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The Grains Sector Saw Continued Demand| Acceleration In The Sale Of Gold

Nasdaq 100, S&P 500, Bitcoin, Crude Oil And Forex Pairs - Financial Markets Today: Quick Take

Saxo Bank 28.03.2022 09:50

Macro 2022-03-28 08:38 6 minutes to read Summary: Markets are a bit nervous to start the week as the steep acceleration higher in US treasury yields continued in the Asian session overnight. Even a casual inspection of prior market regimes shows that a steep back-up in yields at some point will prove dangerous for equity valuations. The 5-year US Treasury yield has vaulted above the 30-year for the first time since 2006. Elsewhere, oil is several dollars lower on hopes for a peace deal in Ukraine. What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) - S&P 500 futures closed on Friday just around the 100-day moving average which were breached twice in February without extending the gains so this time will be more critical. S&P 500 futures are rolling over a bit this morning trading around the 4,518 level with the 200-day moving average around 4,471 being the gravitational point should risk-off come into the market. The key risks for US equities are the rapidly rising US interest rates and headlines coming out of the war in Ukraine. Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I) - Hang Seng Index and Hang Seng TECH Index (HSTECH.I) recovered early losses from the news of COVID-related partial lockdown of Shanghai. At the time of writing, Hang Seng Index was up 1% and Hang Seng TECH Index rose 2.5%. Chinese Internet stock lead the charge higher. Meituan surged 14% after reporting better than expected operating margins and smaller than expected loss in 4Q21. Revenue and operating profits from food delivery beat expectations because of higher order volume. Coal mining stocks surged both in Hong Kong and in A-shares. In A-shares, apart from coal miners, financials, real estates, infrastructures did relatively well, while beverage, defense and electrical equipment underperformed. Stoxx 50 (EU50.I) – European equity futures are flat to slightly higher this morning with the Stoxx 50 futures trading around the 3,790 level putting the index futures in a very tight trading range with the 3,765 level being the key level on the downside; on the upside the 3,865 level is the key to watch. Commodity prices are coming down a bit and the preliminary PMI figures for March in Europe were better than expected last week so the information picture is mostly getting better for European equities, but the key risk is still headlines coming out of the war in Ukraine. USDJPY and JPY crosses – USDJPY rose sharply once again overnight on a further rise in US Treasury yields and as the Bank of Japan overnight was out announcing an unlimited bid for 10-year Japanese Government bonds (JGB’s) as it has declared a 0.25% cap on the yields of these bonds under its yield-curve-control (YCC) policy. The bonds traded as high as 0.251% overnight. As long as global yields continue rising and the Bank of Japan pledges unlimited support for its bond market, the pressure on the JPY to weaken continues. It is worth keeping in mind that the end of quarter and end of the Japanese financial year are both approaching this Thursday, which may bring significant portfolio flows, given a brutal quarter for fixed income in Q1. The next major resistance in the USDJPY chart is the near-20 year high from 2015 at 125.86. AUDUSD and AUDJPY – the strong AUD could be trading as the flip-side, or funding side, of the weak Japanese yen in Asia. Australia’s terms of trade have experienced a seismic shift on the dramatic rise in key commodity prices, all of which Japan lacks. Australia is the world’s largest exporter of LNG, for example, which Japan relies on heavily to power its economy. Even before the war in Ukraine broke out, LNG prices soared on reduction of Russian exports. The AUDUSD has traded above 0.7500 since late last week, within striking distance of the major top from last October at 0.7556, while AUDJPY has risen a staggering 15% from its January lows. One can’t help but see AUDJPY as the ultimate high-beta trade that is linked to both commodity prices via AUD and the weakening Japanese yen that is also heavily impacted by the recent rise in global bond yields (see above in USDJPY comments). Bitcoin rallied 5 % on Sunday and is now trading at just below USD 47k, continuing its two-week stealth rally, and Bitcoin is now back at positive returns YTD. Several factors drive the rally such as the positive sentiment in S&P 500, Do Kwon’s (creator of Terra - 9th biggest crypto) plan to buy a large amount of Bitcoin, and the record low Bitcoin balances on crypto exchanges. Crude oil (OILUKMAY22 & OILUSMAY22) trades lower in early trading with Friday’s rebel attacks on Saudi Arabia are being offset by concerns about the short-term demand outlook in China, after the world’s largest importer of crude, said it would lock down half of Shanghai for mass testing as virus flare-ups continue to spread. Russian and Ukraine peace talks resumes this week but with Putin’s government regarded as toxic to many key buyers, self-sanctioning is likely to continue despite a potential solution. On Thursday, OPEC+ meets virtually to set targets for May but given their inability or unwillingness to discuss the elephant in the room, the drop in Russian production, hopes for additional barrels from GCC producers remain slim. Key resistance in Brent at $123/b while a break below $112/b would signal further loss of momentum. Gold (XAUUSD) trades lower as the global bond rout continues to gather momentum with the US ten-year Treasury yield surging past 2.5% in Asia while crude oil trades lower as China’s virus flare-ups worsens and Ukraine appears to be ready to discuss a deal (see below). Having failed to punch through resistance at $1962 last week, the market is once again trading on the defense with focus on ETF flows, the key source of underlying demand during the past month. Support at $1939 and $1930. Copper (COPPERUSMAY22) trades lower for a third day with traders worried about the short-term impact of demand as China, the world’s top consumer, continues to battle virus flare-ups. In addition, Jiangxi Copper Co., China’s top producer of the metal, warned on Friday that prices of the metal may fall this year along with other commodities as countries roll back stimulus and high prices curb demand, while logistics bottlenecks ease. US Treasuries (TLT, IEF). Last week, markets advanced bets on interest rate hikes, pricing 200bps rate hikes by the end of the year. Two-year yields rose to 2.26%, and they could continue to rise to 2.7% if markets begin to price rate hikes for next year. This week the focus is going to be on the PCE Index and the non-farm payrolls on Friday as strong inflationary and jobs data might provide ground to the Federal Reserve to be more aggressive. What is going on? Shift of war focus in Ukraine. Ukraine appears ready to discuss a deal that would take the situation back to the status quo prior to the Russian invasion in February, with Russia still possibly in possession of Crimea as well as a willingness to discuss the status of the Donbas region. Ukrainian president Zelensky downplayed claims from Turkish President Erdogan that Russia and Ukraine are nearing a peace deal. Meanwhile, Ukrainian forces managed to take up the offensive in areas around Kyiv over the weekend, while fighting continues to rage in the besieged port city of Mariupol. Japanese energy firms continue to face threat of potential supply disruptions from Russia. Hiroshima Gas Co. is considering purchasing LNG from Malaysia and other producers, while Osaka Gas Co. plans to bring forward gas procurement from the US or Australia. Efforts are also in place to allow Japanese utility firms to share some of their reserves in the event of a supply disruption of Russian gas. Alternative sources of energy, possibly coal, oil-powered generators or even nuclear power, may also be explored. Concerns emanate not just from supply disruptions but also Putin seeking payment in rubles. Russian ships “going dark” to avoid detection, and potentially sanctions. For the week ending Friday, there were 33 instances of Russian tankers carrying oil and other products turning off systems designed to announce the ships’ location, more than double the level of the last year, according to maritime risk consultancy company Windward. This could allow cargo transfers to obscure the origins of the ships’ cargo. Global container rates continue to fall as the surging cost of everything raises concerns about the outlook for economic growth and with that demand for key commodities. The danger is currently most acute in Europe, where energy bills have soared due to the overreliance on Russian supplies. With natural gas six times higher than a year ago, and electricity costs almost five times more, several heavy energy consuming industries have been forced to reduce production while consumers also hurt by surging cost of food are cutting back on spending. The result can be seen in the cost of shipping containers between Shanghai and Rotterdam. Last week it dropped to $11,190 for a 40 ft box, a nine-month low and down 25% from the October peak. German IFO for March hits lowest level since January 2021. Tuesday’s purchasing manager indexes presented a rather optimistic picture. But as we have mentioned, these indicators have not been very reliable since the start of the outbreak to assess the economic situation. The IFO Index now stands at 90.8 from 98.5 in February. The expectations component, which is certainly more important, saw an even sharper decline than at the start of the pandemic in March 2022, falling to 85.1 from 99.2 the previous month. It seems that German businesses consider the Ukraine war (and all its consequences) will have a much deeper impact on the economy than Covid in the long run. Germany looks at risk of ‘stagflation’, with weak growth and high inflation. Worrying picture for UK consumer confidence. The GfK index falls below -30 in March – this threshold has presaged recession on 4 out of 5 occasions since 1974. This follows a very sharp growth downgrade by the Office for Budget Responsibility for 2022 and 2023. Household future financial confidence falls to a record low. The next 6-12 months will be very challenging for the UK economy, in our view. Shanghai goes in partial lockdown. Shanghai imposed lockdown on the districts east to Huangpu River for 4 days, from today to 1 April 5am and then the districts west to Huangpu River for another 4 days from 1 April at 5am. Tesla’s Shanghai factory is suspended for four days. What are we watching next? Steep rise in US treasury yields set to continue? This, at some point, is a dangerous moment for markets, as a steep back-up in treasury yields preceded every major bear market or market correct in recent decades, most infamously ahead of the 1987 crash, but also into early 2000, 2007 and 2018. The US 10-year Treasury benchmark yield crossed above the 2.50% level for the first time since May of 2019 and has risen nearly 100 basis points year-to-date. The five-year Treasury yield crossed above the 30-year yield for the first time since early 2006, which is likely to be followed by an inversion of the “classic” 2-10 year yield, which often starts the countdown to an economic recession, if with a significant lag. PMI releases in Asia to support reopening trade. China PMIs may be headed south due to the increasing Covid restrictions, but PMIs for the rest of the Asian economies could potentially see improvements. Japan’s Tankan index is expected to see a decline in sentiment due to the highly uncertain geopolitical situation. While North Asian economies may continue to face threats of supply disruptions, India and Southeast Asia PMIs will focus on reopening of the economies. Singapore will ease restrictions substantially from Tuesday, and Singapore Airlines (SIAL) and Sats (SATS) will be a key focus. Casino stocks in Singapore (Genting, 36T) and Malaysia (Genting, GMALY) may also see interest. Earnings Watch. This week’s earnings will concentrate on Chinese earnings with the country’s major banks reporting their Q4 earnings likely showing a further deterioration in credit quality and potential write-downs related to the weakness in the real estate sector. On Wednesday, Ganfeng Lithium, which is the world’s most valuable standalone lithium miner, will reported earnings with expectations of rapid top and bottom-line growth as lithium prices have soared. In terms of US earnings this week, the key focus will be on Micron Technology and Lululemon Atheletica on Wednesday. Monday: Nongfu Spring, CITIC Securities Tuesday: China Construction Bank, Bank of China, BYD, Kuaishou Technology, BOC Hong Kong, Great Wall Motor, Micron Technology, Lululemon Athletica, McCormick Wednesday: Kweichow Moutai, ICBC, Agricultural Bank of China, CNOOC, COSCO, SD Holding, Haier Smart Home, China Vanke, Ganfeng Lithium, China Longyuan Power Group, BOE Technology, Paychex, BioNTech Thursday: PetroChina, China Overseas Land & Investment, China Resources Land, CITIC Ltd., Walgreens Boots Alliance Economic calendar highlights for today (times GMT) 1100 – UK Bank of England Governor Bailey to speak on UK economy 1200 – Canada Nanos Economic Mood Survey 1230 – US Feb. Advance Goods Trade Balance 1340 – UK Chancellor Sunak to testify 1430 – US Mar. Dallas Fed Manufacturing Survey 0030 – Australia Feb. Retail Sales Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app:

US ADP Employment March Preview: Private job creation slows while yield curve flattens

FXStreet News 29.03.2022 16:43

US ADP payrolls are foreseen at 438K in March, NFP at 475K.US yield curve is flattening, rings recession alarm amid 50-bps May Fed rate hike bets.Fed Chair Powell believes the labor market is strong enough, recession unlikely.The US private sector hiring is seen slowing in March after the American companies added more jobs than expected in February. The US ADP private employment report, due on Wednesday at 12.15 GMT, usually provides a good hint at Friday’s full jobs report, so investors will be looking for clues on any potential labor market slowdown.Pace of jobs creation slows in the USThe Automatic Data Processing (ADP) is forecast to show that US companies have created 438,00 new jobs in March, less than the previous month’s addition of 475,000. In February, business payrolls rose more than the expected 375,000 figure. ADP’s payroll data represent firms employing nearly 26 million workers in the US and its monthly release shows the employment change in the economy.Source: FXStreetOn Friday, the US Labor Department will release the Nonfarm Payrolls, which is expected to show that the economy has likely added 475,000 new jobs in March after a surprise increase of 678,000 reported in February.The Automatic Data Processing ADP jobs report is usually considered a proxy to the official Nonfarm Payrolls figures, which will be released on Friday, April 1.The disparity between the two indicators in recent months, however, makes the ADP result unreliable to gauge the NFP trend and, therefore, could have a limited market impact.US yield curve flattens, Fed remains hawkishHeading into the monthly payrolls data, the Russia-Ukraine conflict rages on while the odds of a 50-basis points (bps) Fed rate hike in May almost appears a done deal.Against this backdrop, the yields on the US Treasuries have rallied to three-year highs, although the increase in the longer-dated yields has failed to match the pace of the advance in the shorter ones. The spread between the two- and 10-year yields narrowed to its lowest since early 2020 on Tuesday. The flattening of the yield curve is usually indicative of a likely recession, as investors remain worried that the aggressive Fed’s tightening would damage the US economy over the longer term.At the March FOMC meeting, Fed Chair Jerome Powell said that the labor market is strong enough that a recession is unlikely. Although Powell remains optimistic about the economy and labor market, he said in his speech last week, “this is a labor market that is out of balance," adding "we need the labor market to be sustainably tight."To concludeMarkets are pricing in a roughly 60% chance of a 50-bps rate hike at the Fed’s May meeting.A slowdown in the hiring pace in the world’s biggest economy could likely feed the risks of a recession, especially in the face of soaring inflation. This could pour cold water on the recent Fed’s hawkishness.The ADP report, however, is unlikely to have any major impact on the US dollar and other related markets. Friday’s NFP release will hold the key to gauging the Fed’s policy action going forward.

Precious Metals: What Can We Expect From Gold In The Near Future?

Gold sank below $1900 on promising Russia-Ukraine talks

Alex Kuptsikevich 29.03.2022 16:13

The price of a troy ounce of gold fell to $1890, its lowest level since late February, on reports of significant progress in negotiations between Russia and Ukraine. Gold retreated 8.5% from the 8th of March peak, returning to the 50-day moving average line. A consolidation below current levels at the end of the day or, better still, the month would be an important market signal to break the wild trend of the last two months. From the tech analysis side, a consolidation below this mark would trigger a realisation “Head & Shoulders” scenario with an implied drop towards $1730, with probable significant support at the 200-day moving average (currently at $1820). However, in addition to the geopolitical driver, there remains an inflationary driver in gold. Investors are buying gold given the significant difference between the inflation rate and the yields in the debt markets. This is an important reason for medium-term gold purchases, which could provide buyers with interest even if there is further military deescalation.

COT Soft Commodities Speculators raise Cocoa bullish bets to 5-week high

Invest Macro 02.04.2022 16:40

COT Energy Speculators pullback on #2 Heating Oil bullish bets for 3rd time in 4 weeks

Invest Macro 02.04.2022 16:53

COT Metals Speculators pushing their Copper bullish bets higher in start of 2022

Invest Macro 02.04.2022 17:33

By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday March 29th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. Highlighting the COT metals data is the recent gains in the Copper futures bets. The speculative net position in the Copper futures has risen for two consecutive weeks and three times in the past four weeks with a total increase by +8,488 contracts over the past four weeks. The recent strength in speculator bets has pushed the current speculator standing back over the +30,000 net contract level for the third time in the past seven weeks following fourteen weeks where spec bets remained below that threshold. Copper bets had hit an 81-week low in late December and had four weeks with speculator bets below the +10,000 contract level at that time. The new year has seen speculators start to increase their sentiment in favor of the red metal and Copper speculator position has now averaged over +23,500 net contracts each week since January 1st. This is down from the 2021 average of 33,688 weekly contracts but above the 2020 average of 20,214 weekly contracts. The Copper price has also had a bullish start to the year with Copper futures currently trading at 4.68 compared to the 4.46 price to start the year. The metals markets that saw higher speculator bets this week were Silver (293 contracts), Gold (9,564 contracts) and Copper (3,769 contracts). The metals markets that saw lower speculator bets this week were Platinum (-5,814 contracts) and Palladium (-803 contracts). Data Snapshot of Commodity Market Traders | Columns Legend Mar-29-2022 OI OI-Index Spec-Net Spec-Index Com-Net COM-Index Smalls-Net Smalls-Index WTI Crude 1,795,929 1 318,731 0 -360,162 99 41,431 73 Gold 574,521 39 257,596 70 -285,937 30 28,341 45 Silver 147,370 14 48,240 70 -61,372 39 13,132 19 Copper 203,692 29 30,581 64 -37,333 34 6,752 64 Palladium 6,720 1 -2,011 10 1,364 84 647 81 Platinum 61,807 25 14,001 22 -20,754 79 6,753 56 Natural Gas 1,100,690 4 -137,411 37 92,762 60 44,649 92 Brent 188,542 30 -25,220 69 21,609 29 3,611 58 Heating Oil 349,618 31 6,455 52 -32,434 37 25,979 88 Soybeans 755,139 34 206,469 81 -178,764 24 -27,705 24 Corn 1,515,106 24 482,092 92 -424,699 11 -57,393 10 Coffee 227,547 6 38,689 77 -42,092 27 3,403 12 Sugar 819,459 1 161,581 70 -202,758 30 41,177 59 Wheat 341,224 3 13,559 59 -9,435 32 -4,124 91 Gold Comex Futures: The Gold Comex Futures large speculator standing this week resulted in a net position of 257,596 contracts in the data reported through Tuesday. This was a weekly rise of 9,564 contracts from the previous week which had a total of 248,032 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 69.6 percent. The commercials are Bearish with a score of 30.4 percent and the small traders (not shown in chart) are Bearish with a score of 44.6 percent. Gold Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 57.0 23.2 8.5 – Percent of Open Interest Shorts: 12.2 72.9 3.6 – Net Position: 257,596 -285,937 28,341 – Gross Longs: 327,632 133,050 49,022 – Gross Shorts: 70,036 418,987 20,681 – Long to Short Ratio: 4.7 to 1 0.3 to 1 2.4 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 69.6 30.4 44.6 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 13.9 -14.3 8.8 Silver Comex Futures: The Silver Comex Futures large speculator standing this week resulted in a net position of 48,240 contracts in the data reported through Tuesday. This was a weekly gain of 293 contracts from the previous week which had a total of 47,947 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 70.4 percent. The commercials are Bearish with a score of 38.7 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 19.3 percent. Silver Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 44.7 30.3 17.1 – Percent of Open Interest Shorts: 12.0 71.9 8.2 – Net Position: 48,240 -61,372 13,132 – Gross Longs: 65,917 44,589 25,145 – Gross Shorts: 17,677 105,961 12,013 – Long to Short Ratio: 3.7 to 1 0.4 to 1 2.1 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 70.4 38.7 19.3 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 24.6 -24.6 2.0 Copper Grade #1 Futures: The Copper Grade #1 Futures large speculator standing this week resulted in a net position of 30,581 contracts in the data reported through Tuesday. This was a weekly gain of 3,769 contracts from the previous week which had a total of 26,812 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 64.4 percent. The commercials are Bearish with a score of 33.8 percent and the small traders (not shown in chart) are Bullish with a score of 64.3 percent. Copper Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 42.5 40.8 8.8 – Percent of Open Interest Shorts: 27.5 59.1 5.5 – Net Position: 30,581 -37,333 6,752 – Gross Longs: 86,553 83,024 17,961 – Gross Shorts: 55,972 120,357 11,209 – Long to Short Ratio: 1.5 to 1 0.7 to 1 1.6 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 64.4 33.8 64.3 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -0.1 1.4 -11.4 Platinum Futures: The Platinum Futures large speculator standing this week resulted in a net position of 14,001 contracts in the data reported through Tuesday. This was a weekly lowering of -5,814 contracts from the previous week which had a total of 19,815 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 21.9 percent. The commercials are Bullish with a score of 79.4 percent and the small traders (not shown in chart) are Bullish with a score of 56.2 percent. Platinum Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 47.9 32.0 15.9 – Percent of Open Interest Shorts: 25.2 65.6 4.9 – Net Position: 14,001 -20,754 6,753 – Gross Longs: 29,585 19,797 9,798 – Gross Shorts: 15,584 40,551 3,045 – Long to Short Ratio: 1.9 to 1 0.5 to 1 3.2 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 21.9 79.4 56.2 – Strength Index Reading (3 Year Range): Bearish Bullish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 5.6 -6.8 12.1 Palladium Futures: The Palladium Futures large speculator standing this week resulted in a net position of -2,011 contracts in the data reported through Tuesday. This was a weekly fall of -803 contracts from the previous week which had a total of -1,208 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 10.1 percent. The commercials are Bullish-Extreme with a score of 84.2 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 81.3 percent. Palladium Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 23.3 53.3 21.8 – Percent of Open Interest Shorts: 53.2 33.0 12.2 – Net Position: -2,011 1,364 647 – Gross Longs: 1,564 3,581 1,468 – Gross Shorts: 3,575 2,217 821 – Long to Short Ratio: 0.4 to 1 1.6 to 1 1.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 10.1 84.2 81.3 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -5.8 2.6 31.8 Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.

10-Year Treasury Bonds Speculator bets surge to 177-week bearish high

Invest Macro 02.04.2022 17:53

Currency Speculators continue Japanese Yen bearishness, push bearish bets to 20-week high

Invest Macro 02.04.2022 19:33

Trade Zone Week Ahead: Indices, Cable and Bitcoin in Focus

8 eightcap 03.04.2022 18:00

In today’s Trade Zone Trading Week Ahead, Simon Massey joins us from Trade Room Plus to pick up the mantle for the month of April and discuss some of the trades he’s looking at as markets open today. In this first episode, we look at the price action for US and European indices, Cable and Bitcoin. Watch the video below to get Simon’s latest insights. JOIN SIMON THIS WEDNESDAY FOR THIS WEEK’S LIVE MARKET UPDATE. REGISTER NOW. Join us at 9 PM AEDT (10 AM GMT) this coming Wednesday as Simon begins his monthly takeover of our Trade Zone series. Register now to attend the first live market update of April, as we analyse the key moves of the week and look ahead at the potential trade moves as the weekend approaches. It’s the perfect session to give you a few valuable pointers on what you should be watching as the trading week approaches its end. Got a burning trading question you need to answer, then stick around for the live Q&A at the end, and let Simon give his view. Registration is free. Click below to secure your seat. Simon Massey is the lead trader of Trade Room Plus, the UK’s premier Live Trade Room. He believes the best way to teach people to trade is to demonstrate live trades. His trading journey started with a small trading account. This led him to trade with ever-larger trading accounts until he was able to leave his previous job and become a full-time trader. Trade Room Plus was established in 2013 and provides educational services to help develop effective trading strategies. Beginners can watch the pros trade financial assets in real-time and learn first-hand from the experts. Important Data Releases & Events this Week Monday CNY Ching Ming Festival Holiday AUD Retail Sales GBP BoE Gov Bailey Speaks Tuesday CNY Ching Ming Festival Holiday AUD RBA Interest Rate Decision, Rate Statement GBP Composite & Services PMI Wednesday USD ISM Non-Manufacturing PMI GBP Construction PMI Thursday CAD Ivey PMI USD Crude Oil Inventories USD FOMC Meeting Minutes EUR ECB Monetary Policy Meeting Notes USD Initial Jobless Claims Friday CAD Employment Change The post Trade Zone Week Ahead: Indices, Cable and Bitcoin in Focus appeared first on Eightcap.

Positions of large speculators according to the COT report as at 22/3/2022

Purple Trading 03.04.2022 21:41

The Recent Rally Of Bitcoin Had Been Capped, The Digital Yuan (eCNY) Has Received Upgrades

Crypto Update: Bitcoin minor correction or something more?

8 eightcap 06.04.2022 12:09

Looking at Bitcoin, we are seeing a few things to keep an eye on. So far, crypto markets look to be following equities lower after yesterday’s Fed shock around inflation worries and policy adjustment to try and correct it (rate rises). Today has seen a second straight day off losses for Bitcoin as sellers continue to hold sway. Fed members shocked risk markets yesterday after reports showed US inflation had climbed to 40-year highs. Their comments came in aggressive and suggested they’re ready to take action to try and rein in the current inflation problem. That normally means rate rises, and comments suggested a more aggressive approach could be coming soon. Bitcoin has been patchy at best over the last 5-trading days, with more of a range forming after the late March first leg lower. That leg broke the fast trend, and we saw an LH form after that break. These one-two patterns can be a good sign of further weakness coming. Selling continued (yesterday and today), confirming the pattern. That brings us to the level/area we are watching, and we have marked it with a green box on the D1 chart. This level is a demand area, and we can see this when buyers held firm on a few occasions. This area is important to us moving forward. If buyers can hold, we are looking at a possible minor correction in play which could turn into a new continuation higher. A move through the area and we could have a deeper move lower on our hands, and we will have to look and wait for when or if price can set a new higher low above or around the new trend line. Bitcoin D1 Chart The post Crypto Update: Bitcoin minor correction or something more? appeared first on Eightcap.

How Will NEAR, BALANCER And RAMP Move In The Near Future?

8 eightcap 08.04.2022 15:43

At this stage, it looks like we are set for a decline in the top 25 coins, snapping a three-week winning streak that has seen just over28% added in the last three weeks. So far, the top 25 index is down a touch over 6% late in the week. The major coins started the week with gains but found it hard to hold momentum. Selling really ramped up on Tuesday as risk markets reacted to further inflation worries. US inflation hit 40-year highs and set up a quick response from the Fed. Members said that policy adjustments would be made swiftly to try and rain in the worrying inflation. This set off the USD. The USD index quickly broke back above 99 and continued to push higher, trading up to 99.71. As traders moved quickly out of risk assets, this looks to have been a strong factor for sellers of crypto. Tuesday was the worst day so far in the week, with over 5% taken off the top 10 and 6.5% taken off the top 25. Sellers tried to get another move going on Thursday but were rejected by buyers. Friday’s trade saw a fightback, but many coins share a similar pattern of a counter-rally after a trend break. Friday’s session gave us a few surprises, with NEAR and BALANCER both trading over 15% higher during the session. RAMP was another strong mover, adding over 30% during Friday’s session. Looking to next week, attention will have to remain on the inflation and policy situation of the Fed as it looks to be having an influence. We are also keen on seeing if some of Friday’s counter-rallies can become something more. This week, due to some mixed-signal price action-wise, we’re going to break down what we see on the daily top 25 index chart. Yes, with Eightcap you can trade an index CFD over the top 25 coins. Let’s not what we’re watching. Clearly, we can see the descending triangle pattern that buyers broke out of, which also broke the long-term downtrend. All nice bullish signs so far. We’ve seen the first leg up that could be seen as a stage one. In the short term, we’ve seen resistance and supply develop, which has stopped the trend for now. The leg lower has beaten the fast uptrend, but it’s started to find demand and support off the 50 and 38.2fib points, which show a healthy retracement area. Where does that leave us? With mixed price signals in the short and medium-term, we want to see if buyers can maintain the fib points and make a new move to test resistance. A break of resistance and the trend should be back on. A fail at or below resistance that sets up a new lower high is a warning and could signal further seller momentum to come. If price moves back below the 50 or 61.8%, we would start to worry about the buyer’s control on the current leg high. The post Crypto Focus: Top 25 Coins Set for a Decline? appeared first on Eightcap.

Commodities Speculators push their Sugar bullish bets to 15-week high

Invest Macro 09.04.2022 12:55

COT Metals Speculators cool off their Gold bullish bets to 6-week low

Invest Macro 09.04.2022 19:02

By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Each Commodity Share Percent of All Commodities Open Interest Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday April 5th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. Highlighting the COT metals data is the recent decline in the Gold futures bets. The speculative net position in the Gold futures dropped this week for the third time in the past four weeks and by a total of -28,847 contracts over that time-frame. Gold spec positions had previously been on a strong run of rising weekly bullish bets and had increased for five straight weeks from February 8th to March 8th with a total gain of +102,246 contracts over that period. That speculator sentiment strength brought positions to a sixty-one week high with a net position of +274,388 contracts and coincided with the Gold price surging above the $2,050 level. Since then, bullish bets have cooled off while the Gold price has also taken a breather and fallen back into a trading range between approximately $1,920 and $1,960 where it currently resides. Overall, the metals market that rose this week was just Copper (5,561 contracts) while Gold (-12,055 contracts), Platinum (-2,711 contracts), Palladium (-30 contracts) and Silver (-3,206 contracts) all had lower bets on the week. Speculator strength standings for each Commodity where strength index is current net position compared to past three years, above 80 is bullish extreme, below 20 is bearish extreme OI Strength = Current Open Interest level compared to last 3 years range Spec Strength = Current Net Speculator level compared to last 3 years range Strength Move = Six week change of Spec Strength Data Snapshot of Commodity Market Traders | Columns Legend Apr-05-2022 OI OI-Index Spec-Net Spec-Index Com-Net COM-Index Smalls-Net Smalls-Index WTI Crude 1,823,366 5 308,594 0 -355,435 100 46,841 81 Gold 560,666 36 245,541 66 -278,758 33 33,217 58 Silver 148,526 15 45,034 67 -60,036 40 15,002 30 Copper 216,157 38 36,142 68 -43,039 30 6,897 65 Palladium 6,642 1 -2,041 10 1,443 85 598 78 Platinum 60,983 23 11,290 18 -17,905 83 6,615 54 Natural Gas 1,169,620 19 -136,611 38 92,647 60 43,964 90 Brent 189,394 31 -29,712 61 26,537 37 3,175 52 Heating Oil 349,618 31 6,455 52 -32,434 37 25,979 88 Soybeans 756,785 35 198,924 79 -170,882 26 -28,042 24 Corn 1,556,206 30 487,073 92 -424,154 12 -62,919 7 Coffee 226,730 5 43,811 80 -48,758 22 4,947 23 Sugar 859,871 10 188,547 75 -240,107 23 51,560 72 Wheat 344,615 5 19,951 64 -15,332 26 -4,619 89 Gold Comex Futures: The Gold Comex Futures large speculator standing this week resulted in a net position of 245,541 contracts in the data reported through Tuesday. This was a weekly decline of -12,055 contracts from the previous week which had a total of 257,596 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 65.8 percent. The commercials are Bearish with a score of 32.6 percent and the small traders (not shown in chart) are Bullish with a score of 58.5 percent. Gold Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 57.9 22.2 9.2 – Percent of Open Interest Shorts: 14.1 71.9 3.3 – Net Position: 245,541 -278,758 33,217 – Gross Longs: 324,570 124,506 51,778 – Gross Shorts: 79,029 403,264 18,561 – Long to Short Ratio: 4.1 to 1 0.3 to 1 2.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 65.8 32.6 58.5 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 0.8 -2.8 18.9 Silver Comex Futures: The Silver Comex Futures large speculator standing this week resulted in a net position of 45,034 contracts in the data reported through Tuesday. This was a weekly lowering of -3,206 contracts from the previous week which had a total of 48,240 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 67.3 percent. The commercials are Bearish with a score of 40.0 percent and the small traders (not shown in chart) are Bearish with a score of 30.2 percent. Silver Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 43.7 30.9 17.7 – Percent of Open Interest Shorts: 13.4 71.3 7.6 – Net Position: 45,034 -60,036 15,002 – Gross Longs: 64,936 45,922 26,307 – Gross Shorts: 19,902 105,958 11,305 – Long to Short Ratio: 3.3 to 1 0.4 to 1 2.3 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 67.3 40.0 30.2 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 14.7 -16.0 9.2 Copper Grade #1 Futures: The Copper Grade #1 Futures large speculator standing this week resulted in a net position of 36,142 contracts in the data reported through Tuesday. This was a weekly boost of 5,561 contracts from the previous week which had a total of 30,581 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 68.4 percent. The commercials are Bearish with a score of 29.9 percent and the small traders (not shown in chart) are Bullish with a score of 65.2 percent. Copper Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 42.0 38.0 8.6 – Percent of Open Interest Shorts: 25.3 57.9 5.4 – Net Position: 36,142 -43,039 6,897 – Gross Longs: 90,779 82,054 18,675 – Gross Shorts: 54,637 125,093 11,778 – Long to Short Ratio: 1.7 to 1 0.7 to 1 1.6 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 68.4 29.9 65.2 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 7.6 -5.7 -13.2 Platinum Futures: The Platinum Futures large speculator standing this week resulted in a net position of 11,290 contracts in the data reported through Tuesday. This was a weekly fall of -2,711 contracts from the previous week which had a total of 14,001 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 18.0 percent. The commercials are Bullish-Extreme with a score of 83.4 percent and the small traders (not shown in chart) are Bullish with a score of 54.3 percent. Platinum Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 47.3 32.6 16.5 – Percent of Open Interest Shorts: 28.8 62.0 5.6 – Net Position: 11,290 -17,905 6,615 – Gross Longs: 28,827 19,894 10,054 – Gross Shorts: 17,537 37,799 3,439 – Long to Short Ratio: 1.6 to 1 0.5 to 1 2.9 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 18.0 83.4 54.3 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -9.1 7.1 17.7 Palladium Futures: The Palladium Futures large speculator standing this week resulted in a net position of -2,041 contracts in the data reported through Tuesday. This was a weekly decrease of -30 contracts from the previous week which had a total of -2,011 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 9.9 percent. The commercials are Bullish-Extreme with a score of 84.7 percent and the small traders (not shown in chart) are Bullish with a score of 78.5 percent. Palladium Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 25.7 52.5 20.6 – Percent of Open Interest Shorts: 56.4 30.7 11.5 – Net Position: -2,041 1,443 598 – Gross Longs: 1,704 3,484 1,365 – Gross Shorts: 3,745 2,041 767 – Long to Short Ratio: 0.5 to 1 1.7 to 1 1.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 9.9 84.7 78.5 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -3.5 1.9 16.6 Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.

COT Currency Speculators boost Australian Dollar bets to best level in 37-weeks

Invest Macro 09.04.2022 20:09

Positions of large speculators according to the COT report as at 29/3/2022

Purple Trading 11.04.2022 06:40

The Swing Overview - Week 14 2022

Purple Trading 11.04.2022 06:41

The Swing Overview - Week 14 Equity indices weakened last week on news of rising interest rates and a tightening of the US economy. The euro is also weakening not only because it is under pressure from the ongoing war in Ukraine and sanctions against Russia, but also from the uncertainty of the upcoming French presidential election. The outbreak of the coronavirus in China has fuelled negative sentiment in oil, where the market fears an excess of supply over demand. The US dollar was the clear winner in this environment. The USD index strengthens along with US bond yields According to the US Fed meeting minutes released on Wednesday, the Fed is prepared to reduce its balance sheet by the USD 95 billion per month from May this year. In addition, the Fed is ready to raise interest rates at a pace of 0.50%. Thus, at the next meeting, which will take place in May, we can expect a rate increase from the current 0.50% to 1.00%. This option is already included in asset prices. As a result of this the yields on US 10-year bonds continued to rise and has already reached 2.64%. The US dollar in particular is benefiting from this development and is approaching the level 100. Figure 1: US 10-year bond yields and USD index on the daily chart Equity indices under pressure from high interest rates The prospect of aggressive interest rate hikes is having a negative impact on investor sentiment, particularly for growth stocks. However, it is positive for financial sector stocks. High yields on the US bonds are attractive to investors, who will thus prefer this yield to, for example, investments in gold, which does not yield any interest. Figure 2: SP 500 on H4 and D1 chart The US SP 500 index is currently moving in a downward correction, which is shown on the H4 chart. Prices could move in a downward channel that is formed by a lower high and a lower low. The SP 500 according to the H4 chart is below the SMA 100 moving average, which also indicates bearish tendencies. The nearest resistance according to the H4 chart is in the range of 4,513 - 4,520. The next resistance is around 4,583 - 4,600. A support is at 4 450 - 4 455. German DAX index A declining channel has also formed for the DAX index. The price is below the SMA 100 moving average on the H4 chart, where at the same time the SMA 100 got below the EMA 50, which is a strong bearish signal. Figure 3: German DAX index on H4 and daily chart According to the H4 chart, the nearest resistance is in the range between 14,340 - 14,370. There is also a confluence with the moving average EMA 50 here. The next resistance is at 14,590 - 14,630. A support is at 14,030 - 14,100. The DAX is influenced by the upcoming French presidential election, the outcome of which could have a major impact on the European economy. The euro remains in a downtrend The Euro is negatively affected by the sanctions against Russia, which will also have a negative impact on the European economy. In addition, uncertainty has arisen regarding the French presidential election. Although the victory of the far-right candidate Marine Le Pen over the defending President Emmanuel Macron is still unlikely, the polls suggest that it is within the statistical margin of error. And this makes markets nervous. A Le Pen victory would be bad for the economy and France's overall international image. It would weaken the European Union. That's why this news sent the euro below 1.09. The first round of elections will be held on Sunday April 10 and the second round on April 24, 2022. Figure 4: EURUSD on H4 and daily chart. The nearest resistance according to the H4 chart is at 1.0930 - 1.0950. The significant resistance according to the daily chart is 1.1160 - 1.1190. A support is at 1.080 - 1.0850. According to the technical analysis, the euro is in a downtrend, but as it is currently at significant support levels, any short speculation could be considered only after the current support is broken and retested to validate the break. The crude oil continues to descend The oil prices fell for a third straight day after the Paris-based International Energy Agency (IEA) announced it would release 60 million barrels of its members' reserves to the open market, adding to an earlier reserve release of 180 million barrels announced by the United States. In total, 240 million barrels would be delivered to the market over six months, resulting in a net inflow of 1.33 million barrels a day. That would be more than triple the monthly production additions of 400,000 barrels per day by the world's oil producers under the OPEC+ alliance led by Saudi Arabia and controlled by Russia. Adding to the negative sentiment on oil was a coronavirus outbreak in Shanghai, the largest in two years, which forced a more than week-long closure of China's second-largest city. This raises concerns about demand among oil consumers in the Chinese economy, which has a significant impact on prices. Figure 5: Brent crude oil on the H4 and daily charts. Brent crude oil is thus approaching support, which according to the H4 chart is at around USD 97-99 per barrel. The nearest resistance according to the H4 chart is at the price of USD 106 per barrel. The more significant resistance is at USD 111-112 per barrel of the Brent crude.

The Swing Overview - Week 13 2022

Purple Trading 11.04.2022 06:41

The Swing Overview - Week 13 Equity indices closed the first quarter of 2022 in a loss under the influence of geopolitical tensions. The Czech koruna strengthened as a result of the CNB raising interest rates to 5%, the highest since 2001. The US supports the oil market by releasing 180 million barrels from its strategic reserves. War in Ukraine The war in Ukraine has been going on for more than a month and there is still no end in sight. Ongoing diplomatic negotiations have not led to a result yet. Meanwhile, Russian President Putin has decided that European countries will pay for Russian gas in rubles. This has been described as blackmailing from Europe's point of view and is not in line with the gas supply contracts that have been concluded. A way around this is to open an account with Gazprombank where the gas can be paid for in euros. Geopolitical tensions are therefore still ongoing and are having a negative effect on stock markets. Equity indices have had their worst quarter since 2020 US and European equities posted their biggest quarterly loss since the beginning of 2020, when the COVID-19 pandemic broke out and the global economy was in crisis. Portfolio rebalancing at the end of the quarter boosted demand for bonds and kept yields lower. On Tuesday, the yield curve briefly inverted, meaning that short-term bonds yields were higher than long-term bonds. An inverted yield curve is a signal of a recession according to many economists. It means that future corporate profits should be rather behind expectations and stock prices might reflect it. On Thursday, the S&P 500 index fell 1.6%. The Dow Jones industrial index also fell by 1.6% and the Nasdaq Composite index fell by 1.5%. The European STOXX 600 index closed down by 0.94%. Even after last week's rally, as investors celebrated signs of progress in peace talks between Russia and Ukraine, the S&P 500 index is still down 5% for the first three months, its worst quarterly performance in two years. Figure 1: SP 500 on H4 and D1 chart The SP 500 index reached the resistance level at 4,600, which it broke, but then closed below it. This indicates a false break. The new nearest resistance is in the range of 4,625 - 4,635. Support is at 4,453 and then significant support is at 4,386 - 4,422. German DAX index The DAX index has rallied since March 8 and has reached the resistance level which is in the 14,800 - 15,000 range. However, the index started to weaken in the second half of the week. The news that Russia will demand payments for gas in rubles, which Western countries refuse, contributed to the index's weakening. The fear of gas supply disruption then caused a sell-off. Figure 2: German DAX index on H4 and daily chart Resistance is between 14,800 - 15,000 according to the daily chart. The nearest support according to the H4 chart is at 14,100 - 14,200. The euro remains in a downtrend The euro was supported at the beginning of the week by hopes for peace in Ukraine. However, by the end of the week, the Ukrainian President warned that Russia was preparing for more attacks and the Euro started to weaken. News of Russia's demand to pay for gas in rubles had a negative effect on the euro as well. Figure 3: The EURUSD on the H4 and daily charts. From a technical point of view, we can see that the EURUSD according to the daily chart has reached the resistance formed by EMA 50 (yellow line). The new horizontal resistance is in the area of 1.1160 - 1.1180. Support is at 1.0950 - 1.0980. The euro still remains in a downtrend. CNB raised the interest rate In the fight against the inflation, the CNB decided to further raise the interest rate by 0.50%. Currently, the base rate is at 5%, where it was last in 2001. The interest rate hike is aimed at slowing inflation by slowing demand through higher borrowing costs. Figure 4: Interest rate developments in the Czech Republic In addition, a strong koruna should support the slowdown in inflation. The koruna could appreciate especially against the euro due to higher interest rates. However, the strengthening of the koruna is conditional on the war in Ukraine not escalating further. We can see that the koruna against the euro is approaching a support around 24.30. The low of this year was 24.10 korunas for one euro. Figure 5: USD/CZK and EUR/CZK on the daily chart. The koruna is also strengthening against the US dollar. Here, however, the situation is slightly different in that the US Fed is also raising rates and is expected to continue raising rates until the end of the year. Therefore, the interest rate differential between the koruna and the dollar is less favourable than between the koruna and the euro. The appreciation of the koruna against the dollar is therefore slower. Currently, the koruna is at the support of 22 koruna per dollar. The next support is at 21.70 and then 21.10 koruna per dollar, where this year's low is. Oil has weakened Oil prices saw the deep losses after the news that the United States will release up to 180 million barrels from its strategic petroleum reserves as part of measures to reduce fuel prices. US crude oil fell 5.4% and Brent crude oil fell 6.6% on Thursday after the news. Figure 6: Brent crude oil on a monthly and daily chart We can see that a strong bearish pinbar was formed on a monthly chart. The nearest support is in the zone 103 – 106 USD per barel. A strong support is around 100 USD per barel which will be closely watched.

Positions of large speculators according to the COT report as at 5/4/2022

Purple Trading 11.04.2022 22:12

Estimating Future Stock Returns, December 2021 Update

David Merkel 11.03.2022 06:15

Image credit: All images belong to Aleph Blog This should be a brief post. At the end of 2021, the S&P 500 was poised to nominally return -1.53%/year over the next 10 years. As of the close yesterday, that figure was 0.73%/year. The only period compares with this valuation-wise is the dot-com bubble. We are near dot-com level valuations, in the 98th percentile. And if you view the 10-year returns from the worst time of the dot-com bubble to now, you can see that the results they obtained are worse than what I forecast here. Of course, a lot of what will happen in nominal terms will rely on the actions of the Fed. Will the Fed: Allow a real recession to clear away dud assets that are on life support from low rates? (Collapsing the current stock/junk bubble.. they would never do this unless their hands were tied.)Risk the 1994 scenario where the compressed coupon stack in the Residential Mortgage Backed Securities [RMBS] market begins a self-reinforcing interest rate rise cycle on the long end as mortgage rates rise, prepayments drop, mortgage durations extend, leading to bond managers selling RMBS and long bonds with abandon to bring their duration risk down. The Fed chases the yield curve up, and the stock and housing markets both fall. The Fed chokes on their policy, and gives up tightening to save both markets.Or, if not the 1994 scenario, does the Fed dare to stop tightening before the yield curve inverts, and just wait for a flat curve to do its work? (Nah, that would be smart. The Fed always inverts the curve to prove their manliness, and blows some part of the market up in the process.)Or do they just accept financial repression, and punish savers to benefit wage earners (Will it really work? Dubious.), as the Fed keeps their policy rate low. I posed those scenarios to Tom Barkin, President of the Richmond Fed when he came to speak to the CFA Institute at Baltimore last week. He gave answers that were either evasive, or he didn’t get it. Anyway, this is an awkward market situation, but the one thing that is clear to me is that investors should be at the lower end of risk for their asset allocation. PS — As for me, I am living with value stocks, small stocks, and international stocks. Very little in the S&P 500 here.

When I was a Boy… (2)

David Merkel 05.04.2022 04:51

Photo Credit: House Photography || I always read a lot when I was young This a is follow-up to When I was a Boy… which I wrote ~5 1/2 years ago. It is also a response to an article posted by Jason Zweig, who I have talked with once or twice, and emailed a little more than that. In that article, he asks the question: How did you learn how to invest? Did you take a class, play a stock-market game in school, have a friend or family member as a mentor?How Should Kids Learn to Invest? If you read the original article, you would know that my original start was from two gifts of stock that male relatives in my extended family gave me in the 1960s. They picked two high-fliers — Litton Industries and Magnavox. Bought and held, by the mid-1970s both generated >80% losses when they were bought by another company. Did I ever play the stock market game in school? Yes, once when I was in seventh grade (early 1973). Our school decided to play around and do an intersession between the two semesters. It was a two week course called “Bulls and Bears. How this Little Piggy Went to Market.” My favorite science teacher was teaching it. I realized that the game was utterly short-term and so I put all of my play money into AT&T warrants, knowing that if AT&T stock rose, the warrants would zoom up. Was I a smart kid, or what? What. Well, AT&T when nowhere for those two weeks, and the same for the warrants. They were at the same price at the contest end, thus losing the commissions on both sides, and this was when commissions were high, prior to deregulation. The three main things that taught me about investing were watching Wall Street Week with my Mom, borrowing books on investing at the Brookfield library, and reading the Value Line subscription that she purchased. I probably read 10 books on investing before I was 18. Louis Rukeyser was an affable guide to the markets, including the elves, the guests, etc. (As an aside, Frank A. Cappiello, Jr. was a founding member of the Baltimore Security Analysts Society, and a frequent guest on his show. After all, where is Owings Mills, Maryland?) With Value Line, I began to understand how corporations worked. The one-page descriptions of companies were just big enough to give me a good idea of what was going on, while not over-taxing a kid 12-21 years old. I remember as a student at Johns Hopkins earning 16% on my money market fund in my freshman year. I was only at Hopkins for three years 1979-1982, but those were tough years, particularly in the Midwest “Rust Belt.” My father’s business earned little, but my Mom’s investing paid off. Though not “working” she was making more off the family portfolio than my Dad was earning off his business. As it was, to help my family then, I paid the last semester of tuition. (My Mom later paid me back for that.) I came back home in 1982 with $5 in my pocket. Then I learned that I overdrew my bank account, costing me $10. Oh, one more thing the clever and distinguished Carl Christ, who signed my Master’s Thesis at Hopkins, taught a class on investing in my junior year. I learned a lot, but the main thing I remember was writing a research report on a firm that made specialty paper — James River. My mother had owned it for a long time, but had sold her stake at an opportune time. When I wrote the report, she did not own it, and the stock had fallen from where she sold it. Dr. Christ had never heard of James River, an was fascinated at what was at that time a midcap firm in a underfollowed industry. I got an “A.” When I showed the report to my Mom, she bought it again, and made money of it. Also, in my senior year, I wrote my thesis on stock splits. As I said there: This brings me to my conclusion: stock splits are a momentum effect, but it is larger when companies are still have a cheap valuation. Perhaps splits have no effect on stock performance — it is all momentum and valuation. To me, that is the most likely conclusion, and my thesis anticipated quantitative money management by 10+ years.On Stock Splits In the summer of 1982, I remember sitting down with Value Line in my family’s living room (quiet place, no TV) and selecting a paper portfolio of 40-50 stocks. I went through all 1700 stocks. I recorded the prices in the Milwaukee Journal, and then went to Grad School at UC-Davis. Over the next year the stocks in my “portfolio” appreciated at double the rate of the market. At that time, I was a TA for a Corporate Financial Management class. I showed it to the professor, and he said, “Oh, you have a beta of two.” I said, “No, this portfolio has stocks that are not as risky as the market. This is alpha, not beta.” Several years later, I participated in the Value Line Investing Contest. I placed in the top 1%, but not good enough to win. When my dissertation committee dissolved, I was forced to abandon my Ph. D. I took three actuarial exams on the fly in early 1986 and passed. I had an informational interview at Pacific Standard Life which sponsored the exams, and they hired me on the spot. (My boss’ secretary told me that the boss said, “No one can pass the first three exams on the first try.” Then a fellow employee told me later, “You didn’t negotiate hard enough. They would have hired you regardless.”) When I worked for Pacific Standard Life, and later AIG, I got investment-related projects, because I was the one actuary that understood investing. During this time, I was managing my own portfolio, sometimes better, sometimes worse. I bought stocks, and mutual funds investing outside the US. I had a CTA in my portfolio. I tried investing in spectrum with the FCC, but that was a bomb. I settled on small cap value investing in the mid-1990s, which was a bad era for small cap value. Still, I managed to keep pace with the S&P 500. In 2000, I had an email exchange with Kenneth Fisher (yes, the big guy of Fisher Investments). This led to he creation of my eight rules. As I wrote on portfolio rule three: Let me give you a little history of how the eight rules came to be. In 2000, I had an e-mail discussion with Kenneth Fisher. I explained to him what I had been doing with small-cap value, and how I had done well with it in the 90s. He told me to forget everything that I’ve learned, especially the CFA syllabus, and look for the things that I can do better than anyone else. We exchanged about five or so e-mails; I appreciate the time he spent on me. So I sat back and thought about what investments had worked best for me in the past. I noticed that when I got the call right on cyclical industries, the results were spectacular. I also noticed that I lost most when investing in companies that didn’t have good balance sheets, no matter how “cheap” they were in terms of valuation. I came to the conclusion that size and value/growth were not the major determinants of my investing success. Instead, industry selection played a large role in what went right and wrong with my investment decisions. So, I decided to formalize that. I would rotate industries with a value bias. But that would have other impacts on how I invested. One of those impacts is rule number three. Over the next ten years, I tore up the pavement, and would have been in the top percentile of mutual fund managers. And so I opened my own shop in 2010, to find for the next eleven years that value investing was overrated. My life is bigger than my little company. I am a happy man. I know Jesus Christ; I have eternal life. Have there been disappointments? Of course. The one main positive I can say about my investing is that I rarely have big losses on any security. This is not due to stop losses; I pay attention to balance sheets and the cyclicality of markets. Even at the age of 61, I am still learning. I am not a boy, obviously, but I am still absorbing new ideas. To all who read me, be life-long learners. I am closer to the end to my life than my beginning, but invest! Take your opportunities to learn and capitalize on them! And remember, Judgement Day is coming. Are you ready? Investments will help you for now, but will be useless in the hereafter.

Russia Look Set To Double Its Exports For The First Half Of 2023

Soft Commodities Speculators continue to boost their Sugar bullish bets to 20-week high

Invest Macro 16.04.2022 19:59

Metals Speculators reduce Platinum bets for 3rd week to 13-week low

Invest Macro 16.04.2022 20:02

COT Currency Speculators drop their Japanese Yen bets to 183-week low

Invest Macro 16.04.2022 22:07

Comparison of client’s profitability among European brokers 2021

Purple Trading 21.04.2022 12:14

How did we come up with this data? This comparison is based on publicly available data on the percentage of retail CFD accounts that were in loss and was collected within a one year span (between 1. 4. 2021 and 31. 3. 2022). Publishing of this data is mandatory for brokerage companies operating in the EU and they have to include them as a part of so-called "disclaimers". These can be found on all marketing materials (online banners, emails, ebooks), but also in the footer on their website. One of the subchapters of this article focuses on how and where to find this data. What does ESMA request? Online Forex trading has come a long way since its wild unregulated beginnings, and while unregulated brokerage firms or those that are less tightly regulated can still be found, Forex traders of today can rely on a much greater degree of protection than their counterparts from the past. The European Securities and Markets Authority (ESMA) provides guidelines to regulators, for example, the Cypriot CySEC, and thereafter each regulator provides guidelines and restrictions to regulated firms. EU regulations are considered to be one of the strictest, caring for the protection of clients (retail traders) and guaranteeing them a high standard of security and transparency compared to other (for example, off-shore) regulators. How regulation protects traders? For example CySEC requires a number of guarantees and client protection mechanisms from brokerage companies, below are some of the main ones. Negative balance protection If a trader loses more money than he had in his trading account due to an accident, adverse market fluctuations, or leverage, he/she does not have to worry about possible debt. Thanks to the new guidelines, retail traders cannot lose more money than they put into their account, if they get into the red, the debt incurred must be paid by the broker. Segregation of client bank accounts In the early days of online Forex trading, we could often witness many fraudulent brokerage companies using their clients’ funds to enrich themselves or pay for operating expenses. Brokerage companies operating in the EU must therefore deposit all client funds in bank accounts, segregated from the company's funds, and insured against bankruptcy. This way, traders have fewer things to worry about. Disclosure of loss rate of client accounts Every 3 months, brokerage companies must publish the loss rate of their clients' trading accounts. This is stated as a percentage and is placed in small print on each advertising banner, image, or other promotional material. You can also find it in the footer on the brokers' websites in the so-called "Disclaimer" (see picture). Figure 1: Percentage of profitability of client accounts in the footer of Purple Trading websites ~/getmedia/897c3636-9d3b-44f4-8420-35bc0c6b5065/P-ziskovost.png Table comparing the profitability of clients of European brokers - how did we do? Because the loss rate of clients’ accounts is information that brokers are required to disclose publicly in the EU, we decided to venture to other broker’s websites in order to see how our competitors are doing. The result completely exceeded our expectations. Table No.1: Comparison of the number of profitable client accounts of leading European brokers *This number refers to CFD retail (client) accounts and is based on data for the period from 1 April 2021 to 31 March 2022) Broker Number of profitable accounts in 2021* 37 % 32 % 29,25 % 29 % 28,95 % 28,76 % 27,13 % 26,97 % 26,07 % 26 % 25,6 % 24,8 % 24 % 23 % 23 % 22 % 19,5 % As you can see, Purple Trading is among the absolute top with more than 35% of client accounts ending up in profit. Which leaves behind a large part of the competition. To some, however, a third of profitable clients may seem like a low number. However, we must take this number in the overall context of the Forex industry. Why a third of profitable clients are such a success? It should be noted that Forex trading is one of the most challenging disciplines and as such has a very steep learning curve. In particular, beginning traders must initially go through a number of educational materials if they want to make money in this discipline. And even then, the task of the most difficult remains ahead of them - to deal with themselves and set strict rules of risk management and thus avoid the psychological pitfalls of trading. What could be the secret behind the profitability of our clients? Ability to respond immediately to trading opportunities Thanks to LD4 Equinix servers in London, our traders can count on lightning-fast executions and thus adequately respond to trading opportunities. If you also want to start trading with a fair Forex broker who takes his clients seriously and provides them with all the means to be truly profitable, Purple Trading is here for you. Comparison of client’s profitability among European brokers in 2021 What our competition doesn't want you to see The profitability of client accounts of European brokers is no longer a figure that you would have to decipher from a footnote written in fine print somewhere in the depths of the terms and conditions. All brokers operating within the EU follow ESMA (European Securities and Markets Authority) guidelines and must publish this number in a way that is as transparent as possible. Therefore, at Purple Trading, we decided to look at it in a more elaborate way and compare the profitability of our clients with that of our competition. And the result took our breath away!

Crypto Focus: Another Choppy Week on the Markets

8 eightcap 22.04.2022 14:44

It’s been a choppy week, with little direction at the end of it all on the top 10 and top 25. Both markets have seen plenty of action with decent ranges above and below the week’s open. As I write this early into Friday’s London session, sellers are now trying to get the upper hand. For now, the losses remain minor. Looking at the top 25, we saw 5.28% added to the upside and 5.77% to the downside (measuring the weekly bars high and low). Bitcoin and Ethereum both tracked closely to the top 10 and 25 indexes and were the two most significant coins edging lower after setting wide highs and lows. ETH is seeing plenty of support from 2980, and that level, for now, remains a key support point. Bitcoin continues to falter at 41,500. We are noting this level as strong resistance at this point. Fed policy remains a sensitive point for crypto traders as Friday morning’s news of a potential 50 point rate rise in May sent shock waves through major coins. This announcement definitely looks to have derailed or added to buyer worries as the fightback we had been seeing through the week stopped. Other news stated that the Treasury Department added BitRiver and ten of its subsidiaries, based in Russia, to its sanctions list. This coming week we still feel that FED policy looks to be the more sensitive issue regarding demand. Now that the news is out and being digested, could this lead to traders moving on from the shock and becoming a little more confident in buying, or could it continue to drive funds out of the top 10 and 25 coins? Some of this week’s big movers; Monero had another great week climbing to 281. Price gained 19.39% as demand remained thick for this coin. RookUSD KeeperDao is this weeks focus. We noticed the strong buying earlier in the week, and nothing changed by Friday’s session. Buyers are flocking to the coin, taking it back above USD$153, adding 34.52%! Price hit new 3-month highs this week after posting a second straight month of gains (at this point). Price has started to confirm a new trend after buyers beat resistance. If the new move can continue, we are looking at 167.60 as potential resistance. As long as we see new higher lows on the new pull back, we will continue to look for new moves higher, confirming the new uptrend. One pullback at resistance is fine, but we will want to see buyers break that level to really show that momentum is on the buyer side. The post Crypto Focus: Another Choppy Week on the Markets appeared first on Eightcap.

The Swing Overview - Week 16 2022

Purple Trading 22.04.2022 15:00

The Swing Overview - Week 16 Jerome Powell confirmed that the Fed will be aggressive in fighting the inflation and confirmed tighter interest rate hikes starting in May. Equity indices fell strongly after this news. Inflation in the euro area reached a record high of 7.4% in March. Despite this news, the euro continued to weaken. The sell-off also continued in the Japanese yen, which is the weakest against the US dollar in last 20 years. The USD index strengthens along with US bond yields Fed chief Jerome Powell said on Thursday that the Fed could raise interest rates by 0.50% in May. The Fed could continue its aggressive pace of rate hikes in the coming months of this year. US 10-year bond yields have responded to this news by strengthening further and have already reached 2.94%. The US dollar has also benefited from this development and has already surpassed the value 100 and continues to move in an uptrend. Figure 1: US 10-year bond yields and USD index on the daily chart Earnings season is underway in equities Rising interest rates continue to weigh on equity indices, which gave back gains from the first half of the last week and weakened significantly on Thursday following the Fed’s information on the aggressive pace of interest rate hikes. In addition, the earnings season, which is in full swing, is weighing on index movements. For example, Netflix and Tesla reported results last week. While Netflix unpleasantly surprised by reducing the number of subscribers by 200,000 in 1Q 2022 and the company's shares fell by 35% in the wake of the news, Tesla, on the other hand, exceeded analysts' expectations and the stock gained more than 10% after the results were announced. Tesla has thus shown that it has been able to cope with the supply chain problems and higher subcontracting prices that are plaguing the entire automotive sector much better than its competitors. The decline in Netflix subscribers can be explained by people starting to save more in an environment of rising prices. Figure 2: The SP 500 on H4 and D1 chart The SP 500 index continues to undergo a downward correction, which is shown on the H4 chart. The price has reached the resistance level at 4,514-4,520. The price continues to move below the SMA 100 moving average (blue line) on the daily chart which indicates bearish sentiment. The nearest resistance according to the H4 chart is at 4,514 - 4,520. The next resistance is around 4,583 - 4,600. The support is at 4,360 - 4,365. The German DAX index The DAX is also undergoing a correction and the last candlestick on the daily chart is a bearish pin bar which suggests that the index could fall further. Figure 3: The German DAX index on H4 and daily chart This index is also below the SMA 100 on the daily chart, confirming the bearish sentiment. The price has reached a support according to the H4 chart, which is at 14,340 - 14,370. However, this is very likely to be overcome quickly. The next support is 13 910 - 14 000. The nearest resistance is 14 592 - 14 632. The DAX is affected by the French presidential election that is going to happen on Sunday April 24, 2022. According to the latest polls, Macron is leading over Le Pen and if the election turns out like this, it should not have a significant impact on the markets. However, if Marine Le Pen wins in a surprise victory, it can be very negative news for the French economy and would weigh on the DAX index as well. The euro remains in a downtrend The Fed's hawkish policy and the ECB's dovish rhetoric at its meeting on Thursday April 14, 2022, which showed that the ECB is not planning to raise rates in the short term, put further pressure on the European currency. The French presidential election and, of course, the ongoing war in Ukraine are also causing uncertainty. Figure 4: The EURUSD on the H4 and daily charts. The inflation data was reported last week, which came in at 7.4% on year-on-year basis. The previous month inflation was 5.9%. This rise in inflation caused the euro to strengthen briefly to the resistance level at 1.0930 - 1.0950. However, there was then a rapid decline from this level following the Fed's reports of a quick tightening in the economy. A support is at 1.0760 - 1.0780. The sell-off in the Japanese yen is not over The Japanese yen is also under pressure. The US dollar has already reached 20-year highs against the Japanese yen (USD/JPY) and it looks like the yen's weakening against the US dollar could continue. This is because the Bank of Japan has the most accommodative monetary policy of any major central bank and continues to support the economy while the Fed will aggressively tighten the economy. Thus, this fundamental suggests that a reversal in the USD/JPY pair should not happen anytime soon. Figure 5: The USDJPY on the monthly chart In terms of technical analysis, the USD/JPY price broke through the strong resistance band around the price of 126.00 seen on the monthly chart. The currency pair thus has room to grow further up to the resistance, which is in the area near 135 yens per dollar.

COT Soft Commodities Speculators raising bullish bets for Soybean Oil as prices hit record high

Invest Macro 23.04.2022 19:33

COT Metals Speculators reduce their Gold bullish bets but positions remain strong

Invest Macro 23.04.2022 20:45

Currency Speculators raise their bullish bets for Canadian Dollar to 40-week high

Invest Macro 23.04.2022 20:49

Trading Week Ahead – Indices, Forex, and Commodities

8 eightcap 29.04.2022 14:45

Watch Andrew Lockwood from ForexSignals.com, as kicks off May’s Trade Zone, with his first Trading Week Ahead Live. Join him as he takes a real-time look at the Indices, Forex, and Commodities markets, and gives you all his potential trade opportunities for the upcoming week. JOIN ANDREW THIS WEDNESDAY, FOR HIS FIRST LIVE MARKET UPDATE OF MAY… REGISTER NOW! Join us this coming Wednesday, at 7 PM AEST (10 AM BST), as Andrew looks back at Monday’s Trading Week Ahead Live, and analyses the development moves made in the markets since Monday’s forecast. Watch as Andrew looks ahead at all the potential trading opportunities available as the weekend approaches, and gives you his reasons for what lays ahead. Register Now If you want a session to summaries the levels you need to be watching? Then this is the perfect session for you, as the trading week draws to a close. At the end of the webinar, join the Trade Zone community, as Andrew Lockwood answers all your market and trade-related questions in an end-of-session live Q&A. So, if you have any questions relating to any of the pairs or commodities covered this week, please have them ready. Sit back, enjoy… And remember to trade safely! Remember to have any questions you may have, about any of the pairs or commodities covered this week The post Trading Week Ahead – Indices, Forex, and Commodities appeared first on Eightcap.

The Swing Overview – Week 17 2022

Purple Trading 03.05.2022 11:04

The Swing Overview – Week 17 Major stock indices continued in their correction and tested strong support levels. In contrast, the US dollar strengthened strongly and is at its highest level since January 2017. The strengthening of the dollar had a negative impact on the value of the euro and commodities such as gold, which fell below the $1,900 per ounce. The Bank of Japan kept interest rates low and the yen broke the magic level 130 per dollar. The USD index strengthened again but the US GDP declined The US consumer confidence in the month of April came in at 107.3, a slight decline from the previous month when consumer confidence was 107.6. The US GDP data was surprising. The US economy decreased by 1.4% in 1Q 2022 (in the previous quarter the economy grew by 6.4%). This sharp decline surprised even analysts who expected the economy to grow by 1.1%. This result is influenced by the Omicron, which caused the economy to shut down for a longer period than expected earlier this year. The Fed meeting scheduled for the next week on May 4 will be hot. In fact, even the most dovish Fed officials are already leaning towards a 0.5% rate hike. At the end of the year, we can expect a rate around 2.5%. The US 10-year bond yields continue to strengthen on the back of these expectations. The US dollar is also strengthening and is already at its highest level since January 2017, surpassing 103 level. Figure 1: US 10-year bond yields and the USD index on the daily chart Earnings season is underway in equities Earnings season is in full swing. Amazon's results were disappointing. While revenue was up 7% reaching $116.4 billion in the first quarter (revenue was $108.5 billion in the same period last year), the company posted an total loss of $8.1 billion, which translated to a loss of $7.56 per share. This loss, however, is not due to operating activities, but it is the result of the revaluation of the equity investment in Rivian Automotive. Facebook, on the other hand, surprised in a positive way posting unexpectedly strong user growth, a sign that its Instagram app is capable of competing with Tik Tok. However, the revenue growth of 6.6% was the lowest in the company's history. Apple was also a positive surprise, reporting earnings per share of $1.52 (analysts' forecast was $1.43) and revenue growth of $97.3 billion, up 8.6% from the same period last year. However, the company warned that the closed operations in Russia, the lockdown in China due to the coronavirus and supply disruptions will negatively impact earnings in the next quarter. Figure 2: The SP 500 on H4 and D1 chart In terms of technical analysis, the US SP 500 index is in a downtrend and has reached a major support level on the daily chart last week, which is at 4,150. It has bounced upwards from this support to the resistance according to the 4 H chart which is 4,308 - 4,313. The next resistance according to the H4 chart is 4,360 - 4,365. The strong resistance is at 4,500. German DAX index German businessmen are optimistic about the development of the German economy in the next 6 months, as indicated by the Ifo Business Climate Index, which reached 91.8 for April (the expectation was 89.1). However, this did not have a significant effect on the movement of the index and it continued in its downward correction. Figure 3: German DAX index on H4 and daily chart The index is below the SMA 100 on both the daily chart and the H4 chart, confirming the bearish sentiment. The nearest support according to the H4 is 13,600 - 13,650. The resistance is 14,180 - 14,200. The next resistance is 14,592 - 14,632. The euro has fallen below 1.05 The euro lost significantly last week. While the French election brought relief to the markets as Emmanuel Macron defended the presidency, geopolitical tensions in Ukraine continue to weigh heavily on the European currency. The strong dollar is also having an impact on the EUR/USD pair, pushing the pair down. The price has fallen below 1.05, the lowest level since January 2017. Figure 4: EURUSD on H4 and daily chart The euro broke through the important support at 1.0650 - 1.071, which has now become the new resistance. The new support was formed in January 2017 and is around the level 1.0350 - 1.040. Japan's central bank continues to support the fragile economy The Bank of Japan on Thursday reinforced its commitment to keep interest rates at very low levels by pledging to buy unlimited amounts of 10-year government bonds daily, sparking a fresh sell-off in the yen and reviving government bonds. With this commitment, the BOJ is trying to support a fragile economy, even as a surge in commodity prices is pushing the inflation up. The decision puts Japan in the opposite position to other major economies, which are moving towards tighter monetary policy to combat soaring prices. Figure 5: The USD/JPY on the monthly and daily chart In fresh quarterly forecasts, the central bank has projected core consumer inflation to reach 1.9% in the current fiscal year and then ease to 1.1% in fiscal years 2023 and 2024, an indication that it views the current cost-push price increases as transitory. In the wake of this decision, the Japanese yen has continued to weaken and has already surpassed the magical level 130 per dollar. Strong dollar beats also gold Anticipation of aggressive Fed action against inflation, which is supporting the US dollar, is having a negative impact on gold. The rising US government bond yields are also a problem for the yellow metal. This has put gold under pressure, which peaked on Thursday when the price reached USD 1,872 per ounce of gold. But then the gold started to strengthen. Indeed, the decline in the US GDP may have been something of a warning to the Fed and prevent them from tightening the economy too quickly, which helped gold, in the short term, bounce off a strong support. Figure 6: The gold on H4 and daily chart Strong support for the gold is at $1,869 - $1,878 per ounce. There is a confluence of horizontal resistance and the SMA 100 moving average on the daily chart. The nearest resistance according to the H4 chart is 1 907 - 1 910 USD per ounce. The strong resistance according to the daily chart is then 1 977 - 2 000 USD per ounce of gold. Moving averages on the H4 chart can also be used as a resistance. The orange line is the EMA 50 and the blue line is the SMA 100.

Crypto News: Is LiteCoin starting new bounce off key support?

8 eightcap 04.05.2022 06:55

Today’s focus is on Litecoin as price has started a new push higher after holding once again at 97.15 key support. Most coins are firm at this point in the day as buyer interest continues to pick up. We saw this yesterday, but things changed in the US session, and gains turned to losses. Could today be different? It’s a hard call as the FOMC is due in today’s US session, and a lot may come down to the FOMC statement and what it spells for rates moving forward. Recently crypto hasn’t reacted well to Fed policy adjustment news to help rein in inflation. Rates are expected to rise today, but could that be factored in? The real worry could be if the Fed commits to a very aggressive stance that exceeds market expectations. That could put pressure on risk markets to the USD and give the USD a boost. As noted, crypto has not reacted well in these situations, so it could be an interesting FOMC today. Back onto today’s focus, Litecoin looks to be setting up from a solid base with 97.15 key support holding for buyers since January this year. Since that point, we are yet to see a close below that support level. We have seen a few false starts off it, but while it continues to hold, there continues to be a floor for buyers. If things support crypto markets today after the FOMC, could we see today’s rally extend and break the current fast downtrend? Buyers do face some resistance at 100.35 and 103.90. If we see these levels cleared, that could be a good sign that buyers are trying to get a new up leg going. If we see a rally follow on, the next test will be the downtrend that caps the current descending triangle pattern. The CCI has also moved above the 0 point showing bullish conditions. We stress again today’s FOMC could have an impact on the current picture. The FOMC statement and federal funds rate is due at 4:00 am AEST, and the press conference follows at 4:30 am AEST. LiteCoin D1 Chart The post Crypto News: Is LiteCoin starting new bounce off key support? appeared first on Eightcap.

Forex News: GBPUSD beats its range. Can buyers start a new leg higher?

8 eightcap 05.05.2022 10:01

Today’s focus is on GBPUSD after its solid rally yesterday after markets surged to the USD after the FOMC statement suggested the Fed might not be as aggressive in its policy to combat inflation. The message also confirmed that the policy would do its best to help the US economy achieve a softish landing, and Powell did comment that inflation remains much too high. Let’s look at the GBPUSD. Price remains in a long-term downtrend. The last key leg we saw was a sharp down leg as the USD continued to fly higher over the previous week. Since the last low was put in on the 28th of April, we have seen a range develop, and that pattern was in place until yesterday, before buyers broke through it to the upside after the FMOC. This break has us thinking, can we see a new leg higher set up after this break? Price so far has been weaker today will sellers retracing over 50% of yesterday’s move. Buyers have been fighting back into today’s European session, and expectations are that the BOE may raise rates again today. Could this continue to give the Cable a boost and send price back up to yesterday’s high? A break and close above yesterday’s high could confirm a new up leg. A close back below the HL is a worry and could suggest that buyer momentum might now be that firm. If we do see a new close above yesterday’s highs and buyers can continue to hold momentum, we would be looking at the closest trend line as a possible higher target. Today’s BOE rates decision is at 9:00 pm AEST. Rates are expected to increase to 1%. GBPUSD D1 Chart The post Forex News: GBPUSD beats its range. Can buyers start a new leg higher? appeared first on Eightcap.

Trade Zone Week Ahead: Indices, Forex, and Commodities Real-Time Insight, with Andrew Lockwood

8 eightcap 06.05.2022 12:43

Join Andrew Lockwood from ForexSignals.com, for Monday’s Trading Week Ahead Live, as he takes you through his markets to monitor for the upcoming week. Watch as he analyses the Indices, Forex, and Commodities markets, and shares his potential trade opportunities for the week. JOIN THIS WEDNESDAY’S LIVE MARKET UPDATE! Do you want to continue monitoring the markets reviewed in Monday’s Trading Week Ahead Live? Then Join us this coming Wednesday, at 7 PM AEST (10 AM BST), as Andrew continues his analysis from Monday. Watch him as he looks back at moves and developments made since Monday, and shares where he foresees the market heading as we approach the weekend. Register Now This is the perfect opportunity to help you summaries the levels you’re watching and understand the movements being made. As usual, at the end of the session, there will be a live Q&A, for you and the rest of the Trade Zone community to ask Andrew Lockwood all your market and trade-related questions. So if you are not sure about the reasons behind a market movement, or you would like to know more about any of the pairs or commodities covered this week? This is the place to come to get the answers you need. So join us and enjoy… And as always remember to trade safely! The post Trade Zone Week Ahead: Indices, Forex, and Commodities Real-Time Insight, with Andrew Lockwood appeared first on Eightcap.

Crypto Focus: A Wild Week on the Markets

8 eightcap 06.05.2022 14:21

What a wild week. Looking at the weekly charts, it just looks like another lower week, but that was far from the truth. Most coins started the week on the sell, with Monday’s session setting new weekly lows. A lot of attention was on Thursday’s FOMC meeting. US policy regarding rates due to inflation has been a key driver, and this meeting was no exception. The FOMC statement surprised the market as the tone looked to take a less aggressive tone. Risk markets jumped after the statement. Gains were across the boards as FX stocks and Crypto all rallied sharply. The USD plunged, threatening to break weeks of gains. Signs looked good on Thursday as daily candles on several coins looked to show engulfing reversal bars. As we regularly see in the markets, you can never get married to anything. The situation changed dramatically on Friday as fears returned around inflation and policy, and gains we watched evaporated into heavy selling that has carried on. However, the question remains – is this reversal a new confirmation of a leg lower? The post Crypto Focus: A Wild Week on the Markets appeared first on Eightcap.

Copper Speculator bets fall to 2-year low as China lockdowns dent demand

Invest Macro 07.05.2022 11:55

Currency Speculators drop Euro bets into bearish territory on interest rates & low growth

Invest Macro 07.05.2022 14:13

CFD News: Gold, close to confirming new leg lower?

8 eightcap 09.05.2022 11:20

Things have taken a turn back to safe havens with heavy selling resuming into today’s European session. After a small push at a fightback, the floodgates reopened. Stock indices and Crypto markets have been the heaviest hit, with some coins dropping over 11% lower. Sellers haven’t overlooked Gold as sellers moved back into the yellow metal knocking back below 1862. We see a little bit on-demand around this area, but this may not offer much resistance if this level of selling continues. For now, price looks to have confirmed an LH, but will we see a new LL continuing the current trend with a new point of normal trend behaviour. Furthermore, a move below the trendline would also be a sign that the current fast downtrend controls the market. A lot will come down to USD demand and continued exit from risk assets as US recession fears continue. Gold D1 Chart The post CFD News: Gold, close to confirming new leg lower? appeared first on Eightcap.

Welcome Back to 1994! [Redux]

David Merkel 10.05.2022 03:17

Image Credit: Aleph Blog with help from FRED || Look at the mortgage rates fly! Okay, you might or might not remember the last piece. But since that time, 30-year mortgage rates have risen more than 1%. Is the Fed dawdling? Maybe, but the greater threat is that they become too aggressive, and blow up the financial economy, leading us into another decade-long bout of financial repression. As it stands right now, mortgage rates are in a self-reinforcing rising cycle, and it will not end until the Fed raises the Fed funds rate until it inverts the Treasury yield curve. But if I were on the FOMC, I would ignore inflation and the labor markets, and I would watch the financial economy to avoid blowing things up. The FOMC won’t do this. They are wedded to ideas that no longer work, or may never have worked, like the Phillips Curve. They imagine that the macroeconomic models work, when they never do. They forget what Milton Friedman taught — that monetary policy works with long and variable lags. Instead, in tightening cycles, the FOMC acts as if there are no lags. And, in one sense, they are correct. The financial economy reacts immediately to FOMC actions. The real economy, with inflation and unemployment, may take one or two years to see the effects. And because the FOMC forgets about the lags, they overshoot. The FOMC, far from stabilizing the economy, tends to destabilize it. We would be better off running a gold standard, and regulating the banks tightly for solvency. Remember, gold was never the problem — bad bank regulation was the problem. ======================= One more thing — the Fed needs to be quiet. The chatter of Fed governors upsets the markets, as do Fed press conferences and the dot-plot. The Fed was most effective under Volcker and Martin. They said little, and let their actions be known through the Fed’s Open Markets Desk. That allowed the Fed to surprise and lead the markets. The current Fed (since Greenspan) made the mistake of following the markets. Following the markets exacerbates volatility, and promotes oversupplying liquidity. ======================= At present I am pretty sure 30-year mortgage rates will rise to 6%, and maybe 7%. No one is panicking enough on this, so it will likely go higher. MBS hedging is a powerful force, and will continue until people no longer want to buy houses at such high interest rates.

RookUSD, are buyers starting to reconfirm the demand area?

8 eightcap 10.05.2022 10:57

After days of heavy selling, crypto markets have started to see signs of demand today, with most of the top 25 coins moving into the positive after being hammered within 24 hours ago. Today, things continued to look dire as coins continued to touch new monthly lows. KeeperDAO (RookUSD) continues to fight back from the 71.40 -76.80 area. This area has been showing demand and support for buyers since January. Sellers till this point haven’t been able to break through, pushing the downtrend to that next level lower. Buyers have rejected five attempts at beating the level. But they haven’t been able to get a new trend going as resistance at 142.20 has continued to halt their runs. Looking at the picture now, there are two obvious outcomes. 1, we see the demand area hold, and we see a new push higher from buyers. If buyers can reach that level again, the test will be at 142.20 resistance. 2, overall pressure returns to the crypto boards, and selling returns pushing price back into the demand area and possibly through it confirming a weekly continuation. RookUSD The post RookUSD, are buyers starting to reconfirm the demand area? appeared first on Eightcap.

Forex News: EURUSD, are we seeing a new breakout?

8 eightcap 12.05.2022 09:48

Risk markets are seeing another session of aggressive selling. The selling so far is across multiple asset classes. It’s a real good old fashioned risk-off day so far. Until today the EURUSD looked to be holding up the best out of the three main risk currencies, but that’s all changed in today’s European session after sellers finally broke through support. Until today the EURUSD continued to hold its line ignoring the AUD and GBP making lower moves to the USD. 1.0490 continued to hold for buyers and even in today’s Asian session, this level remained in play. The AUD and GBP continued to hit new lower lows while the EUR held on. We started to think, is it EU rate raise expectations holding it up? That didn’t make real sense as both currencies saw rate raises recently but continued to move lower. This all changed today after sellers broke support and confirmed a breakout of the descending triangle pattern. These patterns in downtrends are normally seen as trend continuation patterns and this case is no different. While price remains below support we will continue to look for further lower prices and with the ongoing inflation worries and global recession fears, this could be a factor that maintains selling. There is talk of parity with the USD, could this be the start of the move that realise these calls? EURUSD D1 Chart The post Forex News: EURUSD, are we seeing a new breakout? appeared first on Eightcap.

Trade Zone Week Ahead: Begin Your Week, with Real-time Insight from Andrew Lockwood

8 eightcap 12.05.2022 14:43

Join Andrew Lockwood from ForexSignals.com, for his penultimate week on the Eightcap Trade Zone. Start the week with another live Monday morning Trading Week Ahead, as he outlines the markets to monitor from, Indices, Forex, and Commodities, and shares his potential trade ideas for the week for the coming week. JOIN THIS WEDNESDAY’S LIVE MARKET UPDATE | 18th May 2022! Would you like an update on how the markets have been performing this week? Then Join us this coming Wednesday, at 7PM AEST (10AM BST), as Andrew provides his mid-week Live Market Update. Watch him, as he looks back at his analysis from Monday, and updates you with the moves and developments that have been made. Then shares where he foresees the market heading as we approach the weekend. Register Now Do you need some help summarising the market, or want to trade along side a seasoned trader? If so, this is the perfect opportunity to get the help and support you need. As usual there will be a live Q&A at the end of the session, for you and the rest of the Trade Zone community to ask Andrew Lockwood any trade-related questions you may have. So if you are not sure about the reasons behind any of the movements in the market, or you would like to know more about a particular asset or pair? Then this is the place to come to get the answers you need. So join us on the Trade Zone this week, and as always, please remember to trade safely! The post Trade Zone Week Ahead: Begin Your Week, with Real-time Insight from Andrew Lockwood appeared first on Eightcap.

Crypto Focus: Market meltdown continues as Terra (Luna) collapses

8 eightcap 13.05.2022 07:19

Well, what can we say about this last week? It was a horrific week on the crypto boards, with most coins plunging. The selling got going last weekend and peaked with a real market crash on Thursday. 200 billion of value was wiped off just on Thursday’s session alone. Bitcoin hit 25,338 USD at its lowest point on Thursday, and Ethereum touched $1702, setting new year lows. The rout wasn’t just about those two. The top 25 index coin index we quote cashed by 45.18% to its low on Thursday. Why did this happen? As the week went on, a few stories started to emerge. UST was the main influence, and it had a catastrophic effect on Terra Luna, which we will get to later. UST is a stable coin; these coins are meant to be pegged in value to the USD and, in theory, should be at the 1:1 value. UST is a little different as it’s an algorithmic stable coin under-pinned by code rather than cash held in reserve. This is where the trouble began. As UST fell under $1 the cracks opened and fear set in. Selling accelerated, and its value slipped down to .41 cents. This had disastrous consequences for its sister currency Terra Luna which has a floating price and was designed to absorb UST price shocks. Terra crashed on UST failure to hold value and ended Thursday’s session under 1 US cent. We’re talking at 99% plunge! This was catastrophic for traders and investors that owned LUNA as many exchanges slowed to craw trying to deal with the mass of sell orders hitting the exchanges. Pressure on bitcoin, the Luna Foundation owned a mass of bitcoin used to shore up terra in times of crisis. Talk suggested large amounts had been sold to deal with the terra issue and this compounded/added to the panic selling that session. The story continues, tether the world’s largest stable coin, also dipped below $1 US, sending a shock through the markets of a contagion. This added to the panic. It’s difficult to tell what may happen next, but from watching the events this week, it’s important you remain vigilant as this volatility continues. I’m not an industry expert, but from watching the events this week, it’s something that came to my mind.This week’s focus is a sad one, but we can’t skip over Terra Luna. I’m not going to say much more on it as the meat is above. It’s a terrible event as, yes, some might think it’s cool to see markets destroyed, but there’s a personal loss in there as many investors believed in terra and now may face very unfortunate situations. The post Crypto Focus: Market meltdown continues as Terra (Luna) collapses appeared first on Eightcap.

COT Soft Commodities Charts: Speculator bets mostly cool off this week

Invest Macro 15.05.2022 14:46

Gold Stocks Have Performed Very Well Under Pressure

COT Metals Charts: Speculator bets mostly lower this week

Invest Macro 15.05.2022 15:30

Employees Of Amazon Are Planning Protests On Friday

COT Bonds Futures Charts: Speculator bets higher this week

Invest Macro 15.05.2022 15:14

UK Budget: Short-term positives to be met with medium-term caution

COT Currency Speculators raised British Pound Sterling bearish bets for 10th week

Invest Macro 15.05.2022 14:26

Gas And Oil Prices Are Higher Too Ahead Of The EU Embargo On Russian Products

COT Futures: This Week’s Energy Charts

Invest Macro 15.05.2022 14:57

Trade Zone Week Ahead: Begin Your Week with Real-time Insight from Andrew Lockwood

8 eightcap 15.05.2022 14:43

Join Andrew Lockwood from ForexSignals.com, for his penultimate week on the Eightcap Trade Zone. Start the week with another live Monday morning Trading Week Ahead, as he outlines the markets to monitor from, Indices, Forex, and Commodities, and shares his potential trade ideas for the week for the coming week. JOIN THIS WEDNESDAY’S LIVE MARKET UPDATE | 18th May 2022! Would you like an update on how the markets have been performing this week? Then Join us this coming Wednesday, at 7PM AEST (10AM BST), as Andrew provides his mid-week Live Market Update. Watch him, as he looks back at his analysis from Monday, and updates you with the moves and developments that have been made. Then shares where he foresees the market heading as we approach the weekend. Register Now Do you need some help summarising the market, or want to trade along side a seasoned trader? If so, this is the perfect opportunity to get the help and support you need. As usual there will be a live Q&A at the end of the session, for you and the rest of the Trade Zone community to ask Andrew Lockwood any trade-related questions you may have. So if you are not sure about the reasons behind any of the movements in the market, or you would like to know more about a particular asset or pair? Then this is the place to come to get the answers you need. So join us on the Trade Zone this week, and as always, please remember to trade safely! The post Trade Zone Week Ahead: Begin Your Week with Real-time Insight from Andrew Lockwood appeared first on Eightcap.

The Swing Overview - Week 18 2022

Purple Trading 16.05.2022 10:51

The Swing Overview - Week 18 In the war against rising inflation, central banks in the US, the UK and Australia raised interest rates this week. Britain, meanwhile, warned of the risk of a recession. The CNB also raised rates. They have thus reached their highest levels since 1999. The key interest rate in the Czech Republic is now 5.75%. The main stock indices have weakened strongly in response to the monetary tightening policies of the major economies and are at significant support levels. The negative sentiment on the indices is confirmed by the VIX fear indicator, which is above 30. The US dollar, on the other hand, continues to ride on the winning wave. The Fed raised interest rates by 0.5% The Fed raised rates by 0.5% points on Wednesday as expected, the highest jump in 22 years. This took the interest rate to 1%. The Fed chief announced that further half a percentage point rate hikes will continue at the next meetings in June and July. Powell also stated that the US economy is doing well and that it can withstand interest rate hikes without the risk of a recession and a significant increase in unemployment. In addition to the rate hike, the Fed announced that in June it would begin reducing the assets on the bank's balance sheet that the central bank had accumulated during the pandemic. In June, July and August, the Fed will sell $45 billion of assets a month, and starting in September it will sell $95 billion a month. Although Powell ruled out a 0.75% rate hike at the next meetings, interest rate futures markets continue to expect that possibility with about an 80% probability. Figure 1: The CME Fed Watch tool projections of the target interest rate for the next Fed meeting on June 15, 2022 Based on these expectations, US 10-year Treasury yields continue to strengthen and have surpassed the 3% mark. The US dollar is also strengthening and it is at the highest level since January 2017 and approaching 104. Figure 2: The US 10-year bond yields and the USD index on the daily chart Equity indices remain under pressure The SP 500 index initially rallied strongly following the announcement of the rate hike, after Powell ruled out a 0.75% rate hike in subsequent meetings. However, markets gave back all the gains the following day as interest rate futures continue to estimate an 80% probability that the next rate hike, which will take place in June 2022, will be 0.75%. Figure 3: SP 500 on H4 and D1 chart Thus, in terms of technical analysis, the US SP 500 index continues to move in a downtrend below both the SMA 100 and EMA 50 moving averages with resistance, according to the 4 H chart, at 4,308 - 4,313. The next resistance, according to the H4 chart, is 4,360 - 4,365. Strong resistance is at 4,500. The current support is 4 070 - 4 100. German DAX index German industrial orders fell by 4.7% in March, which is more than expected. A major contributor to this negative result was a reduction in orders from abroad as the war in Ukraine hit demand in the manufacturing sector. The outlook is negative and some analysts suggest that the German economy is heading into recession. The reasons are the war in Ukraine, problems in supply chains and high inflation. The Dax index confirms these negative outlooks with a downward trend. Figure 4: German DAX index on H4 and daily chart The index continues to move below the SMA 100 on the daily chart and on the H4 chart, confirming the bearish sentiment. The nearest support according to the H4 is 13,600 - 13,650. Resistance is 14,300 - 14,330. The next resistance is 14,592 - 14,632. The outlook for the euro remains negative HSBC bank on Thursday significantly cut its forecast for the euro, saying it expects the euro to weaken to parity against the US dollar this year, the first major investment bank to make such a prediction. The post-pandemic economic environment, which has been damaged by the ongoing war in Ukraine, looks challenging for the European economy, potentially forcing the European Central Bank to tighten policy slowly compared to the U.S. Federal Reserve, which has begun an aggressive rate-hiking cycle. This has raised the prospect of the single currency falling to levels not seen in two decades. HSBC said it expects the move to happen by the fourth quarter of 2022. ECB board member Isabel Schnabel said this week that rates may need to be raised as early as July. The precursor to any rate hike must be an end to bond purchases and that could come in late June. Markets are pricing in a 90 basis point tightening in rates this year. Figure 5: The EURUSD on H4 and daily chart The EUR/USD pair is in a clear downtrend with resistance at 1.0650 - 1.071. The important support is 1.05, but it has already been tested several times and could be broken soon. The next support is from January 2017 at around 1.0350 - 1.040. The Czech koruna got another injection in the form of an interest rate hike The CNB raised the interest rate by 0.75%, which exceeded analysts' expectations who projected a 0.50% rise. The current rate now stands at 5.75%, the highest since 1999. Consumer price growth continues to rise and by raising the interest rate the central bank is trying to dampen this growth by raising the interest rate. Inflation is expected to reach 15% by mid-year. The CNB has an inflation target of 2% and inflation is expected to reach these levels in 2024. The problem is economic growth, which is slowing significantly. But maintaining price stability is clearly more important than the negative effects of higher rates on the real economy. Figure 6: The USD/CZK and the EUR/CZK on the daily chart The Czech koruna has so far done best on the pair with the euro, as interest rates are zero on the euro. The koruna has been weakening significantly on the USD pair in recent days. The current significant resistance on the USD/CZK is CZK 23.50 per dollar and on the EUR/CZK it is 24.70. Bank of England warned of recession and more than 10% inflation The Bank of England sent out a strong warning that Britain faces the twin dangers of recession and inflation above 10% when it raised interest rates by a quarter percentage point to 1% on Thursday. The pound fell more than a cent against the US dollar and hit its lowest level since mid-2020, below $1.24, as the gloominess of the BoE's new forecasts for the world's fifth-largest economy caught investors off guard. The BoE also said it was also concerned about the impact of renewed COVID-19 lockdowns in China, which threaten to hit supply chains again and increase inflationary pressures. The BoE's rate hike was the fourth since December, the fastest pace of policy tightening in 25 years. The central bank also revised up its price growth forecasts, which suggest it will peak above 10% in the final three months of this year. Previously, it had expected it to peak at around 8% in April. Markets expect interest rates to reach 2-2.25% by the end of 2022. Figure 7: The GBP/USD on weekly and daily charts In terms of technical analysis, the GBP/USD is in a downtrend. The pound is trading at levels below 1.24 pounds per dollar and has reached to the support of 1.225-1.2330. The nearest resistance according to the weekly chart is at 1.2700-1.2750.

Forex News: USDCAD, could a new push lower be on the cards?

8 eightcap 16.05.2022 11:09

Looking at the USDCAD on the daily chart traders, could we see a new move lower if sellers can reverse today’s rally and break last Friday’s low? We are looking for that low break as it will back up a break of the fast trend and confirm the current bearish CCI. Risk markets look to be back in vogue on the short term, but this could be a short term move as overall inflation has not gone anywhere. There could be a case to put forward that rate rises could start to be factored in, and that expectation could outweigh the actual, but from recent history, the USD has been performing since 2021, and yes, we could see an extended retracement in the market, but fundamentals would need to change too dramatically to change the overall trend. Oil is another factor for this pair, and for now, buyers are trimming earlier losses. So we will continue to watch this pair’s price action, and if we do see a new break below last Friday’s low, we will look to see if it can turn into a new leg lower. USDCAD D1 Chart The post Forex News: USDCAD, could a new push lower be on the cards? appeared first on Eightcap.

The Swing Overview - Week 19 2022

Purple Trading 16.05.2022 10:59

The Swing Overview - Week 19 Stock indices continued to weaken strongly last week, while the US dollar has already surpassed the mark 104 and is at 20-year highs. However, a set of important data is behind us, which could bring some temporary relief to the equity markets. The Czech koruna weakened sharply after the appointment of the new CNB Governor Ales Michl, who is a proponent of a dovish approach. Thus, the rise in interest rates in the Czech Republic appears to be close to its peak. Macroeconomic data The US consumer inflation for April was reported on Wednesday, which came in at 8.3% on year-on-year basis. Analysts were expecting inflation to be 8.1%. Although the figure achieved was higher than expectations, it was still lower than the 8.5% inflation figure achieved in March. On a month-on-month basis, the price increase in April was 0.3%, significantly lower than in March when prices rose by 1.5%. On Thursday, industrial inflation was reported at 8.8% year-on-year and 0.4% month-on-month for April. The positive thing about this data is that inflation declined from previous readings. However, it is important to note that the year-on-year comparison is based on data where inflation was also higher in the previous year due to the recovery from the Covid-19 pandemic. The Fed chief reiterated that he expects another 0.50% point rise in interest rates at the next two Fed meetings. He also mentioned that a higher rate hike cannot be ruled out if necessary. The US 10-year bond yields came down from their peak and made a slight correction. However, the US dollar continued to strengthen and broke the resistance at 104. The dollar is thus at 20-year highs. Figure 1: US 10-year bond yields and USD index on the daily chart Equity indices heavily oversold The strong dollar, rising US bond yields, the war in Ukraine and the effects of the lockdown in China were the main reasons for the decline in equity indices. The SP 500 index hit 3,860, the lowest level since March 2021. This is also where long-term support is. However, the important macro data is behind us and the market has processed all the available fundamental information. This could bring temporary relief to the markets and the index could make an upward correction. The fall in 10-year bond yields, gives this move some boost as well. Figure 2: The SP 500 on H4 and D1 chart However, from a technical analysis perspective, the US SP 500 index remains in a current downtrend as the markets have formed lower low and is also below both the SMA 100 and EMA 50 moving averages on the H4 and daily charts. The nearest resistance is 4040 - 4070. The next resistance is at 4,140 and especially 4,293 - 4,300. The support is at 3,860 - 3,900. German DAX index In macroeconomic data, the German ZEW Economic Sentiment for May was reported last week and showed a reading of -34.3, an improvement from the previous month's reading of -41.0. Inflation in Germany for April is at 7.4% on year-on-year basis and up 0.8% from March (the previous month's increase was 2.5%). Figure 3: German DAX index on H4 and daily chart The index continues to move in a downtrend along with the major world indices. The price has reached the SMA 100 moving average on the H4 chart, which tends to signal resistance in a downtrend. The price is moving below the SMA 100 on both the daily chart and the H4 chart, confirming the bearish sentiment. The nearest support according to the H4 is 13,600 - 13,650. The resistance is 14,300 - 14,330. The next resistance is 14,592 - 14,632. The big sell-off in the euro continues The euro fell to 1.0356 against the dollar, the lowest value since January 2017. This value is also an area of significant support where price could stall. Fundamentally, the euro's depreciation is due to the strong dollar and the Fed's hawkish policy, which contrasts with the ECB's policy of not raising rates yet. Figure 4: The EURUSD on H4 and daily chart Eurozone inflation data will be reported next week, which could be an important catalyst for further movement. The significant support is priced around 1.0350 - 1.040. The current resistance is at 1.05. Czech koruna weakened strongly on the new governor appointment The President Miloš Zeman surprised with the appointment of Ales Michl for the governor of the CNB. Michl is known for his dovish views, having spoken out against raising interest rates at recent meetings. His appointment was welcomed in the markets by a strong depreciation of the Czech koruna. However, the bank later intervened in the markets by selling part of its foreign exchange reserves to prevent further depreciation of the Czech koruna. It is important to know that the Bank's monetary policy is decided by the seven-member Bank Board. So far, the proportion for voting on rate hikes has been 5:2. But by the end of June, the president must appoint 3 new board members. This could significantly change the voting ratio on the board and set a new course for the bank's policy, which would mean a halt to the rise in interest rates. However, it is likely that at the June board meeting the board, still with the old composition, will decide on further interest rate increases. Figure 5: The USD/CZK and the EUR/CZK on the daily chart The Czech koruna has reached 24.36 against the dollar and 25.47 against the euro, from which it started to descend after the CNB interventions.

Declines At The Close Of The New York Stock Exchange, The Drop Leaders Were Nike Inc Shares

(TGT) Target Delivers Disappointing Earnings Results To The Market

Rebecca Duthie 18.05.2022 14:13

Summary: Target share price tanks after earnings release. Retailers getting blindsided by higher costs Targets earnings announcement leaves investors shorting the stock Target Corporation's stock tanked on Tuesday after they released their first quarter earnings, their adjusted earnings per share came in well below investor expectations. However, it was not only the first quarters earning report than sent the share price tumbling, the retailer announced they expected the second quarter that its income margin rate is unlikely to be similar to the first quarters 5.3% operating income margin rate. Supply chain issues have also increased costs Target claims to have been blindsided by rising prices in the current environment, causing many financial indicators to come out lower than expected. In addition, supply chain issues have also increased costs. Despite sales rising as customers are having to spend more to buy more (due to rising inflation) profits are still struggling. Target Price Chart Read next: (DJI) Retail Stocks Help Push Dow Jones Industrial Average Price Up, Another Crypto Loses Value In The Market Sources: finance.yahoo.com, barrons.com

COT Metals Speculators have cooled off their Gold and Copper bets

Invest Macro 22.05.2022 11:40

Forex Speculators weaken Commodity Currency sentiment over last month - 22.05.2022

Invest Macro 22.05.2022 12:34

Copper prices hit lowest level this year. Crude oil decreased second day in a row. BoE went for a 25bp hike

COT Metals Speculators have cooled off their Gold and Copper bets - 22.05.2022

Invest Macro 22.05.2022 12:33

Japan's Total Crude Steel Production Will Decline And India's Sugar Production Will Increase

COT Futures Charts: Soft Commodities Speculator bets mixed

Invest Macro 22.05.2022 12:32

Commodities: Favorable weather conditions may be gone some time soon, so energy prices may go further up

COT Charts: Speculator positions were mixed in Energy this week

Invest Macro 22.05.2022 12:21

Bank Of England Is Expected To Choose Between 50 and 75bp, Ethereum Arouses More And More Discussions As Merge Is Around The Bend

COT Bonds Futures Charts: Speculator bets mostly lower this week

Invest Macro 22.05.2022 12:13

Trade Zone Week Ahead: Real-Time Morning Insight with Andrew Lockwood - 23.05.2022

8 eightcap 22.05.2022 11:26

Watch Andrew Lockwood’s final week on the Eightcap Trade Zone. Start with his live Monday morning Trading Week Ahead, as he delivers his insight on the potential markets to monitor from Indices, Forex, and Commodities and shares possible trade ideas and opportunities for the coming week. JOIN THIS WEDNESDAY’S LIVE MARKET UPDATE | 18th May 2022! Would you like to know more about any of the markets or strategies featured in this month’s Trade Zone? Then Join us this coming Wednesday, at 7PM AEST (10AM BST), as Andrew offers his final mid-week Live Market Update. Watch as he looks back at his analysis from Monday, updates his insight about the moves and developments that have been made, and shares where he foresees the market heading as we approach the weekend. Register Now The Trade Zone is the perfect place to get the help and support you need. At the end of the session, join Andrew and the rest of the Trade Zone community for a live Q&A. Ask all your market, strategy, and trade-related questions to get the answers needed to improve your trade education. Join us in the Trade Zone this week, and as always, please remember to trade safely! The post Trade Zone Week Ahead: Real-Time Morning Insight with Andrew Lockwood appeared first on Eightcap.

Trade Zone Week Ahead: Morning Market Insight, with Stuart McPhee

8 eightcap 24.05.2022 22:00

Welcome trader, property investor, and bestselling author Stuart McPhee as he delivers his first Trading Week Ahead Live of June. Join him this coming Monday, as he starts the week by summarising the state of the markets in Forex, Indices, and Commodities. Then shares his perspective on potential trade ideas and opportunities in play for the coming week. JOIN THIS WEDNESDAY’S LIVE MARKET UPDATE | 1st June 2022! Would like you to receive more support and guidance around your trading activity? Then Join Stuart and the rest of the Trade Zone community this coming Wednesday at 7PM AEST (10AM BST). Watch as he gives you his first mid-week Live Market Update of the Month. Revisiting the weeks earlier trade ideas from Monday’s Trading week Ahead, Stuart updates his insight about the moves and progression that have been made and shares his beliefs in the market as we approach the weekend. Register Now At the end of the session, there will be a live Q&A for you to ask all your market, strategy, and trade-related questions and get the answers needed to unlock the secrets to trading CFDs. The Trade Zone is the perfect place to get the help and support you need to improve your skills and understanding of the financial markets. So join the Eightcap Trade Zone this week as we explore the markets together, and please remember to trade safely! The post Trade Zone Week Ahead: Morning Market Insight, with Stuart McPhee appeared first on Eightcap.

Crypto Focus: Markets Continue to Ride the Downtrend

8 eightcap 27.05.2022 12:26

Another lower week traders as the top 10 and top 25 lost further gains continuing the current downtrend. If this week closes lower, that will set 8 weekly lower bars in a row. We discussed a few coins this week, emphasising continuation patterns that formed during the week. We did see some confirmations yesterday as sellers got things back on their terms in the European session. BTC fought back from lows abut sellers regained control on Friday’s session. AVAX was one of the significant coins hardest hit as it set new monthly lows. One positive is that the top 10 didn’t retest their May lows despite most hitting new weekly lows. As noted, buyers resisted the pressure with ranges and consolidations ruling before Thursday’s push lower. ETH seen to be dropping over merger frustration. Confidence drop? Guggenheim’s Scott Minerd once saw Bitcoin hitting $400,000. Now he says it’s more like $8,000. LUNA 2.0 blockchain was approved this week. After the fundamental weakness that we all saw with our own two eyes, we wish that any readers thinking about this should approach with caution and use strict risk management if they choose to go ahead. Ripple, on the other hand, has seen solid buying as price has declined. Reports say whales have been quietly accumulating the coin during this week’s declines and we can see this on the charts today. XRP is this week’s focus due to this buying. XRP caught our attention as it started edging into the positive while other coins continued to see red. Let’s take a look at the daily chart. Price continues to see support and demand from 0.38. We see two failed lows this month, and while price remains above the latter one, we will continue to look at it as a new HL. Price sits in a descending triangle pattern. A break higher, and this could be a new leg higher in the making. A break lower and we will look for the current downtrend to continue. The post Crypto Focus: Markets Continue to Ride the Downtrend appeared first on Eightcap.

COT Week 21 Charts: Energy Speculator Positions Mixed

Invest Macro 28.05.2022 19:32

COT Week 21 Charts: Soft Commodities Speculator bets mostly lower led by Corn & Soybean Oil

Invest Macro 28.05.2022 20:00

COT Week 21 Charts: Bonds Speculator bets mostly lower this week

Invest Macro 28.05.2022 20:32

COT Metals Speculators raise bets for Copper and Gold after multi-week slides

Invest Macro 28.05.2022 21:00

Currency Speculators reboot their Euro bullish bets to a 6-Week High

Invest Macro 28.05.2022 21:32

Trade Zone Week Ahead: Morning Market Insight, with Stuart McPhee - 02.06.2022

8 eightcap 02.06.2022 01:00

Join trader, property investor, and bestselling author Stuart McPhee as he delivers his first Trading Week Ahead Live of June. Watch him as he starts off the week by summarising the state of the markets in Forex, Indices, and Commodities. Then prepare yourself as he shares potential trade ideas and opportunities in play for the coming week. JOIN THIS WEDNESDAY’S LIVE MARKET UPDATE | 8th June 2022! Would you like help to understand the reasons behind the moves made in this week’s markets? Join Stuart and the rest of the Trade Zone community on Wednesday 8th June, at 7PM AEST (10AM BST). Watch as he gives you his first mid-week Live Market Update of the Month. Revisiting the week’s earlier trade ideas from Monday’s Trading week Ahead, Stuart updates his insight, breaking down the developments and moves made, and predicts what may happen as the weekend approaches. Register Now At the end of the session, there will be an opportunity to direct all your market, strategy, and trade-related questions to the expert in a live Q&A. Get the answers needed to trade CFDs. The Trade Zone is the perfect place to get the help and support you need to improve your skills and understanding of the financial markets. So come join Eightcap and Stuart McPhee this week on the Trade Zone as we explore the markets together – Please remember to trade safely! The post Trade Zone Week Ahead: Morning Market Insight, with Stuart McPhee appeared first on Eightcap.

The Swing Overview – Week 20 2022

Purple Trading 02.06.2022 16:36

The Swing Overview – Week 20 The markets remain volatile and fragile, as shown by the VIX fear index, which has again surpassed the level 30 points. However, equity indices are at interesting supports and there could be some short-term recovery. The euro has bounced off its support in anticipation of tighter monetary policy and the gold is holding its price tag above $1,800 per troy ounce. Is the gold back in investors' favor again? Macroeconomic data The week started with a set of worse data from the Chinese economy, which showed that industrial production contracted by 2.9% year-on-year basis and the retail sales fell by 11.1%. The data shows the latest measures for the country's current COVID-19 outbreak are taking a toll on the economy. To support the slowing economy, China cut its benchmark interest rate by 0.15% on Friday morning, more than analysts expected. While this will not be enough to stave off current downside risks, markets may respond to expectation of more easing in the future. On a positive note, data from the US showed retail sales rose by 0.9% in April and industrial production rose by 1.1% in April. Inflation data in Europe was important. It showed that inflation in the euro area slowed down a little, reaching 7.4% in April compared to 7.5% in March. In Canada, on the other hand, the inflation continued to rise, reaching 6.8% (6.7% in March) and in the UK inflation was 9% in April (7% in the previous month). Several factors are contributing to the higher inflation figures: the ongoing war in Ukraine, problems in logistics chains and the effects of the lockdown in China. Concerns about the impact of higher inflation are showing up in the bond market. The benchmark 10-year US Treasury yield has come down from the 3.2% it reached on 9 May and is currently at 2.8%. This means that demand for bonds is rising and they are once again becoming an asset for times of uncertainty. Figure 1: US 10-year bond yields and USD index on a daily chart Equity indices on supports Global equities fell significantly in the past week, reaching significant price supports. Thus, there could be some form of short-term bounce. Although a cautious rally began on Thursday, which was then boosted by China's decision to cut interest rates in the early hours of Friday, there is still plenty of fear among investors and according to Louis Dudley of Federated Hermes, cash holdings have reached its highest level since September 2001, suggesting strong bearish sentiment. Supply chain problems have been highlighted by companies such as Cisco Systems, which has warned of persistent parts shortages. That knocked its shares down by 13.7%. The drop made it the latest big-stock company to post its biggest decline in more than a decade last week. The main risks that continue to cause volatility and great uncertainty are thus leading investors to buy "safe" assets such as the US bonds and the Swiss franc. Figure 2: The SP 500 on H4 and D1 chart From a technical analysis perspective, the US SP 500 index continues to move in a downtrend as the market has formed a lower low while being below both the SMA 100 and EMA 50 moving averages on the H4 and daily charts. The nearest resistance is 4,080 - 4,100. The next resistance is at 4,140 and especially 4,293 - 4,300. Support is at 3,860 - 3,900 level. German DAX index The index continues to move in a downtrend along with the major world indices. The price has reached the support which is at 13,680 – 13,700 and the moving average EMA 50 on the H4 chart is above the SMA 100. This could indicate a short-term signal for some upward correction. However, the main trend according to the daily chart is still downwards. The nearest resistance is at 14,260 - 14,330 level. Figure 3: German DAX index on H4 and daily chart The euro has bounced off its support The EUR/USD currency pair benefited last week from the US dollar moving away from its 20-year highs while on the euro, investors are expecting a tightening economy and a rise in interest rates, which the ECB has not risen yet as one of the few banks. Figure 4: The EURUSD on H4 and daily chart Significant support is at the price around 1.0350 - 1.040. Current resistance is at 1.650 - 1.700. The Gold in investors' attention again The gold has underperformed over the past month, falling by 10% since April when the price reached USD 2,000 per ounce. But there is now strong risk aversion in the markets, as indicated by the stock markets, which have fallen. The gold, on the other hand, has started to rise. Inflation fears are a possible reason, and investors have begun to accumulate the gold for protection against rising prices. The second reason is that the gold is inversely correlated with the US dollar. The dollar has come down from its 20-year highs, which has allowed the gold to bounce off its support. Figure 5: The gold on H4 and daily chart The first resistance is at $1,860 per ounce. The support is at $1,830 - $1,840 per ounce. The next support is then at $1,805 - $1,807 and especially at $1,800 per ounce.

Why do we voluntarily disclose our clients' loss ratios?

Purple Trading 03.06.2022 09:12

Why do we voluntarily disclose our clients' loss ratios? Why rather click on an ad from a brokerage firm that states that 70% of their clients' accounts are loss-making than an ad from a broker that does not disclose this statistic at all? Come with us to delve into the ins and outs of broker licensing and learn what protections you are legally entitled to as a client. Broker's licence The operation of a brokerage company involves many minor acts anchored in legislation. From the operation of the broker as a firm with employees; arranging the opening of client accounts to handling client deposits and managing the online platform through which clients trade. For all of this, a broker needs a license. While this can be issued by almost any state authority, licences of some states are more desirable than that of others. And that is due to variety of reasons. Licenses issued in so-called offshore states allow brokers to provide their clients with very attractive trading conditions. For example, the financial leverage that allows a client to multiply his or her trading position and with it also potential earnings (as well as losses) can often go as high as 1:1000 for offshore licenses. However, when it comes to client protection, offshore licenses fall somewhat short. Client protection takes many forms and one of them is the wording of the mentioned disclaimer. Thus, if you see a disclaimer below the image of an advertisement that does not state the percentage of loss but only somewhat vaguely warns of the potential risk, it is very likely that the broker to whom the advertisement belongs has an offshore license. Image: Purple Trading banner ad (see disclaimer below the button) What is a disclaimer The short phrase "XY% of client accounts lose money" and its other small permutations, which you can see for example under our online advertisements, are part of the so-called disclaimer. The disclaimer takes many forms, from a single sentence under a banner ad on Facebook to a multi-paragraph colossus in the footer of the broker's website. The purpose of the disclaimer is simple - to highlight, to those interested in trading on financial markets, the potential risks of this activity and to disclaim broker’s responsibility for their client’s eventual failure. However, the overall message of the disclaimer might be written differently. Because sometimes we see loss percentages under the advertisement of Broker A, while Broker B's disclaimer merely tells us that trading is risky. No percentage, nothing more. Image: Sample of a shorter disclaimer on the broker's page Offshore vs EU license The European Union's legal environment is characterized by a much stricter regulatory approach. This applies to the control of pharmaceuticals, and foodstuffs, but also, for example, to the control of brokerage companies. This sector is dealt with by ESMA (European Securities and Markets Authority), to which the regulators of all countries within the EU have to answer (including the regulator of Purple Trading, the Cypriot CySEC). It is ESMA that takes it upon itself to protect consumers (in this case, investors and retail traders in the financial markets). And it does so in all sorts of ways. The aforementioned client account loss ratios on brokers' marketing materials are one of them. Other ESMA protections include: Reduced financial leverage Financial leverage is the ratio of the amount of capital a trader puts into an account to the funds provided by the broker. In simple terms, it is essentially borrowed capital from the broker, which is not reflected in the balance of money in your account, but allows you to trade a greater volume of transactions than you could with your own money. More experienced traders can use leverage to increase their profits many times over. However, as well as profits, leverage also multiplies losses, so less-experienced traders should be wary of using leverage generously. That's also why ESMA capped leverage limit for retail clients at 1:30 in 2018, and higher leverage (up to 1:400) can only be provided by brokers to clients who have met a number of strict criteria to qualify as a so-called Professional Client. Protection against negative balance A key aspect of client protection. If a client's trade that he had "leveraged" fails and the multiplied loss puts him in the red, the broker will pay the entire amount that is "in the red" from his pocket. Thus, the client can never lose more money than he has deposited in his account and consequently become a debtor. Negative balance protection is compulsory for all brokers operating in the EU. It is not compulsory for offshore brokers, which, combined with the high leverage offered there, can lead to very unfortunate situations. Segregation of client deposits Forex and online trading, in general, has come a long way since its beginning in 2008. Especially in the early days, the online trading environment was highly unregulated and it was not uncommon for brokers to use capital from client deposits to fund their operations. More than that, there were also cases where the client’s capital was outright misused to enrich a select few. Brokers operating in the EU are obliged to secure clients’ funds in many ways. One is depositing client capital in accounts segregated from the capital brokers use to finance their operations. What if the broker fails to provide his clients with these guarantees? Brokers subject to such strict regulatory authorities as CySEC (cypriot based regulator under ESMA) must undergo regular audits. As part of these audits, the regulator monitors whether all the measures resulting from the licence granted by the regulator are being complied with. Should this not be the case, the broker is usually subject to a hefty fine and often even the suspension of its licence. This means that broker cannot really afford not to comply with the client protection principles of the EU regulatory environment. Conclusion Voluntary disclosure of client account loss rates under broker advertisements may seem odd. However, it is a positive signal that lets you know that the broker in question is highly regulated. Therefore, if you choose to trade with them, you are protected by a number of legislative regulations that the broker will not dare to violate. See which EU broker has the best disclaimer number

Crypto Focus: А Stable Week of the Crypto Market

8 eightcap 03.06.2022 10:37

So far, it’s been another week of what could have been. We saw solid gains on most of the top 10 turn into heavy selling that retraced most of the move. ETH, for instance, lost 11% of gains by Friday’s session. BTC 6.66% while coins like AVAX dipped into the red. BNB and SOL also struggled to find buyer demand tracking lower most of the week. XRP, like Bitcoin, saw plenty of buyer demand throughout the week but failed to hold gains late in the week, trimming gains into Friday. ADA bounced back this week, and it was nice to see the coin trading up to 25% higher before the fade set in. Bitcoin started the week below 30K. This set off a few alarm bells, but those worries subsided after the market leader moved back above 30k. Late week news hit that BTC mining has been banned in New York, and miners are reported to have been offloading their holdings. Ore worry hit the stable coin markets as DEI lost its peg, falling below 0.4. The stable coin issues could continue to undercut confidence in the crypto market. It was only a few weeks ago we saw the utter carnage that UST and Luna caused. Quite a few of the top ten look to be threatening at new pushes lower late into the week, but sellers have tried before to beat levels before being rejected. This week will look at the top 10 index. We can see that price overall remains in a range. The levels we want to see hold are 13,034 and 12,670. Any breaks below 12,670 signals the downtrend is back on. If we can see a close above 13,660, this could suggest buyers are back in control of short term momentum. The post Crypto Focus: А Stable Week of the Crypto Market appeared first on Eightcap.

COT Week 22 Charts: Energy Speculator Positions Mixed led by Heating Oil, Gasoline

Invest Macro 04.06.2022 21:33

By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday May 31st and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. Energy market speculator bets were mixed this week as three out of the six energy markets we cover had higher positioning this week while three markets also had lower contracts. Leading the gains for energy were Heating Oil (6,319 contracts), Gasoline (1,265 contracts) and Natural Gas (1,202 contracts). Meanwhile, leading the declines in speculator bets this week were WTI Crude Oil (-1,785 contracts) and Brent Crude Oil (-1,583 contracts) with Bloomberg Commodity Index (-1,048 contracts) also registering lower bets on the week. Strength scores (3-Year range of Speculator positions, from 0 to 100 where above 80 is extreme bullish and below 20 is extreme bearish) show that the Bloomberg Commodity Index is above its midpoint for the past 3 years while all the other markets are below the 50 percent level. Strength score trends (or move index, that show 6-week changes in strength scores) shows that heating oil, natural gas and WTI crude have had rising scores over the past six weeks. Data Snapshot of Commodity Market Traders | Columns Legend May-31-2022 OI OI-Index Spec-Net Spec-Index Com-Net COM-Index Smalls-Net Smalls-Index WTI Crude 1,787,928 9 332,976 10 -373,761 91 40,785 72 Gold 513,722 18 172,589 5 -200,056 95 27,467 32 Silver 147,301 14 13,997 15 -23,861 99 9,864 6 Copper 189,923 19 -18,025 29 15,425 70 2,600 40 Palladium 6,538 1 -3,133 4 3,221 95 -88 39 Platinum 67,964 35 2,363 7 -6,501 96 4,138 20 Natural Gas 1,115,815 7 -110,368 45 59,679 50 50,689 100 Brent 181,699 25 -40,872 43 38,941 58 1,931 35 Heating Oil 248,966 15 121 43 -17,967 52 17,846 60 Soybeans 753,373 34 186,078 71 -158,757 34 -27,321 25 Corn 1,564,217 32 404,200 82 -353,348 22 -50,852 14 Coffee 214,170 8 43,015 76 -45,757 28 2,742 17 Sugar 848,463 11 201,680 78 -240,752 23 39,072 56 Wheat 331,136 11 22,309 48 -18,647 33 -3,662 91 WTI Crude Oil Futures: The WTI Crude Oil Futures large speculator standing this week recorded a net position of 332,976 contracts in the data reported through Tuesday. This was a weekly fall of -1,785 contracts from the previous week which had a total of 334,761 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 9.9 percent. The commercials are Bullish-Extreme with a score of 91.0 percent and the small traders (not shown in chart) are Bullish with a score of 72.5 percent. WTI Crude Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 23.6 34.8 5.0 – Percent of Open Interest Shorts: 5.0 55.7 2.7 – Net Position: 332,976 -373,761 40,785 – Gross Longs: 421,683 622,867 89,200 – Gross Shorts: 88,707 996,628 48,415 – Long to Short Ratio: 4.8 to 1 0.6 to 1 1.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 9.9 91.0 72.5 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 8.9 -8.7 -3.9 Brent Crude Oil Futures: The Brent Crude Oil Futures large speculator standing this week recorded a net position of -40,872 contracts in the data reported through Tuesday. This was a weekly lowering of -1,583 contracts from the previous week which had a total of -39,289 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 42.6 percent. The commercials are Bullish with a score of 58.0 percent and the small traders (not shown in chart) are Bearish with a score of 35.3 percent. Brent Crude Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 14.7 54.0 4.2 – Percent of Open Interest Shorts: 37.2 32.6 3.2 – Net Position: -40,872 38,941 1,931 – Gross Longs: 26,712 98,147 7,700 – Gross Shorts: 67,584 59,206 5,769 – Long to Short Ratio: 0.4 to 1 1.7 to 1 1.3 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 42.6 58.0 35.3 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -1.3 2.1 -6.9 Natural Gas Futures: The Natural Gas Futures large speculator standing this week recorded a net position of -110,368 contracts in the data reported through Tuesday. This was a weekly gain of 1,202 contracts from the previous week which had a total of -111,570 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 45.5 percent. The commercials are Bearish with a score of 49.6 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 100.0 percent. Natural Gas Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 20.5 37.4 6.8 – Percent of Open Interest Shorts: 30.4 32.0 2.3 – Net Position: -110,368 59,679 50,689 – Gross Longs: 228,487 417,276 75,815 – Gross Shorts: 338,855 357,597 25,126 – Long to Short Ratio: 0.7 to 1 1.2 to 1 3.0 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 45.5 49.6 100.0 – Strength Index Reading (3 Year Range): Bearish Bearish Bullish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 5.9 -7.1 6.6 Gasoline Blendstock Futures: The Gasoline Blendstock Futures large speculator standing this week recorded a net position of 33,690 contracts in the data reported through Tuesday. This was a weekly advance of 1,265 contracts from the previous week which had a total of 32,425 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 4.4 percent. The commercials are Bullish-Extreme with a score of 91.0 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 94.9 percent. Nasdaq Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 24.7 53.9 7.7 – Percent of Open Interest Shorts: 13.8 68.9 3.7 – Net Position: 33,690 -46,032 12,342 – Gross Longs: 76,089 165,784 23,735 – Gross Shorts: 42,399 211,816 11,393 – Long to Short Ratio: 1.8 to 1 0.8 to 1 2.1 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 4.4 91.0 94.9 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -9.0 4.9 26.7 #2 Heating Oil NY-Harbor Futures: The #2 Heating Oil NY-Harbor Futures large speculator standing this week recorded a net position of 121 contracts in the data reported through Tuesday. This was a weekly advance of 6,319 contracts from the previous week which had a total of -6,198 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 42.6 percent. The commercials are Bullish with a score of 52.1 percent and the small traders (not shown in chart) are Bullish with a score of 60.2 percent. Heating Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 17.4 49.7 16.7 – Percent of Open Interest Shorts: 17.4 56.9 9.5 – Net Position: 121 -17,967 17,846 – Gross Longs: 43,360 123,782 41,618 – Gross Shorts: 43,239 141,749 23,772 – Long to Short Ratio: 1.0 to 1 0.9 to 1 1.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 42.6 52.1 60.2 – Strength Index Reading (3 Year Range): Bearish Bullish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 13.5 -7.4 -7.8 Bloomberg Commodity Index Futures: The Bloomberg Commodity Index Futures large speculator standing this week recorded a net position of -10,561 contracts in the data reported through Tuesday. This was a weekly reduction of -1,048 contracts from the previous week which had a total of -9,513 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 67.1 percent. The commercials are Bearish with a score of 31.9 percent and the small traders (not shown in chart) are Bearish with a score of 38.5 percent. Bloomberg Index Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 63.6 28.5 1.9 – Percent of Open Interest Shorts: 93.7 0.0 0.4 – Net Position: -10,561 10,027 534 – Gross Longs: 22,382 10,027 679 – Gross Shorts: 32,943 0 145 – Long to Short Ratio: 0.7 to 1 inf to 1 4.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 67.1 31.9 38.5 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -6.8 7.7 -7.6 Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.

COT Week 22 Charts: Soft Commodities Speculators Positions mostly lower led by Corn & Sugar

Invest Macro 04.06.2022 21:40

COT Week 22 Charts: Bonds Speculator positions lower across the board

Invest Macro 04.06.2022 21:50

COT Metals Speculators continue to decrease their Gold & Silver bullish bets

Invest Macro 04.06.2022 22:22

Concealing Volatility

David Merkel 05.06.2022 05:24

Photo Credit: Marco Verch Professional Photographer || With some private investments, you can’t tell what the value truly is. Third party professional help occasionally assists dishonesty Part of my career was based on concealing volatility. I sold Guaranteed Investment Contracts. I helped design and manage several different types of stable value funds. Life insurance contracts get valued at their book value, regardless of what the replacement cost of an equivalent contract would be like presently. Anytime an investment pool with no current market price has a book value above the underlying value of the investments that it holds, there is risk to those holding the investment pool. The amount of risk can be small yet significant with some types of money market funds. It can be considerably larger in certain types of pooled investments like: Various types of business partnerships, including Private REITs, Real Estate Partnerships, Private Equity, etc.Illiquid debts, such as private credit funds, and notes with limited marketability, whether structured or not.Odd mutual funds that limit withdrawals because they offer “guarantees” of a sort. That applies to Variable Annuities with riders offering guaranteed benefits, if the life insurer becomes insolvent.One-off investment liquid partnerships that are secretive and unusual, like Madoff. The underlying may be illiquid, but the accounting may be fraudulent. Or, the accounting may be fine, but the assets listed are not what is in custody. (With small funds, analyze the auditor, trustees, and custodian.)The value of a company touted by a SPAC promoter may be worth considerably less than what is illustrated.Any investment in public equity or debt pool where the positions are concentrated, and they own a high percentage of the float, or a high amount of the securities relative to the amount that gets traded in an average month. Think of Third Avenue Focused Credit, or Archegos. I have consistently encouraged readers to “look through” their pooled investments, and consider what the underlying is worth. If you only have a vague idea of what the underlying investments are, look at their public equivalents. A rising tide lifts almost all boats, and a falling tide does the opposite. There is a conceit within private equity, private credit and private real estate funds that they are less risky; there is no volatility, because we cannot produce an NAV. They have the same volatility as the publicly traded funds, but the volatility is concealed. If trouble hits the public markets 50-75% of the way through the life of a private fund, it will have difficulty selling their investments at levels anywhere near the book value previously claimed by the sponsors. With consent of the limited partners, perhaps they extend the life of the fund to try to recover value, but that also imposes an opportunity cost on holders who were expecting proceeds from the fund on schedule. Remember as well that in a scenario like 1929-1932, private funds will be wiped out with similarly leveraged private funds. Aleph Blog has consistently warned about the possibility of depression, plague, war, famine, bad monetary policy and aggressive socialism. We have gotten plague, war, and bad monetary policy. Famine in a sense may come from the Ukraine war and trade restrictions on Russia, at least for the African countries that buy from them. Thus I encourage readers to avoid private investments that promise no volatility, like the stupid ads for Equity Multiple that run on Bloomberg Radio. All investments involve some type of risk. Just because you can’t or don’t measure the risk doesn’t mean that there is no risk. Don’t listen to investment sales pitches which tell you to avoid the volatility of the public equity and debt markets, when they are taking the exact same risks in the private market, and they cannot or will not measure the risks for you, no matter how thick or thin the “disclosure” document is. There is no significant advantage in the private market over the public market. Indeed, the reverse may be true. (Yes, I meant all of the ambiguity there.) Look to the underlying, and invest accordingly. Look at fees, and try to minimize them. Prize transparency, because it reduces risk in the long run. Those who are honest are transparent.

Trade Zone Week Ahead: Morning Market Insight, with Stuart McPhee - 06.06.2022

8 eightcap 05.06.2022 20:00

Join trader, property investor, and bestselling author Stuart McPhee as he delivers his first Trading Week Ahead Live of June. Watch him as he starts off the week by summarising the state of the markets in Forex, Indices, and Commodities. Then prepare yourself as he shares potential trade ideas and opportunities in play for the coming week. JOIN THIS WEDNESDAY’S LIVE MARKET UPDATE | 8th June 2022! Would you like help to understand the reasons behind the moves made in this week’s markets? Join Stuart and the rest of the Trade Zone community on Wednesday 8th June, at 7PM AEST (10AM BST). Watch as he gives you his first mid-week Live Market Update of the Month. Revisiting the week’s earlier trade ideas from Monday’s Trading week Ahead, Stuart updates his insight, breaking down the developments and moves made, and predicts what may happen as the weekend approaches. Register Now At the end of the session, there will be an opportunity to direct all your market, strategy, and trade-related questions to the expert in a live Q&A. Get the answers needed to trade CFDs. The Trade Zone is the perfect place to get the help and support you need to improve your skills and understanding of the financial markets. So come join Eightcap and Stuart McPhee this week on the Trade Zone as we explore the markets together – Please remember to trade safely! The post Trade Zone Week Ahead: Morning Market Insight, with Stuart McPhee appeared first on Eightcap.

The EUR/USD Pair Maintains The Bullish Sentiment

Euro Currency Speculators continue to boost their bullish bets for 4th Week

Invest Macro 04.06.2022 22:45

Now with Purple Trading: VIX volatility index as a tradable CFD futures symbol

Purple Trading 06.06.2022 08:55

Now with Purple Trading: VIX volatility index as a tradable CFD futures symbol The volatility or market uncertainty index (VIX) is an invaluable tool used by many when analyzing markets. However, its trading also holds great potential. That's why we have decided to include it alongside our CFD futures symbols. Read this article and find out how and when to trade VIX as an CFD futures symbol. What is the VIX index and what does it indicate The Volatility Index (VIX), as the name suggests, is an index that is used to measure the level of market nervousness, uncertainty, and volatility. For these reasons, it is also sometimes called a fear gauge or fear index. The higher the VIX index values get, the greater the uncertainty in the markets and vice versa. However, it is very important to remember that the VIX index is a forward-looking index, so it shows the expected, not actual, market uncertainty. How the VIX index is calculated VIX index measures 30 days of expected volatility of S&P 500 index, it does so by using S&P 500 options (SPX) listed on CBOE exchange as an input. VIX takes together all SPX call and put options and compares the changing demand and price between them. Relationship between the VIX index and the markets The VIX index generally tracks the S&P 500 index in an inverse manner. That is, if the stock markets (S&P 500) are turbulent and investor nervousness/fear increases, the same can be observed for the VIX index. On the other hand, if stock prices are on the rise, the VIX index generally declines or advances sideways. Meet: VIX.f - tradable CFD futures instrument Similar to other indices, the VIX is not tradable on its own and needs an investment vehicle to go with it. And that is what VIX.f is - a tradable continuous CFD futures instrument that behaves just like our other continuous CFD futures products. Its price is based on the underlying asset, which in this case is a specific VIX futures contract. Continuous in this case means that before each futures contract expires, there is an automatic rollover of the position. This will result in selling of old contracts and the buying of additional nearest futures contracts. It is also important to note that since this is a CFD instrument, you don’t become the owner of VIX.f when trading it. You only speculate on its price. How to trade VIX.f futures symbol VIX.f CFD futures is a very versatile symbol that can help traders and investors in several different situations: Buy/long in case of an expected increase in volatility or turbulence in the markets Risk management or hedging vehicle for investors - through the inverse relationship of the VIX and the S&P 500 Option to open a short position in case of expecting a positive economic development in markets Overall, it should be noted that VIX.f futures is not recommended to be traded in a buy and hold manner, but rather as a short-term investment.Symbol specification: Symbol specification Name in Platform VIX.f Leverage ESMA 1:10 Leverage PRO 1:10 Trade hours (GMT+3) Monday to Friday 1:00 – 24:00 i Check out the current trading hours and hours changes Commission 10 USD/lot Currency USD Tick size 0.01 Tick value 0.1 Volume step 1 Min trade 1 Max trade 50

Crypto News: Has Cardano started up a new leg higher

8 eightcap 06.06.2022 10:11

Happy Monday. After a flat weekend, buyers have defiantly hit the new week with a lot more energy. After a hesitant start, buyers came back into the crypto markets during today’s Asian session. In today’s European and London session we’re still seeing strong interest, with many of the top 10 continuing to hit solid gains. Our focus today is on Cardano. Has today’s rally started to confirm a new leg high? What has our interest is the pattern before today’s action. We can see a clear LL that failed to hold and a new HL in May. We did see one attempt by buyers fail after they tested .6850. After consolidation, today’s move is a breakout with support at .5460 and minor resistance at .6040. We want to see price close above resistance today. Looking forward, we want to see how buyers handle their latest move back into the last supply area. A break above or firm close, close to .68 would be a good sign buyers are in control of momentum. A close below 0.600 would worry, in our opinion. Thanks for stopping by, and please check out or market update below the chart. Cardano D1 Chart Cardano Update Video (Powered by TradingView) The post Crypto News: Has Cardano started up a new leg higher appeared first on Eightcap.

The Swing Overview - Week 22 2022

Purple Trading 07.06.2022 13:59

The Swing Overview - Week 22 Equity indices continued to rise for a second week despite rising inflation and sanctions against Russia. Economic data indicate optimistic consumer expectations and the easing of the Covid-19 measures in China also brought some relief to the markets. The Bank of Canada raised its policy rate to 1.5%. The Eurozone inflation hit a new record of 8.1%, giving further fuel to the ECB to raise interest rates, which is supporting the euro to strengthen. Macroeconomic data The US consumer confidence in economic growth for May came in at 106.4. The market was expecting 103.9. This optimism points to an expected increase in consumer spendings, which is a positive development. The optimism was also confirmed by data from the manufacturing sector. The ISM PMI index in manufacturing rose by 56.1 in May, an improvement on the April reading of 55.4. The manufacturing sector is therefore expecting further expansion. On the other hand, data from the labour market were disappointing. The ADP Non Farm Employment indicator (private sector job growth) was well below expectations as the economy created only 128k new jobs in May (the market was expecting 300k new jobs). The unemployment claims data held at the standard 200k level. However, the crucial indicator from the labour market will be Friday's NFP data. Quarterly wage growth for 1Q 2022 was 12.6% (previous quarter was 3.9%). This figure is a leading indicator on inflation. Faster inflation growth could lead to a higher-than-expected 0.50% rate hike at the Fed's June meeting. The US 10-year Treasury yields have rebounded from 2.6% and have started to rise again. They are currently around 2.9%. However, the US Dollar Index has not yet reacted to the rise in yields. The reason is that the euro, which has appreciated significantly in recent days, has the largest weight in the USD index. Figure 1: US 10-year bond yields and USD index on the daily chart The SP 500 Index The SP 500 index has continued to strengthen in recent days. The market seems to be accepting the expected 0.50% rate hike and while economic data points to some slowdown, forward looking consumers‘ and managers’ expectations are optimistic. Figure 2: The SP 500 on H4 and D1 chart The US SP 500 index is approaching a significant resistance level, which is in the 4,197-4,204 range. The next one is at 4,293 - 4,306. The nearest support is at 4 075 - 4 086. German DAX index Figure 3: German DAX index on H4 and daily chart Germany's manufacturing PMI for May came in at 54.8. The previous month it was 54, 6. Thus, managers expect expansion in the manufacturing sector. Surprisingly, German exports rose in April despite the disruption of trade relations with Russia. Exports in Germany grew by 4.4% even though exports to Russia fell by 10%. The positive data has an impact on the DAX index. However, the bulls in DAX may be discouraged by the expected ECB interest rate hike. The DAX has reached resistance in the 14,600 - 14,640 area. The nearest significant support is at 14,300 - 14,330, where the horizontal resistance is coincident with the moving average EMA 50 on the H4 chart. The euro continues to rise Bulls on the euro were supported by inflation data, which reached a record high of 8.1% in the eurozone for the month of May. Inflation increased by 0.8% on a monthly basis compared to April. Information from the manufacturing sector exceeded expectations, with the manufacturing PMI for May coming in at 54.6, indicating optimism in the economy. The ECB will meet on Thursday 9/6/2022 and it might be surprising. While analysts do not expect a rate hike at this meeting, rising inflation may prompt the ECB to act faster. Figure 4: The EUR/USD on H4 and daily chart The EUR/USD currency pair is reacting to the rate hike expectations by gradual strengthening. A resistance is at 1.0780 The nearest support is now at 1.0629 - 1.0640 and then at 1.0540 - 1.0550. The Bank of Canada raised the interest rate The GDP in Canada for Q1 2022 grew by 2.89% year-on-year (3.23% in the previous period). On a month-on-month basis, the GDP grew by 0.7% (0.9% in February). This points to slowing economic growth. Canada's manufacturing PMI for May came in at 56.8 (56.2 in April ), an upbeat development. The Bank of Canada raised its policy rate by 0.50% to 1.5% as expected by analysts. In addition to the rate hike, the Canadian dollar is positively affected by the rise in oil prices as Canada is a major exporter. Figure 5: The USD/CAD on H4 and daily chart The USD/CAD currency pair is currently in a downward movement. The nearest resistance according to the daily chart is 1.2710-1.2730. Support according to the daily chart is in the range of 1.2400-1.2470.

Positions of large speculators according to the COT report as at 31/5/2022

Purple Trading 07.06.2022 15:38

Trade Zone Week Ahead: Morning Market Insight, with Stuart McPhee - 09.06.2022

8 eightcap 09.06.2022 01:30

Join Stuart McPhee, trader, property investor, and bestselling author, as he gives you his Trading Week Ahead Live for the week. Watch him as he starts off the week by summarising the state of the markets in Forex, Indices, and Commodities. Then prepare yourself as he shares potential trade ideas and opportunities in play for the coming week. JOIN THIS WEDNESDAY’S LIVE MARKET UPDATE | 15th June 2022! Are you tired of analysing the market alone? Would you like to know how the market is taking shape this week? Register for Stuart’s mid-week Live Market Update. Join him on Wednesday 15th June, at 7PM AEST (10AM BST) as he looks back at the earlier market activity and opportunities since his Trading week Ahead. Stuart will then break down the developments and moves made and provide further insight on what may happen as the weekend approaches. Register Now At the end of the session, you will have the opportunity to direct all your market, strategy, and trade-related questions to the expert in a live Q&A. Learn what you need to trade CFDs safely. The Trade Zone is the perfect place to get the help and support you need to improve your skills and understanding of the financial markets. So come join Eightcap and Stuart McPhee this week on the Trade Zone as we explore the markets together – Please remember to trade safely! The post Trade Zone Week Ahead: Morning Market Insight, with Stuart McPhee appeared first on Eightcap.

Hedging as an effective form of protection from loss

Purple Trading 09.06.2022 12:19

Hedging as an effective form of protection from loss On the markets, it is used by both professional traders and big players such as banks, investment funds, and others. No wonder, because if you master hedging, it can help you to significantly reduce potential losses and keep you profitable. In this article, we'll show you how to hedge and which instruments are suitable for that. What is hedging? It is a kind of insurance in the form of a trading strategy. It is designed to mitigate potential risks. In hedging, traders (and also financial institutions) hold positions on assets/contracts that have an inverse relationship to each other and thus develop inversely. When one instrument falls, the other rises and vice versa. Benefits There is one significant advantage to being "hedged". Namely, traders, with this form of insurance, are able to reduce the risks on their opened trading positions and thus better respond to adverse market developments that threaten these positions. At the same time, they have the comfort of being able to guess in advance the value of the maximum potential loss in the event that something goes wrong in the markets. Hedging is thus a really important tool in risk management. Disadvantages Hedging is essentially a form of insurance. And as it happens, you have to pay for insurance. The same is true for investing in opposing instruments. By having one investment grow while the other declines, you lose a certain amount of potential profit. A theoretical example of hedging We have a trader who buys stock XY for $1000. He decides to hedge and to do so he chooses to buy a six-month put option for $100 with a strike price of $850. This means that our trader has half a year until the option expires to sell his stock at 850USD in case the market is unfavorable for him). If the share price rises A six-month put option is about to expire and the share price is higher than 850 USD (e.g. 1150 USD). The trader will therefore logically not exercise his option, thus losing 100 USD (the original price of his option). However, by keeping XY stock, which is now worth 1150 USD, his net profit is 1050 USD (1150 - 100). As we wrote above, the hedging in this case reduced the trader’s overall profit, but that is a tax he needs to pay for being “insured”. The following example will show you what would have happened if the trader had not hedged. The share price plunges In an alternate universe, our trader did not do well and the market gave him a slap in the face in the form of a drop in XY's share price to $600. However, our trader has hedged and exercises his still unexpired option. He can then sell his stock at the option price of the announced 850 USD. In this case, his total loss is 250 USD (850 - 600). If we would take a look at our trader in yet another alternative universe where he has not hedged, his loss would be 400 USD (1000 - 600). CFD hedging: the S&P500 and VIX index The current market developments, influenced by high inflation and the war in Ukraine, are not good for the markets. According to the VIX index, nervousness in the markets will continue to rise and stock indices like the SP500 are currently heading in exactly the opposite direction. However, did you know that these 2 mentioned indices can now be traded in Purple Trading to get a rather effective hedging tool? At Purple Trading, traders now have a unique opportunity to hedge using CFD futures contracts. Namely, we are now launching CFD futures symbols in the form of the VIX index and S&P500, which traders can find in their Purple Trading MT4 platforms. Both symbols have a highly inverse relationship with each other, which is why they are widely sought after when it comes to hedging. Chart 1: Six-month S&P500 price trend (note the apparent inverse relationship with the VIX chart below; source: Googlefinance.com) Chart 2: Six-month VIX price trend (note the apparent inverse relationship with the SP500 chart above) Relationship between VIX and S&P500 The VIX index is often called the fear or nervousness index. Its chart indicates the estimated future nervousness in the markets. This manifests itself in the form of volatility, i.e. sharp and seemingly random price fluctuations caused by nervous investors who are buying/selling more than usual. Thus, if the VIX index shows an increase, volatility/nervousness in the markets can be expected to increase. The exact opposite is true for the S&P500. It outright hates volatility and nervousness in the markets and if it is announced, the S&P500 usually starts to fall. This is due to nervous investors withdrawing from the stock markets to seemingly safer havens, which is gold for example. Thus, if the VIX index (hence volatility) rises, the S&P500 falls and vice versa. Effective hedging is one of the reasons why Purple Trading clients are among the most profitable in the EU FAQ

COT Week 23 Charts: Energy Speculator Positions Mixed led by Brent Crude & Heating Oil

Invest Macro 12.06.2022 15:16

By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday June 7th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. Energy market speculator bets were mixed this week as three out of the six energy markets we cover had higher positioning this week while three markets had lower contracts. Leading the gains for energy markets was Brent Crude Oil (4,774 contracts) and Heating Oil (4,765 contracts) with Bloomberg Commodity Index (2,178 contracts) also showing a positive week. Meanwhile, leading the declines in speculator bets this week were WTI Crude Oil (-4,720 contracts) and Natural Gas (-3,974 contracts) with Gasoline (-3,202 contracts) also registering lower bets on the week. Strength scores (3-Year range of Speculator positions, from 0 to 100 where above 80 is extreme bullish and below 20 is extreme bearish) show that the Bloomberg Commodity Index is the highest above its midpoint for the past 3 years while Brent, Heating Oil and Natural Gas are slightly below the 50 percent level. Strength score trends (or move index, that show 6-week changes in strength scores) shows that Heating Oil and the Bloomberg Commodity Index bets have been rising the strongest over the past six weeks while Gasoline is moving the opposite way. Data Snapshot of Commodity Market Traders | Columns Legend Jun-07-2022 OI OI-Index Spec-Net Spec-Index Com-Net COM-Index Smalls-Net Smalls-Index WTI Crude 1,790,618 10 328,256 8 -369,033 93 40,777 72 Gold 494,130 12 175,268 7 -199,886 95 24,618 18 Silver 148,294 15 17,404 5 -27,990 94 10,586 10 Copper 194,187 22 -3,714 40 879 60 2,835 42 Palladium 7,035 3 -3,461 2 3,581 97 -120 37 Platinum 65,295 31 5,933 12 -9,742 92 3,809 15 Natural Gas 1,127,731 10 -114,342 44 66,419 52 47,923 93 Brent 169,802 16 -36,098 51 34,208 50 1,890 35 Heating Oil 261,651 20 4,886 50 -24,428 45 19,542 66 Soybeans 760,444 35 176,644 68 -148,390 39 -28,254 23 Corn 1,557,167 31 391,264 80 -337,137 24 -54,127 12 Coffee 222,583 15 48,767 81 -51,363 23 2,596 16 Sugar 849,814 12 195,403 77 -234,496 24 39,093 56 Wheat 333,705 12 23,881 50 -19,863 31 -4,018 90 WTI Crude Oil Futures: The WTI Crude Oil Futures large speculator standing this week recorded a net position of 328,256 contracts in the data reported through Tuesday. This was a weekly decrease of -4,720 contracts from the previous week which had a total of 332,976 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 8.2 percent. The commercials are Bullish-Extreme with a score of 92.9 percent and the small traders (not shown in chart) are Bullish with a score of 72.5 percent. WTI Crude Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 23.7 34.8 5.2 – Percent of Open Interest Shorts: 5.3 55.4 2.9 – Net Position: 328,256 -369,033 40,777 – Gross Longs: 423,882 622,320 92,501 – Gross Shorts: 95,626 991,353 51,724 – Long to Short Ratio: 4.4 to 1 0.6 to 1 1.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 8.2 92.9 72.5 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 4.3 -4.2 -2.1 Brent Crude Oil Futures: The Brent Crude Oil Futures large speculator standing this week recorded a net position of -36,098 contracts in the data reported through Tuesday. This was a weekly increase of 4,774 contracts from the previous week which had a total of -40,872 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 50.6 percent. The commercials are Bullish with a score of 50.2 percent and the small traders (not shown in chart) are Bearish with a score of 34.8 percent. Brent Crude Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 15.3 51.5 4.4 – Percent of Open Interest Shorts: 36.6 31.4 3.3 – Net Position: -36,098 34,208 1,890 – Gross Longs: 26,009 87,488 7,434 – Gross Shorts: 62,107 53,280 5,544 – Long to Short Ratio: 0.4 to 1 1.6 to 1 1.3 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 50.6 50.2 34.8 – Strength Index Reading (3 Year Range): Bullish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 4.1 -2.3 -14.1 Natural Gas Futures: The Natural Gas Futures large speculator standing this week recorded a net position of -114,342 contracts in the data reported through Tuesday. This was a weekly decrease of -3,974 contracts from the previous week which had a total of -110,368 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 44.3 percent. The commercials are Bullish with a score of 51.8 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 93.5 percent. Natural Gas Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 20.8 37.2 6.8 – Percent of Open Interest Shorts: 31.0 31.3 2.6 – Net Position: -114,342 66,419 47,923 – Gross Longs: 235,073 419,847 76,779 – Gross Shorts: 349,415 353,428 28,856 – Long to Short Ratio: 0.7 to 1 1.2 to 1 2.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 44.3 51.8 93.5 – Strength Index Reading (3 Year Range): Bearish Bullish Bullish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 0.9 -1.6 4.6 Gasoline Blendstock Futures: The Gasoline Blendstock Futures large speculator standing this week recorded a net position of 30,488 contracts in the data reported through Tuesday. This was a weekly decrease of -3,202 contracts from the previous week which had a total of 33,690 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 1.2 percent. The commercials are Bullish-Extreme with a score of 95.2 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 88.5 percent. Nasdaq Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 24.6 52.7 8.0 – Percent of Open Interest Shorts: 14.7 66.2 4.3 – Net Position: 30,488 -41,866 11,378 – Gross Longs: 75,841 162,330 24,623 – Gross Shorts: 45,353 204,196 13,245 – Long to Short Ratio: 1.7 to 1 0.8 to 1 1.9 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 1.2 95.2 88.5 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -8.9 6.4 16.0 #2 Heating Oil NY-Harbor Futures: The #2 Heating Oil NY-Harbor Futures large speculator standing this week recorded a net position of 4,886 contracts in the data reported through Tuesday. This was a weekly rise of 4,765 contracts from the previous week which had a total of 121 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 49.6 percent. The commercials are Bearish with a score of 45.3 percent and the small traders (not shown in chart) are Bullish with a score of 66.1 percent. Heating Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 17.3 49.5 17.5 – Percent of Open Interest Shorts: 15.4 58.9 10.1 – Net Position: 4,886 -24,428 19,542 – Gross Longs: 45,231 129,588 45,902 – Gross Shorts: 40,345 154,016 26,360 – Long to Short Ratio: 1.1 to 1 0.8 to 1 1.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 49.6 45.3 66.1 – Strength Index Reading (3 Year Range): Bearish Bearish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 17.2 -9.7 -9.1 Bloomberg Commodity Index Futures: The Bloomberg Commodity Index Futures large speculator standing this week recorded a net position of -8,383 contracts in the data reported through Tuesday. This was a weekly increase of 2,178 contracts from the previous week which had a total of -10,561 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 75.4 percent. The commercials are Bearish with a score of 23.5 percent and the small traders (not shown in chart) are Bearish with a score of 37.9 percent. Bloomberg Index Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 33.5 62.0 1.5 – Percent of Open Interest Shorts: 45.0 51.3 0.8 – Net Position: -8,383 7,865 518 – Gross Longs: 24,512 45,368 1,126 – Gross Shorts: 32,895 37,503 608 – Long to Short Ratio: 0.7 to 1 1.2 to 1 1.9 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 75.4 23.5 37.9 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 10.8 -10.2 -6.8 Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.

COT Week 23 Charts: Soft Commodities Speculators Positions mostly higher lead by Soybean Meal & Live Cattle

Invest Macro 12.06.2022 15:46

COT Week 23 Charts: Bond Speculator bets mostly falling this week led by 2-Year & 10-Year Bonds

Invest Macro 12.06.2022 16:06

COT Week 23 Charts: Precious Metals Speculator bets mostly higher lead by Copper & Platinum

Invest Macro 12.06.2022 16:16

COT Week 23 Charts: Forex Speculators Positions mostly higher led by Canadian dollar & Swiss franc

Invest Macro 12.06.2022 17:16

Trading Week Ahead Live with Stuart McPhee

8 eightcap 12.06.2022 00:30

Join Stuart McPhee, trader, property investor, and bestselling author, as he gives you his Trading Week Ahead Live for the week. Watch him as he starts off the week by summarising the state of the markets in Forex, Indices, and Commodities. Then prepare yourself as he shares potential trade ideas and opportunities in play for the coming week. JOIN THIS WEDNESDAY’S LIVE MARKET UPDATE | 15th June 2022! Are you tired of analysing the market alone? Would you like to know how the market is taking shape this week? Register for Stuart’s mid-week Live Market Update. Join him on Wednesday 15th June, at 7PM AEST (10AM BST) as he looks back at the earlier market activity and opportunities since his Trading week Ahead. Stuart will then break down the developments and moves made and provide further insight on what may happen as the weekend approaches. Register Now At the end of the session, you will have the opportunity to direct all your market, strategy, and trade-related questions to the expert in a live Q&A. Learn what you need to trade CFDs safely. The Trade Zone is the perfect place to get the help and support you need to improve your skills and understanding of the financial markets. So come join Eightcap and Stuart McPhee this week on the Trade Zone as we explore the markets together – Please remember to trade safely! The post Trading Week Ahead Live with Stuart McPhee appeared first on Eightcap.

Estimating Future Stock Returns, March 2022 Update

David Merkel 14.06.2022 05:51

Image credit: All images belong to Aleph Blog Well, finally the bear market… at 3/31/2002 the S&P 500 was priced to return a trice less than zero in nominal terms. After the pasting the market received today, that figure is 3.57%/year nominal (not adjusted for inflation). You would likely be better off in an ETF of 10-year single-A rated bonds yielding 4.7% — both for safety and return. I will admit that my recent experiment buying TLT has been a flop. I added to the position today. My view is that the long end of the curve is getting resistant to the belly of the curve, and thus the curve is turning into the “cap” formation, where the middle of the curve is higher than the short and long ends. This is a rare situation. Usually, the long end rallies in situations like this. The only situation more rare than this is the “cup” formation where the middle of the curve is lower than the short and long ends. I will have to update my my old post of “Goes Down Double-Speed.” We’ve been through three cycles since then — bear, bull, and now bear again. People get surprised by the ferocity of bear markets, but they shouldn’t be. People get shocked at losing money on paper, and thus the selloffs happen more rapidly. Bull markets face skepticism, and so they are slow. What are the possibilities given where the market is now? When the market is expecting 3.57% nominal, give or take one percent, what tends to happen? Most of the time, growth at these levels for the S&P 500 is pretty poor. That said, market expectations of inflation over the next ten years are well below the 4.7% you can earn on an average 10-year single-A rated corporate bond. Those expectations may be wrong — they usually are, but you can’t tell which way they will be wrong. I am still a believer in deflation, so I think current estimates of inflation are too high. There is too much debt and so monetary policy will have more punch than previously. The FOMC will panic, tighten too much, and crater some area in the financial economy that they care about, and then they will give up again, regardless of how high inflation is. They care more about avoiding a depression than inflation. They will even resume QE with inflation running hot if they are worried about the financial sector. The Fed cares about things in this order: Preserve their own necksPreserve the banks, and things like themFight inflationFund the US GovernmentPromote nominal GDP growth, though they will call it reducing labor unemployment. The Fed really doesn’t care about labor unemployment, or inequality. They are a bourgeois institution that cares about themselves and their patrons — those who are rich. I know this post is “all over the map.” My apologies. That said, we in a very unusual situation featuring high debt, high current inflation (that won’t last), war, plague, and supply-chain issues. How this exactly works out is a mystery, especially to me — but I am giving you my best guess here, for whatever it is worth. It’s worth than double what you paid for it! Full disclosure: long TLT for clients and me

Crypto News: Cardano focus after support bounce

8 eightcap 14.06.2022 08:44

Well, traders, what an insane few days we have seen on the crypto markets. Some of the falls have just about been doomsday stuff. ETH, for instance, broke below 1100 today, and Bitcoin briefly moved below 21K. Solana’s low retraced the entire 2020/21 run before buyers jumped back in today. So let’s move to today’s focus Cardano. The late May and early June price looked good, moving back above .66 before the latest bear raids kicked off. Five straight sessions saw 24% taken off the price and today looked no different as prices raced a further 9% lower. Buyers emerged into today’s Asian session and, at this stage, have pulled 17% back since today’s low. This caught our attention from where the turnaround occurred, and it lined up very nicely with .4450 support. This could be a good sign as price continues to sit in its range and is not in a solid downtrend like many other top 10 coins. If buyers can hold out today and maintain a close above support, this could be good signs that buyers are trying to regain control. A close below support, and we will be back on the bear front. If buyers can hold support and a decent push higher, we will look for broader buying to show overall demand, and we will then look to see if buyers can break the top of the range to start suggesting that a new move higher could be developing. Cardano D1 Chart The post Crypto News: Cardano focus after support bounce appeared first on Eightcap.

The movie that changed futures trading once and for all

Purple Trading 14.06.2022 08:01

The movie that changed futures trading once and for all There is more than dozen of films about financial markets. However, there is only one that had such an impact that it led to a legislative change in the commodity futures market. Which movie are we talking about and what changes it introduce in regards to commodity trading? Read on! Holywood’s fascination with financial markets Holywood is no stranger to depicting the world of financial markets. The subject became particularly attractive in the 1980s, when it became clear that market capitalism was more viable economic model than central planning of the Eastern Bloc, resulting in many films set in the stock market environment, majority of which focusing on Wall Street. However, only one of these films has managed to leave a mark in the memory of viewers as well as in law textbooks. Trading Places - a probe into the world of commodity trading Brothers Mortimer and Randolp Duke are bored billionaires who own a commodities trading brokerage firm. One day, as a part of somewhat cynical bet, they decide to swap the lives of a young and promising businessman, Louis Winthorpe III (Dan Aykroyd), and a street hustler, Billy Ray Valentine (Eddie Murphy). They want to crush the dreams of the former while helping the latter to become familiar in the world of financial markets. From today's perspective, the film is a unique probe into the workings of the financial markets before they were heavily computerised. In addition to the brilliant scenes in which are the Duke brothers explaining to Billy Valentine how commodities trading works, we also get a glimpse behind the scenes at the New York Board of Trade, where commodities are traded (climactic trading scenes were actually filmed there). The bulk of the plot and the main storyline then revolves around the trading of Frozen Concentrated Orange Juice (FCOJ), specifically the futures contracts of this commodity. Eddie Murphy rule This rule, officially titled "Section 136 of the Dodd-Frank Wall Street Transparency and Accountability Reform and Consumer Protection Act, under Section 746" (but commonly referred to as "the Eddie Murphy rule"), prohibits the misuse of internal government information for the purpose of trading in the commodities markets. No one likes spoilers, so if you haven't seen this movie, we won't give away the plot and the denouement of the final scene of the entire movie. We'll just mention that shorting of FCOJ futures plays an important role here. In fact, so important, that this scene is reportedly often reference by traders on the New York Stock Exchange. Figure 1: The final scene of the film that initiated the inception of "Eddie Murphy rule" (source IMDb.com) Trading FCOJ futures today Although nowadays you don't see crowded rooms full of white collar men and women trying to buy low and sell high, FCOJ futures trading still exists. The only main difference is that rooms and phones have been replaced by computer screens and cubicles. Also, virtually anyone can trade today. If you are interested in trying out CFD trading of FCOJ futures, at Purple Trading we have recently introduced this instrument to our trader platforms. Just like our heroes of Trading Places, you can short (and long) and potentialy profit from both favourable and unfavourable market situations. The only difference is that you won't be able to use government information to do so, because Eddie Murphy Rule wouldn't allow you to.

Crypto News: Bitcoin stalling after yesterday’s recovery?

8 eightcap 16.06.2022 09:25

After a long period of heavy selling, crypto markets saw a small respite yesterday. The Fed raised rates higher than expected yesterday and advised they will do whatever is required to get inflation back around the 2% level. Whether it was a point of oversold value or market confidence in the Fed’s message of action, the result was a recovery in risk markets. From FX to indexes and crypto buyers pushed back, posting higher closes after days of selling. This morning the script continued on from yesterday as buyers continued to hold sway, but this changed into the LON session as a wave of new sellers moved in, knocking the wind out of buyer sails. Bitcoin is the focus of today’s report. After 8 hours of buying, sellers stepped in, re-holding 22,670 resistance. Since that point, we are now seeing three straight bars lower. From here, the 4H show’s a V pattern which could become a reversal but the trends are definitely lower at the moment, and price failed to break 22,670 resistance. We see two paths from this point. One, buyers manage to break resistance extending the current recovery. Two, we see the current selling expand with a new move back to support. If we see a break of support, this could set up a new extension of the current downtrend. Bitcoin 4H chart The post Crypto News: Bitcoin stalling after yesterday’s recovery? appeared first on Eightcap.

Week Ahead Live with Stuart McPhee

8 eightcap 16.06.2022 13:30

Watch Stuart McPhee, trader, property investor, and bestselling author, this Monday for more analysis and market support in his Trading Week Ahead Live for the week. Join him as he begins the week by sharing his market approach, potential trade ideas, and opportunities that are in play for the coming week. JOIN THIS WEDNESDAY’S LIVE MARKET UPDATE | 22nd June 2022! Would you like some more support in understanding the mid-week performance and trajectory of the markets? Register for next week’s Live Market Update and join Stuart on Wednesday 22nd June, at 7PM AEST (10AM BST) as he shares his review of the market progression made and summarises his predictions as we approach the weekend. Register Now At the end of the session, you will have the chance to ask Stuart all your market, strategy, and trade-related questions in a live Q&A. Learn how to approach the markets and what you need to trade CFDs safely. If you are looking for that extra bit of support and guidance, the Trade Zone is the perfect place to get the help you need to improve your skills and understanding. So come join Eightcap and Stuart McPhee this week on the Trade Zone as we explore the markets together – Please remember to trade safely! The post Week Ahead Live with Stuart McPhee appeared first on Eightcap.

The Swing Overview – Week 23 2022

Purple Trading 17.06.2022 08:53

The Swing Overview - Week 23 Major global stock indices broke through their support levels after several days of range movement in response to the tightening economy, the ongoing war in Ukraine, slowing economic growth and high inflation. The Reserve Bank of Australia raised its interest rate by 0.50%. The ECB decided to start raising interest rates by 0.25% from July 2022. The winner of last week is the US dollar, which continues to strengthen. Macroeconomic data Data from the US labour market was highly anticipated. The job creation indicator, the so-called NFP, surprised the markets positively. Analysts expected that 325,000 new jobs had been created in May. In fact, 390 thousand jobs were created in the US. Unemployment is at 3.6%. The information on the growth of hourly wages, which is a leading indicator of inflation, was important. Average hourly earnings rose 0.3% in May, less than analysts who expected 0.4%. Unemployment claims reached 229,000 this week. This is the highest levels since 3/3/2022. However, this is not an extreme increase. The number of claims is still in the pre-pandemic average area. Nevertheless, it can be seen that since 7/4/2022, when the number of applications reached 166 thousand, the number of applications is slowly increasing and this indicator will be closely monitored. The ISM index of purchasing managers in the US service sector reached 55.9 in May. This is lower than the previous month's reading of 57.1. A value above 50 still points to expansion in the sector although the decline in the reading indicates economy. The yield on the US 10-year bond is close to its peak and is currently around 3%. The rise in yields has been followed by a rise in the US dollar. The dollar index has surpassed 103. The reason for the strengthening of the dollar is the aggressive tightening of the economy by the US Fed, which began reducing the central bank's balance sheet on June 1, 2022. In practice, this means that the Fed will let expire the government bonds it previously bought as part of QE and will not reinvest them further. The first tranche of bonds will expire on June 15, so the effect of this operation remains to be seen. Figure 1: The US 10-year bond yields and USD index on the daily chart The SP 500 Index The SP 500 index has been moving in a narrow range for the past few days between 4,200, where resistance is and 4,080, where support has been tested several times. This support was broken and has become the new resistance as we can see on the H4 chart. Figure 2: The SP 500 on H4 and D1 chart The catalyst for this strong initiation move is the strong US dollar and rising bond yields. Therefore, the current resistance is in the 4,075 - 4,085 range. The nearest support is 3,965 - 3,970 according to the H4 chart. The next support is 3,879 - 3,907. German DAX index Macroeconomic data that affected the DAX was manufacturing orders for April, which fell 2.7% month-on-month, while analysts were expecting a 0.3% rise. Industrial production in Germany rose by 0.7% in April (expectations were for 1.0%). The war in Ukraine has a strong impact on the weaker figures. The catalyst for breaking support was the ECB's decision to raise interest rates, which the bank will start implementing from July 2022. Figure 3: German DAX index on H4 and daily chart The DAX is below the SMA 100 moving average according to the daily and H4 chart. This shows a bearish sentiment. The nearest resistance is 14,300 - 14,335. Support is at 13,870 - 13,900 according to the H4 chart. The ECB left the interest rate unchanged The ECB left interest rates unchanged on June 9, 2022, so the key rate is still at 0.0%. However, the bank said that it will proceed with a rate hike from July, when the rate is expected to rise by 0.25%. The next hike will then be in September, probably again by 0.25%. The bank pointed to the high inflation rate, which is expected to reach 6.8% for 2022. Inflation is expected to fall to 3.4% in 2023 and 2.1% in 2024. Figure 4: The EUR/USD on H4 and daily chart According to the bank, a significant risk is Russia's unjustified aggression against Ukraine, which is causing problems in supply chains and pushing energy and some commodity prices up. The result is a slowdown in the growth of the European economy. The bank also announced that it will end its asset purchase program as of July 1, 2022. This is the soft end of this program, as the money that will flow from matured assets will continue to be reinvested by the bank. In practice, this means that the ECB's balance sheet will not be further inflated, but for now, unlike the Fed’s balance sheet, the bank has no plans to reduce its balance sheet. This, coupled with the more moderate rate hike plans and the existence of the above risks, has supported the dollar and the euro has begun to weaken sharply in response to the ECB announcement. The resistance is 1.0760-1.0770. Current support at 1.063-1.064 is broken and it will become new resistance if the break is confirmed. The next support according to the H4 chart is 1.0530 - 1.0550. Australian central bank surprises with aggressive approach In Australia, the central bank raised its policy rate by 0.50%. Analysts had expected the bank to raise the rate by 0.25%. Thus, the current rate on the Australian dollar is 0.80%. However, this aggressive increase did not strengthen the Australian dollar, which surprisingly weakened. The reason for this is the strong US dollar and also the risk off sentiment that is taking place in the equity indices. Also impacting the Aussie is the situation in China, where there is zero tolerance of COVID-19. This will impact the country's economic growth, which is very likely to fall short of the 5.5% that was originally projected. Figure 5: The AUD/USD on H4 and daily chart According to the H4 chart, the AUD/USD currency pair has broken below the SMA 100 moving average, which is a bearish signal. The nearest resistance is 0.7140 - 0.7150. The support is in the zone 0.7030 - 0.7040.

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