve into what pivot points are, how to calculate them, and practical strategies for incorporating them into your trading routine. Understanding Pivot Points Pivot points are a mathematical formula used to identify support and resistance levels. This objective tool automatically determines potential areas where a currency's price might rise, fall, or stall. Derived from pure mathematical calculations, pivot points rely on historical high, low, and closing prices. Traders primarily apply this indicator in day trading, using weekly or monthly quotes as the basis for calculations. For intraday trading, daily pivot points are commonly utilized. The Pivot Points Formula The formula for pivot points involves essential data points: Closing price (C) Highest price within a period (H) Lowest price within a period (L) The pivotal point (P) is calculated as the arithmetic mean of these values: P = (C + H + L)/3. Further calculations yield resistance and support levels: First Resistance (R1): R1 = 2*P – L Second Resistance (R2): R2 = P + (H – L) Third Resistance (R3): R3 = P + (H – L)*2 Similarly, support levels (S) are determined: First Support (S1): S1 = 2*P – H Second Support (S2): S2 = P – (R1 – S1) Third Support (S3): S3 = P – (H – L)*2 Applying Pivot Points in Practice Various approaches exist for leveraging pivot points in making investment decisions. Traders may customize their use based on individual trading methods. Here are general guidelines to aid in concrete actions: Buying and Selling Zones: Typically, above the pivot points line, traders consider a selling zone, engaging in short positions. Conversely, below this line lies the buying zone, where long positions are common. Viewing pivot points as reversal points, traders anticipate price consolidation. Opening a position occurs when the price drops to the S1 level, with a selling signal when reaching the R1 level. Prices often oscillate between R1 and S1, the first resistance and support levels. Breakout Strategy: Alternatively, traders might opt to open a position after breaking a designated level, anticipating a continuation of the established trend. In this scenario, a sell position is initiated when the price falls below S1, while a buy position is triggered when the price surpasses R1, with the aim of reaching a value close to R2. Pivot points serve as one of the many tools for making investment decisions. Some traders find them invaluable, using them frequently, while others incorporate them as a supportive element alongside decisions driven by other analyses. Every trader should experiment and devise a personalized trading strategy. However, for optimal and reliable results, it is advisable to use this method concurrently with other approaches. Incorporating pivot points into your trading arsenal can provide a valuable edge, helping you navigate the complex landscape of Forex markets more effectively. Remember, while pivot points offer insights, combining them with a diversified strategy enhances your overall trading acumen.