yen

  • GBP/JPY bounces off intraday low but stays negative on a day.
  • BoJ Summary of Opinions suggest policymakers are divided considering higher inflation.
  • UK Business Confidence gauge slumps to the lowest levels since 2009.
  • Sluggish markets restrict immediate moves, Tokyo inflation eyed.

GBP/JPY picks up bids to extend the latest rebound from the intraday low past 160.00 heading into Thursday’s London open. Even so, the cross-currency pair remains bearish on a day around 160.45 at the latest.

The opening of the European and British markets seemed to have allowed the GBP/JPY pair traders to consolidate the daily losses amid sluggish market conditions ahead of the key US data concerning growth and spending.

Elsewhere, the Bank of Japan's (BoJ) Summary of Opinions underpins the bearish bias of the GBP/JPY pair as policymakers are divided over the exit of the ultra-easy monetary policy considering the increasing inflation. “The divergence in views highlights the challenge policymak

Sideways drifts and targets hit

Sideways drifts and targets hit

Jason Sen Jason Sen 28.10.2021 12:21
AUDUSD trades sideways after we warned last week that the rally has ended with Thursday's bearish engulfing candle. We keep holding good support at 7465/55 & held just below strong resistance at 7555/65. We can trade the range while we wait for a breakout. NZDUSD longs at 7140/30 work perfectly again yesterday hitting the target of 7180/90 for profit taking as we remain in the sideways trend. This could be the case for an extended period after Thursday's bearish engulfing candle. AUDJPY also likely to trade sideways for a while after Thursday's bearish engulfing candle for a sell signal. Today's Analysis. AUDUSD longs at good support at 7465/55 work again on the bounce to 7500/05 for profit taking before a high for the day yesterday exactly at the next target of 7530/35. Strong resistance at 7555/65 should be a big challenge. Try shorts with stops above 7580, looking for a double top sell signal. Longs at 7465/55 again today stop below 7445 (so the risk is very small). A break lower is a sell signal targeting 7410/7390, perhaps as far as 7360/50. NZDUSD longs at first support at 7140/30 could work again re-targeting 7180/90 for profit taking & as expected this was a high for the day. If we retest 7200/7220, try shorts with stops above 7240, looking for a double top sell signal. BUT be ready to sell again at very strong resistance at 7255/75. Stop above 7300. Longs at first support at 7140/30 must stop below 7120 so the risk is very small. A break lower is a sell signal targeting 7090/80 probably as far as 7040/30. AUDJPY I would sell at 8620/40 (unfortunately yesterday's high was 8605) with stops above 8660 looking for a double top sell signal. A break higher kills the bearish engulfing candle for a buy signal. First support at 8460/40 in the sideways trend. A bounce targets 8500 perhaps as far as 8540/50. A break below 8420 however is the next sell signal targeting 8370 & 8345/35. To subscribe to this daily report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk USDJPY longs at support at 113.40/30 were offered 50 pips yesterday. as we topped exactly at first resistance at 113.80/95. EURJPY buying opportunity at at 131.60/40, stop below 131.30. CADJPY shorts at first resistance at 9240/60 keep working this week. https://www.youtube.com/watch?v=wASlHvMEN6g Update daily at 06:30 GMT Today's Analysis. USDJPY meets minor resistance at 113.85/95. Strong resistance at last week's high at 114.50/70. Shorts need stops above 114.80. A break higher is a medium term buy signal. Good support again at 113.40/30. Longs need stops below 113.20 so the risk is very small. A break lower target 113.00/112.90 & 112.60/50. EURJPY buy at 131.60/40, stop below 131.30. A break lower is a sell signal targeting 130.90 then an important buying opportunity at 130.40/20 with stops below 130.00 Longs at 131.60/40 target 131.90 & 132.10 for profit taking. Strong resistance at 132.20/40. Shorts need stops above 132.60. CADJPY shorts at first resistance at 9240/60 work again as we target 9200 & 9175, hit as I write this morning. A buying opportunity at 9120/00 with stops below 9090. Gains are likely to be limited with first resistance at 9240/60. However on a break higher sell at 9280/9300 with stops above 9320. To subscribe to this daily report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk EURUSD breaks support at 1.1620/00 so this is now working as resistance. It is difficult to trade the pair as the daily ranges are small & we are mostly trading sideways. USDCAD shorts at first resistance at 1.2420/40 this trade worked perfectly on the collapse to 1.2370  & as far as first support at 1.2300/1.2280. Longs here also this trade worked perfectly on the bounce to 1.2370 for an easy 120 pip profit on the day. GBPCAD shorts at first resistance at 1.7050/70 handed a quick & easy 150 pip profit yesterday. Update daily at 06:30  GMT Today's Analysis. EURUSD holding below first resistance at 1.1610/20 targets 1.1580 & 1.1540/30. A break below 1.1520 is an important medium term sell signal. A break above 1.1620 however can target resistance at 1.1665/75.  Next we look for a test of minor resistance at 1.1690/99. Exit longs & try shorts with stops above 1.1720. USDCAD same levels apply for today with first resistance at 1.2420/40. Shorts here stop above 1.2450. Be ready to buy a break above 1.2450 targeting 1.2510/30. Shorts at 1.2420/40 target 1.2370 then support at 1.2300/1.2280. Longs here need stops below 1.2270 for a sell signal. GBPCAD shorts at first resistance at 1.7050/70 worked perfectly on the collapsed to our targets of 1.6950/40 & 1.6910/1.6890 for an easy 150 pip profit yesterday. Ultimately we are looking for the target of 1.6870/60, perhaps as far as support at 1.6800/1.6780. We can try shorts again at first resistance at 1.7050/70 but must stop above 1.7090. A break higher is a buy signal targeting a selling opportunity at 1.7155/75 with stops above 1.7195. To subscribe to this daily report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk GBPUSD high for the day exactly at resistance at 1.3835/55 so far this week followed by a test of support at 1.3740/30, but we over ran to 1.3707. EURGBP longs at important 200 week moving average support at 8405/8395 worked perfectly on the bounce to first resistance at 8455/65 for profit taking. Shorts here are also working as I write. GBPNZD breaks important support at 1.9180/70 for a sell signal. Update daily at 07:00 GMT Today's Analysis. GBPUSD first support at 1.3740/20 but be ready to sell a break below 1.3700 targeting 1.3670/60, perhaps as far as strong support at 1.3600/1.3580. Any longs at support at 1.3740/20 target 1.3770/80, perhaps as far as strong resistance at 1.3835/55. This remains key to direction in severely overbought conditions. Try shorts again with stops above 1.3875. A break above here is a medium term buy signal. EURGBP longs at important 200 week moving average support at 8405/8395 work on the bounce to first resistance at 8455/65 for profit taking. Shorts need stops above 8475. A break higher targets 8500. Shorts at first resistance at 8455/65 are working as we target 8440 before a retest of important 200 week moving average support at 8405/8395. Longs need stops below 8380. A break lower is a medium term sell signal. GBPNZD break below support at 1.9180/70 is a sell signal targeting 1.9110/00. First resistance at 1.9170/90. Shorts need stops above 1.9210.
Intraday Market Analysis – EUR Builds Up Bullish Reveal

Intraday Market Analysis – EUR Builds Up Bullish Reveal

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

Intraday Market Analysis – EUR Builds Up Bullish Reveal - 29.10.2021

Jing Ren Jing Ren 29.10.2021 09:04
The euro surges as the market prices in inflation pressure despite the ECB’s dovish message. Bullish candles have pushed the single currency above the triple top (1.1665) which sits on the 30-day moving average, paving the way for a reversal. Strong momentum is a sign of short-covering from those caught on the wrong side of the market. An overbought RSI could temporarily limit the range of the rally. However, renewed optimism may send the pair to the daily resistance at 1.1750. 1.1620 is the support in case of a pullback. USDJPY tests demand zone The Japanese yen recouped losses after the BOJ sees a weak yen as positive for Japan’s economy. And the US dollar has come under pressure near a four-year high. An overbought RSI on the daily chart points to an overextension. On the hourly level, the pair has found bids around 113.30 near a previous consolidation range. A bearish breakout would test the round number at 113.00, which lies on the 20-day moving average and is critical in safeguarding the uptrend. The bulls need to lift 114.30 before they may resume the rally. US 30 pulls backs for support The Dow Jones consolidates as investors digest earnings near the all-time high. A breakout above the August peak at 35600 and a bullish MA cross from the daily timeframe indicate an acceleration on the upside as the rally continues. Pullbacks could be an opportunity to buy low. An overbought RSI has triggered a minor sell-off below 35600, shaking out weaker hands in the process. A drop below 35450 would lead to the psychological level of 35000. 35830 is now a fresh resistance.
Wild Choppy Moves

Wild Choppy Moves

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

Intraday Market Analysis – USD Grinds Key Resistance

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

Profit-Taking After Earnings May Send Stock Prices Lower

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

Don‘t Fear Risk-Off

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

What Does November Hold for the Miners?

Paul Rejczak Paul Rejczak 01.11.2021 16:20
  As a new month begins, the downtrend in the GDX and GDXJ should resume. When will a new buying opportunity finally present itself? Let’s compare the behavior of the GDX ETF and the GDXJ ETF. Regarding the former, the GDX ETF reversed sharply after reaching its 200-day moving average and a confluence of bearish indicators signaled a similar outcome. For context, I wrote on Oct. 25: Small breakout mirrors what we witnessed during the senior miners’ downtrend in late 2020/early 2021. Moreover, when the GDX ETF’s RSI (Relative Strength Index) approached 70 (overbought conditions) back then, the highs were in (or near) and sharp reversals followed. Furthermore, after a sharp intraday reversal materialized on Oct. 22, the about-face is similar to the major reversal that we witnessed in early August. On top of that, with the GDX ETF’s stochastic indicator also screaming overbought conditions, the senior miners are likely to move lower sooner rather than later. Also, please note that the GDX ETF reversed right after moving close to its 200-day moving average, which is exactly what stopped it in early August. Yes – that’s another link between now and early August. And after declining sharply on Oct. 28 and Oct. 29, the senior miners further cemented their underperformance of gold. Moreover, with relative underperformance often a precursor to much larger declines, the outlook for the GDX ETF remains quite bearish. Please see below: As further evidence, the GDX ETF’s four-hour chart offers some important insights. To explain, the senior miners failed to hold their early September highs and last week’s plunge removed any and all doubt. Likewise, the GLD ETF suffered a sharp drawdown and its recent breakout was also invalidated. Furthermore, my three-day rule for confirming breakouts/breakdowns proved prescient once again. Conversely, investors that piled into mining stocks are likely regretting their decision to act on unconfirmed signals. And as we look ahead, the technicals imply that caution is warranted and more downside is likely for the GDX ETF. As for the GDXJ ETF, the gold junior miners suffered a similar swoon last week. For context, I warned of the prospective reversal on Oct. 25. I wrote: The junior miners’ RSI also signals overbought conditions and history has been unkind when similar developments have occurred. Moreover, the GDXJ ETF’s recent rally follows the bearish patterns that we witnessed in late May and in early 2021. Likewise, the intraday reversal on Oct. 22 mirrors the bearish reversal from early August and a confluence of indicators support a continuation of the downtrend over the coming weeks. And as we begin a new month, the GDXJ ETF’s downtrend should resume and a retracement to the ~35 level will likely materialize in the coming months. Please see below: Finally, while I’ve been warning for months that the GDXJ/GDX ratio was destined for devaluation, the ratio has fallen precipitously in 2021. And after the recent short-term rally, the ratio’s RSI has reached extremely elevated levels (nearly 73) and similar periods of euphoria have preceded major drawdowns (marked with the black vertical dashed lines below). To that point, the ratio showcased a similar overbought reading in early 2020 – right before the S&P 500 plunged. On top of that, the ratio is still below its mid-to-late 2020 lows and its mid-2021 lows. As a result, the GDXJ ETF will likely underperform the GDX ETF over the next few months. It’s likely to underperform silver in the near term as well. The bottom line? If the ratio is likely to continue its decline, then on a short-term basis we can expect it to trade at 1.27 or so. If the general stock market plunges, the ratio could move much lower, but let’s assume that stocks decline moderately or that they do nothing or rally slightly. They’ve done all the above recently, so it’s natural to expect that this will be the case. Consequently, the trend in the GDXJ to GDX ratio would also be likely to continue, and thus expecting a move to about 1.26 - 1.27 seems rational. If the GDX is about to decline to approximately $28 before correcting, then we might expect the GDXJ to decline to about $28 x 1.27 = $35.56 or $28 x 1.26 = $35.28. In other words, ~$28 in the GDX is likely to correspond to about $35 in the GDXJ. Is there any technical support around $35 that would be likely to stop the decline? Yes. It’s provided by the late-Feb. 2020 low ($34.70) and the late-March high ($34.84). There’s also the late-April low at $35.63. Consequently, it seems that expecting the GDXJ to decline to about $35 is justified from the technical point of view as well. In conclusion, mining stocks reprised their role as ‘The Boy Who Cried Wolf.’ And after overzealous investors rushed to their defense last week, another false alarm led to another bout of disappointment. Moreover, with the technical and fundamental backdrops for gold, silver and mining stocks continuing to deteriorate, lower lows should materialize over the medium term. As a result, we may have to wait until 2022 before reliable buying opportunities emerge once again. Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today. Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care * * * * * All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Bitcoin’s trading psychology - 02.11.2021

Bitcoin’s trading psychology - 02.11.2021

Korbinian Koller Korbinian Koller 02.11.2021 09:49
BTC in US-Dollar, Daily Chart, leg analysis:Bitcoin in US-Dollar, Daily chart as of October 25th, 2021.From a pure price perception, it might seem that the consistency bitcoin holds in price bubbles might be of the same origin, but they are not. In 2009, the value of the coin was zero, and fans exchanged it more like reminding of a seedy Star Wars bar exchange of true fans for a new idea, technology, beliefs, and freedom. Even so, bubbles arose a year later, and the price was driven by extreme supply and demand imbalances due to ill-liquidity when news hit the media.Since these times, we have seen all sorts of traders, speculators, investors, banks, hedge funds, governments join the speculation in a profitable market. Each with their specific mindset, interests, and trading psychology. The latest shift is now the race of governments getting a hold on the worldwide dominance reign. They will be true hodlers. Before that last influx, the bitcoin market was dominated by pure speculators for the most part. In a sense, they were forced into this market to stay competitive. Wide swings were the result since there was little incentive to stay in this game for the long term or, in other words, taking the risk on the large downswings.One first step, identifying in which market and cycle one is competing, are comparing up-legs in size (percentage) and steepness (time).The daily chart above shows such measurements of the last two significant moves in bitcoin this year.It has taken bitcoin only three months to more than double in price.BTC in US-Dollar, Weekly Chart, Projections:Bitcoin in US-Dollar, weekly chart as of October 26th, 2021.With governments and the wider population now being the last to come to the party, we will see a shift in the trading behavior of bitcoin. This needs adjustment in one’s trading style to be part of this craze for the virtual, decentralized future.One such shift in the process may be a reduction of retracements depth within the second leg from a weekly perspective. We have drawn a projection of the second leg highly conservative in the chart above. Conservative, since second legs are typically longer, and we only assumed an identical extension to the first leg (1=2=3 in length and angle). BTC in US-Dollar, Monthly Chart, time accuracy:Bitcoin in US-Dollar, monthly chart as of October 26th, 2021.Bitcoins’ childhood days have long passed. Seedy bar purchases have changed for high liquidity and professional exchanges with advanced order execution functionality. The big guns sit on the table, and as such, trading has shaped up. The individual is now playing against the best in the world, like in any other asset class, and risk should be perceived as such.Nevertheless, a larger time frame play for wealth preservation and a hedge against inflation is controllable in risk. Market participation analysis allows for a better grip on what to expect and scales in on targets from a time perspective. The above monthly chart illustrates our view of a possible future. The logarithmic chart shows best what inherent strength bitcoin possesses.Bitcoin´s trading psychology:The largest group that is not invested in bitcoin yet is the more significant part of average citizens. Consequently, we will find ourselves in an extreme supply demand imbalance due to bitcoins fixed limit of 21 million coins. More importantly, we will discover new trading behavior with a new group participating, with new psychology. These purchases will be made by amateurs who are motivated by fear more than greed. This market participant will be a long-term speculator trying to hold on to his investment versus making a quick buck. We anticipate more moderate overall retracements percentagewise. As well, we expect steeper legs up. These will result in a different system needed to participate in a market with low-risk entry points.Feel free to join us in our free Telegram channel for daily real time data and a great community. If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can subscribe to our free newsletter.This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting.By Korbinian Koller|October 26th, 2021|Tags: Bitcoin, bitcoin consolidation, Bitcoin mining, crypto analysis, Crypto Bull, crypto chartbook, crypto mining, low risk, quad exit, technical analysis, trading education|0 CommentsAbout the Author: Korbinian KollerOutstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.
Silver’s fuse is about to be lit

Silver’s fuse is about to be lit

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

What Might it Take for the Fed to Deliver a Hawkish Tapering Announcement?

Marc Chandler Marc Chandler 03.11.2021 14:43
Overview: With the FOMC's decision several hours away, the dollar is trading lower against nearly all the major currencies.  The Antipodeans and Norwegian krone are leading.  The euro, yen, and sterling are posting minor gains (less than 0.1%).  Most of the freely liquid and accessible emerging market currencies are also firmer.  The Turkish lira is a notable exception.  The decline in the core inflation and a smaller than expected rise in the headline pace embolden officials for another rate cut when the central bank meets on November 18.  The JP Morgan Emerging Market Currency Index is rising for the second consecutive session after falling in the previous four sessions.  Equities are lower.  The MSCI Asia Pacific Index fell for the fifth session in the past six.  Among the large markets, Taiwan and Australia bucked the trend.  The four-day advance of the Stoxx 600 in Europe is at risk, and US futures are weaker.   Benchmark 10 year yields are mostly two-four basis points lower across most high-income countries today.  That puts the US 10-year Treasury yield near 1.52%.  Australia's two-year yield fell almost 10 bp to 0.55%.  It had peaked above 0.71% last week.   The three-year yield is off nearly 30 bp in recent days.  Gold continues to chop within the range set last Friday (~$1772-$1801).  Ahead of the OPEC+ meeting tomorrow amid talk that the US may seek to coordinate sales for a coalition of strategic reserves and a build of US inventories reported by API weigh on oil prices.  December WTI has approached the 20-day moving average (~$82), which has not closed below since late August. Base metals are higher as iron ore snapped a five-day slide during which it lost over 20%.  Copper is also recovering after forging a base in the $432-$433 area.  It is up around 1.5% today.  If sustained, it would be the largest gain in three weeks.   Asia Pacific China's Caixin services unexpectedly rose to 53.8 from 53.4 in September.  Recall that the manufacturing reading had improved to 50.6 from 50.0.  The net effect was that the composite edged up to 51.5 from 51.4.  The composite has converged with the "official" PMI, which stands at 50.8.  Separately, note that China is experiencing a broad spread of the virus into a dozen provinces, and the number of new cases is the highest in a couple of months. Inter-provincial travel has been restricted, and new social protocols are being introduced.  According to reports, the government advised households to stock up in necessities and ensure adequate food supplies for local authorities.  Australia's service and composite PMI shows the recovery was not quite as strong as the preliminary data suggested.  The service PMI rose to 51.8, not 52.0  from 45.5.  The composite stands at 52.1 rather than 52.2.  It was at 46 in September.   Tomorrow Australia reports Q3 real retail sales, but it will still be picking up the weakness of the lockdown.  September trade figures will also be reported.  Weaker exports and stronger imports are expected to have narrowed the trade surplus by almost 20% to A$12.4 bln. Ahead of the weekend, the central bank will make its Monetary Policy Statement.  The swaps market is pricing in 70 bp, down from 80 bp, of tightening over the next 12 months.  The dollar has been confined to a narrow quarter yen range through the Asian session and most of the European morning.  Softer yields and equities would be expected to give the yen a bit of support.  The 20-day moving average is near JPY113.65, and the greenback has not closed below it since the September FOMC meeting.  In the bigger picture, we have suggested the dollar-yen rally from mid-September through mid-October puts the dollar in a new range.  We suspected JPY114.50-JPY115.00 marks the upper end and JPY113.00 may be the lower end.  The Australian dollar fell almost 1.4% yesterday, its largest decline since May.  It reached $0.7420 yesterday, just above the $0.7410 (38.2% retracement objective of last month's rally).  It has stabilized today and has (so far) been capped near $0.7450.  Resistance is seen in the $0.7460-$0.7470 area.   For two weeks, the Chinese yuan has been alternating between advances and declines, and net-net little changed over the period.  Yesterday, the yuan slipped (0.04%), and today it is firmer (0.06%).  The PBOC has consistently set the dollar's reference rate above model projections, and today's fix was at CNY6.4079 compared with median expectations (Bloomberg) for CNY6.4068.  The PBOC was unexpectedly generous in its open market operations, injecting CNY50 bln. As a result, the overnight repo rate fell 12 bp to 1.99%.   Europe Norway's central bank meets tomorrow.  It was the first of the high-income countries to raise rates this year, so far, followed only by New Zealand.  We overstated the case for Norway to hike rates at the meeting, but don't be mistaken. The case for a rate hike exists, but the pattern is not to move at these "off-meetings" (without updated formal policy path guidance).  Instead, officials will likely confirm their intentions to raise rates in December. The swaps market is pricing in almost three hikes next year.   The dollar trended lower against the Nokkie since August 20. The downward momentum stalled in late October.  Yesterday it rose above NOK8.50 for the first time since mid-October.  The momentum indicators have turned up.  The 200-day moving average is slightly below NOK8.55 and near NOK8.60 is the (38.2%) retracement of the down move.  The UK is emerging from the economic soft patch in the June-August period.  The final service and composite PMI report today showed stronger activity than the preliminary estimates.  The service PMI rose to 59.1 from 55.4 in September.  The flash estimate had put it at 58.0.  The composite stands at 57.8, up from the preliminary projection of 56.8 and September 54.9.    The Bank of England meets tomorrow.  There does not seem to be much conviction, and the market appears divided. In the Bloomberg survey, 22 out of 45 economists expect a hike that seems to have been largely discounted by the markets (15 bp).  Three of the largest UK banks do not expect a hike.  Some observers argue that what is the point of stopping now when it would end next month. We often think the signaling channel of QE is under-appreciated.  Stopping the bond-buying now adds to the seriousness of the moment if it does not lift rates. Sterling has retreated by 2.3 cents since last week's high to approach $1.36 yesterday in the US. The euro reached its lowest level against sterling since March 2020 in late October near GBP0.8400, and yesterday rose to above GBP0.8500 for the first time since October 12.   Poland's central bank is expected to hike the base rate 25 bp today to 0.75%.  Recall that it hiked 40 bp last month to begin the cycle.  It started later than Czech and Hungary.  Preliminary October CPI rose 1% on the month, accelerating the year-over-year pace to 6.8% (from 5.9% in September.  It was at 5% as recently as July.  The Czech central bank meets Friday and is expected to hike the repo rate 75 bp to 2.25%.  After two quarter-point hikes (June and August), it hiked by 75 bp in September. Inflation (CPI) rose to 4.9% in September from 4.1% in August.  It is the highest since 2008.  Turkey's CPI rose by 2.39% last month to bring the year-over-year rate to 19.89% (19.58% in September), slightly lower than expected.  The core rate slipped slightly to 16.82% from 16.98%.   The euro has been confined to about a quarter of a cent range above $1.1575 so far.  It stalled yesterday near $1.1615, the (50%) retracement of the pre-weekend slide from almost $1.1700 to $1.1535.  It is making session highs in the European morning, but we look for a less friendly North American session.  There are options for about 530 mln euros at $1.16 that expire today.  A hawkish Fed (see below) could bring option expirations tomorrow at $1.1525 (~825 mln euros ) and $1.1550 (~900 mln euros) into play.  Sterling tested $1.36 yesterday, the lowest level since October 13.  It has hardly managed to distance itself from the lows.  It found new offers near $1.3635.   There is a GBP675 mln option expiring today at $1.3650.  A larger one (~GBP820) is at $1.3615 also expires but has liked been neutralized.   America It seems well appreciated that the Federal Reserve will announce it will begin slowing the bond purchases. Most expect a reduction of $10 bln of Treasuries and $5 bln of Agency MBS.  Investors appear to be anticipating the monthly reduction of these amounts through June 2022.  Even with yesterday's upticks, the June Fed funds futures contract continues to discount a rate hike then.  If the effective Fed funds rate is steady in the first half of June at eight basis points and then rises to 33 bp for the second half of the month (25 bp rate hike on June 15), the average effective rate is about 20.5 bp.  The contract settled at an implied rate of 20 bp yesterday.   Since this is already in the market, the tapering announcement itself may not be hawkish.  There are two steps the Fed could take if it wanted to drive home the point.  First, the FOMC statement has been referring to inflation as largely "transitory."  It could simply drop this qualifier or modify it.  The Chair has already acknowledged that it will likely persist longer than initially anticipated.  Indeed, next week's CPI report is expected (Bloomberg survey median) is expected to have risen by 0.5%, which, given the 0.1% increase in October 2020, means the 12-month rate will accelerate to around 5.8%.   Second, after the last press conference, Powell was asked about needing to reduce monetary stimulus while the Fed was still engaged in QE.  The Bank of England said it would hike if necessary while it was still buying bonds.  Powell said in that situation, the Fed would not send contradictory signals but accelerate the tapering process.  Quicker tapering would be a hawkish signal, and reaction by the market would likely bring forward the first hike.   The Democratic Party lost the Virginia gubernatorial context.  Biden had carried the state by 10 percentage points last year, and the preliminary results suggest a loss of suburban voters, a key part of the new Democratic coalition.  New Jersey's governor contest is very close, and the Democratic incumbent is trailing. The results play on ideas that the Democrats are likely to lose both houses of Congress in next year's mid-term election, in which it is common for the party in the White House to lose seats.  Some in the press have been critical that Xi and Putin are not attending COP-26, but their leadership was always in doubt.  The election results may undermine US leadership because Biden's commitments may not get legislative support, and executive decisions could be reversed in 2024.   Today could be the first day since October 13 that the US dollar does not trade below CAD1.2400.  Still, note that the greenback remains in the CAD1.2300-CAD1.2435 range set last Wednesday when the Bank of Canada turned more hawkish.  Yesterday, the US dollar closed above its 20-day moving average for the first time since late September.  We suspect corrective forces could lift the exchange rate toward CAD1.2475, where the (38.2%) retracement of last month's decline is found, and the 200-day moving average (~CAD1.2485).  However, in its way stands the $920 mln option at CAD1.2450 that expires today.  The greenback reached almost MXN20.92120 yesterday, a new eight-month high. Sellers emerged, and the dollar closed lower to snap a five-day advance.  It is softer today but holding above yesterday's low (~MXN20.71).  Ahead of the FOMC outcome, the market may be cautious about taking the dollar below the MXN20.66-MXN20.70 area.   Disclaimer
Lip Service to Inflation, Again

Lip Service to Inflation, Again

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

November Monthly

Marc Chandler Marc Chandler 03.11.2021 15:17
Three main forces are shaping the business and investment climate:  Surging energy prices, a dramatic backing up of short-term interest rates in Anglo-American countries, and the persistence of supply chain disruptions.  The US and Europe have likely passed peak growth.  Fiscal policy will be less accommodative, and financial conditions have tightened. Japan appears to be getting a handle on Covid and after a slow start.  Its vaccination rate has surpassed the US.  The lifting of the formal state of emergency and a hefty dose of fiscal stimulus is expected to be delivered in the coming months. Many developing economies have already lifted rates, some like Brazil and Russia, aggressively so.  They will likely finish earlier too.      US light sweet crude oil rose nearly 12% last month, even though US inventories rose last month for the first time since April.   The price of WTI rose almost 10% in September.  Statistically, the rise in oil prices is strongly correlated with the increase in inflation expectations.  OPEC+ will boost supplies by another 400k barrels a day at the start of November and is committed to the same monthly increase well into 2022.   At the same time, new Covid infections in several Asia-Pacific countries, including China, Singapore, and Australia, warn of the risk of continued supply-chain disruptions.  In Europe, Germany and the UK recently reported the most cases since the spring. Belgium is tightening curbs.  Bulgaria is seeing a rise in infections, and Romania was at full capacity in its intensive care facilities.  The fact that Latvia lags the EU in vaccination at about 50% leaves it vulnerable.  The US may be lagging behind Europe, and the next four-six weeks will be critical.  Roughly 40% of Americans are not fully vaccinated.   The rise in price pressures and the gradual acknowledgment by many central bankers that inflation may be more persistent have helped spur a significant backing up of short-term rates in the Anglo-American economies. The ultimately deflationary implications of the surge in energy prices through demand destruction and the implications for less monetary and fiscal support still seem under-appreciated. Yet, the market has priced in aggressive tightening of monetary policy over the next 12 months.   The focus of the foreign exchange market seems squarely on monetary policy.  From a high level, the central banks perceived to be ahead in the monetary cycle have seen stronger currencies. The likely laggards, like the Bank of Japan, the Swiss National Bank, and the ECB, have currencies that underperformed.  Norway and New Zealand have already raised rates and are expected to do so again in November.    Of course, as you drill down, discrepancies appear.  In October, the Australian dollar was the top performer among the major currencies with a 4% gain.  It edged out the New Zealand dollar and the Norwegian krone, whose central banks are ahead of the Reserve Bank of Australia.  The RBA has pushed against market speculation that has 90 bp of tightening priced into 12-month swaps.  The Australian dollar outperformed sterling by about 2.5% in October even though the Bank of England has been so hawkish with its comments that the market had little choice but to price in a high probability of a hike as early as the November meeting.  In fact, the market has the UK's base rate above 50 bp by the end of Q1 22.  This is important because in its forward guidance that BOE has identified that as the threshold for it to begin unwinding QE by stopping reinvesting maturing issues.  Interestingly enough, when the BOE meets on March 17 next year, it will have a sizeable GBP28 bln maturity in its portfolio.   In an unusual quirk of the calendar, the Federal Reserve meets before the release of the October jobs report.  All indications point to the start of the tapering process.  It is currently buying $120 bln a month of Treasuries ($80 bln) and Agency Mortgage-Backed Securities.  The pace of the reduction of purchases is a function of the duration, and the Fed has clearly indicated the tapering will be complete around mid-year. That suggests reducing the purchases by about $15 bln a month.  Chair Powell indicated that unlike the Bank of England, the Fed will stop its bond purchases before raising rates. A faster pace of tapering would be a hawkish signal as it would allow for an earlier rate hike.  The gap between when the tapering ends and the first rate hike does not appear predetermined. Powell has talked about the economic prerequisites, which emphasize a full and inclusive labor market in the current context. The Fed funds futures entirely discount a 25 hike in July, with the risk of a move in June.  Comments by several officials hint that the Fed may drop its characterization of inflation as transitory, which would also be understood as a hawkish development.   Partly owing to the extended emergency in Japan, it is marching to the beat of a different drummer than the other high-income countries. Inflation is not a problem.  In September, the headline rate rose to 0.2% year-over-year, the highest since August 2020.  However, this is a function of fresh food and energy prices, without which the consumer inflation stuck below zero (-0.5%).  In December 2019, it stood at 0.9%.  In addition, while fiscal policy will be less accommodative in Europe and the US, a sizeable supplemental budget (~JPY30 trillion) is expected to be unveiled later this year.   After expanding by 1.3% quarter-over-quarter in Q2, the Chinese economy slowed to a crawl of 0.2% in Q3, which was half the pace expected by economists. Some of the decline in economic activity resulted from the virus and natural disasters (floods). Still, some of it stemmed from an effort to cut emissions in steel and other sectors.  The problems in China's property development space, accounting for a large part of its high-yield bond market,  unsettled global markets briefly.  Talk of a Lehman-like event seems a gross exaggeration. Still, given the sector's importance to China's economy (30% broadly measured) and the use of real estate as an investment vehicle, it may precipitate a structural shift in the economy.   The Communist Party and the state are reasserting control over the economy's private sector and the internet and social network.  It has also weighed in on family decisions, like the number of children one has, how long a minor should play video games, the length of men's hair, what kind of attributes entertainers should have, and appropriate songs to be played with karaoke.   It seems to be reminiscent of part of the Cultural Revolution and a broader economic reform agenda like Deng Xiaoping did in the late 1970s and Zhu Rongji in the 1990s.  At the same time, Beijing is wrestling with reducing emissions and soaring energy prices, which also dampen growth. Even though consumer inflation is not a problem in China (0.7% year-over-year in September), Chinese officials still seem reluctant to launch new stimulative fiscal or monetary initiatives. Moreover, new outbreaks of the virus could exacerbate the supply chain disruptions and delays fuel inflation in many countries.  The aggressiveness in which investors are pricing G10 tightening weighed on emerging market currencies in October.  The JP Morgan Emerging Market Currency Index fell by almost 0.8% last month after falling 2.9% in September, the largest decline since March 2020.  The continued politicization of Turkey's monetary policy and the aggressive easing saw the lira tumble nearly 7.5% last month, which brings the year-to-date depreciation to 22.5%.   On the other hand, Brazil's central bank has aggressively hiked rates, and the 150 bp increase in late October brought this year's tightening to 575 bp and lifting the Selic to 7.75%.  Yet, it is still below the inflation rate (10.34% October), and the government has lost the confidence of domestic and international business.  The Brazilian real fell nearly 3.5% last month to bring the year-to-date loss to almost 7.8%.   Our GDP-weighted currency basket, the Bannockburn World Currency Index, snapped a two-month decline and rose by 0.35%.  The rise in the index reflects the outperformance of the currencies against the dollar.  The currencies from the G10 countries, including the dollar, account for about two-thirds of the index, and emerging markets, including China, the other third.  The yen was the weakest of the majors, falling 2.3%.  It has a weighting of 7.5% in the BWCI.   Among the emerging market currencies in our GDP-weighted currency index, the Brazilian real's 3.4% decline was the largest, but its 2.1% weighting minimizes the drag.  It was nearly offset by the Russian rouble's 2.5% advance.  It has a 2.2% weighting in our basket.  The Chinese yuan, which has a 21.8% share, rose by 0.6%.      Dollar:   The market is pricing in very aggressive tightening by the Federal Reserve.  As recently as late September, only half of the Fed officials anticipated a hike in 2022.  The December 2022 Fed funds futures are pricing in a little more than two hikes next year. More than that, the market is discounting the first hike in June next year, implying a transition from completing the bond-buying to raising rates with no time gap.  The disappointing 2% Q3 GDP exaggerated the slowing of the world's largest economy.  We note that the supply-side challenges in vehicle production halved the growth rate.  Growth is likely to re-accelerate in Q4, but we continue to believe that the peak has passed.  While inflation is elevated, the pace of increase slowed in Q3.  Consider that the PCE deflator that the Fed targets rose at an annualized rate of 4.0% in Q3 after a 5.6% pace in Q2.  The core rate slowed to an annualized pace of 3.3% last quarter, half of the speed in the previous three months.  The infrastructure spending plans have been reduced, and some of the proposed tax hikes, including on corporations, appear to be dropped as part of the compromise among the Democratic Party.   Euro:  For most of Q3, the euro has been in a $1.17-$1.19 trading range.  It broke down in late September, and was unable to recapture it in October.  Instead, it recorded a new low for the year near $1.1525.  A convincing break of the $1.1500 area could signal a move toward $1.1300. The single currency drew little support because growth differentials swung in its favor in Q3:  the Eurozone expanded by 2.2% quarter-over-quarter while the US grew 2% at an annualized pace.  The ECB is sticking to its analysis that the rise in inflation is due to transitory factors while recognizing that energy prices may prove more sticky.  That said, news that Gazprom may boost gas sales to Europe after it finishes replenishing Russian inventories after the first week in November, natural gas prices fall at the end of October.  After the Pandemic Emergency Purchase Program ends next March, decisions about the asset purchases next year will be announced at the December ECB meeting along with updated forecasts.   (October indicative closing prices, previous in parentheses)   Spot: $1.1560 ($1.1580) Median Bloomberg One-month Forecast $1.1579 ($1.1660)  One-month forward  $1.1568 ($1.1585)    One-month implied vol  5.1%  (5.1%)         Japanese Yen:  The dollar rose 2.3% against the yen in October to bring the year-to-date gain to nearly 9.5%.  The Bank of Japan will lag behind most high-income countries in the tightening cycle, and the higher US yields are a crucial driver of the greenback's gains against the yen.  Japan's headline inflation and core measure, which only excludes fresh food, may be rising, but they are barely above zero and, in any event, are due to the surge in energy prices. In response to the weakening yen, Japanese investors appear to have boosted their investment in foreign bonds, while foreign investors increased their holdings of Japanese stocks.  The LDP and Komeito maintained a majority in the lower chamber of the Diet. A sizeable stimulus supplemental budget is expected to help strengthen the economic recovery now that the formal emergencies have been lifted.  In Q3, the dollar traded mainly between JPY109 and JPY111.  It traded higher in the second half of September rising to nearly JPY112.00.  The dollar-yen exchange rate often seems to be rangebound, and when it looks like it is trending, it is frequently moving to a new range.  We have suggested the upper end of the new range may initially be the JPY114.50-JPY115.00.  The four-year high set last month was about JPY114.70.  A move above JPY115.60 could target the JPY118.50 area.     Spot: JPY113.95 (JPY111.30)       Median Bloomberg One-month Forecast JPY112.98 (JPY111.00)      One-month forward JPY113.90 (JPY111.25)    One-month implied vol  6.4% (5.6%)   British Pound:  Sterling rallied around 4 1/3 cents from the late September low near $1.34.  The momentum stalled in front of the 200-day moving average (~$1.3850).  After several attempts, the market appeared to give up.  We anticipate a move into the $1.3575-$1.3625 initially, and possibly a return toward the September low. The implied yield of the December 2021 short-sterling interest rate futures rose from 22 bp at the end of September to 47 bp at the end of October as the market.  It was encouraged by Bank of England officials to prepare for a hike at the meeting on November 4, ostensibly while it is still providing support via Gilt purchases.  If there is a surprise here, it could be that, given the unexpected softening of September CPI and the fifth consecutive monthly decline in retail sales, rising Covid cases, that the BOE chooses to take the more orthodox route.  This would entail ending its bond purchases, as two MPC members argued (dissented) at the previous meeting and holding off lifting rates a little longer.        Spot: $1.3682 ($1.3475)    Median Bloomberg One-month Forecast $1.3691 ($1.3630)  One-month forward $1.3680 ($1.3480)   One-month implied vol 6.8% (7.1%)      Canadian Dollar:  The three drivers for the exchange rate moved in the Canadian dollar's favor in October and helped it snap a four-month slide against the US dollar.  First, the general appetite for risk was strong, as illustrated by the strength of global stocks and the record highs in the US.  Second, the premium Canada pays on two-year money more than doubled last month to almost 60 bp from 25 bp at the end of September.  Third, commodity prices in general and oil, in particular, extended their recent gains.  The CRB Index rose 3.8% last month, the 11th monthly increase in the past 12, to reach seven-year highs.  The Bank of Canada unexpectedly stopped its new bond purchases and appeared to signal it would likely raise rates earlier than it had previously indicated.  The swaps market is pricing 125 bp of rate hikes over the next 12 months, with the first move next March or April.  Still, the US dollar's downside momentum stalled near CAD1.2300.  There is scope for a corrective phase that could carry the greenback into the CAD1.2475-CAD1.2500 area.     Spot: CAD1.2388 (CAD 1.2680)  Median Bloomberg One-month Forecast CAD1.2395 (CAD1.2580) One-month forward CAD1.2389 (CAD1.2685)    One-month implied vol 6.2% (6.9%)      Australian Dollar:  The Aussie's 4% gain last month snapped a four-month, roughly 6.5% downdraft.  Despite RBA Governor Lowe's guidance that the central bank does not anticipate that the condition to hike rates will exist before 2024 is being challenged by the market.  Underlying inflation rose above 2% in Q3. The central bank's failure to continue defending the 10 bp target of the April 2024 bond spurred speculation that it would be formally abandoned at the November 2 policy meeting.  The RBA's inaction unsettled the debt market.  The two-year yield soared almost 70 bp last month, and the 10-year yield rose nearly 60 bp.  Although the RBA could have handled the situation better, New Zealand rates jumped even more.  Its two-year yield jumped 80 bp while the 10-year yield surged by 58 bp.  Last month, the Australian dollar's rally took it from around $0.7200 to slightly more than $0.7550, where it seemed to stall, just in front of the 200-day moving average.  We suspect the October rally has run its course and see the Aussie vulnerable to a corrective phase that could push it back toward $0.7370-$0.7400.  The New Zealand dollar has also stalled ($0.7220), and we see potential toward $0.7050.       Spot:  $0.7518 ($0.7230)        Median Bloomberg One-Month Forecast $0.7409 ($0.7290)      One-month forward  $0.7525 ($0.7235)     One-month implied vol 9.1  (9.0%)        Mexican Peso:  The peso eked out a minor gain against the dollar last month.  However, the nearly 0.4% gain understated the swings in the exchange rate last month.  The dollar's recovery seen in the second half of September from almost MXN19.85 to nearly MXN20.40 at the end of the month was extended to a seven-month high around MXN20.90 on October 12.  It then proceeded to fall to almost MXN20.12 before the greenback was bought again.  A move above the MXN20.60 area now would likely signal a test on last month's high and possibly higher. Recall that the dollar peaked this year's peak set in March was near MXN21.6350. The economy unexpectedly contracted in Q3  by 0.2% (quarter-over-quarter).  Nevertheless, with the year-over-year CPI at 6% in September, Banxico will see little choice but to hike rates at the November 11 meeting. The market expects a 25 bp increase.  A 50 bp hike is more likely than standing pat.       Spot: MXN20.56 (MXN20.64)   Median Bloomberg One-Month Forecast  MXN20.42 (MXN20.41)   One-month forward  MXN20.65 (MXN20.74)     One-month implied vol 9.6% (11.0%)      Chinese Yuan: Our starting point is the yuan's exchange rate is closely managed.  The fact that the yuan rose to four-month highs against the dollar and a five-year high against the currency basket (CFETS) that the PBOC tracks imply a tacit acceptance.  While it is tempting for observers to link the appreciation to securing an advantage as it secures energy supplies and other commodities, we note that the yuan's gains are too small (0.6% last month and less than 2% year-to-date) to be impactful.  We suspect that the dollar's recent weakness against the yuan will be unwound shortly.  The US government continues to press its concerns about the risk for investors in Chinese companies listed in the US and American companies operating in China. At the same time, the FTSE Russell flagship benchmark began including mainland bonds for the first time.  China's 10-year government bond is the only one among the large bond markets where the yield has declined so far this year (~16 bp).  On the other hand, Chinese stocks have underperformed.  That said, some investors see this underperformance as a new buying opportunity.  The NASDAQ Golden Dragon Index that tracks Chinese companies listed in the US fell by 30% in Q3 and gained 5% in October, its best month since February.  Lastly, the Central Committee of the Chinese Communist Party meets November 8-11 this year, a prelude to the important National Party Congress in 2022 that is expected to formally signal the third term for President Xi.     Spot: CNY6.4055 (CNY6.4450) Median Bloomberg One-month Forecast  CNY6.4430 (CNY6.4470)  One-month forward CNY6.4230 (CNY6.4725)    One-month implied vol  3.5% (3.4%)    Disclaimer
Intraday Market Analysis – USD Struggles To Bounce Back

Intraday Market Analysis – USD Struggles To Bounce Back

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

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

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

Crude Eyeing OPEC+ Meeting – Where is Oil Headed?

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

Leading the Taper Run

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

Gold FINALLY Breaks Free Amidst S&P INSANITY

Mark Mead Baillie Mark Mead Baillie 08.11.2021 08:13
Gold, after 18 weeks of being stuck in a maniacal Short trend without price really going anywhere, FINALLY broke the bonds of the M word crowd by flipping to Long -- but not without a mid-week scare: more later on that affair. But we begin by assessing the stark INSANITY besetting the parabolic performance of the S&P 500, +25% year-to-date. It settled yesterday (Friday) at 4698 (reaching 4718 intra-day), a record closing high for the seventh consecutive session. Such phenomenon has occurred but five other times in the past 41 years! So here's a multiple choice question for you: Ready? Across all those years (i.e. from 1980-to-date), what is the longest stretch of time between all-time highs for the S&P 500? â–  a) eight monthsâ–  b) just over three yearsâ–  c) slightly less than six yearsâ–  d) all of the above (for you WestPalmBeachers down there)â–  e) none of the above If having answered "e)", you are correct: the longest stint was almost seven-and-one-quarter years from 24 March 2000 through the DotComBomb up to 13 Jul 2007. 'Twas the complete antithesis of the current paradigm of an all-time high every single trading day. But wait, there's more: those of you who were with us way back in the days at AvidTrader may recall our technically having "mild", "moderate" and "extreme" readings of both oversold and overbought conditions for the S&P. Well, get a load of this: yesterday was the S&P's 12th consecutive day with an "extremely overbought" reading. During these 41 years, that has only happened once before, 36 years ago in 1985. And the price/earnings ratio then was a respectable 10.5x: today 'tis five times that much at 54.4x (!!!) easily more than double the S&P's lifetime median P/E (since 1957) of 20.4x. And still more: Every time the S&P moves from one 100-point milestone to the next, 'tis a FinMedia "big headline deal", albeit the percentage increase comparably narrows. Nonetheless, trading gains and losses are measured by the point, not the percentage. And from 1980-to-date, the S&P has gone from 100 to now 4700, (i.e. through 46 milestones. Upon having just achieved the 4600 level on 29 October, the average number of trading days over these past 41 years to reach each 100-point milestone is 236 (just about a year's worth). But now from 4600-4700 took just five days! Cue John McEnroe: "You canNOT be SERious!!" 'Course, every trend reaches a bend, if not its end. And whilst the market is never wrong, something will the S&P upend. You regular readers already know the "earnings are not there" to support even one-half the S&P's current level. Moreover, 'tis said when the Federal Open Market Committee does nudge up its Bank's Funds rate, 'twill be "Game Over" for the S&P, (something of which the Fed is very fearful). "But mmb, even a rise from just 0.25% to only 0.50% maintains a really low rate..." Nominally still low, yes Squire: but upon it occurring, the Fed shall have doubled the cost for every bank that comes to the borrowing window, from which one can then ask banking clientele: "How's that variable rate loan workin' out for ya?" And thus falleth the first domino. And the S&P. Have a great day. Gold had a great day yesterday in settling out the week at 1820. But as noted, 'twas not before a mid-week scare. With Gold wallowing on "The Taper of Paper" Wednesday -- down at 1758 (a three-week low) -- the tried-and-true, widely followed daily moving average convergence divergence (MACD) crossed to negative. Such previous 11 negative crossings had averaged downside follow-through of 86 points. Thus within that technical vacuum, another run sub-1700 was placed on Gold's table. What instead followed was a one-day whipsaw, Gold's MACD finishing the week with a positive cross, and even better, the weekly parabolic Short trend FINALLY being bust per the first Gold-encircled dot in our weekly bars graphic: FINALLY too Gold had its first Friday in five of not being flogged ostensibly by the M word crowd. Should they thus have left the building, in concert with both the daily MACD back on the positive side and the weekly parabolic again Long, the door is open for Gold to glide up into the 1900s toward concluding 2021. As for the five primary BEGOS Markets, here are their respective percentage tracks from one month ago (21 trading days)-to-date, the S&P having swiftly replaced Oil as the leader of the pack. Of more import, note the rightmost bounce for Gold and the Bond. Why are those two stalwart safe havens suddenly getting the bid? (See our opening commentary on S&P INSANITY): Meanwhile as we waltz into the waning two weeks of Q3 Earnings Season, of the S&P's 505 constituents, 426 have reported (450 is typically the total within the seasonal calendar), of which 340 (80%) have bettered their bottom lines from Q3 of a year ago when much of the world purportedly was "shut down". Thus such significant improvement was expected: "They better have bettered!" Yet as noted, our "live" P/E is at present 54.4x. Thus to bring earnings up to snuff such as to reduce the P/E to its lifetime median of 20.4x, bottom lines need increase by 167%: but the median year-over-year increase (for those 396 constituents with positive earnings from both a year ago and now) is only 19%. Thus for those of you scoring at home, a 19% increase is nowhere near the "requisite" 167%. "Look Ma! Still no earnings!" (Crash). Still earning to grasp good grace is the track of the Economic Barometer, which bopped up a bit on the week's headline numbers. To be sure, October's Payrolls improved with a decline in the Unemployment Rate and a jump in the Institute for Supply Management's Services Index. But with a return of folks to the workplace (excluding those who've post-COVID decided they don't need to work) came a plunge in Q3's Productivity combined with a spike in Unit Labor Costs. As well, October's growth in Hourly Earnings slowed and the Average Workweek shortened, such combination suggesting temporary jobs materially lifted the overall Payrolls number. Also less highlighted was September's slowing in Factory Orders, shrinkage in Construction Spending, and the largest Trade Deficit recorded in the Baro's 24-year history. Here's the whole picture from one year ago-to-date with the S&P standing up straight: To our proprietary Gold technicals we go, the two-panel graphic featuring price's daily bars from three months ago-to-date on the left with the 10-day Market Profile on the right. And note the "Baby Blues" of linear regression trend consistency being abruptly stopped in their downward path thanks to Friday's "super-bar" -- Gold's best intra-day low-to-high run in nearly four weeks -- and the highest closing price since 04 September. As well in the Profile, price sits atop the entire stack, which you'll recall for the prior two weeks was at best a congestive mess. But to quote Inspecteur Clouseau, "Not any moooure...": As for Silver, she's not as yet generating as much comparable excitement. At left, her "Baby Blues" continue to slip even as price gained ground into week's end. At right, the price of 24 clearly is her near-term "line in the sand". Still, our concern a week ago of her falling into the low 22s has somewhat abated, albeit the daily parabolic trend remains Short; however a quick move to 24.700 ought nix that condition. "C'mon, Sister Silver!": So there it all is. We see Gold as poised to FINALLY move higher toward year-end, (barring a resurgence of the M word crowd). And we see the S&P as poised for its off-the-edge-of-the-Bell-curve INSANITY to cease, (barring an economic erosion that instead furthers the flow of free dough). After all, bad is good, just as Gold is always good. In that spirit to conclude for this week, here are three good bits from a few of the smartest (so we're told) people in the world: Betsey "With an e" Stevenson says with respect to folks not returning to the workforce post-COVID that "...It’s like the whole country is in some kind of union renegotiation..." That is True Blue Michigan-speak right there. But think about it: when you've got a) the upper labor hand, and b) the aforementioned free dough that you popped into the stock market to thus gain some 38% since the economy first shutdown, why work, eh? Besides, the feeling of marked-to-market wealth is a beautiful thing. Elon "Spacey" Musk now notes that Tesla has not contracted with Hertz to sell 100,000 four-wheel batteries. Recall when that deal first was announced, the price of TSLA went up many times more than the additional incremental return of the transaction. But hardly has it since retracted. 'Course, the company's Q3 earnings were "fantastic", in turn nicely bringing down the stock's P/E to just now 345.8x. And comparably as you already know, the only other two S&P 500 constituents classified as being in the sub-industry category of "Automobile Manufacturers" are Ford (P/E now 26.1x) and General Motors (P/E now 7.7x). But a shiny object that rolls, too, is a beautiful thing. Peter "Techie" Thiel has just opined that the soaring price of bits**t is indicative of inflation being at a "crisis moment" for the economy. 'Tis not ours to question this notion; rather 'tis beyond our pay grade to understand it. What we do understand is that THE time-tested (understatement) indicator and mitigator of inflation -- i.e. Gold -- is priced at such an attractively low level versus where it "ought" be (i.e. 3981 per our opening graphic's decree), that never again such a beautiful opportunity shall we see! Cheers! ...m... www.deMeadville.com www.TheGoldUpdate.com
Inflation Is Not The Only Consequence Of The Russian Invasion

And the Dollar Bounces Back, While BOE is in Focus

Marc Chandler Marc Chandler 04.11.2021 11:30
Overview:  The Federal Reserve announced tapering and, like the Reserve Bank of Australia earlier in the week, did not validate expectations for an aggressive rate hike.  Now the focus is on the Bank of England, where several officials seemed to goad the market into lifting short-term rates. The S&P 500 and NASDAQ rallied to new record highs yesterday and helped raise global shares today.  Among the large markets in the Asia Pacific region, only Taiwan and India did not participate in today's dance.  In Europe, the Stoxx 600 is extending its advance for the sixth consecutive session and nine of the past ten.  US futures are trading firmer.  The market is trimming yesterday's 5.5 bp rise in the US 10-year yield. It is about 3 bp lower near 1.57%.  European yields are 1-3 bp lower. The dollar, which slipped lower after the FOMC meeting, is back with a vengeance today.  It is gaining against all the majors, with the euro bearing the brunt, off about 0.5% to return toward the week's lows below $1.1550.  The yen is the most resilient and is flattish.  Emerging market currencies are also mostly lower.  The Chinese yuan is the strongest emerging market currencies today with about a 0.15% gain, recouping its losses of the past two sessions.  The Polish zloty is the weakest, off 0.6%, despite the larger than expected 75 bp hike yesterday.  Gold was tarnished by 1% yesterday, its biggest loss since mid-October, but is steadied today, up around 0.4% near $1777.  December WTI extended its pullback from $85 seen at the start of the week to dip briefly below $80.  It has firmed back above $81 in the European morning ahead of the OPEC+ meeting outcome.  Cooper prices have stabilized after tumbling 1% yesterday.   Asia Pacific  The final reading of Japan's service and composite PMI was unchanged from the preliminary estimate, with both at 50.7. The services component was the first above the 50 boom/bust level since January 2020.  The composite is at the highest since April.  The virus and formal emergency hobbled the economy, but the economy is on the mend, though out of sync with the other major economies.  Japan intends to use fiscal policy in a pro-cyclical fashion.  Prime Minister Kishida is preparing a large stimulus budget, and it is expected to be unveiled around the middle of the month.  Australia is also emerging from a soft economic period.  Real retail sales fell 4.4% in Q3, faring a little better than economists expected.  Separately, it reported its September trade surplus in line with expectations of about A$12.2 bln.  However, how it got, there was a bit different than anticipated.  First, the August trade surplus was shaved to A$14.7 bln from A$15.1 bln as imports were revised to show a 2% gain instead of a 1% loss. Second, exports fell 6% in September, twice the decline expected, but this was offset by a 2% decline in imports, rather than a 1% gain.  First thing tomorrow, the central bank issues its monetary policy statement, which is hoped to shed more light on the RBA's intent.  The US dollar is straddling the JPY114.00 area.  It reached a three-day high slightly below JPY114.30 and has held above JPY113.90.  Two large options expire today, but they have likely been neutralized.  The first is for nearly $2 bln at JPY114.00, and the other is for $1.8 bln at JPY114.30.  The Australian dollar extended yesterday's recovery to reach $0.7470 before meeting a wall of sellers, which drove it back to almost $0.7425.  Yesterday's low was set near $0.7410.  A break of $0.7400 could signal a test on the $0.7365 area.  The greenback finished yesterday at its best level against the Chinese yuan in almost three weeks, but it continues to be sold on moves above CNY6.40.  Today's yuan gain has nearly recouped the past two session's decline.  Meanwhile, the PBOC continues to set the dollar's reference rate slightly above where bank models project.  Today's fix was at CNY6.3943, while the median (Bloomberg) had it at CNY6.3926.  The PBOC has been relatively generous with its money market provisions.  New fiscal spending this month and next is expected to provide more liquidity.   Europe Before the Bank of England's last meeting (September 23), the December short-sterling interest rate futures implied a yield of 13 bp.  It is now yielding 46 bp.  The market appears to have a 15 bp hike discounted, but economists are split.  A hawkish hold could be delivered if the BOE signaled its intention to raise rates shortly while ending its bond-buying operations early.  With weak retail sales (down five months in a row through September), softer than expected September CPI, and no employment data since the furlough program, is the urgency exaggerated?   The eurozone flash services PMI was shaved lower to 54.6 from 54.7, and this led to the paring of the composite reading to 54.2 from 54.3.  It was the third consecutive decline in the composite PMI.  German and French preliminary estimates were confirmed.  Spain surprised on the upside with a service reading of 56.6.  Economists had expected a 55.8 report after 56.9 in September.  The smaller than expected decline saw a 56.2 composite, down from 57.0, but not as soft as expected.  Italy disappointed.  The services PMI fell to 52.4 from 55.5.  The median forecast was 54.5.  The composite stands at 54.2, down from 56.8.   Germany's September factory orders showed a muted response after August's revised 8.8% drop (initially reported as a 7.7% decline).  The 1.3% gain was less than expected and solely a function of foreign orders (6.3%).  Moreover, the foreign orders were from outside the euro area.  They rose by 14.9%, offsetting August's 14.7% fall.  Domestic orders fell by 5.9%.  It is the third consecutive month domestic orders declined.   The euro has been pushed below $1.1550, where a 1.1 bln euro option expires today.  It initially tried extending yesterday's post-Fed gains but stalled a little above $1.1615.  That area now looks like formidable resistance.  Support is seen in the $1.1525-$1.535 area, but note that the $1.1490 level corresponds to the (50%) retracement objective of the euro's rally from March 2020 lows.  A break of that targets the $1.13 area.  Similarly, sterling's advance yesterday was marginally extended but stopped in front of $1.3700, which is also below the 20-day moving average.  It has been sold in the European morning ahead of the BOE outcome. It has found support in front of $1.3600. Below there, the $1.3575 area marks the (61.8%) retracement target of the rally from the late September low near $1.3410.  Sterling's retreat has left the intraday momentum indicators stretched, warning of the risk of a bounce after the BOE.   America By announcing it would reduce its bond-buying starting this month by $15 bln (a month), the Federal Reserve delivered as expected. The Fed's statement was modified slightly, saying that the elevated prices are "expected" to be transitory.  There was no hawkish surprise, and Chair Powell's tried to thread the proverbial needle by acknowledging that price pressures are likely to continue well into next year.  Treasury Secretary Yellen suggested a similar scenario recently.  The dollar softened, and stocks rallied on the news.   Separately, we note that recently President Biden said he would soon make an announcement about the Fed Chair, whose term expires next February.  Yellen has defended Powell on two issues--financial market regulation and the officials trading/investing--suggests that if Biden does not re-nominate Powell, he would likely have to overrule his Treasury Secretary.   Powell cited the dramatic rise in the Employment Cost Index at yesterday's press conference.  Today, the US reports a more holistic measure of labor costs:  unit labor costs, which incorporates productivity.  The fact of the matter is that unit labor costs fell in H1. However, they are volatile quarter-to-quarter, and unit labor costs likely rise sharply in Q3.  It appears that many employers thought to get by over the summer, waiting for the end of the extra federal unemployment compensation and the re-opening of schools to free up labor without having to pay up for it.  Indeed, Q3 non-farm payroll growth averaged 488k a month, the lowest three-month average since February. This is because the employers preferred to have the existing workers do more overtime than hire.  However, the end of the benefits and re-opening of schools so far proved insufficient.  Another factor that Powell could have cited was the loss of immigrant workers. Pre-pandemic immigrants accounted for one-in-five manufacturing workers and closer to one-in-four in some industries like semiconductors, medical equipment, and food processing.  This squeeze end around November 8 as the border will be re-opened with work visas.  The US has lobbied OPEC+ to boost output faster.  Part of the problem is that some OPEC+ members, like Nigeria and Angola, have been unable to increase production, leaving OPEC+ short of the 400k barrels a day they were going to add last month.  Separately, the US reportedly will join new talks with Iran later this month.  The prospect of Iranian oil also weighed on prices.  In addition, some of the large shale producers have indicated plans to boost output. The US also reports the September trade balance.  A record shortfall is expected of a little more than $80 bln.  Weekly jobless claims pale in comparison to tomorrow's national employment report.  Canada reports September's merchandise trade balance.  Through August, Canada has reported an average monthly surplus of $700 mln.  In the first eight months of 2020, the average deficit was a little more than C$3 bln and in the same period, in 2019 recorded an average deficit of C$1.5 bln. The US dollar spiked to almost CAD1.2460 yesterday but reversed lower and settled on its lows near CAD1.2390.  It is consolidating and straddling CAD1.2400 today.  There is an option for nearly $800 at CAD1.2420 that expires today and one for $515 mln at CAD1.2375 that expires tomorrow.  The intraday momentum indicator suggests limited upside in early North America.  The greenback posted a potential key reversal against the Mexican peso yesterday by first making a new high for the move (~MXN20.98) and then selling off to close below the previous session's low.  Yesterday's low (~MXN20.5150) has held so far today as the dollar consolidates mostly below MXN20.60.  An option for $430 mln at MXN20.55 expires today.  A break of MXN20.50 sees nearby support around MXN20.47 (the 20-day moving average ) and MXN20.44 (the 6.18% retracement objective of the dollar's rally from late last month).  Disclaimer
Meaning Of The Bull Market - The Opposition To The Bear One

Where‘s the Beef?

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

Silver, patience pays

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

Intraday Market Analysis – AUD Seeks Support

John Benjamin John Benjamin 03.11.2021 08:48
AUDUSD breaks lower The Australian dollar softened after a dovish RBA stressed that inflation was still too low to hike soon. The pair has met stiff selling pressure near last July’s high of 0.7550. While sentiment has turned positive from the daily chart’s perspective, an overbought RSI has made buyers cautious. The drop below 0.7490 then 0.7450 has forced out leveraged positions, exacerbating the downward pressure. 0.7380 on the 30-day moving average would be the next support. An oversold RSI may attract bids in this congestion area. NZDUSD retreats from double top The New Zealand dollar bounced back after the Q3 unemployment rate fell to 3.4%. A double top at 0.7220 suggests exhaustion in the kiwi’s ascent after the RSI repeatedly pointed to an overbought situation. A break below 0.7130 indicates that the bears have gained the upper hand, pushing the opposing side to close their bets. The previous supply zone around 0.7070 has turned into a demand zone. This coincides with the 30-day moving average, and along with an oversold RSI, it may gain support from a buy-the-dips crowd. UK 100 tests demand zone The FTSE 100 consolidates gains as investors turn their attention to the US Federal Reserve meeting. The bulls are looking to get a foothold after a close above the August peak at 7240. The RSI’s double top in the overbought zone is a sign of overextension in the short term. Trend followers may look to stake in at the psychological level of 7200, a key demand zone on the 20-day moving average. A bearish breakout would deepen the pullback to 7140. On the upside, a rebound above 7310 would resume the rally.
USDJPY best at support at 113.40/30 again today

USDJPY best at support at 113.40/30 again today

Jason Sen Jason Sen 02.11.2021 10:50
USDJPY best at support at 113.40/30 again today. EURJPY up one day, down the next day in the sideways trend for over a week. Becoming more erratic & therefore difficult to trade. CADJPY also more random & more erratic last week, although shorts at first resistance at 9240/60 work again yesterday with a 70 pip profit offered this morning. Update daily at 06:30 GMT Today's Analysis. USDJPY first support again at 113.40/30. Longs need stops below 113.20 so the risk is very small. A break lower is a sell signal targeting 113.00/112.90 & 112.60/50 for profit taking on shorts. Longs at 113.40/30 target 113.80/90. We should pause here but further gains meet minor resistance at last week's high of 114.25/30. Strong resistance at the October high of 114.50/70. Shorts need stops above 114.80. A break higher is a medium term buy signal. EURJPY first support at 131.60/40, stop below 131.35. A break lower is a sell signal initially targeting 130.90 & we could hold here initially, maybe even bounce to 131.40/50. Further losses meet an important buying opportunity at 130.40/20 with stops below 130.00 First resistance at 132.20/30 . Above 132.40 can target 132.90, perhaps as far as strong resistance at October's high of 133.30/50. CADJPY shorts at first resistance at 9240/60 worth a try again targeting 9200 & 9175 (hit as I write). A buying opportunity at 9120/00 with stops below 9090. Gains are likely to be limited with first resistance at 9240/60. However a break higher retests October's high at 9295/9305. Emini S&P December on the way to the next target of 4625/35 this week. Longs at first support at 4590/85 starting to work. Nasdaq December closed at the new all time high at 159864 keeping the outlook positive for this week as we hit the next target of 15900/950. Emini Dow Jones December making a clear break above the all time high at 35540/550 for a buy signal as we hit the next target of 35800/850 & now look for 36000/100. Update daily at 07:00 GMT. Today's Analysis. Emini S&P longs at first support at 4590/85 are expected to target 4625/35 but a high for the day is likely if tested today. Shorts are very risky of course in the bull trend. A break above 4645 is the next buy signal. First support at 4590/85. Longs need stops below 4575. Strong support at 4545/35. Longs need stops below 4525. Nasdaq December now expected to target 15900/950 (hit yesterday) & now 16050/080. Downside is expected to be limited ion the bull trend with first support at 15780/750. Stop below 15720. A break lower targets 15670 with strong support at 15580/540. Longs need stops below 15500. Emini Dow Jones December now targeting 35800/850 & 36000/100, even as far as 36250/280. Downside is expected to be limited with minor support at 35670/650 & 35525/500. A buying opportunity at 35320/280 with stops below 35250. To subscribe to this report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk No representation or warranty is made as to the accuracy or completeness of this information and opinions expressed may be subject to change without notice. Estimates and projections set forth herein are based on assumptions that may not be correct or otherwise realised. All reports and information are designed for information purposes only and neither the information contained herein nor any opinion expressed is deemed to constitute an offer or invitation to make an offer, to buy or sell any security or any option, futures or other related derivatives.
Here We Go Again - Gold Simply Can’t Stand $1,800!

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

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

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

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

Calling the Precious Metals Bull

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

USD Index: Are New Milestones in the Cards?

Przemysław Radomski Przemysław Radomski 08.11.2021 16:54
While the greenback's failed breakout on Nov. 4th may seem bearish, it faced a similar situation in August and October, only to recover and achieve new highs. After the USD Index’s negative response to the ECB’s monetary policy meeting on Oct. 28, I warned on Oct. 29 that dollar bears were unlikely to celebrate for much longer. I wrote: Based on the rather random comment during the conference, the traders panicked and bought the EUR/USD, which triggered declines in the USD Index (after all, the EUR/USD is the largest component of the USDX). Was the breakout to new 2021 lows invalidated? No. The true breakout was above the late-March highs (the August highs also served as a support level, but the March high is more important here) and it wasn’t invalidated. What was the follow-up action? At the moment of writing these words, the USDX is up and trading at about 93.52, which is just 0.07 below the August high in terms of the closing prices. Consequently, it could easily be the case that the USD Index ends today’s session (and the week) back above this level. You’ve probably heard the saying that time is more important than price. It’s the end of the month, so let’s check what happened in the case of previous turns of the month; that’s where we usually see major price turnarounds. I marked the short-term turnarounds close to the turns of the month with horizontal dashed blue lines, and it appears that, in the recent past, there was practically always some sort of a turnaround close to the end of the month. Consequently, seeing a turnaround (and a bottom) in the USD index now would be perfectly normal. And after the forecast turned into reality, the USD Index surged above 94 and remains poised to resume its uptrend over the medium term. To explain, if we zoom in on the four-hour chart, it highlights the importance of the price action on Nov. 5. During the session, the USD Index hit a new 2021 intraday high before a small reversal occurred. This might seem bearish at the first sight (it’s a failed breakout, after all)… However, similar developments were also present in August and October. After the dollar basket attempted to make new highs and failed, the greenback eventually regained its composure and achieved the milestones. As a result, another 2021 high should occur sooner rather than later. Please see below: The first failed attempt to break above the previous highs triggered sizable short-term declines. This happened in August (marked with red). The second – September – attempt triggered only a small correction (marked with green) that was then followed by a bigger rally. Similarly, the – marked with red – October invalidation was followed by a sizable decline, and the current one (marked with green), is relatively small. And it’s likely to be followed by a short-term rally, just like the September correction was. On top of that, as you can see on the below chart, the current setup for the USD Index and gold mirrors what we witnessed in early August. Following its sharp summertime rally, the USD Index moved close to its 50-day moving average without reaching it. And after buyers stepped in, the USD Index resumed its uptrend and made a new 2021 high. Moreover, with a similar pattern and a similar reading on the USD Index’s RSI (Relative Strength Index) present today, the greenback’s outlook remains robust. I marked both cases with red, vertical, dashed lines below. More importantly, though gold, silver, and mining stocks’ upswings concluded once the USD Index bottomed close to its 50-day moving average in August and sharp drawdowns followed. Moreover, while gold, silver, and mining stocks’ recent rallies were likely underwritten by expectations of a weaker USD Index (it did fail to move to new highs, right?) , technical (as described above and below) and fundamental realities contrast this thesis. As a result, the 2021 theme of ‘USD Index up, PMs down’ will likely resume over the medium term. Please see below: Equally bullish for the greenback, the Euro Index remains overvalued and should suffer a material drawdown over the medium term. For example, the index’s previous lows, its 50-day moving average, and its declining resistance line combined to create major resistance and the Euro Index is now retesting its 2021 lows. As a result, the next temporary stop could be ~1.1500 (the March 2020 highs, then likely lower). For context, the EUR/USD accounts for nearly 58% of the movement of the USD Index, and that’s why the euro’s behavior is so important. Please see below: Adding to our confidence (don’t get me wrong, there are no certainties in any market; it’s just that the bullish narrative for the USDX is even more bullish in my view), the USD Index often sizzles in the summer sun and major USDX rallies often start during the middle of the year. Summertime spikes have been mainstays on the USD Index’s historical record and in 2004, 2005, 2008, 2011, 2014 and 2018 a retest of the lows (or close to them) occurred before the USD Index began its upward flights (which is exactly what’s happened this time around). Furthermore, profound rallies (marked by the red vertical dashed lines below) followed in 2008, 2011 and 2014. With the current situation mirroring the latter, a small consolidation on the long-term chart is exactly what occurred before the USD Index surged in 2014. Likewise, the USD Index recently bottomed near its 50-week moving average; an identical development occurred in 2014. More importantly, though, with bottoms in the precious metals market often occurring when gold trades in unison with the USD Index (after ceasing to respond to the USD’s rallies with declines), we’re still far away from that milestone in terms of both price and duration. Moreover, as the journey unfolds, the bullish signals from 2014 have resurfaced once again. For example, the USD Index’s RSI is hovering near a similar level (marked with red ellipses), and back then, a corrective downswing also occurred at the previous highs. More importantly, though, the short-term weakness was followed by a profound rally in 2014, and many technical and fundamental indicators signal that another reenactment could be forthcoming. Please see below: Just as the USD Index took a breather before its massive rally in 2014, it seems that we saw the same recently. This means that predicting higher gold prices (or the ones of silver) here is likely not a good idea. Continuing the theme, the eye in the sky doesn’t lie. And with the USDX’s long-term breakout clearly visible, the wind still remains at the dollar’s back. Please see below: The bottom line? With my initial 2021 target of 94.5 already hit, the ~98 target is likely to be reached over the medium term, and the USDX will likely exceed 100 at some point over the medium or long term. Keep in mind though: we’re not bullish on the greenback because of the U.S.’ absolute outperformance. It’s because the region is fundamentally outperforming the Eurozone, the EUR/USD accounts for nearly 58% of the movement of the USD Index, and the relative performance is what really matters. In conclusion, the USD Index remains in the driver’s seat and new highs should materialize over the medium term. And while gold, silver and mining stocks have rode the S&P 500 higher recently, history has been unkind when the precious metals ignore technical and fundamental realities. Moreover, with gold, silver, and mining stocks’ strong negative correlations with the U.S. dollar standing the test of time, it’s likely only a matter of time before investors realize this as well. Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today. Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care * * * * * All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
The uncertain certainty of bitcoin

The uncertain certainty of bitcoin

Korbinian Koller Korbinian Koller 09.11.2021 10:24
Some might argue that it is best to sit on one’s hands and wait for a time when bitcoin prices are suppressed, and they have a point with the possibility of a market crash. And then again, they might have said that already when bitcoin was still trading at US$3,000 (we do not find it likely that bitcoin will ever retrace to those levels again.). Where are the uncertainties in bitcoins certainty? When you dissect a complex mechanism, you will always find a problem. It is like going to the bakery. It would be foolish to expect to get anything else but bread. Maybe it is better to look at a glass half full, meaning why not look at why bitcoin could be a certainty? BTC in US-Dollar, Monthly Chart, every buyer is a winner if he didn’t sell: Bitcoin in US-Dollar, Monthly chart as of November 9th, 2021. The monthly chart above certainly shows that whoever bought in the past has made a profit by now. Yet, we know “hodling” isn’t an easy thing. Personal risk appetite determines the number of bitcoin that can be held throughout these boom and bust cycles. We solved this dilemma through our quad exit strategy. And we teach low-risk position size building in our free telegram channel. BTC in US-Dollar, Weekly Chart, new all-time highs: Bitcoin in US-Dollar, Weekly chart as of November 9th, 2021. Now, moving forward to real-time, we can make out a similar bullish picture on the weekly chart after our glimpse in the past. Recent events provide data that substantiates bitcoin’s long-term certainty. A look at the last two weeks of October (marked in white) reveals a very brief battle with a minimal retracement level at the double top of all-time highs. Bears barely get a foot in the door, where typically bitcoin experiences significant retracements. To us, a clear sign that the rush is on. Big player money is now rushing to accumulate the necessary size they aim to hold on their books for the long term. Consequently, reducing volatility, one of the most feared aspects of bitcoin, which in times to come will attract more market players to this trading vehicle.   BTC in US-Dollar, Monthly Chart, six figures in 2022: Bitcoin in US-Dollar, Monthly chart as of November 9th, 2021. A look into the future from a monthly chart perspective is confidence building as well. With new all-time high prices printing at the time of publication of this chart book, our bet is still on bitcoin with a 63% over 47% chance that prices will advance from here rather than retracing to a substantially lower price level. So far, bitcoin has done nothing else but eradicate the uncertainties placed in its way. The most stubborn doubter would likely be happy if they had picked up a few coins when they traded at a dollar. What provides confidence for our forecast is the confirmation that bitcoin price retracements are now more modest. This lets us assume that the number of professional traders participating in this market has increased. In the monthly chart above, you can make out that closing prices of the month’s May, June, and July this year closed above the 50% Fibonacci retracement levels. A conservative retracement for bitcoins historical standards. We project for the near term that bitcoin will reach six-figure prices in mid-February next year. The uncertain certainty of bitcoin: From the anticipatory perspective, it seems evident that holding bitcoin is a prudent move with a look into the future. A hedge is needed once the risk is apparent to all, and the house of cards will tumble.  From a real-time perspective, we also find bitcoin to be a “must-own.” The charts above showed the strength with which bitcoin is aching to claim its turf, and it is never good to wait till “fear of missing out” kicks in, and low-risk entry opportunities become scarce.  And from a reactionary perspective, a look in the past, it is evident that anybody would like a piece of the action where bitcoin has nothing but a stunning history of unheard percentage moves and made it from eight cents to US$ 67,000 in just a dozen years.  There are always uncertainties in speculative ventures, but bitcoin itself is a certainty, not to be rationalized away for the years to come. Feel free to join us in our free Telegram channel for daily real time data and a great community. If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can subscribe to our free newsletter. This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting. By Korbinian Koller|November 9th, 2021|Tags: Bitcoin, bitcoin consolidation, Bitcoin mining, crypto analysis, Crypto Bull, crypto chartbook, crypto mining, low risk, quad exit, technical analysis, trading education|0 Comments About the Author: Korbinian Koller Outstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.
Intraday Market Analysis – GBP Seeks Support

Intraday Market Analysis – GBP Seeks Support

John Benjamin John Benjamin 09.11.2021 09:01
EURGBP sees a temporary pullback The sterling inched higher as traders took profit after the BOE’s dovish shift last week. The rally above the supply area of 0.8570 is a sign of commitment from the buy-side. Strong momentum has forced the bears to rush for the exit door. 0.8620 is now the next resistance. Its break would bring the euro to September’s high at 0.8660, where a breakout may lead to a bullish reversal in the medium-term. In the meantime, an overbought RSI is causing a pullback. The base of the latest surge at 0.8465 is an important support. NZDUSD tests key resistance The New Zealand dollar recoups losses as risk appetite recovers. The pair has met buying interest at 0.7070 along the 20-day moving average. A bullish RSI divergence is a sign that the bearish momentum has waned. When this happens in a demand zone, it makes a rebound of greater significance. 0.7180 is a major hurdle ahead following a previously botched bounce. Its breach may resume the kiwi’s uptrend above 0.7220. The RSI’s double top in the overbought area may briefly limit the bullish impetus. GER 40 consolidates gains The Dax 40 continues to rally in hopes of a prolonged low-rate environment. The bulls are pushing towards 16200 after the index reached the milestone at 16000. However, the RSI’s multiple ventures into the overbought area and a bearish divergence indicate that the rally may have overextended. A temporary pullback would be necessary to let the bulls catch their breath. 15920 is the immediate support. Further down, 15730 on the 20-day moving average would be an area of interest.
Bitcoin is climbing undeterred higher

Bitcoin is climbing undeterred higher

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

Great Profitable Runs

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

Intraday Market Analysis – Euro Attempts To Bounce

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

How Strange! Gold Rises on Strong Payrolls!

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

Profiting on Hot Inflation

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

Intraday Market Analysis – USD Cuts Through Resistance

John Benjamin John Benjamin 11.11.2021 09:26
USDJPY attempts a bullish reversalThe US dollar broke higher after October’s CPI exceeded expectations.On the daily chart, the RSI has dropped back into the neutrality area. The greenback has secured bids around the 30-day moving average. An oversold RSI on the hourly chart attracted a ‘buying-the-dips’ crowd at 112.70.The latest surge above the psychological level of 114.00 has prompted sellers to cover their bets, paving the way for a bullish reversal above 114.25. Before that, an overbought RSI may lead to a pullback towards 113.05.XAUUSD breaks resistanceRising US CPI boosts the demand for gold as an inflation hedge.After being unable to clear the daily chart’s triple top at 1833 over the course of the summer, the precious metal has cut through the resistance like a hot knife through butter. High volatility suggests that sellers were quick to bail out.As momentum traders jump in, the bullish breakout would lead to an extended rally towards 1900. An overbought RSI may cause a limited pullback. In that case, 1823 at the base of the rally may see strong buying interest.USOIL retreats from resistanceWTI crude edged lower after the EIA reported a slight rise in US inventories. The price’s swift recovery above the sell-off point at 83.00 is an indication that sentiment remains overall optimistic.However, the previous peak and psychological level of 85.00 seems like a tough hurdle to overcome for now. An overbought RSI has triggered a temporary pullback with a break below 81.90. In turn, this is deepening the correction towards 79.30.Trend followers may see the limited retracement as an opportunity to stake in.
Intraday Market Analysis – USD Seeks Support - 19.10.2021

Intraday Market Analysis – USD Keeps Bullish Momentum

John Benjamin John Benjamin 12.11.2021 09:33
GBPUSD buried in bearish territory The pound continues to retreat after Britain’s growth fell short of expectations in Q3. A break below September’s low at 1.3420 has invalidated the latest rebound, putting buyers on the defensive once again. The RSI’s double bottom in the oversold area may ease the bearish push momentarily. A bounce could be an opportunity to sell into strength. 1.3500 is the immediate resistance. On the downside, renewed momentum would drive price action towards last December’s lows around 1.3200. AUDUSD struggles for support The Australian dollar came under pressure after the unemployment rate returned above 5% last month. The sell-off continued after a brief pause over the 30-day moving average near 0.7390, turning the latter into a fresh resistance. The lack of support suggests increasingly downbeat sentiment. The base of October’s bullish breakout at 0.7240 is the next support. The RSI’s oversold situation may cause a limited rebound from the round number at 0.7300, though it is likely to turn out to be a dead cat bounce. US100 tests demand zone The Nasdaq 100 suffers losses as high inflation dents risk appetite. An RSI divergence showed a deceleration in the uptrend, a sign that the rally has overheated. Subsequently, a drop below 16200 has prompted leveraged buyers to exit for fear of a correction. As the RSI inched into the oversold territory, the index saw bids near the breakout zone (15900) from earlier this month. The support-turned-resistance at 16200 is the first hurdle. Then the bulls will need to clear 16400 before the rally can resume.
HK Rallies and PBOC Cuts, US Stocks Stabilize

Focus on the Real Gains

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

Red Hot and Running

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

Gold: Don’t Fret the Small Stuff

Przemysław Radomski Przemysław Radomski 10.11.2021 14:38
  Do small upswings really matter if one has medium-term goals in mind? Have the bulls come home?  The medium-term back and forth movement in gold continues. If I could make the markets move in a certain direction sooner, and end the prolonged consolidation, I would. However, I can’t, and the only thing that I can do is to report to you what I see on the markets and describe what my course of action will be. During yesterday’s session we saw more of what we’ve been seeing in the previous days. Gold moved higher, and gold stocks moved higher (but in a weak manner), and even though gold moved to new monthly highs, the HUI Index is not even back to its late-October highs. It’s boring, discouraging, and demotivating. But the only thing that we can do is to react to what the market is willing to provide us with. What do yesterday’s and today’s pre-market price moves tell us? First of all, the market tells us that the breakout to new highs in the USD Index is not being invalidated. I know that I’ve written this tens of times, but this factor remains intact and it continues to have very important implications going forward. These are bullish for the USD Index and bearish for the precious metals sector. Second, as I had already written earlier today, gold stocks are not showing strength relative to gold. The gold price just made new monthly highs and is now visibly above its October highs, but the silver price and – most importantly - gold stocks are not. In fact, they are just a little above their mid-October highs. Consequently, the thing that one tends to see in the final parts of a short-term rally remains in place. So, when will the decline in PMs finally continue? Based on what I wrote on Monday – in particular about gold’s reversal points, it’s likely to start soon – perhaps as early as this week. As a quick reminder, you can see gold’s triangle-vertex-based reversal on the chart below: And you can see gold’s long-term cyclical turning point on the chart below: The fact that gold moved to its recent medium-term highs is also a factor here. Resistance provided by those highs is quite likely to trigger a reversal in gold, and based on today’s pre-market action, it’s what we might already be seeing right now. The move lower is small so far, but all bigger moves have small beginnings, and given the reversal points and the resistance that gold just encountered, this could be “it”. Also, speaking of resistance levels, on today’s second chart I placed a red resistance line based on the previous highs. It might be tempting to view the price action below it as an inverse head and shoulders pattern, which could have bullish implications. However, let’s keep in mind that without a breakout above the neck level (approximately the previous highs), the formation is not yet complete, and as such it has NO bullish implications whatsoever, as it simply doesn’t exist yet. All in all, the outlook for the precious metals market is not bullish, even though the last several days / weeks might make one feel otherwise. Before viewing the recent move higher as something significant and/or bullish, please consider how tiny this upswing is compared to the decline in gold stocks between May and October. No market moves in a straight line, and periodic corrections are inevitable. It doesn’t make them a start of a new powerful upswing in each case, though. And if the part of the precious metals market that is supposed to rally the most at the start of a major upswing is so weak right now, then why should one expect the current upswing to be anything more than a corrective upswing within a bigger downtrend? Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today. Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care * * * * * All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
S&P 500: Inflation Fears May Push Stock Prices Lower

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

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

Intraday Market Analysis – USD Seeks Consolidation

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

Silver, the waiting game

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

Gold 'n Silver 'n CPI Oh My!

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

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

Marc Chandler Marc Chandler 15.11.2021 10:14
The jump in US headline CPI above 6% crossed some Rubicon and injected dynamic into the process.  The dollar rallied, and new highs for the year were recorded against the euro and sterling.  The dovish tapering announcement by the Fed on November 3 was completely unwound as the December 2022 Fed funds futures returned to the high-yield mark of 66 bp ahead of the weekend.   The two-year yield rose from about 39 bp at the start of the last week to almost 55 bp.  The volatility of the bond market (the equivalent of the VIX for the S&P 500) surged back to the year's high (above 78%).   Ultimately, the idea that R-star, the real short-term interest rate when the US economy is at full capacity and inflation stable, has continued to trend lower will likely cap nominal rates.  Equities wobbled, and the S&P 500 snapped an eight-day advance, and the NASDAQ's 11-day rally stalled.  US equities stabilized and posted modest gains in the past two sessions.   The rise in price pressures requires the Federal Reserve to be more flexible to address a range of possible outcomes.  The pace of the tapering is the main constraint on policy.  The FOMC statement committed the Fed to reduce the bond-buying by $15 bln in November and December.  While it anticipated that the pace would continue, it reserved the right to adjust the rate.  This is likely to be the focus in the run-up to the mid-December meeting.  To finish QE in March, as St. Louis Fed's Bullard, a noted hawk, has argued, the Fed would need to double its pace of tapering to $30 bln a month starting in January.  What is at stake is when the Fed's rate hike cycle can begin, not the terminal rate, which is expected to be below 2%.   Dollar Index:  The CPI saw the Dollar Index surge to convincingly surpass the (38.2%) retracement target of the decline from the March 2020 high (~103) to the January 6 low (~89.20).  That retracement (~94.55) had been penetrated briefly before, but it did not stick.  This time, the Dollar Index rose to new highs for the year, slightly above 95.25.  The next retracement (50%) is found a little above 96.00, and the (61.8%) objective is almost 97.75.   The momentum indicators suggest a high is not yet in place, but the move since the mid-week CPI shocker, above the upper Bollinger Band (~95.00) warns against chasing it.  That said, initial support is likely in the 94.60-94.75 area.   Euro:  The euro was driven below $1.15 after the US CPI report and failed to resurface above this previous floor, which now acts as resistance.  A low near $1.1435 was recorded ahead of the weekend.  Neither the MACD nor Slow Stochastic is over-extended, but, as we saw with the Dollar Index, the exchange rate is outside the Bollinger Band (slightly below $1.1465) and settled below it for the third consecutive session ahead of the weekend. There is little chart support until the $1.1290-$1.1300 area is approached.  Moreover, if the euro has carved out some kind of topping pattern, the risk may extend toward $1.10.   Japanese Yen:  From around mid-September through mid-October, the dollar broke out of the old JPY109-JPY111 range to reach JPY114.70 on October 20.  It consolidated at lower levels and approached JPY112.70 on November 9.  The jump in the US CPI reported the following day lifted the greenback to JPY114.00, and it reached JPY114.30 before the weekend.  We often experience the dollar-yen exchange rate as a pair often rangebound.  We had anticipated a JPY113-JPY115 range and would allow about a half a yen range or so violation. The MACD has flatlined, while the Slow Stochastic has turned higher.  Although the fit is not perfect, we still look at US yields for directional cues.   British Pound:  Sterling had been turned lower on November 4 from $1.37 by the BOE, who caught the market leaning too far over its skis, arguably encouraged to do so by official rhetoric.  Its attempt to recover was stalled near $1.36, and the US inflation jump set it to new lows for the year.  The low ahead of the weekend was slightly below $1.3355.  The MACD is entering oversold territory, while the Slow Stochastic, which leveled off, seems to be slipping into over-extended territory as well.  After closing for two sessions below the lower Bollinger Band, it finished the week back above it (~$1.3355).  A close above $1.3400 would suggest a consolidative phase lies ahead.  Last December, sterling recorded lows $1.3135-$1.3185, and the risk is for this area to be tested.   Canadian Dollar:  Since the US CPI surprise, the Canadian dollar has been the weakest of the major currencies, falling around 0.75% against the greenback.  It was the third consecutive weekly decline for the Loonie, which was preceded by a five-week advance.  The US dollar posted an outside up day in the middle of last week on the back of the CPI news.  It rallied from slightly below CAD1.2390 to a little above CAD1.25.  On Thursday, when US and Canadian banks were closed for holidays, the dollar rose to almost CAD1.2600 and made a marginal new high ahead of the weekend.  This met the (50%) retracement of the US dollar's decline since the CAD1.29 level was approached a couple of days before the September 22 FOMC meeting.  The Slow Stochastic is over-extended, though the MACD has more scope to run.  Here too, the market moved quickly, and the greenback settled the past two sessions above the Bollinger Band (~CAD1.2555). The CAD1.2480 area may offer initial support.   Australian Dollar:  The Australian dollar recorded the low for the year on August 20, near $0.7100.  It recovered into early September (~$0.7480) before being turned back to $0.7170 by the end of the month. The Aussie launched another advance last month that carried to around $0.7555 and the 200-day moving average.  It has come under new pressure this month and fell to nearly $0.7275 ahead of the weekend, meeting the (61.8%) retracement target of the overall rally since August 20.  It closed on a firm note above $0.7300.  The Slow Stochastic is over-extended and could turn up next week.  The MACD is still pointing lower.  After settling out the Bollinger Band on Wednesday and Thursday, the Aussie moved back into it (~$0.7300) ahead of the weekend.  Initial resistance is seen in the $0.7335-$0.7355 band.   Mexican Peso:  The US CPI boosted the dollar by nearly 1.6% against the peso, the most in five months.  It was the only advance of the week, but it was sufficient for the greenback to close around 0.6% stronger.  The high for the week (~MXN20.7225) was recorded in the hours after the central bank delivered its fourth quarter-point rate hike.  Banxico showed no appetite to increase the pace, unlike other regional central banks, even though CPI is still accelerating.  Still, the greenback slightly exceeded the (61.8%) retracement target (~MXN20.70) of its decline from the November 3 high (~MXN20.98) to the November 9 low (~MXN20.2515) before retreating ahead of the weekend.  Support is seen around the 20-day moving average (~MXN20.42).  Among emerging market currencies, the Brazilian real (~2.3%) and the Chilean peso (1.6%) fared best.  The Hungarian forint (~-2.9%) and the Turkish lira (-2.75) saw the largest losses.  The JP Morgan Emerging Market Currency Index fell by about 0.40% last week, the eighth weekly decline in the past ten.   Chinese Yuan:  One would not know it by reading much of the free financial press, but the Chinese yuan is the strongest currency in the world this year.  Its 2.3% advance eclipses the Canadian dollar, the only major currency stronger against the US dollar on the year (~1.3%).  The tensions in Europe and the pullback in oil prices saw the Russian rouble tumble almost 2.3% last week.  It was knocked from its perch as the top performer, allowing the yuan to pull ahead.  The dollar settled last week, slightly under CNY6.38, its lowest close since May 31, when it recorded a three-year low (~CNY6.3570).  The trend line connecting the 2014 dollar-low and 2018 low is frayed in May and June but essentially held.  It is now being violated more convincingly.   Sentiment toward investment in China has become in fashion again.  The NASDAQ Golden Dragon Index that tracks Chinese companies that trade in the US rallied nearly 7% last week.  China's 10-year yield of 2.80% may not sound particularly exciting, but it is the only benchmark that has not sold off this year.  The yield has fallen 20 bp.    Disclaimer
EURUSD shorts at first resistance at 1.1610/20 are working today

EURUSD shorts at first resistance at 1.1610/20 are working today

Jason Sen Jason Sen 03.11.2021 14:18
EURUSD shorts at first resistance at 1.1610/20 are working today USDCAD remains in a sideways range, good for scalping opportunities only as we hold first resistance again at 1.2420/40. Shorts stop above 1.2450. GBPCAD did not break lower but is holding around the low. Today's Analysis. EURUSD first resistance again at 1.1610/20. Shorts need stops above 1.1630. A break higher can target strong resistance at 1.1695/1.1705. Exit longs & try shorts with stops above 1.1720. A break higher is a buy signal targeting 1.1765/70 & 1.1800/10. Shorts at 1.1610/20 target 1.1580/75 (hit) perhaps as far as first support at the October low at 1.1530/20 today for profit taking. A break below 1.1510 is a sell signal initially targeting 1.1490 & although this could hold initially (a low for the day certainly possible but longs are risky) we eventually expected to target 1.1430/20. USDCAD first resistance again at 1.2420/40. Shorts stop above 1.2450. Be ready to buy a break above 1.2450 targeting 1.2510/30. Shorts at 1.2420/40 target 1.2370/65 (likely to pause here) then support at 1.2300/1.2280. Longs here need stops below 1.2270. A break lower is a sell signal. GBPCAD hits targets of 1.6950/40 & 1.6910/1.6890 for profit taking on shorts as finally we head for the target of 1.6870/60, perhaps as far as support at 1.6800/1.6780. First resistance at 1.680/90. Shorts need stops above 1.7010. We can try shorts again at 1.7050/70 but must stop above 1.7090. To subscribe to this report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk No representation or warranty is made as to the accuracy or completeness of this information and opinions expressed may be subject to change without notice. Estimates and projections set forth herein are based on assumptions that may not be correct or otherwise realised. All reports and information are designed for information purposes only and neither the information contained herein nor any opinion expressed is deemed to constitute an offer or invitation to make an offer, to buy or sell any security or any option, futures or other related derivatives.
MSFT, Johnson&Johnson and More Companies With Reports to be Released shortly

Weekly S&P500 ChartStorm - 14 November 2021

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

The Greenback Slips at the Start the New Week

Marc Chandler Marc Chandler 15.11.2021 12:19
Overview:  While the Belarus-Poland border remains an intense standoff, there have been a couple other diplomatic developments that may be exciting risk appetites today.  First, Biden and Xi will talk by phone later today.  Second, reports suggest the UK has toned down its rhetoric making progress on talks on the implementation of the Northern Ireland Protocol.  Equities in the Asia Pacific region were mostly firmer, with China a notable exception among the large markets, even though the October data was generally stronger than expected.  Europe's Stoxx 600, which has fallen only once this month, is edging higher to new records, while US futures are enjoying a firmer bias.  Benchmark 10-year yields are 1-2 bp lower, which puts the Treasury yield near 1.55%.  The European periphery is outperforming the core.  The dollar is soft.  The Scandis and Antipodeans lead the move, while the euro, yen, and British pound are little changed.  Emerging market currencies are also mostly stronger.  Here the Philippine peso is notable as it falls the most in seven weeks as corporates bought dollars.  After falling by 0.65% last week, the JP Morgan Emerging Market Currency Index is edging higher today.  Gold is snapping a seven-day rally, stalling near $1868.  Support is seen in the $1842-$1845 area.  January WTI  was sold again as it poked above $80.  It is pinned near last week's lows (~$78.65) as the US response is awaited.  European natural gas futures are firm as the capacity auction results are awaited, and Europe faces its first cold snap of the season.  Iron ore and copper prices are posting small losses.   Asia Pacific Japan's Q3 GDP disappointed, but it is old news and will likely spur Prime Minister Kishida to support a large supplemental budget, which could be unveiled by the end of the week.  Economic growth in the world's third-largest economy contracted for the fifth quarter in the past eight.  The 0.8% loss of output in Q3 was more than the 0.2% expected by the median forecast in Bloomberg's survey.  Consumption (-1.1%), business spending (-3.8%), and public investment (-1.5%) did the most damage.  The GDP deflator was unchanged from Q2 at -1.1%.  The Japanese economy is recovering here in Q4.  Talk of the size of the supplemental budget has increased to around JPY40 trillion (~$350 bln) from JPY30 trillion.  It is expected to include a cash payment for 18-year olds and younger, a tax break for companies that boost wages, a new subsidy for domestic travel, snd pay hikes for caregivers. China's October data was stronger than expected but does not shake off concern that the world's second-largest economy is struggling.  The year-over-year pace of retail sales rose for the second consecutive month in the face of expectations for a decline.  The 4.9% increase follows the 4.4% gain in September and 2.5% in August. In October 2020, it rose 4.3% year-over-year.  Industrial output rose 3.5% from a year ago. It was the first increase since March. Last October, it had increased by 6.9%. The surveyed joblessness was steady at 4.9%.  Fixed asset investment and property investment slowed.  Chinese officials have not addressed the economic slowdown with large-scale fiscal or monetary initiatives.   We have suggested that the dollar-yen exchange rate has entered a new range after trending higher from mid-September through mid-October.  That new range is likely JPY113-JPY115, and to find the floor, the dollar briefly traded below JPY112.80 last week. After spiking back to JPY114.00 on the US CPI surprise, the greenback continues to hover around there, the middle of the range.  Tomorrow's expiring options ($830 mln at JPY113.40 and $1.6 bln at JPY114.30) may mark the near-term range.  The Australian dollar is building on its pre-weekend recovery.  It saw a low slightly above $0.7275 on Friday and settled on its highs (a little above $0.7330).  It has risen to $0.7365, and the intraday momentum is getting stretched.  Look for resistance near $0.7375.  The greenback edged slightly lower against the Chinese yuan to record a new six-month low (~CNY6.3785) before recovering within a narrow range.  It is trading slightly above CNY6.3830 in late dealings. The PBOC set the dollar's reference rate at CNY6.3896, a little below the median forecast of CNY6.3896 (Bloomberg survey).  The PBOC rolled over in full the policy loans (CNY1 trillion) coming due this month, and the overnight repo rate fell by seven basis points to 1.78%, the lowest in three weeks.   Europe Tensions between the UK and EU appear to have taken a step away from the brink.  A deal on medicine supplies from other parts of Great Britain to Northern Ireland may have been the critical catalyst.  Reports suggest a de-escalation of UK rhetoric threatening to invoke Article 16, which allows for unilateral over-riding of the Northern Ireland Protocol under certain circumstances of serious economic, environmental, or societal risks.  Separately, two polls have begun showing Labour is edging ahead of the Tories. The Opinium poll (published in the Guardian) gave Labour a one percentage point lead, the first since January.  The Savanta Com Res poll (for the Daily Mail) put Labour ahead by six percentage points at 40%.  The main issue appears to be Prime Minister Johnson's handling of several ethics issues.  His personal support has also waned.    The US was warning at the end of last week that Russian may be preparing to invade Ukraine. Moscow seems to be acting out of fear, fear of the US and Europe creeping presence in Ukraine.  If Ukraine is going to remain independent, Russia insists it can only be a (weak) buffer state.  US rhetoric seemed aggressive in Moscow.  Last month US Defense Secretary Austin argued that no third country [i.e., Russia] has a veto over NATO membership decision[i.e., Ukraine].    Poland, Lithuania, and Latvia are considering formally requesting NATO consultations, while the EU is expected to announce new sanctions on Belarus later today.  Separately, we note reports that India has begun taking delivery of the S-400 air defense missile system from Russia (part of a $5.5 bln deal), which is the same that earned Turkey American sanctions.   The euro edged above the pre-weekend high, but the tone remains fragile, and for the third consecutive session has been unable to resurface above old support at $1.1500.  Since the US CPI report in the middle of last week, it has fallen, and the sideways movement could alleviate the overextended technical condition.  Sterling extended its pre-weekend recovery to reach $1.3440 before sellers reemerged to knock it to the session low of almost $1.3400.  We suspect it can move higher in North America today and target the $1.3480 area.   America The US seems more eager for the Biden-Xi call than Beijing  Expectations should be low, and with no actionable outcome likely (not even a statement), there appears to be little reason to spin it as a virtual summit. The top officials and the senior staff of the two largest economies should talk.  Previously, there were high-level meetings regularly.  Since their last call, a new US-UK-Australian alliance was announced that will result in Australia acquiring nuclear-powered submarines, and it was confirmed that the US has had military personnel in Taiwan since last November.  China continues with its intimidation campaign of repeatedly entering Taiwan's air-identification zone. China's assessment of the US is unlikely to have changed.  Beijing sees the same thing many others do.  Biden's approval rating has fallen to near 41%, and less than that has a favorable view of his handling of the economy.  At the end of last week, the Univerity of Michigan's consumer sentiment measure (preliminary November) fell to its lowest in a decade.  Surveys continue to point to the likelihood that the Democratic Party will lose both houses of Congress in next year's mid-term.  And to underscore the pressure on Biden, the US Court of Appeals (5th Circuit) sustained a block on OSHA's ordered vaccine mandate (or weekly test).  With the sixth plenum over,  Xi has, by all accounts, confirmed his ascendancy and domination of Chinese politics for years to come.   The week's economic calendar for the US begins off slowly.  The November Empire State manufacturing survey is on tap.  It has been in a sawtooth pattern, alternating between gains and losses for the past five months.  It fell sharply (19.8 from 34.3) in October and is expected to have turned up in November.  The US reports October retail sales and industrial production figures tomorrow. Fed officials begin taking to the public stage starting tomorrow.  Over the course of the week, around 11 officials are scheduled to speak.  In addition to US bills, the Treasury Dept sells 20-year bonds, whose auctions have been among the most challenging for coupons, and 10-year TIPS at the end of the week.   Canada reports September manufacturing and wholesale sales today, but the October existing home sales may be more important.  Tomorrow Canada reports housing starts, but the highlight of the week is Wednesday's October CPI.  Price pressures are accelerating in Canada, and the headline CPI is likely to move toward 5% (4.4% in September).  The swaps market is pricing in about 65 bp of tightening in six months.  This week, Mexico has a light economic diary after last week's higher than expected CPI (6.24%) and Banxcio's 25 bp rate hike (to 5%).  Brazil also has a light economic calendar this week.  Last week featured a further rise in (IPCA) CPI (10.67% vs. 10.25%) and weak September retail sales (-1.3% vs. -0.6% median forecast in Bloomberg's survey after a revised -4.3% fall in August). Last week's US CPI shocker saw the greenback jump from around CAD1.24 to slightly above CAD1.26, roughly the 50% retracement of the slump from CAD1.2900 on September 20.  It settled last week on a soft note, and some follow-through selling has seen the US dollar eased to about CAD1.2525.  A break here sees CAD1.2500 and then possibly CAD1.2470.  Since last September, the greenback has moved into a new and higher range against the Mexican peso.  It has not traded much below MN20.12.  Nor has it spent much time above MXN20.90.  It is in the pre-weekend range (~MXN20.45-MXN20.72).  Look for the consolidative day to continue through the local session.  The Brazil real was the strongest emerging market currency last week, rising almost 1.6% against the US dollar.  The US dollar found support around BRK5.40. Trendline support (from June, August, and September lows) and the 200-day moving average are near BRL5.36.   Disclaimer
S&P 500: More Short-Term Uncertainty As Trading Range Narrows

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

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

Getting Real on PMs and Inflation

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

Intraday Market Analysis – Gold Approaches Supply Zone

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

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

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

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

Paul Rejczak Paul Rejczak 15.11.2021 15:51
  Stocks retraced some of their recent declines on Friday and the S&P 500 index is expected to open higher this morning. So is the downward correction over? The S&P 500 index gained 0.72% on Friday, Nov. 12, as investor sentiment turned bullish and the market bounced from the support level of around 4,650. On Wednesday it fell to the local low of 4,630.86 and it was almost 88 points or 1.86% below the previous week’s Friday’s record high of 4,718.50. The recent rally was not broad-based and it was driven by a handful of tech stocks like MSFT, NVDA, TSLA. The market seemed overbought in the short-term and traded within a topping pattern. But today the index may get back to the 4,700 level. The nearest important support level remains at 4,630-4,650 and the next support level is at 4,600. On the other hand, the resistance level is at 4,700-4,720. The S&P 500 broke below its steep short-term upward trend line recently, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Nasdaq Bounced From the 16,000 Level Let’s take a look at the Nasdaq 100 chart. In the previous week the technology index broke above the 16,000 level and it was trading at the new record high. The market accelerated higher above its short-term upward trend line. But since then it has been retracing the rally. On Friday the index retraced some of the recent declines, however it remained below its short-term local lows, as we can see on the daily chart: Apple Is Still Close to $150, Microsoft Remains Relatively Strong Let’s take a look at the two biggest stocks in the S&P 500 index, AAPL and MSFT. Apple continues to fluctuate along the $150 price level. It is still well below the early September record high. Microsoft stock was reaching new record highs recently but last week it broke below its upward trend line. So those two big cap tech stocks remain mixed, as we can see on their daily charts: Conclusion The S&P 500 index retraced some of its recent declines on Friday and today it is expected to open 0.4% higher. So it looks like a downward correction is over and the market may reach new highs or at least extend a short-term consolidation along the 4,700 level. Investors will wait for tomorrow’s Retail Sales number release and some Fed-talk later in the week. Here’s the breakdown: The S&P 500 is expected to extend its Friday’s advance this morning and it may get to the 4,700 level. Still no positions are justified from the risk/reward point of view. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
The Top 5 Companies Added to Our Stock Market Watchlist this Quarter

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

Invest Macro Invest Macro 16.11.2021 12:10
https://investmacro.com/2021/11/the-top-5-companies-added-to-our-stock-market-watchlist-this-quarter/ Body: By InvestMacro The fourth quarter of 2021 is approximately halfway over and we wanted to highlight some of the top companies that have been analyzed by our QuantStock system so far. The QuantStock system is an algorithm that examines each company’s fundamental metrics, earnings trends and overall strength trends to pinpoint quality companies. We use it as a stock market ideas generator and to update our stock watchlist every quarter. However, be aware the QuantStock system does not take into consideration the stock price so one must compare each idea with their current stock prices. Many studies are consistently showing overvalued markets and that has to be taken into consideration with any stock market idea. As with all investment ideas, past performance does not guarantee future results. Here we go with 5 of our Top Stocks halfway through Quarter 4 of 2021: Gilead Sciences Inc. Health Care, Large Cap, 4.29% Dividend, Our Grade = A Gilead Sciences Inc. (NASDAQ: GILD) is first up and is a company engaged in developing innovative therapies for life-threatening diseases. Its medicine portfolio includes treatment for conditions ranging from HIV and hepatitis to coronavirus and cardiovascular disorders. If we talk about its financial performance, the bio-pharmaceutical company recently crushed expectations for the third quarter. It posted adjusted earnings of $2.65 per share on revenue of $7.42 billion for the quarter ended September 30. The results easily beat the consensus forecast of $1.76 per share for earnings and $6.29 billion for revenue. If we look at its key financial metrics, Gilead stock is currently trading around $67.48 against its 52-week range of $56.56 – $73.34. Moreover, its P/E value is 11.55, while the company’s total market value is just over $84 billion.   US Steel Materials, Small Cap, 0.77% Dividend, Our Grade = A- United States Steel Corporation (NYSE: X), founded in 1901, is one of the leading steel producers in the U.S. The strong demand for steel helped the company post better-than-expected financial results for the third quarter. United States Steel reported adjusted earnings of $5.36 per share for the three months ended September 30, beating expectations of $4.85 per share. Quarterly revenue of $5.96 billion also surpassed the consensus forecast of $5.79 billion. If we look at the recent price movement, United States Steel stock has gained more than 50 percent value so far in 2021. The 52-week range of the stock is $10.72 – $30.57, while the total market value of the company is approx. $7 billion.   Seagate Technology Information Technology, Medium Cap, 3.18% Dividend, Our Grade = A- Seagate Technology Holdings plc (NASDAQ: STX) is one of the world’s biggest hard disk drives (HDDs) makers. It still generates a large portion of its revenue by selling traditional HDDs. The company last month announced better-than-expected financial results for its fiscal first quarter, driven by solid demand from cloud data center clients. Seagate reported adjusted earnings of $2.35 per share on revenue of $3.12 billion for the three months ended October 1, while analysts were looking for earnings of $2.21 per share on revenue of $3.11 billion. The impressive financial performance drove Seagate stock higher in recent weeks. Seagate stock is now up nearly 80 percent on a year-to-date basis.   Synchrony Financial Financials, Medium Cap, 1.68% Dividend, Our Grade = A- Synchrony Financial (NYSE: SYF) has vast experience in the financial sector. It is one of the biggest credit card issuers in the U.S., working with hundreds of retailers to support their credit card plans. The company last month announced a solid profit for the third quarter. Synchrony reported earnings of $2 per share, significantly higher than 52 cents per share in the comparable period of 2020 and better than the consensus forecast of $1.52 per share. If we see its recent price trend, Synchrony has grown its value at a decent pace so far in 2021. The company’s share price has increased about 47 percent on a year-to-date basis. The 52-week range of the stock is $29.32 – $52.49, while its P/E ratio stands at 7.10.   Lazard Ltd Financials, Small Cap, 3.98% Dividend, Our Grade = A- Lazard Ltd (NYSE: LAZ) specializes in financial advisory and asset management services. It mainly advises clients on mergers and acquisitions (M&A), capital structure, and restructuring plans. It has advised on some of the biggest and most complicated M&A deals of the last century. If we look at its financial performance, Lazard posted mixed results for the third quarter. Its earnings of 98 cents per share exceeded the expectations of 95 cents per share. However, the quarterly revenue of $702 million missed analysts’ average estimate of $715 million. Lazard stock traded mostly lower following the results. Nevertheless, the company’s share price is still up nearly 15 percent on a year-to-date basis. -------------------------------------------------------------------------------------------------- By InvestMacro – Be sure to join our stock market newsletter to get our updates and to see more top companies. All information, stock ideas and opinions on this website are for general informational purposes only and do not constitute investment advice.
The Elephant in the Room

The Elephant in the Room

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

Strategy sessions - How to trade EURUSD and the EUR crosses

Chris Weston Chris Weston 16.11.2021 16:30
The recent EURUSD move could be considered a classic case study for traders, across strategies, and notably for those who cut their craft on timeframes larger than 30 minutes. On one hand, the attraction to own USDs is almost too obvious and that worries me as a USD bull – we have inflation far higher than where the Fed has been forecasting only back in September and unemployment is also trending towards what the Fed considers ‘full employment’. We get the November CPI print on 11 December and that promises to be even hotter than the October print of 6.2% YoY. The Fed meet on 16 December, and in response we should get some punchy upward revisions to their forecasts on labour and inflation. Given the potential revisions on economic projections, it feels incredibly likely that the pace of QE tapering should subsequently accelerate - this sets up an earlier finish for asset purchases and ultimately opens the door to potentially start hiking from as early as May 2022. The Fed’s median projection for the fed funds rate (the dots) in 2022 is for one hike – it’s feasible to believe this lifts to two hikes next year. So, it's straightforward to take a constructive view on the USD, especially when you hear from former Fed officials Bill Dudley and Jeffery Lacker that they think the fed funds rate may need to move to 3% to control inflation. That would get the USD bulls excited, although 3% would probably be seen as a potential policy mistake by many. Year-to-date moves vs the USD Preview (Source: TradingView - Past performance is not indicative of future performance.) The market has some key event risks in its sight and are clearly running a progressively greater short EURUSD position into the Nov CPI print and FOMC meeting – and that has started now. We also have an important ECB meeting (also on the 16 December) and that too could be a volatility event – it promises to be a huge 24 hours for EURUSD and the EUR crosses! We can talk up the USD but looking across the FX universe this appears to be a EUR move, with our EUR spot basket (EURX on MT4/5) at the lowest levels since May 2020. Aside from the JPY, the EUR is the weakest G10 currency in 2021 – and is at the bottom of the pack on a 1-, 3- or 6- month basis – a true momentum play. EURUSD has been at the heart of the falls in our EUR basket and has been predictably well traded by clients. Maybe this is as simple as a central bank divergence play – with the ECB aggressively pushing back on expected rate hikes in 2022, hell-bent on the view that inflation is in fact ‘transitory’. While the Fed, on the other hand, are open-minded to hiking, if it's required, and the market certainly is adamant it will be in 2022 - and could soon be pricing 3 hikes in 2022. Trading diverging monetary policy paths is perhaps the most simplistic form of tactical trading, in essence, it's FX trading 101, and it's working and we’re all witnessing the trend lower. We’re seeing a similar theme play out in EURCAD and EURNZD, and EURCAD is especially interesting as the cross has broken its consolidation range and if we see a hot Canadian CPI print (Thursday 00:00 AEDT) then the market will expect a rate hike in January by the BoC. Diverging monetary policy expectation’s part explains the move in EURCHF, but it clearly doesn’t explain the one-way move in EURJPY from 133.50 to sub-130. As we explain here EURCHF should be on all FX traders’ radars. So the market is clearly happy to sell EURs and the order books at banks would have become quite one-sided. Trend-followers and momentum-based funds, many of them systematic, would have been all over this move lower adding to shorts as price broke level after level. And, while EURUSD implied or realised volatility hasn’t picked up markedly, the rallies from 1.2260 (in May) have been corrective in nature and short-lived Preview (Source: TradingView - Past performance is not indicative of future performance.) The question I'm asking now and noting that US non-farm payrolls, CPI and FOMC meetings are still some way off, is how to best trade the EURUSD in the near term. That's of course determined by strategy – in this case, mean reversion or momentum. To buy EURUSD as a mean reversion play – personally, I feel the counter rallies should be limited so would change to an ultra-short-term moving average (such as the 5-day EMA) over a traditional 20-day MA Leave limit orders to sell into the former downtrend at 1.1415, or take the timeframe in and see the reaction, price action and behaviour into the former trend before initiating shorts Or, just to stay short as a pure momentum trade and have a stop above 1.1464. One way moves and mature trends eventually come to an end, notably when positioning becomes too extreme – over loved consensus trades rarely end well if you’re the last one in. However, while the street is clearly short of EURs, the fundamentals justify this and if heat come out of the move, then it should offer a renewed chance to short as we head into a huge December for FX traders.  That’s how I see it as we head towards a wild December of major event risk.
Bitcoin, a battle for freedom

Bitcoin, a battle for freedom

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

Intraday Market Analysis – USD Pushes Higher

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

European Gas Jumps, while the Euro and Yen Slump

Marc Chandler Marc Chandler 17.11.2021 15:31
Overview: The prospects that the 6.2% CPI will prompt the Fed to move quicker continue to underpin the dollar.  The euro fell to about $1.1265, its lowest level since last September, and the Japanese yen slumped to a fresh four-year low.  The JP Morgan Emerging Market Currency Index tumbled 1% yesterday, the largest decline since February.  A more stable tone is evident in Europe, as the euro has recovered above $1.13, and the JP Morgan Index is paring yesterday's losses.  The dollar is holding just below JPY115.00.  Asia Pacific equities did not fare well.  Only China and Taiwan markets, among the large regional markets, managed to rise.  Europe's Stoxx 600 is edging higher for the sixth consecutive session.  Recall it has fallen only once since October 27.  US futures are narrowly mixed. The bond market is quiet, with the US 10-year hovering around 1.62%.  European yields are a little softer.  Gold slid below $1850 yesterday but has snapped back today to test the $1860 area.  Crude oil is heavy, with the January WTI contract around $78.80, unable to resurface above $80 amid talk that the US and China may coordinate the release of strategic holdings.  Gas prices are up another 7% in Europe today after surging 16% yesterday and 9% on Monday. Due to "unplanned maintenance," a Belarus pipeline to Poland has been shut down, which may last three days.  Iron ore prices are giving back around half of yesterday's 1.2% gain, for the third loss in four sessions.  Copper is off for a third session, losing after dropping 2.2% in the past two sessions.   Asia Pacific Japan's October trade data disappointed.  Exports and imports were weaker than expected, and this resulted in a smaller deficit. Exports slowed to 9.4% year-over-year, down from 13% in September, defying expectations for a small double-digit increase.  Imports were up 26.7% from a year ago, off the heady 38.2% pace seen in September and below the 31.8% projected.  The resulting trade deficit of JPY67.4 bln was about a fifth of what economists anticipated (Bloomberg survey).  It is the third consecutive monthly deficit.  In the first seven months of the year, Japan recorded two deficits.  A year ago, Japan recorded a JPY840 bln surplus.   Reports suggesting that the possibility that the US and China coordinate the drawdown of strategic oil reserves are light on details, but the suggestion itself is enough to weigh on prices.  Still, the International Energy Agency yesterday echoed the broad assessment of America's EIA in anticipating that the tightness of the oil market could ease shortly.   Increased output in the US, Saudi Arabia, and Russia may account for half of the 1.5 mln barrel a day anticipated increase in supply. Nevertheless, the acting head of the EIA warned tapping the US Strategic Petroleum Reserve would have a short-term impact, for which other dynamics would quickly overshadow it.  Separately, note that the API estimated a slight build of 655k barrels in US stocks this past week, while gasoline inventories fell.   In other regional developments, Australia's wage price index rose a modest 0.6% in Q3 for a year-over-year pace of 2.2%.  This was in line with expectations.  It would seem to support the RBA's argument that it need not be in a hurry to raise rates.  The June 2022 T-bill yield settled last month at 69 bp and is now near 40 bp.  Separately, China appears to be allowing "high quality" property developments to return to the asset-backed securities market to raise capital after a three-month hiatus. Lastly, reports suggest Beijing is moving ahead with its import substitution plans to reduce dependency on foreign technology.    The dollar approached JPY115.00, where an option for almost $610 mln expires today.  The dollar has not traded above there since March 2017.  Since the dollar broke above JPY112.00, we have suggested that JPY114.50-JPY115.00 may mark the top of the new range.  While this has worked for the past month, the risk is on the upside.  A convincing break of around JPY115.50 would target the JPY118.00 area.  Initial support is now seen near JPY114.70.  Note that the upper Bollinger Band is slightly below JPY114.80.  The Australian dollar is trading near its lowest level since October 6, near $0.7265.  It is holding above a trendline connecting the August and September lows, which is found near $0.7250 today, but little stands in the way of a test on the $0.7200 in the coming days.  An option for a little more than A$800 mln at $0.7300 is set to expire today.  After posting a key upside reversal yesterday, the US dollar consolidated against the Chinese yuan today, and no follow-through buying materialized.  Instead, it seemed that the local market took advantage of the pop above CNY6.39 to sell the greenback, which is straddling CNY6.38 in late dealings.  The reference rate was set at CNY6.3935, just below the bank projections (CNY6.3936, according to the median in the Bloomberg survey).  We note that the yuan is also at its best level since 2015 against the trade-weighted CFETS basket the PBOC uses.   Europe On the heels of a strong employment report, the UK reported a larger than expected increase in the October CPI.  The preferred measure, which includes owner-equivalent housing costs, jumped to 3.8% from 2.9%.  The older measure rose to 4.2% from 3.1%.  On the month, consumer prices rose 1.1% rather than the 0.8% economists forecast (Bloomberg median). Flattered by increasing gas and electricity prices.  Core prices rose 3.4% year-over-year, accelerating from 2.9% in September and defying forecasts for a 3.1% pace.  Separately, producer prices, both input and output, also rose more than expected.  Lastly, UK house prices rose 11.8% year-over-year in September, up from a revised 10.2% in August.  The recent peak was 12.6% in June, which was the highest since 2004.    European gas prices are at one-month highs.  Belarus has stopped its pipeline to Poland, claiming unplanned maintenance issues, while the border tensions and earlier threats raise suspicions of a political move.  Separately, the German regulator suspended the certification process of the controversial Nord Stream 2 pipeline as corporate assets are rearranged.  Separately, a German court yesterday dismissed an environmental challenge to the pipeline.  Lastly, we note that the virus flare-up continues in Europe, and Germany and the Czech Republic reported a record number of cases. The euro surpassed our $1.1290 Fibonacci target and did not find bids until the $1.1265 area in Asian turnover.  The single currency has been in a tight range in Europe, holding above $1.1300.  Initial resistance is seen around $1.1330 now.  A move above yesterday's high, near $1.1385, is needed to lift the tone. We suspect the near big target is closer to $1.10.  Sterling slipped to a three-day low, slightly below $1.34, but shot up to the session high near $1.3375 on the inflation news. However, the momentum was not sustained, and sterling is little changed in late morning European turnover near $1.3430. The euro briefly traded below GBP0.8400 for the first time since March 2020 but snapped back.  An 840 mln euro option at GBP0.8445 expires today and another for about 620 mln euros at GBP0.8450 expires tomorrow.   America US retail sales surged last month, and the 1.7% rise was the best since March.  After slowing in Q3, consumption is off to a strong start in Q4.  Industrial production was also much stronger than expected, rising 1.6% compared with the 0.9% gain anticipated by economists (median, Bloomberg survey).  The US reports October housing starts today, and they are expected to have recovered from the 1.6% decline seen in September. Housing starts fell in Q3 but are seen rising in Q4, encouraged by an easing of some supply chain issues.   In fact, on several fronts, there are preliminary signs that the disruptions are dissipating.  Some reports suggest that the shortage of semiconductor chips may be passed, and US auto sales rose in October for the first time in six months.  Both the EIA and IEA have forecast a more balanced oil market, and some measures of shipping costs have moderated. The Los Angeles port has reportedly reduced the number of empty containers by around a quarter this month as six new sweeper ships have been brought into operation.  In addition, we note that the re-opening of US borders means immigrant workers may begin returning.  There is still much debate, of course, on the extent that the elevated price pressures are the result of supply chain disruptions.  A report by the Bank for International Settlements estimates that without the supply problems, US inflation would be closer to 2.5% and eurozone inflation near 1.5%. President Biden is expected to make his Fed announcements in the next few days, according to reports, but it could slip into early next week.  Powell is still the favorite, and he has Treasury Secretary Yellen's in support.  Yellen warns that action is needed soon on the debt ceiling.  Her efforts may be exhausted early next month.  Lastly, San Francisco Fed President Daly opined she was more bullish on the economy than a year ago.  This seems backward to us.  A year ago, the vaccine was announced, and fiscal stimulus was anticipated after the US election. Going forward, there will be less monetary and fiscal stimulus.  The pent-up demand ("excess savings") is projected to be exhausted by early next year, and, as we have noted, the doubling of the price of oil has preceded the last three recessions in the US. We suspect that there is sufficient stimulus and need to rebuild inventories to sustain reasonably strong growth for the next few quarters, but by the second half of next year, sub-3% growth will return as the norm.  Canada reports October CPI figures today.  The headline is likely to rise to 4.7% from 4.4% in September (Bloomberg median).  However, the base effect points to a further rise this month and December, when in 2020, the CPI rose 0.1% and fell 0.2%, respectively.   The underlying core rates are also increasing.  The Deputy Governor of the Bank of Canada cautioned about the high degree of uncertainty around potential structural shifts in the labor market that make it challenging to gauge full employment with any degree of confidence.  He pointed to economic areas that still show slack.  The market is expecting the first hike next March/April.  Note that tomorrow, the "Three Amigos" (Biden, Trudeau, and AMLO) meet in the US amid concern that the US "Build Back Better" has strong nationalistic elements, including for electric vehicles.     The US dollar posted an outside up day against the Canadian dollar yesterday, and follow-through buying has lifted it to around CAD1.2585.  At the end of last week, the high set was slightly above CAD1.2600, which close approximates the (50%) retracement of the greenback's decline since the September 20 high near CAD1.29.  The next retracement (61.8%) is found by CAD1.2665.  Still, we expect that a firm CPI report will lend the Loonie some support.  The session low, set in late Asia, near CAD1.2540, may be protected a CAD1.2545 option for $600 mln that expires today.  The greenback is consolidating against the Mexican peso today after rallying yesterday from about MXN20.56 to nearly MXN20.85.  The high from earlier this month was near MXN20.98.  It has not been above MXN21.00 since March.  Initial support is seen around MXN20.60.   Disclaimer
COT Currency Speculator Sentiment rising for Euro & British Pound Sterling

Forex: US dollar takes the lead after the jump in inflation

Capital Capital 17.11.2021 16:01
Forex: US dollar takes the lead after the jump in inflation The US dollar rallied against all other currencies on Thursday, after US Consumer Price Index (CPI) rose more than expected in October, reviving speculations about faster interest rate hikes next year.  The US Dollar index (DXY) hovers around new 52-week highs at 95.00 level, gaining 0.8% since the CPI release. US Treasury yields also rose after the inflation surprise, with a 7 basis points (bps) increase in the 2-year yield and 9 bps on the 10-year benchmark.   EUR/USD and GBP/USD both slipped by nearly 0.7% from yesterday’s midday London trading, while they edged down around 0.1% from previous close.   The Swiss franc (CHF) and the Japanese yen (JPY) have lost 0.7% of their value against the greenback since the CPI was out, while the Aussie (AUD) and the Kiwi (NZD) weakened 1.2% and 1.9% respectively.  Elsewhere, emerging market currencies sold-off after the inflation print, with the South African rand (ZAR) and the Mexican peso (MXN) both down 1.4% against the dollar, while the Turkish lira (TRY)  hit new all-time lows by weakening 1% versus the greenback.  US dollar As of writing, the US Dollar index (DXY) was last at 94.98 level, up 0.21% on the day. In October, US inflation was substantially higher than market forecasts and not only confined to COVID-related items but broad based across the main items in the index, as the cost of services is also rising. Core CPI inflation, which excludes food and energy prices, increased by 0.6% points to 4.6% on the year, well above consensus (4.3%). Core inflation in the US reached the highest level since 1991. Headline inflation rose by 0.8% points to 6.2% on the year, hitting the highest level since 1990 and again above expectations of a 5.8% year-on-year rise. Markets are now pricing in a 71% probability, up from 56.5% yesterday, Fed starts hiking interest rate in June next year. DXY technical levels: 52-week high: 95.03 52-week low: 89.212 50-day moving average: 93.59 200-day moving average: 92.08 14-day Relative Strength Index (RSI): 64.83 Euro As of writing, the euro is down 0.15% from previous close versus the US dollar (EUR/USD) and flat against the British pound (EUR/GBP). Yesterday, ECB Governing Council member Robert Holzmann said that asset purchases (QE) could end next in September or December next year, depending on the inflation dynamics. Today, ECB Chief Economist Philip Lane will speak at the 2nd joint ECB-FED New York conference, while ECB executive board member Isabel Schnabel will take part at a Q&A organized by Ludwig-Maximilians-Universität. EUR/USD technical levels: 52-week high: 1.2349 52-week low: 1.1455 50-day moving average: 1.1662 200-day moving average: 1.1882 14-day Relative Strength Index (RSI): 35.72 British pound GBP/USD is down 0.15% to 1.3532 as of writing. On the data front, UK gross domestic product (GDP) preliminary figure came in at 6.6% year-on-year in Q3 (1.3% quarter-over-quarter), disappointing market expectations by 0.2%. Manufacturing production increased 2.8% year-on-year in September, missing market forecast of 3.1%, while business investment was up 0.8% quarter-over-market in Q3, disappointing market expectations of a 2.6% increase. GBP/USD technical levels. 52-week high: 1.4248 52-week low: 1.3091 50-day moving average: 1.3684 200-day moving average: 1.3845 14-day Relative Strength Index (RSI): 33.39
2 Tools Every Trader Needs: FBS Trader app & MetaTrader

2 Tools Every Trader Needs: FBS Trader app & MetaTrader

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

Intraday Market Analysis – GBP To Test Resistance

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

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

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

Investors Expect High Inflation. Golden Inquisition Ahead?

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

Like Clockwork

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

Euro Bounces Back, but The Turkish Lira Remains Unloved

Marc Chandler Marc Chandler 18.11.2021 15:17
Overview:  The US dollar's sharp upside momentum stalled yesterday near JPY115 and after the euro met (and surpassed) a key retracement level slightly below $1.1300.  Led by the Antipodean currencies today, the greenback is mostly trading with a heavier bias.  Among the majors, helped by a steadying of US yields, the yen is soft.  In the emerging market space, the Turkish lira continues its headlong plunge while the yuan softened and the Mexican peso is off.  Hungary's central bank surprised with a 70 bp hike in the one-week deposit rate.  The JP Morgan Emerging Market Currency Index is posting a small gain through the European morning.  Disappointing tech results in China (Baidu and Bilibili) weighed on Chinese shares, but most markets in the region fell but Australia and Taiwan.  Europe's Stoxx 600 is struggling to extend the six-day advance.  US futures are also a little firmer.  After yesterday's four basis point pullback, the US 10-year yield is little changed near 1.58%.  European yields are 1-2 bp lower.  Gold remains within Tuesday's range (~$1850-$1877), but the moment seen earlier last week has faded, and the yellow metal is trading choppily in a consolidative phase.  The prospect of a coordinated sale of oil after China's announced it would tap its reserves for the second time saw the January WTI contract fall to $76.45, its lowest level since early October. Still, the price has stabilized in the European morning around $77 a barrel.  The benchmark European natural gas contract (Netherlands) has extended yesterday's pullback.  It settled a little below 75 euros last week, and after two days of declines, it is above 92 euros.  Iron ore is also falling for a second session and is now lower on the week.  Note that it settled October a little above $104 and is now around $86.40. Copper is lower for the fourth consecutive session.  It is trading around $424, off $20.5 this week.   Asia Pacific  Japan is expected to unveil the much-awaited supplemental budget tomorrow.  Prime Minister Kishida will get one bite of the proverbial apple, and he is expected to go big.  Talk of the size of the overall package has risen in recent days.  The Nikkei seemed to suggest a JPY79 trillion (~$690 bln) effort, while others report something on the magnitude of JPY56 trillion.  Still, it is recognized that part of the budget will include funds that were earmarked under previous budgets, which have not been spent.  The clear water is seen around JPY32 trillion.  Japan is one of the few countries that will provide new fiscal support.   New Zealand's central bank meets next week.  It is widely expected to hike rates for the second time in the cycle.   The swaps market has 200 bp of tightening priced in for the next 12 months.  The cash rate stands at 50 bp.  Earlier today, the central bank reported that the two-year inflation expectations (business survey)  rose to 2.96% in Q4 from 2.27% in Q3.  It is the highest in a decade.  The one-year expectation rose to 3.7% from 3.02%.  Still, with other countries slower to raise rates, a 50 bp move may not be necessary.  The Kiwi rose almost 4% last month and has given back nearly half so far in November.  Separately, the Philippines and Indonesia central banks met and left rates steady as expected.   The dollar posted a key reversal against the yen yesterday.  It made a new high for the move, a few pips below JPY115.00, and proceeded to sell-off and close (slightly) below Tuesday's low.  However, follow-through selling has been limited, and the greenback is trading firmly but may be absorbing sales related to the $1.34 bln in options in the JPY114.20-JPY114.25 area that expire today.  The Australian dollar initially extended its losses to almost $0.7250, where a A$575 mln option expires today. However, since early in the Asian session, it has posted corrective upticks and looks set to challenge yesterday's high and five-day moving average a little above $0.7300.   The Chinese yuan appears to have begun consolidating.  It remains in the range set on Tuesday that saw the dollar trade roughly between CNY6.3670 and CNY6.3965.  The small gain is the third this week.  The PBOC fix was at CNY6.3803, a bit firmer compared with expectations (CNY6.3786 in the Bloomberg survey) than seen recently.  Note that there is a $1 bln option at CNY6.3830 that expires today.   Europe The auto industry in Europe remained under pressure last month, though the US reported its first increase in sales in six months.  New car registration in Europe, including the UK, is a proxy for sales.  They tumbled by slightly more than 30% year-over-year in October.  This is considerably weaker than expected and is the poorest since May 2020.  The shortage of semiconductors is the likely culprit, and there are some signs of improvement.  The EC will propose modest tweaks in rules about how funds outside of its borders (UK) can be managed while avoiding more dramatic changes.   Draft proposals call for at least two full-time senior managers in the EU and for regulators to be notified when most of their assets are managed outside the EU.  These seem quite minor and unlikely to disrupt the UK fund business.  Earlier this month, the EU Commissioner for Financial Services indicated that temporary waivers would be granted to allow EU banks and money managers to clear trades in the UK. Meanwhile, the dispute over fishing appears to be worsening (Denmark complaining, not just France), and the UK continues to threaten to invoke Article 16.  Former Prime Minister Blair says he will propose a solution to the dispute over the Northern Ireland Protocol in the coming days.  Hungary delivered a 30 bp hike in the base rate earlier this week, which now stands at 2.10%.  It warned that it could make a separate decision on its one-week deposit rate.  It did so today, hiking it 70 bp to 2.50%.  It is a hawkish move that sent the forint higher.  Separately, as widely expected, the Central Bank of the Republic of Turkey cut the one-week repo rate 100 bps to 15%. As a result, the lira is weaker for the eighth consecutive session.  The lira's weakness not only fuels inflation but also will challenge companies and banks with foreign exchange exposure.  The dollar finished last month near TRY9.60 and after the rate hike, pushed above TRY10.97 before stabilizing.   The euro overshot the (61.8%) retracement target of the rally that took it from near $1.0640 in March 2020 to high on January 6, around $1.2350.  That retracement target was about $1.1290, and the euro fell to around $1.1265 yesterday. It recovered to new session highs early in North America yesterday (~$1.1330), leaving bullish hammer candlestick, and follow-through buying lifted it to $1.1345 today.  The combination of higher inflation and stronger retail sales this week have helped sterling to recover.  It had traded near $1.3350 at the end of last week and has barely traded below $1.34 this week.  Indeed, sterling is rising today for the fifth consecutive session, the longest advance in nearly seven months.  It poked above $1.35, where an option for about GBP345 mln will expire today.  A convincing move above $1.3515 could signal another cent advance.  The euro slipped to below GBP0.8385 today before recovering.  It is testing the GBP0.8400, which holds options for 1.1 bln euros that also expires today.   America Leave aside the gaffes by President Biden over Taiwan.  Bloomberg counts four such verbal blunders that have required official walk back or explanation or clarification.  Reports indicate that Biden probed Xi about oil sales.  China has intervened in the commodities (industrial metals) and crude oil market recently.  Today it indicated it will provide more oil from its strategic reserves.  The September is action 7.1 mln barrels, according to reports, and privately sold more.  It is unclear whether today's sales were planned or grew out of the "virtual summit."  Still, it puts the ball back into the US court.  If the US does not sell or lend oil from its strategic reserves, it will look bad after China's move.  On the other hand, its own agency (EIA) projects that it may not be needed as oil will be in oversupply shortly.  Moreover, the pain for consumers is coming from gasoline prices, not oil per se.  Drawing down strategic reserves may not help the gasoline market.  Apparently, Japan has been approached by the US about coordinating the release of oil, though Europe was not.  The US reports weekly initial jobless claims today.  They have fallen for six consecutive weeks, and at 267k, it is the lowest since the pandemic struck.   That said, at the end of 2019, there were below 220k.  The Philadelphia and Kansas City Feds publish their November survey results.  Both surprised last month, with the former on the downside and the latter on the upside.  This time it may be the other way around, with the Philly survey showing strength and the KC survey softer.  Canada reports its monthly portfolio flow data ahead of tomorrow's retail sales report.  Mexico and Brazil have light economic calendars.   Canada's Prime Minister Trudeau and Mexico's President AMLO visit Washington today for the North America's Leaders Summit.  There is tension among the "three amigos."  The Build Back Better US initiative contains several elements that favor American producers. A key one is that substantial tax break for Americans buying electric vehicles if they are made in the US.  This would seem to put Canada and Mexico at a disadvantage, given the integration of the auto sector on a continental basis. Mexico and Canada are also concerned that the Biden Administration's interpretation of the domestic content requirement in the USMCA treaty is also narrow and puts them at a disadvantage.   Canada is also concerned about the pipelines after Biden nixed the Keystone Pipeline in one of his first acts in office, and the Line 5 pipeline is being challenged by Michigan.  The US, and to a less extent, Canada, is worried about the efforts by AMLO to increase the power of the state sector energy companies (oil and electricity), deterring private sector efforts.  The US may try pressing against this on environmental grounds.  Climate and immigration are reportedly on the top of today's agenda.  The US dollar reversed higher against the Canadian dollar on Tuesday, posting an outside up day.  Follow-through buying yesterday lifted the greenback a little above CAD1.2620.  It ticked ever so slightly higher today but has come back offered.  Support is seen in the CAD1.2555-CAD1.2575 area.  The $1.04 bln option at CAD1.25 that expires today is too far away to be impactful. Meanwhile, the US dollar remains within Tuesday's range against the Mexican peso (~MXN20.56-MXN20.85).  This range looks set to hold today.   Disclaimer
Intraday Market Analysis – USD In Pullback Mode

Intraday Market Analysis – USD In Pullback Mode

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

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

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

The Wild Card Is Back

Monica Kingsley Monica Kingsley 19.11.2021 15:58
S&P 500 rose, once again driven by tech and not value. That‘s still defensive, mirroring the weak credit markets posture. While waiting for bonds to turn – not that there wouldn‘t be an optimistic HYG open yesterday – the Austria lockdown news sent markets into a tailspin, the fear being good part of Europe would follow suit rather sooner than later. Oil has taken the crown of panicked selling, stocks held up better, and precious metals weren‘t changed much. Sure, any crippling of European economic activity would take a toll at the most sensitive commodities, but in light of energy policies across much of the Western world, it‘s my view that oil prices would be affected only in the short-term. This isn‘t a repeat of the Apr 2020 liquidation sending black gold negative. Rest of the world would be happy to step in, U.S. included, as we‘re entering winter with comparatively very low stockpiles from oil to copper – and don‘t get me started on silver. If you want green economy, these metals are essential, and oil is still in huge demand in the interim. Fed money printing hasn‘t vanished, debt ceiling awaits, and dollar is so far still solidly underpinned. Banking sector and emerging markets performance isn‘t panicky, but some time for stocks to come back at ATHs, is needed. Precious metals resilience is encouraging for commodities, which need the most time to recover (eyes on energy). Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 bulls have the upper hand, but short-term volatility and uncertainty is creeping in. Still, there is no sinking the bull right here, right now. Credit Markets Tentative signs of credit markets stabilization are here, and HYG turnaround to last, is the missing sign. I‘m though not looking for risk-off slant to disappear, which would slow down the coming rise in yields. Gold, Silver and Miners Gold and silver are still consolidating, and the more time passes at current levels, the less opportunity the bears have. The chart remains very bullish as precious metals are anticipating inflation to come. Crude Oil Crude oil bulls are facing spanner in the works today, and it‘s my view the sellers wouldn‘t get too far. I‘m looking at oil sector to presage that. Copper The copper setback was soundly bought, and commodities hardly sold off, the same for other base metals. I still like the chart posture – favors the bulls. Bitcoin and Ethereum Bitcoin and Ethereum bears took the gauntlet, and another opportunity to pause might be here. I‘m not yet optimistic prices would hold out before the upleg resumes. Summary S&P 500 bulls keep hanging in there, as if waiting for bonds to come to their senses. The credit markets non-confirmation being probably in its latter stages, was my yesterday‘s point – but with corona panic returning, all short-term bets are off. Looking at the big picture, energy hasn‘t been fixed, precious metals are set to rise sharply, and inflation hasn‘t yet knocked off stocks or the real economy. Look for VIX to keep rising from the current 17.50 level. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Weekly S&P500 ChartStorm - 21 November 2021

Weekly S&P500 ChartStorm - 21 November 2021

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

Silver, shrugging off attacks

Korbinian Koller Korbinian Koller 20.11.2021 13:32
Weekly chart, Silver in US-Dollar, strong along gold: Silver in US-Dollar, weekly chart as of November 20th, 2021. The weekly chart illustrates price behavior over the last 15 months. Silver prices are trading near the center of the sideways range. Gold in US-Dollar, weekly chart, rumors shrugged off: Gold in US-Dollar, weekly chart as of November 20th, 2021. The weekly chart of gold isn’t much different from where prices stand. In short, there is no evidence that gold has lost its luster. Otherwise, we would see silver trading in a relationship much lower. Rumors are just that – rumors! Silver is shrugging them off. Silver in US-Dollar, quarterly chart, room to go: Silver in US-Dollar, quarterly chart as of November 20th, 2021. A historical review with a quarterly chart over the last eighteen years reveals that silver prices can sustain extreme extensions from the mean (yellow line) for extended periods. Using the extreme of the second quarter in 2011 as a projective measurement (orange vertical line) for an upcoming target would provide for a price target more than 10% above all-time highs at US$56. In addition, the chart shows that we find ourselves in a strong quarter so far, which is in alignment with cyclical probabilities. Silver in US-Dollar, weekly chart, prepping the play: Silver in US-Dollar, weekly chart as of November 20th, 2021. Trade setup Let us return to the weekly time frame for a possible low-risk entry scenario with this target in mind.We find a supply zone based on fractal transactional volume analysis near the price of US$24.11 and US$22.65. Both attractive entry zones for excellent risk/reward-ratio plays.   Phase 1 drilling program at Guigui discovered not only the largest intrusive ever found in the district, but it’s the first mineralized skarn ever seen in Guigui! Silver, shrugging off attacks: It will not be rumors, doubts, and speculations that will be the catalyst for silvers’ success or failure. It isn’t a question of “if,” but just a question of “when” we will see the next massive price advance in this precious metal. The odds are stacked too much in favor of a continued price movement up that the long-term investor should let doubts allow for diverging from a splendid opportunity to partake in wealth preservation and a very profitable way to participate in a chance rarely presented this prominent. Feel free to join us in our free Telegram channel for daily real time data and a great community. If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can also subscribe to our free newsletter. This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting. By Korbinian Koller|November 20th, 2021|Tags: Crack-Up-Boom, Gold, Gold bullish, Gold/Silver-Ratio, inflation, low risk, Silver, silver bull, Silver Chartbook, silversqueeze, technical analysis, time frame, trading principles|0 Comments About the Author: Korbinian Koller Outstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.
COT: Solid gold buying raising short term concerns

COT: Solid gold buying raising short term concerns

Ole Hansen Ole Hansen 22.11.2021 11:35
Summary:  This summary highlights futures positions and changes made by hedge funds across commodities, forex and financials up until last Tuesday, November 16. The report shows the reaction to the US inflation shock on November 11 which among others drove strong demand for gold and more surprisingly a reduction in the dollar long. Also another strong week for most agriculture commodities with positions in coffee and KCB wheat hitting fresh multi-year highs Saxo Bank publishes weekly Commitment of Traders reports (COT) covering leveraged fund positions in commodities, bonds and stock index futures. For IMM currency futures and the VIX, we use the broader measure called non-commercial. Link to latest report This summary highlights futures positions and changes made by hedge funds across commodities, forex and financials up until last Tuesday, November 16. A week where the market responded to the US inflation shock on November 11 by sending  the dollar up by 2% to fresh high for the cycle while 10-year breakeven yields jumped 20 basis point a decade high. While bond market volatility jumped, stocks held steady with the VIX showing a small decline. The commodity sector was mixed with gains in precious metals and not least grains and soft commodities helping offset weakness across the energy sector.  Commodities Hedge funds raised their total commodity exposure, measured in lots, across 24 major futures contracts by the most since July. Driven by continued strong price action across the agriculture sector and more recently also precious metals in response to surging inflation. These sectors saw all but one market being bought while the energy sector were mixed with continued selling of crude oil only being partly offset by demand for gasoline and natural gas. Energy: Crude oil’s four week slide resulted in the biggest weekly reduction since July, and this time, as opposed to recent weeks, it was WTI that led the reduction with a 10% cut to 307k apart from a deteriorating short-term technical outlook also being driven the prospect of a US stockpile release to dampen domestic gasoline prices. Brent meanwhile saw its net long slump to a one-year low at 221.5k lots, and during the past six weeks the net length has now slumped by one-third, a reduction which gathered momentum after the late October failure to break the 2018 high at $86.75, now a double top. Crude oil comment from our daily Market Quick Take: Crude oil (OILUKJAN22 & OILUSDEC21) opened softer in Asia after Friday’s big drop but has so far managed to find support at $77.85, the previous top from July. The market focus has during the past few weeks shifted from the current tight supply to the risk of a coordinated reserve release, fears about a renewed Covid-driven slowdown in demand and recent oil market reports from the EIA and IEA pointing to a balanced market in early 2022. Having dropped by around 10% from the recent peak, the market may have started to conclude that a SPR release has mostly been price in by now. Metals: Another week of strong gold buying has now raised the alarm bells given the risk of long liquidation should the yellow metal fail to hold onto its US CPI price boost above $1830. Last week the net long in gold reached a 14-month high at 164k lots and the speed of the accumulation, especially the 70% jump during the past two weeks alone carries, will be raising a red flag for tactical trading strategies looking for pay day on short positions should support give way.  Gold extended Friday’s drop below $1850 overnight, before bouncing ahead of key support in the mentioned $1830-35 area. The risk of a quicker withdrawal of Fed stimulus supporting real yields and the dollar has for now reduced gold's ability to build on the technical breakout. However, the price softness on Friday helped attract ETF buying with Bloomberg reporting a 10 tons increase, the biggest one-day jump since January 15. A second week of silver buying lifted the net to a four-week high at 35.9k lots, but still below the May peak at 47.8k lots. Copper’s rangebound trading behavior kept the price and the net long unchanged. The latter due to an even size addition of both new long and short positions. Agriculture: Broad gains across the grains market lifted the combined long across the six most traded contracts to a six-month high at 560k lots. Buyers returned to soybeans after the net long recently hit a 17-month low, the corn long was the biggest since May while the KCB wheat long at 60.6k lots was the highest since August 2018. Supported by an increasingly worrying supply outlook, coffee speculators lifted their net long by 16% to a five-year high at 55k lots. Cotton and sugar longs also rose while short-covering helped halve the cocoa net short. More on the reasons behind the current strength in wheat and coffee, and agriculture in general can be found in may recent update: Agriculture rally resumes led by coffee, wheat and sugar ForexIn a surprise response to the US inflation shock on November 11 speculators ended up making a small reduction in their overall dollar long against ten IMM futures and the Dollar index. Selling of euro in response to the 2.4% drop and a 161% increase in the sterling short to a 17 month high ended up being more than off-set by the buying of all other major currencies, most notably JPY and CHF. The result being a fifth weekly reduction in the dollar long to $21.3 billion, now down by 17% reduction from the near 30-month high reached during October. What is the Commitments of Traders report? The COT reports are issued by the U.S. Commodity Futures Trading Commission (CFTC) and the ICE Exchange Europe for Brent crude oil and gas oil. They are released every Friday after the U.S. close with data from the week ending the previous Tuesday. They break down the open interest in futures markets into different groups of users depending on the asset class. Commodities: Producer/Merchant/Processor/User, Swap dealers, Managed Money and otherFinancials: Dealer/Intermediary; Asset Manager/Institutional; Leveraged Funds and otherForex: A broad breakdown between commercial and non-commercial (speculators) The reasons why we focus primarily on the behavior of the highlighted groups are: They are likely to have tight stops and no underlying exposure that is being hedged This makes them most reactive to changes in fundamental or technical price developments It provides views about major trends but also helps to decipher when a reversal is looming
COT Speculators drop British pound sterling bets to lowest level in 76-weeks

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

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

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

Marc Chandler Marc Chandler 22.11.2021 09:39
Strong US consumption and production figures kept the greenback well supported last week on the heels of the jump in CPI to 6.2%.  Meanwhile, the surge of Covid cases in Europe underscores the divergences with the US, sending the euro to new lows for the year.   At the same time, oil prices headed south for the fourth consecutive week, matching the longest decline in more than two years.  It did not favor the Norwegian krone, the weakest of the majors, with a 2.15% drop.  It brought this year's loss to almost 3.5%, despite it being the first G10 central bank to hike rate, with another likely next month.   The prospects of a Bank of England rate hike next month were lifted by the strong inflation and retail sales figures.  Sterling was the best performing major currency, rising a little more than 0.25% against the dollar.  It also traded at its best level against the euro since March 2020.  At the end of the week, the euro also broke down against the Swiss franc, trading below CHF1.05 for the first time since July 2015.   Japan's October CPI showed that excluding fresh food and energy, the world's third-largest economy has still not broken free of deflation's grip (-0.7% year-over-year).  A weaker yen is not a problem for Japanese policymakers or corporates.  Japan has averaged a monthly trade surplus this year through October of about JPY7.8 bln a month, hardly the stuff that should excite protectionists.  The BIS estimates that eurozone inflation would be closer to 1.5% than the 4.1% reported in October without the supply chain disruptions. The weakness of the euro does not appear problematic for the ECB either.  With the Fed already slowing the pace of its monetary accommodation, a stronger dollar reinforces the policy thrust. Even though net exports shaved Q3 growth by about 1.1 percentage points, it has yet to spur criticism, and September was a record shortfall.   Dollar Index:  The Dollar Index rose for the fourth consecutive week.  It met the (50%) retracement objective of its slide from March 2020 (~103.00) to the January 6 low (~89.20), which is found near 96.10.  DXY stalled ahead of the weekend, just shy of the high set in the middle of the week near 96.25. A move above there targets the next retracement (61.8%), which is close to 97.75.    The MACD is over-extended but still headed higher, while the Slow Stochastic appears to be turning lower.  Support is seen around 95.50.  The market seems to have discounted much of the good news for the dollar and Fed policy.  We note that the US 2-year yield fell almost six basis points last week.  That leaves it off about 4.5 bp this month, despite the strong CPI reading, robust retail sales, and industrial output figures. Euro: The divergence of monetary policy has been the critical weight on the euro, but at the end of last week, it seemed that surge in Covid cases in Europe helped drive the single currency to new lows. It fell to $1.1250 ahead of the weekend to take out the mid-week low near $1.1265.  The weekly loss of about 1.3% is the biggest in five months.  Recall that the $1.1290 area represented the (61.8%) retracement of the rally that began in March 2020.  The momentum indicators are stretched, but a possible bullish divergence is appearing in the Slow Stochastic. A cap seems to be forming around $1.1375.  After repeated tests, and much to the chagrin of the Swiss National Bank, the euro was sold through CHF1.05 ahead of the weekend for the first time since July 2015.  Given its modus operandi, the SNB is likely resisting.  There is little on the charts ahead of CHF1.0250.  In the second half of last week, the euro found support near GBP0.8385, its lowest level since March 2020.  Support is seen close to GBP0.8275-GBP0.8300.  Lastly,  the euro found support near JPY128.00, which has more or less withstood several tests since moving above there in February.   Japanese Yen:  The greenback recorded a new four-year high against the yen, less than a handful of pipis from JPY115 in the middle of last week.  It reversed lower and settled ever so slightly below the previous session's low to leave a key reversal in its wake.  It recorded the week's low ahead of the weekend near JPY113.60.  Since the dollar pushed above JPY112 early last month, we have suggested a JPY113-JPY115 trading range.  It did trade to about JPY112.75 on November 10 and 11 but snapped back into the range.  The US 10-year note futures (December contract) posted a key reversal in the middle of last week, too, and also ended the week at eight-session highs, which, of course, means lower yields.  The dollar-yen exchange rate still seems to be a range-bound creature, more the most part, and heavily influenced by external factors, like US 10-year yield and broader risk appetites.  British Pound:  Sterling outperformed the other major currencies last week, but the 0.3% gain is nothing to write home about.  It remained within the previous week's range. It was unable to sustain the upside momentum after approaching the (50%) retracement objective of the decline since the month's high and outside down day on November 4 (BOE meeting).  That retracement stands at $1.3525.  The strong CPI report on November 17 helped lift sterling to the week's high near $1.3515.  However, the underlying strength of the dollar proved too much, and ahead of the weekend, sterling traded a little below $1.3410.  The momentum indicators have turned higher, and as long as $1.3400 holds, sterling looks attractive.  However, the market appears to have a 15 bp hike at next month's meeting fully discounted.  While it remains a distinct possibility, if not a likelihood, but 100% confidence may leave sterling vulnerable to a reassessment.  Canadian Dollar:  The US dollar rose for the fourth consecutive week against the Canadian dollar, matching the longest advance since early last year.  With the pre-weekend gain, the greenback met the  (61.8%) retracement objective of decline since CAD1.29 was approached on September 20, found near CAD1.2665. The US dollar's broad strength, coupled with the stock market wobble (a proxy for risk), and the drop in crude prices by around 4.25%, the fourth consecutive weekly decline shaved about 0.75% off the Canadian dollar.  The implied yield of the June 2022 Banker Acceptances fell last week and is now about 10 bp lower than at the end of last month.  The MACD is headed up though over-extended, while the Slow Stochastic has flatlined at extreme levels and has not yet confirmed the new highs.  The US dollar continues to hug the upper Bollinger Band, which will begin the new week near CAD1.2650. Australian Dollar:   The Aussie fell for the third straight week, and ahead of the weekend, approached $0.7225, last seen in early October.  As seen with some of the other currency pairs, the MACD is still warning of currency weakness, while the Slow Stochastic is flatlining but over-extended.  The trendline connecting the August and September lows initially held last week. It (~$0.7240) yielded ahead of the weekend, but the Aussie managed to close back above it.   It needs to resurface above $0.7300 to be anything meaningful.  Softer than expected, wage growth may have reinforced the RBA's message to the markets, and the yield of the June 2022 T-bill futures fell seven basis points last week and is now down 31 bp on the month.   Mexican Peso:  Emerging markets currencies remain out of favor in a strong dollar environment.  The JP Morgan Emerging Market Currency Index slumped by more than 2% last week, the most since June.  The Turkish lira collapsed by nearly 11%.  The Indian rupee rose by 0.3%, the strongest in the EM space.  The greenback made a new marginal high in two-and-a-half weeks before the weekend, slightly below MXN20.89.  The momentum indicators are constructive for the dollar, but it is at the upper end of its recent range (~MXN20.12-MXN21.00).  The high for the year was set in March near MXN21.64, and it will come into view when the greenback rises above MXN21.15.   Chinese Yuan:   By shadowing the dollar so tightly, the yuan is dragged higher on a trade-weighted basis in the stronger greenback environment. The yuan is at six-year highs on the basket the PBOC tracks (CFETS).  The PBOC reportedly stressed the importance of exchange risk management ahead of the weekend, and it may be a warning that its willingness to tolerate a stronger yuan is limited.  The yuan slipped an inconsequential 0.12% against the dollar last week.  For nearly the past five weeks, the exchange rate has been mostly confined to a CNY6.38-CNY6.40 range.  It is a fuzzy range and allows for around a big figure in both directions. The index of Chinese companies listed in the US (NASDAQ Golden Dragon Index) fell about 5.7% last week.  The major benchmarks in China, including the CSI 300, posted small gains.  The Hang Seng fell 1.1% last week, and most of that was before the weekend on disappointing earnings from Alibaba (-10.3% in HK).     Disclaimer
Special Podcast: Happy 30th Birthday To Saxo, An Overview Of The Market In Recent Decades And Reflection On Its Future

ChiNext: The growth market that has defied Chinese equity trouble

Peter Garnry Peter Garnry 22.11.2021 14:26
Summary:  ChiNext is up 19% this year while the rest of the Chinese equity market is down highlighting that there is a high quality pocket in China that investors should have on the radar. The ChiNext Index comprises of leading technology companies within battery and medical technology including biotechnology. It is a closed market for most investors but luckily a Hong Kong based asset management is offering a Hong Kong listed ETF providing exposure to this interesting market in China. China has a growth pocket nobody talks about This year has been a rollercoaster ride for Chinese equities. It all started with blistering growth and strong momentum in Chinese equities before rising US interest rates and inflation talks temporarily ended the trade in technology stocks. While technology stocks came back in the developed equity market Chinese equities went from crisis to crisis, first in housing during the summer months and which is still ongoing, to that of an energy crunch like in Europe as energy prices have galloped higher. But there is one pocket in the Chinese equity market that has defied the negative forces of higher energy prices and housing woes, and that is the ChiNext board on the Shenzhen Stock Exchange. ChiNext is up 19% this year highlighting a stunning comeback following a 29% drawdown during the technology correction during February and March. CSI 300, the leading benchmark index of Chinese mainland equities, is down 4% this year, and Hang Seng in Hong Kong is down 6% this year. While ChiNext is the crown jewel in terms of innovation and growth companies within key technology, it has struggled to deliver against Nasdaq 100 which is up 29% this year, and since June 2010, Nasdaq 100 is up 23.2% annualized compared to 13.1% annualized for ChiNext. ChiNext is closed market for foreign investors In recent years China has opened up its capital markets making it easier for foreign investors to invest directly in mainland China equities listed in Shanghai and Shenzhen, but the ChiNext board is still closed land for most investors due to prohibitive rules. In effect it is only accessible for few foreign institutional investors. Luckily the ETF market is providing an opportunity for retail investors to get access to this market through the CSOP SZSE ChiNext ETF (Saxo ticker is 03147:xhkg) managed by CSOP Asset Management which is a Chinese regulated asset management firm based in Hong Kong with $10bn in asset under management as of December 2020. The ETF consists of 160 securities with $110mn in assets and tracking the ChiNext Index and a total expense ratio of 1.16%. The ETF uses a combination of a physical representative sampling and a synthetic representative sampling strategy (swaps), which means that the fund is not holding the underlying index 1:1, but tries minimize the tracking error through sampling. This enables the fund to minimize tracking error while getting better liquidity conditions for investors. The 10 largest positions in the fund constitute 49.3% of the funds market value with Contemporary Amperex Technology (CATL) being the largest position with 19.1% weight and also the biggest company in our battery equity basket. CATL is one of the world’s largest manufacturers of lithium-ion batteries and is becoming China’s crown jewel within the fast-growing and emerging battery industry which will be transformational and essential to the green transformation including electric vehicles. The ETF also provides exposure to China’s largest financial and stock information provider East Money Information with $1.8bn in revenue and growing 82% over the past year. The ETF also gives exposure to some of the most interesting medical technology and biotechnology companies in China. The 10 largest holdings in the CSOP SZSE ChiNext ETF The history of ChiNext and why it will play a major role ChiNext was first discussed in August 1999 in the CPC Central Committee and the State Council during the height of the dot-com bubble. China was looking at the technological change in the US and especially what was going on with the Nasdaq exchange. In August 2000, China decided that the Shenzhen Stock Exchange should prepare to create a second board which should include innovative companies with key technologies in order to support growth industries. The ChiNext board was inaugurated on 23 October 2009. In 2020, more than 800 companies were listed on the ChiNext Market with the combined market capitalization approaching $1trn.
Like the Latest Bond Flick, the US Dollar Has No Time to Die

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

Przemysław Radomski Przemysław Radomski 22.11.2021 15:11
While the dollar is on a tear, precious metal stocks have gotten away with it lately. But how long will their resistance last? The USD Index (USDX) After the USD Index’s negative response to the ECB’s monetary policy meeting on Oct. 28, I warned on Oct. 29 that dollar bears were unlikely to celebrate for much longer. I wrote: Based on the rather random comment during the conference, the traders panicked and bought the EUR/USD, which triggered declines in the USD Index (after all, the EUR/USD is the largest component of the USDX). Was the breakout to new 2021 lows invalidated? No. The true breakout was above the late-March highs (the August highs also served as a support level, but the March high is more important here) and it wasn’t invalidated. What was the follow-up action? At the moment of writing these words, the USDX is up and trading at about 93.52, which is just 0.07 below the August high in terms of the closing prices. Consequently, it could easily be the case that the USD Index ends today’s session (and the week) back above this level. You’ve probably heard the saying that time is more important than price. It’s the end of the month, so let’s check what happened in the case of previous turns of the month; that’s where we usually see major price turnarounds. I marked the short-term turnarounds close to the turns of the month with horizontal dashed blue lines, and it appears that, in the recent past, there was practically always some sort of a turnaround close to the end of the month. Consequently, seeing a turnaround (and a bottom) in the USD index now would be perfectly normal. And with the USD Index making quick work of 94, 95, and now 96, the greenback’s rally continues to gain steam. What’s more, the USD Index also surged above its late 2020 resistance and 98 should be the next bullish milestone. More importantly, however, gold, silver, and mining stocks are sensing that something is amiss. For example, while they largely ignored the USD Index’s recent ascent, their negative correlations resurfaced last week (on a very short-term basis, so far, but still). Moreover, while the precious metals’ recent rallies were likely euro-weakness-driven and not USD Index-strength-driven, the dollar basket’s uprising should elicit more pain for gold, silver, and mining stocks over the medium term. To explain, I wrote on Nov. 17: The euro recently declined and the prices of silver and gold recently rallied shortly after dovish comments from the eurozone. Namely, while the expansionary nature of fiscal and monetary decisions in the U.S. might be after its peak (with the infrastructure bill signed even despite high inflation numbers), the eurozone is far from limiting its expansionary (i.e., inflationary) policies, and it was just made clear recently. That was bearish for the euro and bullish for the gold price – as more money (euros in this case) would be chasing the same amount of physical gold. The point here is that it might have been the decline in the value of the European currency that caused gold to rally, and it had little to do with what happened in the USD Index. Don’t get me wrong, most of the time, the gold-USD link is stable and negative. In some cases, gold shows strength or weakness by refusing to move in tune (and precisely: again) with U.S. dollar’s movement. But in this case, it seems that it’s not about the U.S. dollar at all (or mostly), but rather about what happened in the Eurozone and euro recently. As a result, with the USD Index likely to take the lead in the coming months, the precious metals should suffer along the way. For context, the USD Index is approaching overbought territory and a short-term decline to ~95 isn’t out of the question. However, it’s more of a possibility than a given. Moreover, the greenback’s medium-term outlook remains robust, and any short-term pullback is likely a corrective downswing within a medium-term uptrend. Circling back to the euro, I’ve been warning for months that the Euro Index was materially overvalued and that a sharp re-rating would likely unfold. I wrote previously: The next temporary stop could be ~1.1500 (the March 2020 highs, then likely lower). For context, the EUR/USD accounts for nearly 58% of the movement of the USD Index, and that’s why the euro’s behavior is so important. And after the Euro Index sunk to a new 2021 low last week, the European currency has officially fallen off a cliff. To that point, after breaking below the declining support line of its monthly channel, a drawdown to ~111 is likely next in line (which is signaled by the breakdown below its bearish head & shoulders pattern). The Euro Index is near oversold territory and a short-term bounce may ensue, but the bearish medium-term implications remain intact. Please see below: Adding to our confidence (don’t get me wrong, there are no certainties in any market; it’s just that the bullish narrative for the USDX is even more bullish in my view), the USD Index often sizzles in the summer sun and major USDX rallies often start during the middle of the year. Summertime spikes have been mainstays on the USD Index’s historical record and in 2004, 2005, 2008, 2011, 2014 and 2018 a retest of the lows (or close to them) occurred before the USD Index began its upward flights (which is exactly what’s happened this time around). Furthermore, profound rallies (marked by the red vertical dashed lines below) followed in 2008, 2011 and 2014. With the current situation mirroring the latter, a small consolidation on the long-term chart is exactly what occurred before the USD Index surged in 2014. Likewise, the USD Index recently bottomed near its 50-week moving average; an identical development occurred in 2014. More importantly, though, with bottoms in the precious metals market often occurring when gold trades in unison with the USD Index (after ceasing to respond to the USD’s rallies with declines), we’re still far away from that milestone in terms of both price and duration. Again, the recent move higher in the USD Index doesn’t necessarily apply in the case of the above rule, as it was not the strength of the USD but weakness in the euro that has driven it. Likewise, with the USD Index now approaching its long-term rising support line (which is now resistance), a rally above the upward sloping black line below would invalidate the prior breakdown and support a move back above 100. However, with the dollar basket’s weekly RSI (Relative Strength Index) now above 70, a short-term consolidation may ensue. Conversely, please note that the recent medium-term rally has been calmer than any major upswing witnessed over the last 20 years where the USD Index’s RSI has hit 70. I marked the recent rally in the RSI with an orange rectangle and I did the same with the second-least and third-least volatile of the medium-term upswings. The sharp rallies in 2008 and 2014 were of much larger magnitudes. And in those historical analogies, the USD Index continued its surge for some time without suffering any material corrections. As a result, the short-term outlook is more of a coin flip. However, the medium-term outlook remains profoundly bullish, and gold, silver, and mining stocks may resent the USD Index’s forthcoming uprising. Just as the USD Index took a breather before its massive rally in 2014, it seems that we saw the same recently. This means that predicting higher gold prices (or the ones of silver) here is likely not a good idea. Continuing the theme, the eye in the sky doesn’t lie. And with the USDX’s long-term breakout clearly visible, the wind still remains at the dollar’s back. Please see below: The bottom line? With my initial 2021 target of 94.5 already hit, the ~98 target is likely to be reached over the medium term, and the USDX will likely exceed 100 at some point over the medium or long term. Keep in mind, though: we’re not bullish on the greenback because of the U.S.’ absolute outperformance. It’s because the region is fundamentally outperforming the Eurozone, the EUR/USD accounts for nearly 58% of the movement of the USD Index, and the relative performance is what really matters. In conclusion, while the USD Index’s 2021 surge caught the consensus by surprise, I’ve been sounding the bullish alarm for many months. And with more strength likely to materialize over the medium term, the ‘death of the dollar’ narrative has been grossly over-exaggerated. Moreover, while gold, silver, and mining stocks recently ignored the greenback’s fervor, history implies that their relative strength won’t last. As a result, more downside will likely confront the precious metals over the next few months. Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today. Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care * * * * * All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
More And More Universities Are Including Metavers In Their Education Program

Fixed income market: the week ahead

Althea Spinozzi Althea Spinozzi 22.11.2021 14:23
Summary:  This week it's all about a surge of Covid-19 cases and inflation. The debt ceiling issue will keep long-term yields in check in the United States while spurring volatility in money markets. Lack of collateral and new lockdown measures are also compressing spreads in the Euro area. Yet, policymakers' engagement to the idea of less accommodative monetary policies on both sides of the Atlantic indicates that yields will not remain rangebound for long. Once the lid is lifted, inflationary pressures will push yields higher. Therefore, it's safe to assume a continuous bear flattening of yield curves. US Treasuries: volatility in money markets will keep long-term yields in check. Yet, inflation concerns continue to grow, pointing to higher rates once the debt ceiling issue is resolved. This week, investors will need to focus on the Fed Minutes released on Wednesday, inflation numbers, and the White House's announcement concerning the Federal Reserve Chair nomination. The Fed’s minutes might unveil details regarding the decision that led to tapering this month and whether FOMC members begin to fret about inflationary pressures. Last week, several Fed’s speakers opened up about accelerating tapering and hiking interest rates in 2022. Among them, Fed Vice Chair Richard Clarida called for a discussion to expedite tapering to enable the central bank to hike interest rates sooner. At the same time, if Biden nominates Leal Brainard as Fed Chair, it could advance inflation worries. Brainard is known to be more dovish than Powell. In the case of her nomination, the market could anticipate interest rates to remain low for longer, implying stickier inflation, provoking a selloff in bonds. The Personal Consumption Expenditure Index, one of the inflation data most looked at after the Federal Reserve, will be released on Wednesday. The PCE core deflator index YoY is expected to rise to 4.1%, the highest in more than 31 years. As we mentioned in earlier editions of “Fixed income market: the week ahead”, we expect inflationary pressures to continue to rise and higher rents, housing and wages to make inflation stickier, putting at odds policymakers’ transitory narrative. Therefore, although the US yield curve has already flattened substantially, we cannot expect anything else than more flattening. The only difference is that once the debt ceiling issue is resolved, long term yields will need to rise together with short term yields, putting at risk weaker credits. The debt ceiling will be a crucial topic for December. Janet Yellen has said that the US Treasury will run out of cash soon after the 3rd of December if an agreement over the debt ceiling is not found. However, money markets have started to price a default during the second half of December. Indeed, last week's 4-week T-Bills auction was priced with a yield of 0.11%, more than double the Reverse Repurchase facility rate. We expect volatility in money markets to continue to remain elevated until the debt ceiling is lifted or suspended. Until then, the long part of the yield curve will serve as a safe haven causing yields to remain compressed. Yet, once the debt ceiling hurdle has cleared, long-term rates will resume their rise. European sovereigns: lack of collateral and a surge in Covid-19 cases will keep yields compressed. Yet, something is changing among policymakers. In Europe, governments are imposing new lockdown measures due to increasing Covid-19 cases, causing yields to drop significantly. Yet, inflationary forces have already been set into motion. Another lockdown might exacerbate inflation further as consumption will switch from services to goods, putting more pressure on prices. Meanwhile, policymakers have started to open to the possibility that upside inflation risk might remain throughout winter. Therefore, near-term hikes expectations are unlikely to reverse despite new lockdown measures. Yet, lack of collateral in the euro area contributes to keeping short-term yields compressed across the euro area, including the periphery. At the same time, swaps with the same maturity have widened as the market prices earlier interest rate hikes. Demand for collateral will remain strong until the end of the year. However, 2022 opens up to widening risk, as demand for bonds will start to wane, and the front part of the yield curve will shift higher according to interest rate hikes expectations. Source: Bloomberg and Saxo Group. However, it looks too early to call for higher yields in the Euro area, as a lot still depends on yields in the US and December's ECB meeting. Suppose more governments across the euro area impose lockdown measures. In that case, the central bank might look to extend the PEPP bond-buying program after March, compressing yields further. The next few weeks preceding Christmas are going to be critical to set direction in European sovereigns. Economic calendar: Monday, the 22nd of November  Spain:  Balance of Trade United States: Chicago Fed National Activity Index, Existing Home Sales (Oct),  2-year Note Auction, 5-year Note Auction Eurozone: Consumer Confidence Flash (Nov) Tuesday, the 23rd of November Germany: Markit Composite, Manufacturing and Services PMI Flash (Nov) Eurozone: Markit Composite and manufacturing PMI Flash (Nov) United Kingdom: market/CIPS Composite, Manufacturing and Services PMI Flash (Nov) United States: Markit Manufacturing PMI flash (Nov), NY Fed Treasury Purchases TIPS 7.5 to 30 years, 2-year FRN Auction, 7-year Note Auction Wednesday, the 24th of November New Zealand: Interest Rate Decision, RBNZ Press Confidence France: Business Confidence Germany: Ifo Business Climate (Nov), 15-year Bund Auction United States: Durable Goods Orders (Oct), GDP Growth Rate QoQ 2nd Est (Q3),  Continuing Jobless Claims, Corporate Profits QoQ Prel (Q3), Durable Goods Orders (Oct),  Goods Trade Balance (Oct), Initial Jobless Claims, Jobless Claims 4-week Average, retail Inventories Ex Autos (Oct), Core PCE Price Index (Oct), Michigan Consumer Sentiment Final (Nov), PCE Price Index (Oct), Personal Income (Oct), Personal Spending (Oct), FOMC Minutes, 4-week and 8- week bill auction Thursday, the 25th of November New Zealand: Balance of Trade Japan: Foreign bond Investment, Coincident Index Final, Leading Economic Index Final (Sep) Germany: GDP Growth Rate YoY Final (Q3), GfK Consumer Confidence (Dec) Sweden: Monetary Policy Report, Riskbank Rate Decision France: Unemployment Benefit Claims Canada Average weekly earnings YoY Friday, the 26th of November Australia: Retail Sales MoM Prel (Oct) South Korea: Interest Rate Decision France: Consumer Confidence Switzerland: GDP Growth Rate YoY (Q3) Italy: Business Confidence (Nov)
Intraday Market Analysis – USD Bounces Back

Intraday Market Analysis – USD Bounces Back

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

Ever Thought About Biofuels to Diversify Your Portfolio?

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

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

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

Best Pick for Corona Woes

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

Intraday Market Analysis – Nasdaq Hits Resistance

John Benjamin John Benjamin 23.11.2021 09:20
NAS 100 pulls back Investors took profit after Jerome Powell’s renomination as US Federal Reserve Chairman. The tech index saw an acceleration in its rally after a break above the previous peak (16450). Strong momentum suggests that buyers are committed to keeping the uptrend intact after a brief pause. However, the RSI’s triple top in the overbought area indicates exhaustion, and a fall below 16550 has triggered a correction. 16300 is the next support from a previous supply zone. A rebound needs to clear 16750 before the rally could resume. AUDUSD struggles for support China’s property slowdown and lower commodity prices weigh on the Australian dollar. The pair has given up most of its gains from the October rally, a sign that support is hard to come by. Nonetheless, a series of lower lows has attracted trend followers’ interest in maintaining the status quo. 0.7220 is an intermediate support. An oversold RSI may prompt the short side to cover, raising bids in the process. However, the bulls will need to lift offers around the former support at 0.7300 before they could expect to turn the tables. NZDJPY seeks support The New Zealand dollar remains under pressure after disappointing retail sales in Q3. The kiwi is seeking support after a surge above last May’s peak at 81.20 led the daily RSI into an overbought situation. Short-term sentiment remains bearish as the pair struggles to achieve a new high. 80.55 is a major resistance after the bulls’ multiple failed attempts. A bullish breakout may pave the way for a reversal towards 82.00. Otherwise, a drop below 79.50 would send the pair towards September’s high at 78.50.
All alone with bitcoin

All alone with bitcoin

Korbinian Koller Korbinian Koller 23.11.2021 11:06
With this psychological burden, you want to stack your odds as good as possible to gain an edge for balance. Bitcoin provides such advantages. The inherent volatility allows for follow-through after an entry. In other words, one gets good risk/reward-ratios in midterm plays on bitcoin. Also, necessary for the long-term time frame player since hodling has another psychological hurdle that piled on top can be devastating. You won’t find many traders who bought a bundle of bitcoin when it traded at a dollar and are still holding it without ever having sold or rebought some. BTC in US-Dollar, Quarterly Chart, the Doji explosion: Bitcoin in US-Dollar, Quarterly chart as of November 23rd, 2021. The quarterly chart of bitcoin shows how explosive moves to the upside can be. If you look at the yellow lines, you will see that a small Doji builds after a retracement, and then prices explode within the next quarter like rockets. This trading behavior provides for sensational risk/reward-ratios. The quarterly chart shows a bullish quarter. Even though all-time highs have been rejected, we see the year ending on a bullish note. The great thing about this self-directed profession, on the other hand, is that you get all the credit. Work directly translates into money, without the typical step in between, selling a product or a service. If you are good at what you are doing in the trading/investing arena, rewards can be more than plentiful. No gift baskets need to be sent to a boss or coworker. True rewards for arduous work to yourself. A very self-fulfilling profession indeed. BTC in US-Dollar, Monthly Chart, most often trending: Bitcoin in US-Dollar, Monthly chart as of November 23rd, 2021. The monthly chart illustrates the steepness of the trend, and yellow lines provide a possible long reload opportunity, which will take all-time highs out next year. Another benefit for individual traders choosing to trade bitcoin is its unique personality of trending much more than most trading instruments. This unique feature adds a massive edge to a trader’s trading arsenal. BTC in US-Dollar, Weekly Chart, freeing investment capital fast: Bitcoin in US-Dollar, weekly chart as of November 23rd, 2021. But this isn’t all. From a trading perspective, bitcoin supports the unsupported individual in comparison to gold or silver as alternate wealth preservation tools due to its speed. Risk is the most defining aspect for a trader, and consequently, capital exposure time is the most crucial aspect. After all, the longer money is in the market, the more exposed it is, let’s say, to unexpected news and six sigma events. Market money parked cannot produce elsewhere and is also emotionally draining. No such thing in bitcoin.A look at the weekly time frame illustrates what we mean by this. It took less than eight weeks for bitcoin to gain staggering percentage moves within the first and second leg in this steep regression channel up. We also just entered a low-risk entry zone again for a third leg to mature. In short, you are all alone with bitcoin, but at least you picked the most ideal alliance with this trading vehicle to stack the odds in your favor. All alone with bitcoin: The business of market play is unique. You’re not learning this skill in school, mentors are hard to come by, and it isn’t a group sport. It is advisable to seek out a community of like-minded traders like our free telegram channel, since spouses rarely can comprehend the steepness of the learning curve and the challenges of constant self-reflection and pain until the consistency is mastered.  While one typically can team up and is supported within a group at the mastery level required, it’s a solo sport in trading.  Statistics support that the likeliest reason for failure in this business is underestimating the time required to acquire all the important skills necessary for success. New traders run either out of money or patience.  The press makes it look so easy, and the fact that all one needs to do is press a button doesn’t help towards a more respectful attitude. Yet, the mere truth is that it is one of the most demanding businesses to find oneself into. Feel free to join us in our free Telegram channel for daily real time data and a great community. If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can subscribe to our free newsletter. This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting. By Korbinian Koller|November 23rd, 2021|Tags: Bitcoin, bitcoin consolidation, crypto analysis, Crypto Bull, crypto chartbook, DeFi, low risk, quad exit, technical analysis, trading education|0 Comments About the Author: Korbinian Koller Outstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.
Betting on Hawkish Fed

Betting on Hawkish Fed

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

Interest rate sensitivity is back in town haunting technology stocks

Peter Garnry Peter Garnry 23.11.2021 16:23
Summary:  Interest rate sensitivity came back roaring yesterday pushing down all of our growth baskets. Yesterday's move shows the potential for a correction in US technology stocks should the US 10-year yield continue to rapidly advance towards the highs from March. We also show how the Nasdaq 100 and STOXX 600 move in opposite direction during large up or down days in the US 10-year yield. Growth baskets look awfully vulnerable Yesterday’s move in the US 10-year yield of 8 basis points made it the 10th biggest move higher in US yields this year. Back in March when technology stocks were under pressure we wrote a lot about interest rate sensitivity in growth stocks as their present value are derived from expected cash flows further into the future than the typical MSCI World company. If interest rates rise faster than future growth expectations then the net effect is negative on the present value and more so for growth stocks as they have a higher duration. We saw downside beta (higher sensitivity) in all of our growth equity baskets with the gaming basket down 2.3% and the worst performers being the E-commerce and Crypto & Blockchain baskets down 4.2% and 5.1% respectively. This tells you a lot about the sensitivity and given the drawdown in technology stocks back in March, we could easily experience a 15-20% drawdown in technology stocks. The local highs from March in the US 10-year yield is the key level to watch for a breakout and a new trading environment. With all the options activity in Tesla dwarfing the combined options activity in FTSE 100 constituents, we believe Tesla will be at the center of the next risk-off move in technology. Nasdaq 100 vs STOXX 600 are yin and yang of interest rates We have previously tried to calculate the interest rate sensitivity, but this time we are pursuing a different approach. We look at the past 231 trading days this year and group the 1-day difference in the US 10-year yield into deciles. In order to measure interest rate sensitivity we calculate daily excess log returns for Nasdaq 100, S&P 500 and STOXX 600 against the MSCI World Index and compute their average daily excess return for each decile. As the barplot shows, there is significant negative excess return in Nasdaq 100 in the 1st decile (the 10% days with the highest positive difference in US 10-year yield) and significant positive excess return in STOXX 600. This makes perfect sense because Nasdaq 100 is high duration growth stocks and STOXX 600 has a clear value tilt towards financials, energy and mining which exhibit much lower duration. The pattern is completely reversed in the 10th decline (days with large negative difference in US 10-year yield). The other eight deciles do not show the same clear spread between Nasdaq 100 and STOXX 600. In other words, if interest rates suddenly move aggressively higher then growth portfolio will take a serious hit and hence why we recommend investors to improve the balance between growth and value stocks, or said differently reduce the equity duration.
S&P 500: Rallying Tech Stocks vs. Plummeting Oil Stocks

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

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

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

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

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

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

Tech Sell-Off Continues

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

Intraday Market Analysis – EUR Stays Under Pressure

John Benjamin John Benjamin 24.11.2021 09:15
EURUSD struggles to rebound The euro bounced back after PMI readings in the eurozone exceeded expectations. The pair is testing July 2020’s lows around 1.1200. The RSI’s oversold situation on the daily chart may limit the downward pressure for now. We can expect a ‘buying-the-dips’ crowd as price action stabilizes. Sentiment remains fragile though and sellers may fade the next rebound. The bulls will need to lift 1.1360 before a reversal could take shape. Failing that, a bearish breakout would trigger a new round of sell-off towards 1.1100. NZDUSD lacks support The New Zealand dollar softened after the RBNZ met market expectations and raised its cash rate by 25bps. The downward pressure has increased after 0.6980 failed to contain the sell-off. The pair has given up all gains from the October rally, suggesting a lack of interest in bidding up the kiwi. An oversold RSI caused a rebound as short-term traders took profit and the bears were swift in selling into strength. The directional bias remains bearish unless 0.7010 is cleared. The September low at 0.6860 is the next support. UKOIL bounces back Brent crude recovers on speculation that OPEC+ may lower production to counter a release of strategic reserves. A break below 79.30 has shaken out the weak hands. The price has met buying interest over the daily demand zone around 77.70, which coincides with last July’s peak. A surge above 82.00 puts the bears on the defensive. Short-covering would exacerbate short-term volatility. An overbought RSI may cause a brief pullback. Then 85.50 is a key hurdle before the uptrend could resume.
Dax 40 December longs at 16080/060 stopped below 16040 for a sell signal targeting 1a buying opportunity at 15960/930.

Dax 40 December longs at 16080/060 stopped below 16040 for a sell signal targeting 1a buying opportunity at 15960/930.

Jason Sen Jason Sen 24.11.2021 10:52
Dax 40 December longs at 16080/060 stopped below 16040 for a sell signal targeting 1a buying opportunity at 15960/930. However unfortunately we unexpectedly ran as far as 15860 before the bounce. EuroStoxx 50 December we wrote: just completed a head & shoulders reversal pattern for a sell signal initially targeting 4310/00 then 4270/60 (a low for the day here), perhaps as far as strong support at 4240/30. FTSE 100 December shorts at first resistance at 7240/60 worked a few times for 50 tick scalping opportunities before we eventually broke higher, so now this is today's support. Update daily at 07:00 GMT Today's Analysis. Dax my buying opportunity at 15960/930 was clearly too high - apologies - I will revise to 15870/840. Try longs with stops below 15800. Very strong support at 15750/700. Longs need stops below 15650. A break lower meets the best support for this week at 15575/525. Strong resistance at 16050/100. Shorts need stops above 16150. A break higher keeps bulls in control for today targeting 16260/280. A break above 16290 should target 16350/390. EuroStoxx shorts work on the slide to 4270/60. Holding first resistance at 4300/10 risks a retest of 4270/60 with a fall as far as strong support at 4240/30 possible before the end of the week. Resistance at 4300/10. Second resistance at 4330/40 but above here allows a recovery to 4375/80 before a retest of 4400/10. Anyone want to bet on a double top sell signal here? A break above 4410 however targets 4418/20 but eventually we can reach as far as 4450/55. FTSE holding what is now first support at 7260/40 targets 7300/10, perhaps as far as 7335/40 before a retest of 7380/90. Minor support at 7260/40 then we have a buying opportunity at 7170/50 with stops below 7135. A break lower targets 7100/7090, perhaps as far as 7040/30. Emini S&P December longs at first support at 4670/68 unexpectedly stopped below 4660 before a bounce from 4650. Bulls remain in control with no sell signal. (Although the bearish engulfing candle is likely to signal sideways trend so ease severely overbought conditions). Nasdaq December lower after a huge bearish engulfing candle, which is a very short term negative signal. Shorts at first resistance at 16400/450 worked perfectly, with a high for the day here. However we were buying at 16230/200, with stops below 16150...a low for the day at 16119 so unfortunately my stop was too tight with a recovery now as far as 16350. Emini Dow Jones December shorts at first resistance at 35850/950 worked perfectly with a high for the day here, followed by buying in to longs at strong support at 35450/350 & a low for the day here. Perfect calls!! Update daily at 07:00 GMT. Today's Analysis. Emini S&P I am going to stick with first support at 4670/68 but a break below 4660 targets 4640 then the better support at 4630/20. Try longs with stops below 4615. The best support at 4600/4395 this week - stop below 4385. Very minor resistance at 4700/10 but above here retargets 4720/23 & 4735/40 then 4750. Nasdaq December best support for today at 16230/180. Try longs with stops below 16100! Hopefully that gives us enough room. A break lower however sees 16180/230 working as resistance to target 16030/010 before a buying opportunity at 15900/850. Try longs with stops below 15750. First resistance again at 16400/450. Shorts need stops above 16500. A break higher targets 16550/600 before a retest of the all time high at 16630/767. Emini Dow Jones December longs at at 35450/350 worked perfectly on the bounce to 35790, just below first resistance at 35850/950. A break above 36000 should be a buy signal targeting 36230/250. Strong support again at 35450/350. A break lower however targets 35100/35000. Watch for a bounce from here on the first test. However a break lower meets a buying opportunity at 34800/750, with stops below 34650. To subscribe to this report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk No representation or warranty is made as to the accuracy or completeness of this information and opinions expressed may be subject to change without notice. Estimates and projections set forth herein are based on assumptions that may not be correct or otherwise realised. All reports and information are designed for information purposes only and neither the information contained herein nor any opinion expressed is deemed to constitute an offer or invitation to make an offer, to buy or sell any security or any option, futures or other related derivatives.
COT Speculator Extremes: Brent Oil, Coffee, Mexican Peso & Palladium lead Bullish & Bearish Positions

COT Speculator Extremes: Brent Oil, Coffee, Mexican Peso & Palladium lead Bullish & Bearish Positions

Invest Macro Invest Macro 24.11.2021 08:11
November 23, 2021 By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter The latest update for the weekly Commitment of Traders (COT) report was released by the Commodity Futures Trading Commission (CFTC) on Friday for data ending on November 16th 2021. This weekly Extreme Positions report highlights the Top 5 Most Bullish and Top 5 Most Bearish Positions for the speculator category. Extreme positioning in these markets can foreshadow strong moves in the underlying market. To signify an extreme position, we use the Strength Index (also known as the COT Index) of each instrument, a common method of measuring COT data. The Strength Index is simply a comparison of current trader positions against the range of positions over the previous 3 years. We use over 80 percent as extremely bullish and under 20 percent as extremely bearish. (Compare Strength Index scores across all markets in the data table or cot leaders table) Speculators or Non-Commercials Notes: Speculators, classified as non-commercial traders by the CFTC, are made up of large commodity funds, hedge funds and other significant for-profit participants. The Specs are generally regarded as trend-followers in their behavior towards price action – net speculator bets and prices tend to go in the same directions. These traders often look to buy when prices are rising and sell when prices are falling. To illustrate this point, many times speculator contracts can be found at their most extremes (bullish or bearish) when prices are also close to their highest or lowest levels. These extreme levels can be dangerous for the large speculators as the trade is most crowded, there is less trading ammunition still sitting on the sidelines to push the trend further and prices have moved a significant distance. When the trend becomes exhausted, some speculators take profits while others look to also exit positions when prices fail to continue in the same direction. This process usually plays out over many months to years and can ultimately create a reverse effect where prices start to fall and speculators start a process of selling when prices are falling.   Here Are This Week’s Most Bullish Speculator Positions: Brent Oil The Brent Oil speculator trader’s futures position comes in as the most bullish extreme standing this week. The Brent speculator level is currently at a 98 percent score of its 3-year range. The speculator position totaled -12,900 net contracts this week which was a change by -1,049 contracts from last week. The speculator long position was a total of 45,201 contracts compared to the total spec short position of 58,101 contracts. Free Reports: Top 5 Companies Added to Our Stock Watch List this Quarter - Here are the Stock Symbols that stood out so far in the fourth quarter of 2021. Get our Weekly Commitment of Traders Reports - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.   Coffee Futures The Coffee Futures speculator trader’s futures position comes next in the extreme standings this week. The Coffee speculator level is now at a 97 percent score of its 3-year range. The speculator position was 66,081 net contracts this week, a change by 5,261 contracts from last week. The speculator long position was a total of 79,550 contracts versus the total speculator short position of 13,469 contracts. New Zealand Dollar The New Zealand Dollar speculator trader’s futures position comes in third this week in the extreme standings. The NZD speculator level resides at a 95 percent score of its 3-year range. The speculator position was 13,965 net contracts this week which marked a change by 1,083 contracts from last week. The speculator long position was a total of 26,388 contracts versus the total speculator short position of 12,423 contracts. 2-Year Bond The 2-Year Bond speculator trader’s futures position comes up number four in the extreme standings this week. The 2-Year speculator level is at a 91 percent score of its 3-year range. The speculator position was -5,445 net contracts this week and changed by 11,292 contracts from last week. The speculator long position was a total of 345,245 contracts against the total spec short position of 350,690 contracts. US Treasury Bond The US Treasury Bond speculator trader’s futures position rounds out the top five in this week’s bullish extreme standings. The Long T-Bond speculator level sits at a 88 percent score of its 3-year range. The speculator position was -16,368 net contracts this week which was a move of 11,704 contracts from last week. The speculator long position was a total of 144,973 contracts in comparison to the total speculator short position of 161,341 contracts. This Week’s Most Bearish Speculator Positions: Mexican Peso The Mexican Peso speculator trader’s futures position comes in as the most bearish extreme standing this week. The MXN speculator level is at a 2 percent score of its 3-year range. The speculator position was -47,655 net contracts this week, a weekly change of 752 contracts from last week. The speculator long position was a total of 69,984 contracts versus the total spec short position of 117,639 contracts. Palladium The Palladium speculator trader’s futures position comes in next for the most bearish extreme standing on the week. The Palladium speculator level is at a 7 percent score of its 3-year range. The speculator position was -2,038 net contracts this week which was a change by 916 contracts from last week. The speculator long position was a total of 3,108 contracts compared to the total speculator short position of 5,146 contracts. Japanese Yen The Japanese Yen speculator trader’s futures position comes in as third most bearish extreme standing of the week. The JPY speculator level resides at a 10 percent score of its 3-year range. The speculator position was -93,126 net contracts this week saw movement by 12,225 contracts from last week. The speculator long position was a total of 24,635 contracts against the total spec short position of 117,761 contracts. Nikkei 225 Yen The Nikkei 225 Yen (Japanese stock market) speculator trader’s futures position comes in as this week’s fourth most bearish extreme standing. The Nikkei 225 Yen speculator level is at a 11 percent score of its 3-year range. The speculator position was -4,195 net contracts this week which was a change by -3,892 contracts on the week. The speculator long position was a total of 9,075 contracts versus the total speculator short position of 13,270 contracts. 5-Year Bond Finally, the 5-Year Bond speculator trader’s futures position comes in as the fifth most bearish extreme standing for this week. The 5-Year speculator level is at a 20 percent score of its 3-year range. The speculator position was -344,595 net contracts this week and changed by 62,890 contracts from last week. The speculator long position was a total of 300,750 contracts compared to the total spec short position of 645,345 contracts. 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.
FX Update: USD remains firm, RBNZ taps brakes on expectations

FX Update: USD remains firm, RBNZ taps brakes on expectations

John Hardy John Hardy 24.11.2021 13:44
Summary:  The US dollar remains firm after the news of Fed Chair Powell getting the nod for a second term on Monday, but a more aggressive extension of its recent strength is avoided as US yield rises were tempered yesterday. Elsewhere, a less hawkish than expected RBNZ saw the kiwi sharply weaker as the market removed a chunky bit of forward rate hike expectation on the latest guidance. FX Trading focus: USD follows US yields higher in the wake of Powell getting nod for 2nd term The US dollar strengthening in the wake of President Biden’s announcement that he would tap Jay Powell for a second term as Fed Chair extended modestly yesterday and into this morning, somewhat tempered by a strong US 7-year treasury auction taking the steam out rises in yields yesterday – with the 7-year benchmark actually notching new highs for the cycle before retreating in the wake of the auction. The more widely tracked 10-year US treasury yield benchmark is still rangebound below the October pivot high of 1.7% and the post-pandemic outbreak high of 1.75%  from the end of March. This has kept USDJPY from extending notably above the sticky 115.00 area of the moment. Elsewhere, the euro remains relatively weak despite ECB Vice President de Guindos out speaking and hinting some concern on inflation rises: “the ECB is continuously pointingout that the inflation rebound is of a transitory nature....However, we have also seen how in recent months these supply factors are becoming more structural, more permanent.” But just this morning we also have the ECB’s Holzmann out saying that inflation is likely to slow from next year. Later today we will get the expected German government coalition deal (SPD’s Scholz as Chancellor with Green’s Baerbock reportedly set for the foreign minister post and importantly, the liberal LDP’s Lindner set to lead the finance ministry), with a press conference set for 3 p.m. EURJPY and EURUSD are heavy this morning and note that  the 128.00 level in EURJPY is a well-defined range low, while EURUSD doesn’t have notable  support until well below 1.1200 and arguably not until psychological levels like 1.10. With covid spiking and a galloping energy crisis, I don’t envy the new German leadership. Overnight, the Reserve Bank of New Zealand waxed a bit more cautious than was expected by the market, and not only by raising the rates 25 basis points rather than the 50 basis points that a minority were expecting to see. In the central bank’s new statement, the bank strikes a more cautious tone: yes, clearly further rate hikes are set for coming meetings, but the bank is clearly in a wait and see mode, given the tightening of financial conditions already in the bag and that which the market has already priced in: “the Committee expressed uncertainty about the resilience of consumer spending and business investment....(and) also noted that increases in interest rates to householdsandbusinesses had already tightened monetary conditions. High levels of household debt, and a large share of fixed-rate mortgages re-pricing in coming months, could increase the sensitivity of consumer spending to these interest rate increases.” Later today, we have a stack of US data releases crammed into today because of the Thanksgiving holiday tomorrow (and for most, Friday as well). The most important of these is the October PCE Infation data print. Not expecting much from the FOMC minutes later as all eyes are on whether we are set for an acceleration of the QE taper at the December FOMC meeting, with some arguing that Powell and company have more room to move and administer a bit more hawkish message, if they so desire, as the nomination news is out of the way and this reduces hyper-sensitivity to bringing any message that could risk cratering market sentiment. Chart: AUDNZDThe 2-year yield spread between Australia and New Zealand has risen sharply in recent days and especially overnight, where the more cautious than expected tones from the RBNZ inspired a 14 basis point drop in 2-year NZ yields. The price action in AUDNZD was sympathetic with the rally back toward local resistance near 1.0450, though the rally needs to find legs for a move up to 1.0600 at least to indicate we may have put a structural low in with a double bottom here. A brighter relative outlook for  Australia could be in the cards if China is set to stimulate and raise steel output, the anticipation of which has already sharply lifted iron ore prices this week, a key indicator for the Aussie. No notable expectations for the Riksbank tomorrow – as the central bank is expected to wind down its balance sheet expansion next year, while the policy forecast is thought to be in play (perhaps a late 2024 lift-off built into expectations, though the market is ahead of that as 2-year Swedish swap rates have risen close to 30 basis in recent weeks. This is the area where the Riksbank can surprise in either direction relative to expectations). The EURSEK rally has now reversed the entirety of the prior sell-off leg and double underlines the very weak sentiment on Europe, which remains “non-existential” in nature, i.e., so far the market is keeping this about policy divergence and dark clouds over the economic outlook, not about the longer term viability of the EMU, etc…, which in the past 2010-12 crisis inspired SEK upside as a safe haven. Table: FX Board of G10 and CNH trend evolution and strengthA bit of a relative pick-up in petro-currencies in the wake of yesterday’s oil rally, as the market bought the fact of US President Biden announcing a release of barrels from strategic reserves. Elsewhere, the NZD is losing relative altitude and the USD and especially CNH reign supreme. Table: FX Board Trend Scoreboard for individual pairs.Here, note AUDNZD flipping back to positive - a move that would be “confirmed” by a close solidly above 1.0450. Also note NOKSEK trying to flip positive on the latest oil rally, although beware the Riksbank meeting up tomorrow there. .Upcoming Economic Calendar Highlights (all times GMT) 1330 – US Weekly Initial and Continuing Jobless Claims 1330 – US Oct. Advance Goods Trade Balance 1330 – US Q3 GDP Revision 1330 – US Oct. Durable Goods Orders 1430 – UK BoE’s Tenreyro to speak 1500 – US Oct. PCE Inflation 1500 – US Final University of Michigan Sentiment Survey 1500 – US Oct. New Home Sales 1900 – US FOMC Meeting Minutes
Waking Up the Giants

Waking Up the Giants

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

Danish equities are feeling the heat from interest rates

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

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

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

Cleaning Up with Carbon Credits

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

Black Friday can squeeze supply chains and challenge Christmas

Saxo Bank Saxo Bank 25.11.2021 08:31
Thought Starters 2021-11-24 14:00 Summary:  Black Friday is upon us and with the current pressure on supply chains the shopping frenzy may make it difficult for Christmas presents to reach stores in time for the Holidays. ‘Tis the season for shopping. While Thanksgiving still is primarily a tradition for Americans and people who are into American football, the Friday after, Black Friday, has become a global phenomenon, where shops across the globe make offers that can’t be refused.But, on the back of the COVID-19 pandemic, the act of getting goods from factories to shops, which is a task that’s previously been taken for granted, has become increasingly difficult.“Containers are generally shipped from the big ports in China to the big ports in Europe and on the US East and West Coast. The frequency with which this has happened has been challenged by a strong global economic recovery creating a strong demand for goods around the world. Simultaneously, we’ve all become accustomed to the fact that when we order something online, we get it delivered within a few days. That has broken down and we have to be much more patient now,“ says Ole Hansen, Head of Commodities at Saxo.In the picture below it can be seen that the amount of cargo being off-loaded and loaded in a port like Hong-Kong has fallen roughly 25 pct. on average from 2020 to 2021. This serves as an example of what Hansen describes above, i.e., that there are bottlenecks in the global supply chains, which make it harder for goods to go from one place to another and thus delivery takes longer. The picture also shows the massive price increase on shipping containers, which has almost tripled from 2020 to 2021. This indicates the imbalance between the “supply of logistics” relative to the demand of it. In other words, as a company it’s harder to get your goods in a container and on a containership and therefore get it to where it’s being sold. Therefore, you are willing to pay more for those containers. So where does that leave all the Black Friday shoppers?“Black Friday is going to happen even though I'm sure there's still a lot of stuff at harbours around the world, which is not going to reach the shops in time. But we have noticed something interesting; last month, the retail sales in the US surprised positively and it could potentially be consumers worrying that there won't be enough goods available when we get close to Christmas, so they're already stocking up on some of the goods they need to already now. Based on that it’s fair to assume we will have enough goods for Black Friday but Christmas is another matter,” says Hansen.What does this mean for investors?From an investor point of view, this is something to take note of, as it can have an impact on equities in both the logistics sector, as well as the e-commerce and consumer goods sectors. However, Head of Equity Strategy at Saxo, Peter Garnry, notes that with the right investment strategy, it shouldn’t be seen as a fundamental crisis: “There's always something we can worry about in the equity markets, but, as I tell the young people here at Saxo, who wants to listen to me: it pays off to be an optimist. I think you have to be an optimist about the world and these things will solve themselves. And if you stay true to being long-term in your investments and you remember to diversify your portfolio, then I think you’re off to a good start,” he says. If you want to have a look at some of the global logistics stocks and read more about the sector and its risks, you can invest in and get exposure towards these challenges, have a look at Garnry’s Logistics theme basket here (will open in a new window and require log-in to Saxo). If you instead want to have a look at his E-commerce basket, which is also affected by the supply chain issues, and read about its construction and risks, then take a look here (will open in a new window and require log-in to Saxo).
Crude Oil: Anticipating Dips in the Near-Term

Crude Oil: Anticipating Dips in the Near-Term

Sebastian Bischeri Sebastian Bischeri 24.11.2021 16:49
The market is struggling with further downward pressure, triggered by a stronger US dollar, and threats that the US and others will start using their strategic oil reserves. Trade Plan Review Indeed, Japanese Prime Minister Fumio Kishida said on Saturday (Nov 20th) that his government was considering drawing on oil reserves in response to rising crude prices. Since Japan sources most of its oil from the Middle East, the recent surge in prices and the decline of the yen have pushed up import cost for the Japanese archipelago. As a reminder, last week I anticipated a lower dip that would take place onto the $75.25-76.22 yellow band. The recommended objective would be the $79.37 and 82.24 levels. My suggested stop would be located on the $74.42 level (below both the previous swing low from 7-October and the previous high-volume node and volume point of control (VPOC) from September). Alternatively, you could also eventually use an Average True Range (ATR) ratio to determine a different level that may suit you better. For now, that dip did happen Friday around that support area (likely to become a demand zone) where we might see some ongoing accumulation for the forthcoming hours. Now, we can observe a doji formation (candlestick figure), and more precisely a long-legged doji appearing on the daily chart, which is generally synonymous with indecision. WTI Crude Oil (CLF22) Futures (January contract, daily chart) To visualize how the price action is currently developing, let’s zoom into the 4H chart, which illustrates a much clearer downtrend: WTI Crude Oil (CLF22) Futures (January contract, 4H chart) So, as you can see, even on that lower timeframe we have a doji pattern, where the bulls are trying to take over the bears to push the market towards higher levels. Will the current 4H downtrend extend lower, or will the longer-term (daily) uptrend resume its rally? Let’s see where this is going to end up. Here is the latest chart from today (Nov 24th): Figure 1 - WTI Crude Oil (CLF22) Futures (January contract, monthly chart) By the way, my trade target for WTI Crude Oil positions has almost been reached. Please check out more details on my latest oil targets in Monday’s article. That’s all for today, folks. Happy trading! Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Oil Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Sebastien BischeriOil & Gas Trading Strategist * * * * * The information above represents analyses and opinions of Sebastien Bischeri, & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Sebastien Bischeri and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Bischeri is not a Registered Securities Advisor. By reading Sebastien Bischeri’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Sebastien Bischeri, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Is the S&P 500 Topping or Just Consolidating?

Is the S&P 500 Topping or Just Consolidating?

Paul Rejczak Paul Rejczak 24.11.2021 15:44
The S&P 500 continues to fluctuate along the 4,700 level. So is this a topping pattern or just a flat correction before another leg up? The S&P 500 index extended its Monday’s decline yesterday, as it fell to the daily low of 4,652.66. But it closed 0.17% higher following an intraday rebound. The market rebounded to the 4,700 level again. The broad stock market keeps trading within an over two-week-long consolidation. For now, it looks like a flat correction within an uptrend. However, it may also be a topping pattern before some more meaningful downward reversal. The nearest important support level remains at 4,630-4,650 and the next support level is at 4,600. On the other hand, the resistance level is at 4,700-4,750. The S&P 500 continues to trade along the 4,700 level, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Nasdaq Broke Below the Trend Line Let’s take a look at the Nasdaq 100 chart. The technology index reached the new record high on Monday, led by the megacap tech stock rallies, but it reversed its intraday course and yesterday it fell below the 16,200 level. The index broke below its short-term upward trend line, as we can see on the daily chart: Apple and Microsoft – a Potential Reversal Let’s take a look at the two biggest stocks in the S&P 500 index, AAPL and MSFT. Apple accelerated its uptrend on Monday and Microsoft slightly extended its recent advance. Both reached the record highs before reversing lower. Yesterday they were mixed, and today we may see some more short-term uncertainty. Conclusion The S&P 500 index is expected to open 0.4% lower this morning following a series of economic data releases. The market will wait for some more economic data releases - the Core PCE Price Index, Personal Income/ Personal Spending at 10:00 a.m., and the FOMC Meeting Minutes at 2:00 p.m. We may see a short-term consolidation ahead of tomorrow’s holiday break and the long holiday weekend. So overall, the broad stock market may be trading within a topping pattern. However there have been no confirmed negative signals so far. Nevertheless, we decided to open a speculative short position yesterday, and we are expecting a 5% correction from the current levels. Here’s the breakdown: The S&P 500 backed from the new record high on Monday and it looked like a short-term or medium-term topping pattern. A speculative short position is justified from the risk/reward perspective. We are expecting a 5% correction from the current levels. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Dax 40 December longs at very strong support at 15750/700 worked perfectly

Dax 40 December longs at very strong support at 15750/700 worked perfectly

Jason Sen Jason Sen 25.11.2021 10:49
Dax 40 December longs at very strong support at 15750/700 worked perfectly. EuroStoxx 50 December we wrote: just completed a head & shoulders reversal pattern for a sell signal initially targeting 4310/00 then 4270/60 (a low for the day here), perhaps as far as strong support at 4240/30. That call could not have been more accurate with a low for the day at 4240/30. A potential profit of up to 100 ticks. FTSE 100 December broke minor support at 7260/40 but held 18 ticks above the buying opportunity at 7170/50 Update daily at 07:00 GMT Today's Analysis. Dax longs at strong support at 15750/700 worked perfectly on the bounce with resistance at 15950/16000 for some profit taking. Strong resistance at 16050/100. Shorts need stops above 16150. A break higher keeps bulls in control for today targeting 16260/280. A break above 16290 should target 16350/390. Minor support at 15880/860. Very strong support at 15750/700. Longs need stops below 15650. A break lower meets the best support for this week at 15575/525. EuroStoxx shorts work on the slide to strong support at 4240/30 with a low for the day here so longs also worked perfectly on the bounce to 4300/10. This is the only resistance of the day. Shorts need stops above 4320. A break higher targets 4340/50. Holding resistance at 4300/10 targets 4280/70 before a retest of strong support at 4240/30. Longs need stops below 4220. A break lower is a sell signal. FTSE shot higher to the 7300/10 target as I write this morning, perhaps as far as 7335/40 later on today, before a retest of 7380/90. Minor support again at 7260/40 before a buying opportunity at 7170/50 with stops below 7135. A break lower targets 7100/7090, perhaps as far as 7040/30. Emini S&P December bearish engulfing candle is likely to signal sideways trend so ease severely overbought conditions, although my first support at 4670/68 was not accurate because we over ran again to 4656. Nasdaq December longs at best support for the day at 16230/180 worked as we held above 16100 for a bounce to first resistance again at 16400/450. Emini Dow Jones December shorts at first resistance at 35850/950 worked perfectly with a high for the day here, followed by buying in to longs at strong support at 35450/350 & a low for the day here. Perfect calls!! Update daily at 07:00 GMT. Today's Analysis. Emini S&P seeing a recovery as expected reaching very minor resistance at 4700/10 but above here retargets 4720/23 & 4735/40 then 4750. I am still expecting the downside to be limited with first support at 4670/60 . Longs need stops below 4650. Next target & better support at 4630/20. Try longs with stops below 4615. The best support at 4600/4395 this week - stop below 4385. Nasdaq December up to 200 ticks profit on our longs as we hit first resistance again at 16400/450. Shorts need stops above 16500. A break higher targets 16550/600 before a retest of the all time high at 16630/767. Best support for today at 16200/160. Try longs with stops below 16100! Hopefully that gives us enough room. A break lower however sees 16180/230 working as resistance to target 16030/010 before a buying opportunity at 15900/850. Try longs with stops below 15750. Emini Dow Jones December longs at at 35450/350 worked perfectly on the bounce to first resistance at 35850/950 for an easy 400 tick profit. A break above 36000 should be a buy signal targeting 36230/250. Minor support at 35750/700 but below here targets 35600. Strong support again at 35450/350. A break lower however targets 35100/35000. Watch for a bounce from here on the first test. However a break lower meets a buying opportunity at 34800/750, with stops below 34650. To subscribe to this report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk No representation or warranty is made as to the accuracy or completeness of this information and opinions expressed may be subject to change without notice. Estimates and projections set forth herein are based on assumptions that may not be correct or otherwise realised. All reports and information are designed for information purposes only and neither the information contained herein nor any opinion expressed is deemed to constitute an offer or invitation to make an offer, to buy or sell any security or any option, futures or other related derivatives.
Santa preparing to take back the reins of the market! | MarketTalk: What’s up today? | Swissquote

Silver on Christmas gift list

Korbinian Koller Korbinian Koller 26.11.2021 11:06
Monthly chart, Silver in US-Dollar, favorable timing: Silver in US-Dollar, monthly chart as of November 26th, 2021. Timing for a physical acquisition is in alignment as well. The monthly chart shows a high likelihood for November’s candle closing as an inverted hammer. Consequently, it provides for silver prices approaching the low end of the last 17-month sideways range near US$22. The white line assumes a potential price projection for 2022. Even if we are wrong with our assessment, a gift of silver for a long-term horizon is highly likely to appreciate from momentary levels to a much higher price target. Silver in US-Dollar, weekly chart, silver on Christmas gift list: Silver in US-Dollar, weekly chart as of November 26th, 2021. The value of a gift like this doesn’t stop there. Numismatics provides for children and teenagers a way to study history. Beautiful coins and bars inspire us to hold on to value for future times and encourage saving. The weekly silver chart shows in a bit more detail possible price expansion from a time perspective. This would be our most conservative picture of the future. The green bordered box is an entry zone for a potential reversal to the upside. With a high likelihood of an interest rate change by the Federal Reserve Bank in the second quarter of 2022, the inner yellow curve supersedes in probability for the expected time frame for a price increase. Silver in US-Dollar, daily chart, physical only, spot to risky: Silver in US-Dollar, daily chart as of November 26th, 2021. If you look at the daily chart above, you will find that we have seen a swift downward move in the past. Under our beauty principle, there is a good likelihood that this might occur again. If so, reaction times are much longer with a physical purchase than with spot price trading. Meaning there is no need to precision trade (precision purchase) physical silver, but be not spooked if a swift, extended decline might happen. Consequently, we are pointing this purchase out for physical acquisition only but do not advise taking a spot price position based on the risk.   Phase 1 drilling program at Guigui discovered not only the largest intrusive ever found in the district, but it’s the first mineralized skarn ever seen in Guigui! Silver on Christmas gift list: In this bargain hunting season around Black Friday, we find it is especially sensible to refocus and ask different questions. The human psyche is prone to give in to instant gratification, especially after the hard time the last two years provided. But with this much at stake for 2022, possibly being a year that sets a mark in history, it might be more prudent to look for wealth preservation in a longer time horizon to invest one’s fiat currencies rather than short-lived pleasures. After all, a careful look for generations to come, your children, is a view most valuable in general. Feel free to join us in our free Telegram channel for daily real time data and a great community. If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can also subscribe to our free newsletter. This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting. By Korbinian Koller|November 26th, 2021|Tags: Crack-Up-Boom, Gold, Gold/Silver-Ratio, inflation, low risk, Silver, silver bull, Silver Chartbook, silversqueeze, technical analysis, time frame, trading principles|0 Comments About the Author: Korbinian Koller Outstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.
New virus strain pulls back online vs offline bets in equities

New virus strain pulls back online vs offline bets in equities

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

Covid Strikes Back

Marc Chandler Marc Chandler 26.11.2021 12:44
November 26, 2021  $USD, Covid, Currency Movement, Hungary, Mexico, South Korea Overview: Concerns that a new mutation of the Covid virus has shaken the capital markets.  Equities are off hard, and bonds have rallied.  In the foreign exchange market, the Japanese yen and Swiss franc have rallied.  While there may be a safe haven bid, there also appears to be an unwinding of positions that require the buying back of the funding currencies, which is also lifting the euro.  The currencies levered from growth, the dollar-bloc and Scandis are weaker.   Oil has been knocked back by around  6.7%, with January WTI trading near $73. Led by 2%+ losses in Japan, Hong Kong, and India, and 1%+ losses in South Korea, and Taiwan, the MSCI Asia Pacific Index has slumped to its lowest level since July.   Europe's Stoxx 600 gapped lower and is off around 2.4% near midday.  US futures are sharply lower (1.25%-2.5%).  The US 10-year yield has dropped around 12 bp to nearly 1.50%.  While UK Gilts have kept pace with US Treasuries, continental benchmark yields are off 6-8 bp.  The US 2-year yield is about 15 bp lower (~0.49%), while European 2-year yields are mostly 2-5 bp lower.  The 2-year Gilts yield has shed about 12 bp, as the market unwinds some of the chances of a rate hike next month.   Key Development: A new variant of the Covid virus was found.  It is thought to have the most mutations to date.  The EU, UK, Israel, and Singapore have quickly banned travel from South Africa and five neighboring countries.  This is coming on top of and is separate from the outbreak in Europe, where Germany has reported a record number of new cases and several other countries have introduced new restrictions.  Almost a third of Shanghai flights were canceled as three local cases were found.  US infections are also on the rise.  Asia Pacific  As widely expected, South Korea hiked its key 7-day repo rate by 25 bp to 1.0% yesterday.   It follows a 25 bp hike in August.  Consumer inflation rose 3.2% year-over-year in October, while the core rate rose 2.8%.  Growth in Q3 was 4.0%.  With today's roughly 0.3% decline, it brings this year's loss to almost 9%.  Only the yen (~-9.4%) and the Thai baht (~-11%) have performed worse in the region.   Australia reported stronger than expected October retail sales.  The 4.9% month-over-month surge was more than twice the Bloomberg median forecast (2.2%) and follows September's 1.3% gain.  It underscores the recovery that is taking place. The preliminary PMI showed the recovery continuing into November.  The composite rose to 55.0, its highest reading since June.   The dollar was fraying the upper end of the range we anticipated against the yen, pushing against JPY115.50.  The momentum looked to have been at risk of stalling when the news struck.  The dollar was sold to almost JPY113.65.  An option for $710 mln at JPY113.70 expires today.  The price action appears to be stabilizing a bit in the European morning, and the greenback is hovering around JPY114.00.    The trendline connecting the September and the previous two November lows comes in today near there today.  The JPY114.50 area looks to offer initial resistance.  The Australian dollar had been leaking through $0.7200, and the risk-off move sent it slightly through $0.7115, just above the low for the year set on August 20, closer to $0.7105.  A break could spur a move toward $0.7050, which is the (38.2%) retracement of the Australian dollar's recovery since March 2020, when it hit a low near $0.5500.  The $0.7140 area may provide the initial cap for the bounce.   The Chinese yuan is a rock.  It has hardly moved despite the broader developments.  The greenback is slightly (less than 0.05%) firmer and still a little below CNY6.39.  The PBOC set the dollar's reference rate at CNY6.3936, a touch above the CNY6.3934 median projection (Bloomberg survey).   Europe Part of the limited reaction short-end of the European debt market derives from the fact that investors had not expected a change in ECB's monetary policy until the very end of next year, at the earliest.  The surge in the delta strain had already emerged as a weight on the euro.  We had put emphasis on the divergence with the US and saw it captured in the two-year interest rate differential between the US and Germany.  The US premium had risen from around 90 bp in mid-September to 140 bp in the middle of this week.  It has fallen back to about 128 bp today.  Some observers had focused on the year-end adjustments of European banks and the shifting of liquidity through the cross-currency swap basis.   The new German coalition has been announced, and it will have its work cut out.  A record number of new cases have been reported in Germany, and many countries are introducing new social restrictions.  Portugal will try something a bit different.  It is set to require people to work from home in early January for a week to avoid a spike in the virus after the holidays.   Hungary was more aggressive than expected yesterday.  It raised its one-week deposit rate by 40 bp to 2.90%.  Recall that on November 18, it had hiked the one-week deposit rate 70 bp to 2.50%.  Two days earlier, it lifted the base rate 30 bp to 2.10%.  The forint had fallen to a record low against the euro on November 23.   The euro's high was just shy of HUF372, and it fell back to about HUF364.80 yesterday before jumping back to almost HUF369.50 today.  It has steadied around HUF368 in the European morning.   The euro's downside momentum had begun easing as bids below $1.12 were being filled.  The virus developments have spurred what appears to a be short-covering rally that has lifted the single currency thought $1.1280, where a 460 mln euro option expires today.  Nearby resistance is seen near $1.1300 and then last week's high near $1.1375.  Sterling recorded a new low for the year near $1.3280 in late Asian turnover before finding support.  It recovered to about $1.3335 so far.  A move above yesterday's high (~$1.3355) could spur a move to $1.3400-$1.3425.    America The dollar's rally has been fueled by the prospect of a divergence of monetary policy that favored the Fed over the ECB and BOJ.  Indeed, since the November 10 surprise jump in the October CPI to above 6%, we had emphasized the likelihood that the Fed would have to taper quicker to give it the flexibility to lift rates earlier if needed.  Since then, 4-5 Fed officials and several large banks have also underscored this possibility. However, this scenario is being called into question today, which is evident in the swaps markets and the Fed funds futures.  The implied yield of the June 2022 Fed funds futures contract is 7.5 basis points lower, and the December 2022 contract implied yield is down 14.5 bp.  The US dollar rallied to CAD1.2775, its highest level since late September.  It tests a downtrend line connecting the August (~CAD1.2950) and September (~CAD1.2900) highs. A convincing break of the trendline would signal a test on those earlier highs.   We are inclined to see it hold but cannot be confident until CAD1.2720 yields.   The Mexican peso was trampled before today amid concerns about the implications of President AMLO pulling Herrera's nomination for central bank head.  Herrera is a seasoned hand, and although he worked closely with AMLO from the finance ministry, his appointment did not seem to jeopardize the independence of the central bank.  Perhaps the market has been influenced by developments in Turkey, but the nomination of a less experienced and less known candidate has weighed on sentiment.  The dollar, already bid, jumped to MXN22.1550, at its best level since September 2020.   It has pulled back to around MXN21.83, which leaves it up around 1.2%.  This would be the seventh consecutive decline in the peso.  Support is seen around MXN21.60.  Disclaimer
FX Update: Position squaring in FX as new covid strain roils markets

FX Update: Position squaring in FX as new covid strain roils markets

John Hardy John Hardy 26.11.2021 14:30
Forex 2021-11-26 14:05 5 minutes to read Summary:  The contagion across asset markets triggered by new covid strain concerns has hit FX in the form of classic deleveraging, as euro and yen shorts are squeezed on a reversal of recent US yield rises and safe haven seeking, while the US dollar gets a pass elsewhere because it is still safer than smaller, less liquid currencies, particularly in EM. The timing is terrible for this wave of risk aversion as we have thin trading conditions over the US Thanksgiving holiday.   FX Trading focus: Position squaring hits heavy euro- and yen shorts Risk contagion across the board overnight on the news of a new covid strain in South Africa with significant mutations and signs of overtaking as a percentage of cases in regional outbreaks. There may a sudden “straw that broke the camel’s back” angle to this, given the covid concerns elsewhere, particularly in Europe. The timing is worse than unfortunate, as the liquidity backdrop of particular concern as the news has hit with the US out on holiday yesterday and only open for half a session today, with few likely anticipating until last night or this morning that they would even need to bother showing up for work today. The sense of whiplash has been particularly acute as we have just had a look at US President Biden nominating Powell for a second term and many highlighting the focus on inflation in his acceptance speech for the nomination, with Brainard’s acceptance speech also highlighting inflation as a major concern. This had jolted Fed expectations for next year to new highs for the cycle at the outset of this week, and now just a few days later we get covid mutation concerns that have sent a deleveraging wave across markets. In US treasuries, this has mean a sharp drop along the entire US yield curve, giving the euro and the yen a strong boost, as the euro in particular was headed south and fast on the policy divergence theme of the ECB seen likely to maintain zero rates and even some level of QE out over the horizon while the market had priced in three full Fed rate hikes by the end of next year before this sudden reversal. On the weak side, while the US dollar has fallen within the G3 and is approximately flat against sterling, the smaller currencies are sharply lower against all of the above, and EM generally doubly so. Meanwhile, a chunky new drop in oil prices on the anticipation of widening international travel restrictions and even domestic lockdowns in places is adding to the NOK woes just after that currency was trying to recover versus the single currency last week, sending EURNOK up through its 200-day moving average and above 10.20 at one point today after trading below 9.70 barely over a month ago. Chart: AUDJPYAUDJPY is doing its usual job of capturing a wave of risk aversion as the lurch lower in risk sentiment was reflected here, and the clearly important 200-day moving average gave way with a bang. This is beginning to demolish the longer-term bullish hopes as it is a hold below the 200-day moving average here is a kind of confirmation of the rejection of the next cycle highs above 85.00 that were attempted last month. Theoretically, if the last gasp support of the 61.8% retracement of the local rally wave can avoid falling, there is shred of hope, but that would likely depend on a full reversal of everything we have just seen overnight. As we emphasized in this morning’s Saxo Market Call podcast, it is impossible to know how the virus situation shapes up here until further details emerge, but the market appears poorly positioned here for a more difficult global growth outlook at a time was just on how much the Fed is going to have to course correct and end QE and hike rates because US Q4 GDP is running incredibly hot. And that was in turn driving the predominant focus on relative policy divergences, with especially Europe being singled out for its particularly weak outlook, given the energy crunch and it being at the epicenter of the latest covid wave. If I am to poke around at places where moves are getting a bit overdone here in the short term, the EURSEK squeeze move looks a bit excessive, but that isn’t to say that poor liquidity and the usual market correlations can’t send it squeezing higher still. Yesterday, the Riksbank brought a rate hike into its forward guidance (late 2024) for the first time for the cycle at a time as the market is front running that and even pricing the ECB to achieve lift-off next year. Trading a market move like the one has developed overnight is tricky business as anything can happen and either direction. Concern may deepen and dramatically so that nations will scramble to limit the spread of this new variant until more is known, and we still know little about its virulence. And in the very short-term, a self-propelling position squaring can extend aggressively ahead of the weekend as risk managers force adjustments linked to the blow-up in volatility. Then the gap risk can move in the other direction over the weekend. Impossible to know, only to limit risk and exercise patience and a couple of weeks or more of headline risks before we know the lay of the land better. Table: FX Board of G10 and CNH trend evolution and strengthAs noted above, the big direction change here is in the euro and the JPY, which have pulled sharply higher in most crosses, with the Swiss franc happy to continue higher as well (suggesting that the USDCHF pair was increasingly important positioning-wise recently?). Elsewhere, SEK downside is beginning to look extreme, and CNH upside likewise if commodity prices continue to crater. Table: FX Board Trend Scoreboard for individual pairs.Far too early to talk trends when what we have here is a sudden positioning wipeout – but we will have to see how the next few days develop. Most “flips” as of this update are linked to the oil move (NOKSEK, CAD crosses etc.) although note the euro ripping higher against AUD and NZD.
Focusing On US CPI, Fed, Commodities and Bank Of Japan - Saxo Market Call

Market Quick Take - November 29, 2021

Saxo Bank Saxo Bank 29.11.2021 09:48
Macro 2021-11-29 08:40 6 minutes to read Summary:  The market is trying to brush off fears that the new omicron covid variant may significantly disrupt the global economy, with only partial success as cases of the variant have been discovered in multiple countries outside of the original outbreak area. Equities and crude oil markets have erased a portion of the enormous losses from Friday, but the Japanese yen strength actually accelerated at times overnight as Japan will move to halt entry by all foreign visitors. What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) - US equity futures with especially Nasdaq 100 futures are charging ahead trading above the 50% retracement level based on Friday’s price action. The new Covid variant has for now made the market put monetary tightening on pause for a while until we get a better picture of the new variant and its impact. This is supporting US technology stocks as it puts less upward pressure on interest rates. Stoxx 50 (EU50.I) - European equities were down the most on Friday logically bouncing back the most in today’s session with Stoxx 50 futures trading at the 50% retracement level of Friday’s selloff at the 4,151 level. The next big resistance level on the upside is 4,189. If the new Covid variant ends up restricting mobility and travelling we expect Europe and emerging markets to perform worse than US equities. USDJPY and JPY crosses – The Friday meltdown in risk sentiment saw the Japanese yen rallying strongly, with a classic risk proxy pairing like the AUDJPY suffering its worst single day draw-down since the pandemic outbreak in March of 2020. While other markets tried to put on a hopeful face at the start of the week in Asia today, it is notable that the JPY strength has actually accelerated, perhaps in part as Japan is taking the remarkable step of banning all inbound travel from foreign destinations starting tomorrow. In USDJPY, we watch the important pivot low of 112.73, a fall through which could set up a challenge of the 111.50-111.00 zone that supports the trend from the lows of early 2021. Speculative positioning is quite short the JPY, so there is considerable potential fuel for an extension of this JPY rally. EURJPY has broken down through the important 128.00 area support overnight. EURUSD – the squeeze higher in EURUSD on Friday appears linked with the market moving quickly to remove expectations of Fed rate hikes in the wake of the news of the new omicron covid variant, which improves the equation for the euro from a “yield spread” perspective. For EURUSD to trade to new cycle lows from here, we would likely either need to see a return to new highs for the cycle in Fed expectations or some new meltdown in sentiment that would reward the US dollar more as a safe haven. Resistance is perhaps 1.1350-1.1385. Gold (XAUUSD) failed to attract a strong safe haven bid on Friday to push it through resistance at $1816. This despite multiple tailwinds emerging from the omicron-driven carnage after bond yields slumped while the dollar and the VIX jumped. Instead, a slump across industrial metals spread to silver and platinum, thereby curtailing golds potential upside. Gold trades lower today with other markets making a tentative recovery in the belief Friday’s selloff was overdone. However, until we have more details about the virus (see below) the markets will remain nervous as can be seen in fresh yen strength this Monday (see above). Four failed attempts to break below $1781, a key Fibonacci level, may also offer returning bulls some comfort. Crude oil (OILUKJAN22 & OILUSJAN21) suffered one of its largest one-day crashes on Black Friday in response to worries the new omicron virus variant could drive renewed demand weakness caused by widespread lockdowns and travel bans. Equally importantly was probably the very bad timing with the news hitting the markets on a low liquidity day after the Thanksgiving holiday. The market traded higher in Asia as buyers concluded the selloff was overdone while also speculating OPEC+ may act to support prices when they meet on Thursday. The group may decide to postpone the January production increase or if necessary, temporary cut production into a period that was already expected to see the return of a balanced market. Ahead of the meeting and until we know more about the new strain and its associated risks, the market will remain very volatile. US Treasuries (IEF, TLT). The omicron strain will be in the spotlight this week as well as monetary policies expectations and the non-farm payrolls on Friday. Jerome Powell’s speech tomorrow and on Wednesday will be key as the Coronavirus and CARES act will be discussed. It’s likely that rates will remain compressed across the yield curve as there continue to be uncertainties surrounding the omicron strain. Yet, we expect the Federal Reserve to stick to their hawkish agenda and accelerate the pace of tapering in December as inflation will continue to be a concern. It implies, the yield curve will continue to bear flatten, and could even invert as economic expectations dive, pinning down long-term yields. If the White House looks to add more stimulus, that would imply more bond issuance, putting further pressure in the front part of the yield curve. German Bunds (IS0L) and Italian BTPS (BTP10). This week’s focus will be the Eurozone CPI flash numbers and news concerning Covid lockdowns and restrictions. Friday’s flight to safety provoked yields to drop across the euro area, including among sovereigns with a high beta such as Italy. The reason behind it is that German Bunds are tightly correlated to US Treasuries and that the market was anticipating more accommodative monetary policies from the ECB, which have been benefitting mostly the periphery. Investors should remain cautious. Indeed, inflation remains a big focus and could drive towards less accommodative policies rather than more. What is going on? Market is grappling with what to do about the omicron covid variant. The worst impact so far is from the speed with which countries are moving to halt inbound foreign travel, with many countries stopping all flights from South Africa and other countries in the region, while Japan has taken the dramatic step of halting all inbound foreign travel from tomorrow. More hopeful indications from virologists in the virus origin area are anecdotally that this variant is not particularly virulent, although others point out that too little is known about the virus’ effects on more vulnerable patients. Weak Black Friday spending in the US, particular in-store sales. While up strongly from last year’s virus impacted activity at physical stores, US Black Friday spending in-store was down some 28% from 2019 levels and the online shopping on Friday was at $8.9 billion vs. $9.0 billion in 2019, rather disappointing totals, although some suggest that Americans have brought forward their holiday shopping this year because of widespread fears of shortages of popular products. What are we watching next? Whether market can quickly recover from fresh wave of virus concerns. The virus concerns triggered by the new variant were a jarring development, given the prior focus recently on inflation and central banks having to bring forward tightening plans to stave off inflationary risks. US stocks have been the quickest to try to put a brave face on the situation and there is some support for equities as rate hike expectations from the Fed have dropped sharply and long US treasury yields are also sharply lower, but it will take time to learn how transmissible and virulent this new omicron virus strain is, as well as how much damage will be done to growth and sentiment by new limitations on travel and other restrictions. We also have to recall that prior to this news, Europe was the epicenter of the latest wave of the delta variant and was already trading somewhat defensively. US President Biden is set to speak this evening on the new virus variant. The UN FAO will publish its monthly World Food Price Index on Thursday, and another strong read is expected, although the year-on-year increase look set to ease from 31.3%. November has been another strong month for the grains sector led by wheat due to strong demand and worries about the Australian harvest. Elsewhere Arabica coffee trades near a ten-year high on increased concerns about production in Brazil. Before Friday’s carnage across markets the Bloomberg Agriculture Spot index had reached a 5 ½-year high after rallying by 40% during the past year. Earnings Watch – earnings this week are light with the key ones to watch being Li Auto, Snowflake, Crowdstrike, Elastic, and DocuSign. Monday: Sino Biopharmaceutical, China Gas, Acciona, Li Auto Tuesday: Bank of Nova Scotia, Salesforce, Zscaler, NetApp, HP Enterprise Wednesday: Trip.com, Royal Bank of Canada, National Bank of Canada, Snowflake, Synopsys, Crowdstrike, Veeva Systems, Okta, Splunk, Elastic, Five Below Thursday: Canadian Imperial Bank of Commerce, Toronto-Dominion Bank, Cooper Cos, Marvell Technology, DocuSign, Ulta Beauty, Asana, Dollar General, Kroger Friday: Bank of Montreal Economic calendar highlights for today (times GMT) 0830 – Sweden Q3 GDP 0830 – ECB's Guindos to speak 0930 – UK Oct. Mortgage Approvals 1000 – Euro Zone Nov. Confidence Surveys 1130 – ECB's Schnabel to speak 1300 – Germany Nov. Flash CPI 1330 – Canada Oct. Industrial Product Prices 1530 – US Nov. Dallas Fed Manufacturing Survey 1715 – ECB President Lagarde to speak 2000 – US Fed’s Williams (voter) to speak 2005 – US Fed Chair Powell gives opening remarks at conference 2350 – Japan Oct. Industrial Production 0030 – Australia Oct. Building Approvals 0100 – China Nov. Manufacturing and Non-manufacturing PMI 0200 – Australia RBA’s Debelle to speak  Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple Spotify Soundcloud Sticher
AUDUSD shorts at 7210/00 worked perfectly after the sell signal targeting 7170/65 & 7120/10...

AUDUSD shorts at 7210/00 worked perfectly after the sell signal targeting 7170/65 & 7120/10...

Jason Sen Jason Sen 29.11.2021 11:45
AUDUSD shorts at 7210/00 worked perfectly after the sell signal targeting 7170/65 & 7120/10 for a potential 90 pips profit, with a low for the day exactly here. NZDUSD we wrote: hit the next target of 6855 as we look for 6810. This target was hit after a 57 pip drop. AUDJPY shorts at 8310/20 offered up to 200 pips profit on the slide to 8110/00. Longs were stopped below 8075 before we hit the next target of 8055/50, with a low for the day. Today's Analysis. AUDUSD shorts at 7210/00 working after the sell signal targeting 7170/65 & 7120/10. Further losses look likely when we open to first support at 7070/50 in oversold conditions. A break lower targets 7000. Gains are likely to be limited with minor resistance at 7150/55. Strong resistance at 7175/85. Shorts need stops above 7195 but try shorts again at 7215/25, with stops above 7235. NZDUSD hit the next targets of 6855 & 6810. Expect strong support at 6780/60. Longs need stops below 6730. Gains are likely to be limited with minor resistance at 6835 & strong resistance at 6855/65. Shorts need stops above 6875. Try shorts at 6890/6900, with stops above 6915. AUDJPY hit all the downside targets as far as 8055/50. Further losses meet very strong support at 8010/7990. Longs need stops below 7960. Gains are likely to be limited at this stage, with first resistance at 8110/30. Strong resistance at 8180/8200. Shorts need stops above 8220. USDJPY broke strong support at 114.20/10 for the next target of 113.40/30, before a bounce from 113.03. EURJPY collapsed to the only support for the week at 127.95/90. CADJPY shorts at 9100/9110 worked perfectly on the slide to 8900/8890 but we continued lower look to the next target of 8875/50. Update daily at 06:30 GMT Today's Analysis. USDJPY gains are likely to be limited with first resistance at 113.55/65. A better selling opportunity at 113.95/114.05, with stops above 114.20. Minor support at 113.10/00. A break below 112.90 targets the November low at 112.70 then strong support at 112.45/35. Try longs with stops below 112.20. EURJPY collapsed to the only support for the week at the August/September low at 127.95/90, with a good bounce from just 12 pips below. A break lower is obviously an important sell signal this week, with another 100 pip drop likely. Resistance at 128.60/70 but above 128.80 meets a selling opportunity at 129.10/20 with stops above 129.40. CADJPY strong support at 8850/30. Longs need stops below 8810. A break lower targets 8770/60 then 8710/00. Longs at 8850/30 target 8900/10, perhaps as far as first resistance at 8950/60. Try shorts with stops above 8975. To subscribe to this report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk No representation or warranty is made as to the accuracy or completeness of this information and opinions expressed may be subject to change without notice. Estimates and projections set forth herein are based on assumptions that may not be correct or otherwise realised. All reports and information are designed for information purposes only and neither the information contained herein nor any opinion expressed is deemed to constitute an offer or invitation to make an offer, to buy or sell any security or any option, futures or other related derivatives.
Gold's Gains Get Marred as Biden Bonks Brainard

Gold's Gains Get Marred as Biden Bonks Brainard

Mark Mead Baillie Mark Mead Baillie 29.11.2021 08:32
The Gold Update by Mark Mead Baillie --- 628th Edition --- Monte-Carlo --- 27 November 2021 (published each Saturday) --- www.deMeadville.com  Five key points right off the top: â–  Indeed literally at the top: the above Gold Scoreboard displays valuation having crossed above the $4,000/oz. threshold; and yet you can own Gold for a fraction of that at $1,792/oz given yesterday's (Friday's) settle; "Got Gold?" â–  Both wrong -- and moreover shocked -- we were over Biden's handlers writing "Jerome Powell" rather than "Lael Brainard" on the FedHead index card for the President to read aloud this past Monday; a selection 180° anti-correlative with the Administration's endless money 'n climate change modus operandi; â–  The emphasis of last week's piece was for a near-term technical pullback in Gold's price, wherein 'twas stated "...the 1800s ... appear safe..."; rather, this past week's low was 1777, the "Powell" selection being the fundamental impetus justifying that technical condition; â–  Prior to The WHO's (not the band, but the U.N. organization) effort to maintain its raison d'être with Friday's "Oh my! Omicron!" scare, we were prepared to state that "Powell" would push for a FedFunds rate hike in the 26 January Policy Statement; but if this instead is "The Beginning of the End, Part Deux", shall they ever raise again? â–  And "Oh my! Omicron!" in turn is credited as the catalytical scapegoat for the S&P 500's -2.3% loss on Friday, (recall the single-day COVID losses in 2020 were several times that amount); yet still not a FinMedia peep about the S&P's earnings levels simply not being supportive of the Index: our "live" P/E = 49.3x; its lifetime median = 20.4x; (ready for the next means reversion?) Now: but for two trading day's remaining in November's balance, let's go with the following usual month-end graphic, albeit both Monday and Tuesday can well blow us far from Kansas, Toto. Thus with that in mind and seat belts fastened, here are the BEGOS Markets Standings year-to-date. The economically-driven markets dominate the top three podium spots whilst the safe havens remain the also-rans. "Everything's great!" right? Specific to Gold, as above shown -5.7% to this point in 2021, here below we've the weekly bars and parabolic trends, the ongoing blue-dotted Long stance now four weeks in duration. As measured from a year ago, this past week was Gold's third worst performance on both a points and percentage loss basis. A bit of a heartbreaker, that. Even as "Oh my! Omicron!" is wild-card bullish for Gold; yet "Powell" is the more hawkish-to-be FedHead selection (bearish, but not really) for Gold: "You're saying that because rising rates have actually found Gold to rise too, right, mmb?" Spot on there, Squire. Lest we forget, from 2004-2006 the FedFunds rate rose from 1% to 5% and Gold from 380 to 710. Further, to reiterate, Gold by U.S. monetary debasement (wildly bullish) is today worth the Scoreboard-noted 4001. Either way, Gold's year-over-year percentage track has been, on balance, sideways. Which in turn really emphasizes the "Live by the miners, Die by the miners" nature of precious metals-based equities as is starkly made obvious here: For the record from this time a year ago, as positive we've only Franco-Nevada (FNV) +5%, followed in decline by Gold itself -1%, Newmont (NEM) -3%, the Global X Silver Miners exchange-traded fund (SIL) -5%, the VanEck Vectors Gold Miners exchange-traded fund (GDX) -6%, Pan American Silver (PAAS) -12%, and Agnico Eagle Mines (AEM) -19%. (Note to those of you fortunate enough to be scoring at home: the U.S. Money Supply for the same period is +12% versus the supply of Gold just +1% ... Pssst: again, "Got Gold?"). As for our Economic Barometer, the past week's slate of incoming metrics found but one which was negative: October's Durable Orders (itself a volatile series). The balance of the bunch had improvements including Home Sales (both New and Existing), plus Personal Income and Spending. But the "turn a blind eye to it" Q3 Chain Deflator was revised upward: that's the party pooper, further highlighted by the Fed's favourite gauge of inflation -- Core Personal Consumption Expenditures -- doubling its October growth over that for September. "Hey Jay! Raise 'em 26 January anyway?" Here's the Baro along with the wee pullback in the S&P: Next as we go 'round the horn with the BEGOS Markets, their respective rightmost daily bars are indicative of Friday's "Oh my! Omicron!" effect. And note from the safe haven standpoint the net comparable under-performance of the precious metals vis-à-vis the leaps by the Bond, Euro and Swiss Franc. As well, the three year-to-late leaders in the aforeshown BEGOS Markets Standings turned tail toward butt ugly, namely Oil, Copper and the S&P 500. And with all those baby-blue dots of trend consistency on the skids, a Santa Claus rally doesn't at present appear in the bids: As for the 10-day Market Profiles for the precious metals, be it for Gold on the left or Silver on the right, from each one's height, they now hardly look right. Indeed, the pick of "Powell" thus far trumps any Gold-positive fear of "Oh my! Omicron!": And thus Gold for November has gone from stud to dud, the rightmost monthly bar below barely green by a nub. Gold's trying to re-secure The Northern Front remains a Battle Royale: So there it all is. Gold was on a November roll -- up some 95 points (+5.3%) -- just over a week ago, albeit with momentum already perceptively slowing, our last missive showing. Then Monday came Biden's shocking bonking of "Brainard" toward maintaining "Powell" as FedHead, and from the month's high of 1880, Gold post-bonk was swiftly down over 100 points. Even as a safe-haven following Friday's WHO surprise "Oh my! Omicron!" cry, Gold bounced a bit, but failed to hold grip, the question now being: "Does Gold further slip?" Regardless, we answer: "Just buy Gold's dip!" Cheers! ...m... www.deMeadville.com www.deMeadville.com
Day That Changed the World?

Day That Changed the World?

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

Feeling the Quickly Changing Pulse

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

COT: Speculative positioning ahead of Fridays omicron dump

Ole Hansen Ole Hansen 30.11.2021 18:42
Commodities 2021-11-30 10:30 Summary:  Futures positions and changes made by hedge funds across commodities, forex and financials up until last Tuesday, November 23. While a lot of water has flowed under the bridge since last Tuesday, it is nevertheless interesting, not least considering the report encapsulated the market reaction to last weeks renomination of Fed chair Powell which helped send both treasury yields and the dollar sharply higher, as well as the oil market reaction to the coordinated SPR release announcement. Finally, it also gives us an idea about the level of positioning ahead of Friday's omicron related sell off Saxo Bank publishes weekly Commitment of Traders reports (COT) covering leveraged fund positions in commodities, bonds and stock index futures. For IMM currency futures and the VIX, we use the broader measure called non-commercial. Link to latest report The below summary highlights futures positions and changes made by hedge funds across commodities, forex and financials up until last Tuesday, November 23. The report normally released on Friday's was delayed due to last weeks Federal holidays, and while a lot of water has flowed under the bridge, its nevertheless interesting. Not least considering the report encapsulated the market reaction to last weeks renomination of Fed chair Powell which helped send both treasury yields and the dollar sharply higher, as well as the oil market reaction to the coordinated SPR release announcement. Also it gives a good idea about how funds and speculators were positioned ahead of the sharp risk off to the new omicron virus variant. Commodities The commodity sector saw sizable shift out of energy and metals into the agriculture sector where all 13 futures contracts covered in this update saw net buying. During the week the energy sector lost 2.1% while precious metals dropped 4.3% after gold broke below key support at $1830. A 1.5% rise in copper was not enough to convince speculators who cut their net long by 20%. Most noticeable however was the strong buying seen across the agriculture sector, with strong demand and weather worries more than offsetting the headwind caused by the stronger dollar. Energy: Crude oil, both Brent and WTI, were sold ahead of the coordinated SPR release announcement last Tuesday. The combined net long dropped by 14k lots to a one-year low at 514.6k lots. The loss of price momentum during the past few months has, despite an overriding bullish sentiment in the market, been driving the reduction, and following Friday's 10% price collapse these traders have been rewarded for sticking to the signals the market was sending instead of listening to bullish price forecasts. Hedge funds are not "married" to their positions hence their better ability to respond to changes in the technical and/or fundamental outlook.Metals: Having increase bullish gold bets by 65k lots during the previous two weeks, funds were forced to make 45k lots reduction last week in response to the Powell renomination sending gold sharply lower and below support in the $1830-35 area. Speculators have been whipsawed by the price action in recent weeks and it helps to explain why they are in no mood to reenter in size despite renewed support from Covid19 angst. Silver's 6% sell off during the week helped trigger a 17% reduction in the net long to 30k lots while in copper a small price increase was not enough to stem the slide in net length. Following seven weeks of selling, the net length has dropped by 64% to 19.5k lots, a 13-week low. Months of rangebound behaviour has reduced investor focus, and until we see High Grade Copper make an attempt to break its current $4.2 to $4.5 range, the level of positioning is likely to remain muted. Agriculture:  More concerned with other drivers such as weather, strong demand and supply chain disruptions helped trigger across the board buying of all 13 futures contracts split into grains, softs and livestock. The combined long held across these contracts reached a six-month high at 1.13 million lots, representing a nominal value of $43.5 billion. Buying was broad with the top three being corn, sugar and soybeans. Elsewhere the net long in Arabica coffee reached a fresh five-year high at 58k lots and KCB wheat a four-year high at 65.6k lots. UPDATES from today's Market Quick TakeCrude oil (OILUKJAN22 & OILUSJAN21) turned sharply lower in early European trading as the mood across markets soured on renewed concerns about the omicron virus strain. This after Moderna’s head told the Financial Times that existing vaccines will be less effective at tackling omicron and it may take months before variant-specific jabs are available at scale. The news come days before the OPEC+ group of producers meet to discuss production levels for January. Brent crude oil already heading for its biggest monthly loss since March 2020 trades below its 200-day moving average for the first time in a year, a sign that more weakness may lie ahead, thereby raising the prospect for OPEC+ deciding to pause or perhaps even make a temporary production cut. Gold (XAUUSD) received a muted bid overnight in response to the omicron virus comments from the head of Moderna (see oil section above). In addition, comments from Fed chair Powell helped reduced 2022 rate expectations from three to two after he said the omicron virus posed risks to both sides of the central bank’s mandate for stable prices and maximum employment. Despite this development together with softer Treasury yields and a weaker dollar, gold continues to struggle attracting a safe-haven bid. Silver (XAGUSD) looks even worse having dropped to a six-week low on weakness spilling over from industrial metals. Forex:Broad dollar buying following Fed chair Powell's renomination helped drive a 20% increase in the greenback long against ten IMM currency futures and the Dollar index to $25.4 billion and near a two-year high. All the currencies tracked in this saw net selling with the biggest contributors being euro (12.6k lots), CAD (11.8k) and JPY (4.1). The net short on the latter reached 97.2k lots or the equivalent of $10.6 billion, a short of this magnitude helps explain the strength of the sell off in USDJPY since last Thursday when safe haven demand picked up as the omicron news began to spread. Despite hitting a 16-month low last week the euro short only reached 12.6k lots, a far cry from the -114k lots reached during the panic month of February last year when the pair briefly traded below €1.08. What is the Commitments of Traders report? The COT reports are issued by the U.S. Commodity Futures Trading Commission (CFTC) and the ICE Exchange Europe for Brent crude oil and gas oil. They are released every Friday after the U.S. close with data from the week ending the previous Tuesday. They break down the open interest in futures markets into different groups of users depending on the asset class. Commodities: Producer/Merchant/Processor/User, Swap dealers, Managed Money and otherFinancials: Dealer/Intermediary; Asset Manager/Institutional; Leveraged Funds and otherForex: A broad breakdown between commercial and non-commercial (speculators) The reasons why we focus primarily on the behavior of the highlighted groups are: They are likely to have tight stops and no underlying exposure that is being hedged This makes them most reactive to changes in fundamental or technical price developments It provides views about major trends but also helps to decipher when a reversal is looming
Intraday Market Analysis – USD Treads Water

Intraday Market Analysis – USD Treads Water

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

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

FXStreet News FXStreet News 30.11.2021 17:39
Apple stock recovers ground on Monday as it rises 2%. AAPL shares close above $160 and just below all-time highs. Apple and equity indices see increased volatility as Omicron data awaited. After a freaky Friday, it was back to business as usual on Monday with equity markets putting in a solid start to the week. All those rookie traders who panicked on Friday were likely given a stern rebuke from returning senior traders who know that this market in 2021 is a one-way bet. That is thanks to the flow of money from the Fed juicing markets, a huge earnings potential from mega tech names and now a large buyback season as companies are past earnings blackouts. That is certainly what happened on Monday as volumes returned from Friday's reduced levels and markets got back to rallying. Goldman Sachs had said it does not see Omicron as a risk, and the South Africans appear to see this as an overreaction, with cases being reported as mild so far. Hopefully, this plays out to be true, but while it is hard to derail this 2021 bull, we could be in for some volatile weeks ahead. Apple (AAPL) stock news We await more concrete evidence on how sales look for Black Friday/Cyber Monday, but initial reports were not positive with overall online sales down on previous years. Wedbush though sees Apple selling 10 million iPhones over the Thanksgiving weekend and predicts 40 million iPhone sales between now and Christmas. It should be noted Wedbush is strongly bullish on Apple. They have been largely correct with that stance. Apple did receive some good news yesterday in the form of a price target raise from HSBC. Apart from that, it was relatively calm on the news front. Apple (AAPL) stock forecast AAPL stock really needs to break above $162 to hold Monday's gains and push on. Above there, volume thins out, so a move to all-time highs should be achievable. Failure though will likely see a move lower to $150. Volume is light until then apart from a slight spike with support at $157. AAPL 30-minute chart The daily chart shows the strong trend intact and the $157 support. Large volume support sits at $148. AAPL 1-day chart
Dogecoin price could see 400% gains if DOGE holders band together

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

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

Intraday Market Analysis – USD Seeks Support - 30.11.2021

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

Bitcoin, overcoming adversity

Korbinian Koller Korbinian Koller 30.11.2021 10:47
Nevertheless, this might be over soon. Regulation might kill the majority of the expanded crypto world. Bitcoin might be banned, as it has been in the past in various countries. And yet, once fiat currency value implodes, bitcoin will be the last man standing. BTC in US-Dollar, Weekly Chart, last weeks call on the nose: Bitcoin in US-Dollar, weekly chart as of November 23rd, 2021. We posted the above weekly chart of bitcoin in last week’s chart book release. We anticipated a low-risk entry. BTC in US-Dollar, Weekly Chart, as planned: Bitcoin in US-Dollar, Weekly chart as of November 29th, 2021. Since then, prices have swiftly penetrated our entry zone. We caught two trades, a daily and a weekly time frame position. We posted these trades (entries and the partial exits), as usual, in real-time in our free Telegram channel.Furthermore, we employ a quad exit strategy that ensures instant risk elimination by quickly taking half of the position off. With entries of US$ 53,877 (daily timeframe trade) and US$ 54,000 (weekly timeframe trade), we were able, with first exits at US$ 54,591 and US$ 55,797, to not only eliminate risk but ensure profits on half of the positions of 1.33% and 3.33%. As well our next following targets have been reached! We took another 25% of position size out at US$ 55,811.6 and US$ 57,317.7, which booked us another 3.59% return on the daily position and 6.14% on the weekly position. The remaining 25% of position sizes on each trade we call runners. With stops set now at break-even entry levels, we can only produce additional winnings for each trade. Each trade had tight stops, assuring less than half a percent of risk per trade.   BTC in US-Dollar, Monthly Chart, modest odds for follow through: Bitcoin in US-Dollar, Monthly chart as of November 30th, 2021. The possible contrarian short signal on the monthly chart makes the weekly trades success probabilities for the runner smaller. Nevertheless, this quad exit approach allows for low-risk positioning versus endless mind chatter and debate since it is typical that different time frames show different long, short and sideways plays. Here, bitcoin again overcomes adversity. Typically, tight ranged instruments erase many trade opportunities for profit margins relating to commissions and risk to small. The earlier mentioned profit percent numbers are typical for bitcoins volatility and, as such, allow for risk reduction and short- to midterm profitability being more extensive than the average S&P500 annual return. Bitcoin, overcoming adversity: Bitcoin will be the cure to inflation damage for those you invested in it in a timely manner. Inflation is a creeping disease to money. Humans seem to have in history always procrastinated towards dangers of inflation, mostly since inflation treads slowly. Inflation also holds illusions supporting hope, hope that also fuels procrastination. While most who suffer under inflationary times think prices for goods went up, the reality is that monetary value went down. With this illusion, we hold on to stock portfolios seemingly rising, bonds, 401ks, and Roth IRAs trusting governments for the status quo to be protected or at least trouble to be temporary. Much more likely, most citizens are drained of their savings and cheated out of their retirements. At the end of such a monetary devaluation cycle, it will be the last time bitcoin will defend its place.  Doubt will finally vanish. Unfortunately, too late for those who did not educate themselves early enough to find a haven in this principled way to protect one’s wealth. Feel free to join us in our free Telegram channel for daily real time data and a great community. If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can subscribe to our free newsletter. This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting. By Korbinian Koller|November 29th, 2021|Tags: Bitcoin, Bitcoin bounce, Bitcoin bullish, bitcoin consolidation, crypto analysis, Crypto Bull, crypto chartbook, DeFi, low risk, quad exit, technical analysis, trading education|0 Comments About the Author: Korbinian Koller Outstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.
Can You Hear It? That’s the Crowd Booing Gold’s Downturn

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

Przemysław Radomski Przemysław Radomski 29.11.2021 15:46
Even though the technicals have been predicting this for several months, people were still taken aback by gold’s fall — that’s why they are booing. While the precious metals received a round of applause for their performances in October, I warned on several occasions that the celebration was premature. And with gold, silver, and mining stocks resuming their 2021 downtrends, investors’ cheers have turned into jeers in short order. To explain, I warned previously that the GDX ETF could rally to or slightly above $35 (the senior miners reached this level intraday on Nov. 12, moving one cent above it). However, with the GDX ETF’s RSI (Relative Strength Index) signaling overbought conditions, I highlighted just how quickly the air often comes out of the balloon. For context, the blue vertical dashed lines below depict the sharp reversals that followed after the GDX ETF’s RSI approached or superseded 70. Why am I telling you this? To emphasize that what happened recently was neither random nor accidental. What you see is a true, short-term top that formed in tune with previous patterns. You also see a fake inverse head-and-shoulders formation that was invalidated. This means that the implications of what happened really are bearish. Let’s check why and how, in tune with the past patterns, the previous broad top really was. Please see below: The GDX ETF rallied on huge volume on Nov. 11 and there were only 4 cases in the recent past when we saw something like that after a visible short-term rally. In EACH of those 4 cases, GDX was after a sharp daily rally. In EACH of those 4 cases, GDX-based RSI indicator (upper part of the chart above) was trading close to 70. The rallies that immediately preceded these 4 cases: The July 27, 2020 session was immediately preceded by a 29-trading-day rally that took the GDX about 42% higher. It was 7 trading days before the final top (about 24% of time). The November 5, 2020 session was immediately preceded by a 5-trading-day rally that took the GDX about 14%-15% higher (the high-volume day / the top). It was 1 trading day before the final top (20% of time). The January 4, 2021 session was immediately preceded by a 26-trading-day rally that took the GDX about 17%-18% higher (the high-volume day / the top). It was 1 trading day before the final top (about 4% of time). The May 17, 2021 session was immediately preceded by a 52-trading-day rally that took the GDX about 30% higher. It was 7 trading days before the final top (about 13% of time). So, as you can see these sessions have even more in common than it seemed at the first sight. The sessions formed soon before the final tops (4% - 24% of time of the preceding rally before the final top), but the prices didn’t move much higher compared to how much they had already rallied before the high-volume sessions. Consequently, since history tends to rhyme, it would have been only natural for one to expect the GDX ETF to move a bit higher here (but not significantly so) and for one to assume that this move higher would take between additional 0 to 7 trading days (based on the Nov. 12 session). That’s what is wrote to my subscribers – to expect this kind of performance. The final top formed on Nov. 16 - 4 trading days after the huge-volume session, practically right in the middle of the expected 0-7 trading day range. Moreover, since the GDX topped very close to its 38.2% Fibonacci retracement, it seems that miners corrected “enough” for another huge downswing to materialize. Having said that, let’s move on to more recent developments. Gold price declined heavily recently and the same goes for the silver price. What’s more, the proxy for junior mining stocks - the GDXJ ETF (our short position) materially underperformed on Nov. 26 – after it declined by nearly 3x the percentage of the GDX ETF – and, in my opinion, more downside is likely to materialize over the medium term. The GDXJ ETF ended the Nov. 26 session slightly below its 50-day moving average, and the milestone is often a precursor to sharp drawdowns. That’s what happened in late February 2020 and also in mid-June 2021. Big declines followed in both cases. Moreover, with the S&P 500’s weakness on Nov. 26 mirroring the onslaught that unfolded in early 2020, the GDXJ ETF’s underperformance follows a familiar script. As a result, another ‘flash crash’ for the pair may unfold once again. Keep in mind, though: while asset prices often don’t move in a straight line, a bullish pause may ensue if/once gold reaches its previous lows. All in all, though, lower lows should confront the GDXJ ETF over the short term and my $35 price target remains up to date. As a reminder, that’s only an interim target, analogous to the late-Feb. 2020 low. Interestingly, it is the February 2020 low along with its late-March 2020 high that created this target. Also, the GDXJ/GDX ratio is falling once again. And with the price action implying that the GDXJ ETF is underperforming the GDX ETF, a drop below 1 isn’t beyond the realms of possibility. In fact, it’s quite likely. As such, this is why I’m shorting the junior mining stocks. For context, I think that gold, silver and the GDX ETF are all ripe for sharp re-ratings over the medium term. However, I think that the GDXJ ETF offers the best risk-reward proposition due to its propensity to materially underperform during bear markets in the general stock market. Finally, the HUI Index/gold ratio is also eliciting bearish signals. For example, I marked (with the shaded red boxes below) just how similar the current price action is to 2013. And back then, after a sharp decline was followed by a small corrective upswing before the plunge, the ratio’s current behavior mirrors its historical counterpart. What’s more, the end of the corrective upswing in 2013 occurred right before gold sunk to its previous lows (marked with red vertical dashed lines in the middle of the chart below). Thus, the ratio is already sending ominous warnings about the PMs’ future path. In addition, with the S&P 500 acting as the bearish canary in the coal mine, the ratio plunged in 2008 and 2020 when the general stock market tanked. Thus, if a similar event unfolds this time around, the gold miners’ sell-off could occur at a rapid pace. For more context, I wrote previously: A major breakdown occurred after the HUI Index/gold ratio sunk below its rising support line (the upward sloping black line on the right side of the chart above). Moreover, with the bearish milestone only achieved prior to gold’s crash in 2012-2013, the ratio’s breakdown in 2013 was the last chance to short the yellow metal at favorable prices. And while I’ve been warning about the ratio’s potential breakdown for weeks, the majority of precious metals investors are unaware of the metric and its implications. As a result, investors’ propensity to ‘buy the dip’ in gold will likely backfire over the medium term. In conclusion, the crowd has turned on the precious metals, and the narrative has shifted once again. However, despite all of the drama and the volatility that came with it, the technicals have been predicting this outcome for several months. And with the GDXJ ETF down by more than 20% YTD (as of the Nov. 26 close), the junior miners’ 2021 performance is far from critically-acclaimed. As a result, the chorus of boos will likely continue over the short- and/or medium term. Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today. Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care * * * * * All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Intraday Market Analysis – Yen’s Rally Gains Traction

Intraday Market Analysis – Yen’s Rally Gains Traction

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

Fragile Calm Returns and Powell's Anti-Inflation Rhetoric Ratchets Up

Marc Chandler Marc Chandler 01.12.2021 14:08
December 01, 2021  $USD, China, Currency Movement, EMU, Federal Reserve, Japan, PMI, South Korea, UK Overview:  Into the uncertainty over the implications of Omicron, the Federal Reserve Chairman injected a particularly hawkish signal into the mix in his testimony before the Senate.  These are the two forces that are shaping market developments.  Travel restrictions are being tightened, though the new variant is being found in more countries, and it appears to be like closing the proverbial barn door after the horses have bolted. Equities are higher.  The MSCI Asia Pacific Index, led by South Korea, and India, rose for the first time in four sessions, and Europe's Stoxx 600 is recouping more of yesterday's loss.  US futures are trading more than 1% higher.  Benchmark yields are higher.  The 10-year US Treasury yield is up four basis points though is still below 1.50%.  European yields are mostly 3-5 bp higher, though Italy's benchmark is 8 bp higher near 1.05%.  The dollar remains the fulcrum of the see-saw, but the funding currencies (yen, Swiss franc, and euro) are lower, and the dollar bloc is higher.  The dollar is pulling back against the Turkish lira after approaching TRY14 yesterday, even though President Erdogan's rhetoric about pushing for even lower rates seemed to have ratcheted up.  Emerging market currencies are more broadly mixed, but the JP Morgan Emerging Market Currency Index is up for the third consecutive session to match the longest advance in nearly three months.  Gold posted an outside down day yesterday, but there has been no follow-through selling today, and the yellow metal is consolidating inside yesterday's range.  January WTI slipped below $65 yesterday and is pushing above $69 today ahead of the OPEC meeting.   Dutch natural gas prices are firm, recouping most of yesterday's loss.  Iron ore and copper prices are also retracing yesterday's weakness.   Asia Pacific China's Caixin manufacturing PMI unexpectedly slipped below the 50 boom/bust level, albeit barely (49.9).  It was expected to be unchanged at 50.6.  It had eased below 50 in August (49.2).  Recall that the world's second-largest economy nearly stagnated in Q3 (0.2% quarter-over-quarter), and it appears to be accelerating here in Q4. Still, many look for the PBOC to provide more stimulus, perhaps in the form of a cut in reserve requirements, as it did this past July.  Separately,  officials seem to be cracking down harder on the "variable interest entity" structure that characterizes offshore listings, especially in the US.   Japan's November manufacturing PMI was revised to 54.5 from 54.2.  It stood at 53.2 in October.  The world's third-largest economy is recovering.  Australia reported Q3 GDP contracted by 1.9%, less than the 2.7% contraction economists had projected (Bloomberg median).  Its economy also is recovering.  The November manufacturing PMI was confirmed at 59.2, up from 58.2 previously.  House prices in Australia and New Zealand rose last month but sequentially at a slower pace.  To round out this regional overview, note that South Korea's exports in November were stronger than expected, pointing to robust foreign demand.  Exports rose 32.1% year-over-year.  Economists (Bloomberg median) expected a 27.2% pace after 24.1% in October.   It is the strongest pace since August.  Imports jumped 43.6% year-over-year, which was also more than expected, and follows a 37.7% increase previously.   The dollar is firm after being sold to its lowest level against the yen yesterday since October 11 (~JPY112.55).  It stalled near JPY113.60 in late Asia, which is slightly lower than the high seen in the US yesterday in response to the Fed's Powell hawkish pivot. However, barring fresh negative impulses, the JPY113 area may offer support again.  The Australian dollar is firm near yesterday's highs after falling to a new low for the year yesterday.  That low (~$0.7065) approached the (38.2%) retracement objective of the Aussie's rally from the March 2020 low near $0.5500.  A move now above $0.7080 would lift the technical tone and target the $0.7120-$0.7150 area.  The greenback initially fell to nearly CNY6.36, just ahead of the year's low recorded in May near CNY6.3570, before recovering to around CNY6.3720.  Resistance may be seen in the CNY6.3750-CNY6.3800 area.  The PBOC set the dollar's reference rate CNY6.3693.  The market (Bloomberg survey) had anticipated CNY6.3682.   Europe Covid was surging in several parts in Europe, including Germany, before the sequencing of the Omicron variant, and things have gotten worse.  The economic impact is beginning to be evident.  Germany's October retail sales, which economists had expected to recover after falling by 1.9% in September, disappointed with a 0.3% decline. The final November manufacturing PMI was revised to 57.4 from the flash 57.6 (and 57.8 in October).  It is the fourth consecutive decline.  The French manufacturing PMI was revised to 55.9 from the preliminary estimate of 54.6 (53.6 in October).  It is the first gain since May.  Economists hoped that Spain's manufacturing PMI was going to rise after falling for two months through October.  Instead, it fell again (51.1 vs. 57.4) to stand at its lowest level since March.  Italy is the standout.  Its manufacturing PMI was stronger than expected, jumping to 62.8 from 59.7, representing a new cyclical peak.  The aggregate for the eurozone as a whole edged up to 58.4 from 58.3 in October, but slower than the 58.6 flash estimate.  Still, it managed to eke out its first gain since June.  The UK's November manufacturing PMI stands at 58.1, down slightly from the preliminary estimate (58.2).  It was at 57.8 in October.  It is the second consecutive monthly gain after falling from June through September.  The UK economy grew by 1.3% in Q3 and is expected to slow to 1.1% this quarter.  The implied yield of the December 2021 short-sterling interest rate futures fell for eight sessions coming into this week.  It has been choppy so far this week, and net-net, the yield is about 1.5 bp higher than at the end of last week.  The overnight index swaps imply about a 40% chance of a hike next month.   The euro traded on both sides of Monday's range yesterday and closed above Monday's high.  However, there has been no follow-through buying today, and a consolidative tone has emerged.  A move above $1.1400 is needed to lift the tone, and it most likely won't happen today.  A 1.2 bln euro option is struck there that expires today.  The focus is on the downside. So far, it has held above $1.13, and support is seen around $1.1290.  Sterling recorded the low for the year yesterday, a little below $1.3200.  It stopped shy of our $1.3165 target, the (38.2%) retracement of cable's recovery from the March 2020 low. Its bounce off yesterday's lows fizzled out near $1.3330. Note that there is a GBP600 mln option at $1.33 that expires tomorrow.   America We have argued that the US October CPI surprise (6.1%) was a pivot point for Fed officials, even a reputed dove like San Francisco's Daly.  We also detected a change in rhetoric, and this point was driven home by Fed Chair Powell yesterday.  He clearly brandished his anti-inflaton credentials. Powell declared that the Fed would use its tools to step inflation from becoming entrenched.  At the same time, he recognized that it cannot assess Omicron now, though it clearly poses a risk.  Still, the next FOMC meeting is two weeks away, and by then, more information will be known.  Powell confirmed that the Fed would discuss the pace of tapering.  While the Fed will stop referring to inflation as transitory, Powell echoed Yellen's recent assessment that price pressures are projected to ease in H2 22.  Of note, the short end of the coupon curve sold off, but the long end remained firm.  The 30-year bond yield slipped to its lowest level since January, and the 2-10 year curve flattened 13 bp to below 90 bp, the flattest in 10 months.   The North American economic calendar is jammed today.  The US sees ADP's private-sector jobs estimate. Around 525k jobs are expected to have been filled, down from 571 in October.  In the last three months, the ADP estimate has undershot the official measures by an average of 23k.  Year-to-date, the average under-estimate is a little more than 50k.  November auto sales are expected to have risen for the second consecutive month after falling from May through September.  The final manufacturing PMI will also be reported.  The flash reading was the first increase since July.  The ISM manufacturing survey will also be published.  It has been a bit more resilient than the PMI.  Late in the session, the Beige Book will be released.  Canada reports October building permits (expected softer after the 4.3% gain in September) and the manufacturing PMI (57.7 in October).  Mexico reports its manufacturing PMI and IMEF surveys.  The central bank's inflation report is also due.  Mexico reports October worker remittances today.  They have averaged $4.15 bln a month this year through September.  The average for the same period in 2020 was $3.33 bln, and in 2019 $3.03 bln.  Note that the average trade deficit this year (through October) is almost $1.2 bln.   After reaching almost CAD1.2840 yesterday, its highest level since the September FOMC meeting, the greenback has come back offered today. It briefly and marginally traded below yesterday's CAD1.2730 low.  It needs to convincingly break below CAD1.2720 to be of any technical significance.  Initial resistance now may be seen near CAD1.2780.  The dollar peaked against the Mexican peso at the end of last week near MXN22.1550.  It is moving lower for the third consecutive session, and found initial support around MXN21.27 today.  The MXN21.20 area is the halfway mark of last month's range.  A move above  MXN21.40 may signal the dollar's downside correction is over.   Disclaimer
EUR/USD: How To Trade The Pair This Week

EUR/USD: How To Trade The Pair This Week

Kseniya Medik Kseniya Medik 01.12.2021 14:57
Fundamental factors EUR/USD ended last week with a steamrolling. This week, the pair keeps edging up. Why? First, the uncertainty over the new Covid-19 variant, omicron, led to a surge in demand in safe-haven currencies such as the Japanese yen and the Swiss. Since the US dollar lost its safe-haven role, traders preferred the EUR to the greenback. Second, the USD was rising as the markets were pricing in the rate hike by the Federal Reserve. However, omicron raised concerns that the US central bank can delay a rate increase – the bearish factor for the USD. Overall, a recovery in the US dollar depends on the vaccine progress against the omicron variant. Today, on Wednesday, we see the US dollar climbing up. It is the result of Powell’s comments. Jerome Powell is the Federal Reserve Chair. He signaled his intention to taper faster, and it supported the USD. Both omicron and Powell’s comments increased volatility in EUR/USD. What to expect further? The US will reveal essential economic data in the upcoming weeks. If it is strong, the Fed can turn more hawkish at the FOMC meeting on December 16. Technical factors The overall trend is bearish. EUR/USD has been moving down since May. However, the short-term trend is bullish as EUR/USD surged and recovered some losses thanks to the weak dollar. It has failed to cross the resistance level of 1.1370 – the high of November 19. The pair can reverse down to the recent low of 1.1260. If it crosses it from the top down, there are more chances the pair will fall further to the psychological mark of 1.1200. Resistance levels are 1.1370 and 1.1460. Download the FBS Trader app to trade anytime anywhere! For a personal computer or laptop, use MetaTrader 5!
Stocks - More Volatility Following Hawkish Powell

Stocks - More Volatility Following Hawkish Powell

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

It‘s the Fed, Not Omicron

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

Copper upside remains despite months of inaction

Ole Hansen Ole Hansen 01.12.2021 16:26
Commodities 2021-12-01 15:00 Summary:  Industrial metals spent most of November trading sideways with concerns about demand being offset by tight market conditions, especially in aluminum and copper. In fact, the price has during these past few months, when worries about Chinese demand took centerstage, been trading relatively close to the average price seen since April. A behavior which in our view highlights a strong underlying demand for copper, not least considering the prospect for inelastic supply struggling to meet green transformation demand towards electrification. Industrial metals spent most of November trading sideways with concerns about demand being offset by tight market conditions, especially in aluminum and copper. Apart from two failed upside attempts in May and October, copper has since April stayed mostly rangebound not swaying too far away from its average price, at $9550 per tons in London and $4.35 per pound in New York. During the past few months copper has performed relatively well considering heightened worries about the economic outlook for China, and more specifically its property sector which has seen near defaults as well as a slump in home sales. Additional headwinds have been created by the stronger dollar and central banks beginning to focus more on inflation than stimulus. In order to counter Chinese economic growth concerns, Vice Premier Liu He has been out saying growth this year should exceed targets, and the government plans more support for business. High Grade Copper has been averaging $4.35 since April with the current action confined to a range between $4.2 and $4.5 while major support can be found in the $4 area. The lack of momentum in recent months has driven a sharp reduction in the speculative long held by hedge funds, a development that could trigger a significant amount of activity once the technical and/or fundamental picture becomes clearer. Against these mostly demand focused macroeconomic headwinds, we have at the same time been witnessing an unusual synchronised tightness in stock levels monitored by the major futures exchanges in London and Shanghai. Unusual in the sense that price arbitrage between the two exchanges often drive changes in stock levels from one exchange to the other. Recently however we have been witnessing levels fall at both exchanges, with aluminum and copper stockpiles at the LME falling to their lowest levels since 2007 and 2005 respectively. In fact, the six industrial metals traded on the LME are currently all trading in backwardation for the first time since 2007. A condition where spot prices trade higher than futures, and driven by the mentioned drop in inventories in response to a post-pandemic surge in demand as well as supply-chain disruptions. On the subject of supply, especially during the coming years when the green transformation will account for an increased proportion of global copper demand, planned mining taxes in Chile, the worlds biggest producers have raised the alarm bells. Politicians are looking for a bigger share of mining profits to help resolve inequalities exacerbated by the pandemic, and with a potential approval moving closer BHP Group has warned it could derail investments thereby making it harder to meet future demand, especially considering the mentioned need for copper towards electrification. Source: Bloomberg An example of increased copper demand driven by the green transformation are the number of finished and planned subsea interconnectors which are paramount for cutting emissions and boosting the effectiveness of renewable energy production. Increased volatility in the production of power from renewable sources such as wind and solar as opposed to traditional sources like coal and gas will continue to increase the need for large scale transmission capabilities of power between countries and regions. The cable below has been used in the now finished 720 kilometer North Sea Link between Norway and the UK, as well in the under-construction Viking link between Denmark and the UK. It carries as much as 1.45 Gigawatt (about the capacity of a nuclear reactor) with most of the 50 kg/meter weight coming from copper. Several other subsea links are planned over the coming years, and together with the need for increased capacity on the electrical grid to support the roll out of EV’s, demand for copper, the king of green metals, look set to increase over the coming years. Electrification and urbanisation will drive growth in copper wrote my colleague Peter Garnry in this update from November 19. In it he also offered a table of mining companies providing exposure to copper. The table below shows 16 mining companies with exposure to copper with Codelco, the largest copper producer in the world, absent from the list as the Chilean miner is only listed in Chile and thus not investable for our clients. The copper mining industry has delivered a median total return in USD of 132.6% over the past five years beating the global equity up 105% in the same period. The rising copper prices the past year driven by investors positioning themselves in green metals (defined as metals that will play a key role in the green transformation) which in turn has pushed up revenue in the industry by almost 40%. Sell-side analysts are generally bullish on copper miners with a median upside of 16% from current levels. In our view investors should select one or two copper miners to get exposure and avoid the ETFs on the industry as they are too broad-based and lack the pure exposure profile needed to play the copper market. As the table also show, there is no such thing as pure exposure to copper except for futures, options and CFDs on the underlying copper. The miner with the highest revenue exposure to copper is Antofagasta with 84.8% revenue share from copper extraction and refining. Most copper miners also extract gold and silver as part of their copper operations, and out of the 16 copper miners in our list, only 6 of these miners have more than 50% of revenue coming from copper extraction and refining.
FX Update: Powell is now an inflation fighter, not a punchbowl spiker

FX Update: Powell is now an inflation fighter, not a punchbowl spiker

John Hardy John Hardy 01.12.2021 16:30
Forex 2021-12-01 15:25 4 minutes to read Summary:  Fed Chair Powell cemented recent evidence that the Fed has changed its stripes from a punch bowl refiller for the economy and the labor market to an inflation fighter at large. The market is finding it tough to absorb this message, given the recent market choppiness and virus distractions, but interesting that the US dollar has not found more strength on this momentous pivot. FX Trading focus: Hawkish broadside from Powell Fed Chair Powell cemented the impression that the Fed has shifted firmly into inflation fighting mode with an appearance yesterday before a Fed panel. The rhetoric was direct and of a make-no-mistake variety. Powell said that the end of balance sheet expansion would likely wind down a few  months sooner than originally foreseen, even with the current omicron variant of covid concerns. He also spelled out that it is probably time to retire the word “transitory” when discussing inflation, ad said that the risk of higher inflation has increased. Perhaps most interesting was a comment that persistent higher inflation brought a risk to getting the labor market back to where it was pre-covid. It is crystal clear at this point that the Fed has pivoted to inflation-fighting and tightening and will move in that direction as quickly as it can until the inflation numbers improve markedly. Of course, the market was already adjusting to clear signs that the Fed is moving into a far more hawkish stance early last week, only to be sidelined viciously by the omicron variant worries in recent days. Were it not for that interlude, Fed expectations would likely be at new cycle highs as yesterday’s signals from Powell make the Fed shift as clear as day. As it is, we have only clawed back a majority of the 2022 hikes priced in pricing of Fed rate hikes, still some 8 basis points to go for end of year Fed pricing (the “omicron discount” being perhaps 15 basis points or more?). The two curious things are that the US yield curve continues to viciously flatten and the market continues to price the terminal Fed rate for the coming hiking cycle at 2.00%. The inability for the longer yields to lift higher recently may be reining in the USD upside for. The other indicator besides yield-curve shifts that is making waves here on my radar screen of financial conditions is the measure of corporate credit, where spreads have blown wider, as discussed over the last couple of episodes of the Saxo Market Call podcast. The bluntness from the Fed yesterday may have driven the particularly bad day for junk bonds as the new style from the Fed could lead investors in the riskiest debt to conclude that they may be allowed to twist in the breeze down the road if inflation levels stay high, rather than receiving endless bailouts that keep zombie companies in business and able to forever roll forward their debts. We are set up for an interesting 2022 that will likely look very different from 2021. The shift in Fed rhetoric will make the market extra-sensitive to US data and developments that impact inflation, from energy prices, to the CPI/PCE data itself and the average hourly earnings data perhaps even more than the usual nonfarm payrolls change focus. Today’s Beige Book could be interesting for anecdotal evidence from interviews with companies on their impression of supply constraints, wage adjustments and issues finding qualified workers, etc. Today’s November ADP Payrolls was another strong 500k+ as expected. Chart: USDJPYUSDJPY was handcuffed by developments yesterday – on the one hand with the USD supported by a rise in Fed expectations, but on the other hand, JPY traders finding no fresh reason to bid up the JPY as the long end of the US yield curve remains pinned at quite low yields and there has been no shift in the Fed’s “terminal rate” – where the market sees the Fed rate hike cycle peeking out. So the price action bobbed well back above the 112.73 range pivot level that was broken yesterday, but has a steep wall to climb to threaten the 115.00+ cycle highs again, something that would likely require the entire Fed yield curve to lift, and more aggressively than expectations for policy normalization elsewhere. Source: Saxo Group Table: FX Board of G10 and CNH trend evolution and strengthAgain, the market is finding the reaction function increasingly difficult to the recent jolts in inputs. Note the huge momentum shift in SEK, where the market overdid the recent squeeze, but the strength there will likely only improve once the euro bottoms and the outlook for EU yields and fiscal improves. Table: FX Board Trend Scoreboard for individual pairs.Well entrenched trends are few and far between, but the EURCNH and EURCHF downtrends stand out, with the latter’s lack of volatility after recent direction changes remarkable. The Swiss franc does well as a safe haven and does well because the SNB can’t be seen weakening the currency when inflation pressures are rising. Upcoming Economic Calendar Highlights (all times GMT) 1500 – US Fed Chair Powell, Treasury Secretary Yellen to testify before House panel 1500 – US Nov. ISM Manufacturing 1530 – DOE’s Weekly Crude Oil and Fuel Inventories 1900 - Fed Beige Book 0030 – Australia Oct. Trade Balance
Saxo Bank 2022 Outrageous Predictions: Here comes a revolution!

Saxo Bank 2022 Outrageous Predictions: Here comes a revolution!

Saxo Bank Saxo Bank 02.12.2021 14:35
Saxo Bank has today released its 10 Outrageous Predictions for 2022. The predictions focus on a series of unlikely but underappreciated events which, if they were to occur, could send shockwaves across financial markets: The plan to end fossil fuels gets a rain check Facebook faceplants on youth exodus The US mid-term election brings constitutional crisis US inflation reaches above 15% on wage-price spiral EU Superfund for climate, energy and defence announced, to be funded by private pensions Women’s Reddit Army takes on the corporate patriarchy India joins the Gulf Cooperation Council as a non-voting member Spotify disrupted due to NFT-based digital rights platform New hypersonic tech drives space race and new cold war Medical breakthrough extends average life expectancy 25 years While these predictions do not constitute Saxo’s official market forecasts for 2022, they represent a warning against the potential misallocation of risk among investors who might typically assign just a one percent chance of these events materialising.  It’s an exercise in considering the full extent of what is possible, even if not necessarily probable, and particularly relevant in the context of this year’s unexpected Covid-19 crisis. Inevitably the outcomes that prove the most disruptive (and therefore outrageous) are those that are a surprise to consensus. Commenting on this year’s Outrageous Predictions, Chief Investment Officer at Saxo Bank, Steen Jakobsen said:   “The theme for 2022 Outrageous Predictions is Revolution. There is so much energy building up in our inequality-plagued society and economy. Add to that the inability of the current system to address the issue and we need to look into the future with a fundamental view that it’s not a question of whether we get a revolution but a more a question of when and how. With every revolution, some win and some lose, but that’s not the point—if the current system can’t change but must, a revolution is the only path forward. A culture war is raging across the globe and the divide is no longer simply between the rich and the poor. It’s also the young versus the old, the educated class versus the less educated working class, real markets with price discovery versus government intervention, stock market buy-backs versus R&D spending, inflation versus deflation, women versus men, the progressive left versus the centrist left, virtual signalling on social media versus real changes to society, the rentier class versus labour, fossil fuels versus green energy, ESG initiatives versus the need to supply the world with reliable energy—the list go on. We collaborated globally on Covid vaccines in 2020 and 2021. Now we need a new Manhattan Project–-type endeavour to set the marginal cost of energy, adjusted for productivity, on the path to much lower levels while eliminating the impact of our energy generation on the environment. Such a move would unleash the most significant productivity cycle in history: we could desalinate water, make vertical farms feasible almost anywhere, increase computer powers to quantum states, and continue to explore new boundaries in biology and physics.” Remember that the world is forever evolving if at varying speeds, while business and political cycles are always finite.” The Outrageous Predictions 2022 publication is available here with headline summaries below: 1. The plan to end fossil fuels gets a rain check Summary: Policymakers kick climate targets down the road and support fossil fuel investment to fight inflation and the risk of social unrest while rethinking the path to a low-carbon future. Realising the inflationary threat from surging commodities prices and the risk of an economic train wreck due to the unrealistic timeline for the green energy transition, policymakers kick climate targets down the road. They relax investment red tape for five years for oil production and ten years for natural gas production, to encourage producers to ensure adequate and reasonably priced supplies that bridge the gap from the energy present to the low-carbon energy future. This development has already jacked up prices and price volatility, not only for energy, but also for industrial metals, most of which are needed in greater quantities for the green transformation push. On top of this, surging energy prices have spiked prices for diesel and especially fertiliser, important farming costs that raise concerns about the production of key food crops. Market impact: The iShares Stoxx EU 600 Oil & Gas ETF (Ticker: EXH1:xetr) surges 50 percent as the whole energy sector gets a new lease on life 2. Facebook faceplants on youth exodus Summary: The young abandon Facebook’s platforms in protest at the mining of personal information for profit; the attempt by Facebook parent Meta to reel them back in with the Metaverse stumbles. Facebook has gone from being a vibrant hub of young people, to a platform for older “boomers” as young people would say. Young people are increasingly turned off by Facebook’s algorithms turning their social media experiences into that of homogenous feedback loops of identical content, or even worse, hateful and disinforming content. Facebook’s own research suggests that teens spend 2 to 3 times longer on TikTok than on Instagram (which is Facebook’s youngest social media asset), and that Snapchat is the preferred way to communicate with friends. A new company name (Facebook is now called Meta) and brand identity to separate and shield Instagram (its most valuable current asset), together with creating a new product tailored towards young people, is the exact same playbook tobacco companies have used for years. But in 2022, investors will realise that Meta is rapidly losing the young generation and thus the future potential and profitability of the company. In a desperate move, Meta tries to acquire Snapchat or TikTok while throwing billions of dollars into building the creepy Metaverse, which is aimed at surveilling users more directly than ever before and getting young people back into Meta’s universe of social media platforms, in the perceived wisdom that being a first mover is always best in technology. The plan struggles to take off as the young generation fails to sign up. Market impact: Facebook parent company Meta struggles, down 30 percent versus the broader market and is urged to spin off its components as separate entities, shattering Zuckerberg’s monopolistic dreams. 3. The US mid-term election brings constitutional crisis Summary: The US mid-term election sees a stand-off over the certification of close Senate and/or House election results, leading to a scenario where the 118th Congress is unable to sit on schedule in early 2023. The chaotic 2020 US Presidential Election was a scary moment for many US institutions. The sitting president Donald J. Trump initially refused to conceded defeat in the election and complained that the election was stolen, a claim that was never seriously challenged in a court of law but one which had widespread sympathy among the Trump base. A crowd of hard-core believers in the stolen election conspiracy was encouraged by the President’s rhetoric to a sufficient degree to storm Capitol Hill and “stop the steal”, i.e., to prevent the election result from being made official on January 6, 2021, in a scene unprecedented in US history. Prior to this, and then again later in the hotly contested Senate run-off elections in Georgia, dedicated election officials—many of them Republican—were doing their duty to tally the real results while risking their life amidst threats—even death threats—from extremists. In 2022, the Republicans ensure that no such traditional duty-bound officials are in the “wrong” place, with all election-related positions filled by toe-the-line partisans ready to do anything to tilt the results to suppressing voter turnout. In the wake of the 2022 election, a handful of key Senate and House races come down to the wire and one or both sides move against certifying the vote, making it impossible for the new Congress to form and sit on its scheduled first day of January 3, 2023. Joe Biden rules by decree and US democracy is suspended as even Democrats also dig in against the Supreme Court that was tilted heavily by Trump. A full-blown constitutional crisis stretches over the horizon over the stand-off as 2023 gets under way. Market impact: extreme volatility in US assets, as US treasury yields rise and the USD drops on hedging against the existential crisis in the world’s largest economy and issuer of the world’s reserve currency of choice. 4. US inflation reaches above 15% on wage-price spiral Summary: By the fourth quarter of 2022, the wages for the lower half of US incomes are rising at an annualised 15% clip as companies scramble to find willing and qualified workers who are increasingly selective due to a rising sense of entitlement as jobs are plentiful relative to the meagre availability of workers at all skill levels. The official US CPI reached a peak at 11.8% in February 1975. It wasn’t until the recession of 1980-82 and brutal policy rate increases to levels as high as 20% that inflation was finally killed. In 2022, the Federal Reserve and Fed chair Jerome Powell repeats the same mistake all over again as the post-Covid outbreak economy and especially the labour market are severely supply constrained, making a mockery of the Fed’s traditional models. Powell believes millions of Americans will return to work and fill some of the 10.4 million open job positions as Covid-19 fades. But this is plain wrong. Some have retired early due to the crisis and thus have permanently left the US workforce. The big difference between today and yesterday is that the pandemic has fuelled a great awakening of workers. Across sectors and income classes they realise they are now more empowered than ever. They demand a better experience: better job conditions, higher wages, more flexibility and a sense of purpose from work. Coupled with persistent inflationary pressures coming from the production side, the energy crisis and labour shortage, this results in unprecedented broad-based double-digit annualised wage increases by Q4. As a consequence, US inflation reaches an annualised pace above 15% before the start of 2023, for the first time since WWII. This prompts the Federal Reserve into a too-little, too-late move to tighten monetary policy faster in a desperate effort to tame inflation. But the central bank has lost credibility; it will take time to regain it. Market impact: extreme volatility in US equity and credit markets. The JNK high-yield ETF falls as much as 20% and the VIXM mid-curve volatility ETF soars as much as 70%. 5. EU Superfund for climate, energy and defence announced, to be funded by private pensions Summary: To defend against the rise of populism, deepen the commitment to slowing climate change, and defend its borders as the US security umbrella recedes, the EU launches a bold $3 trillion Superfund to be funded by pension allocations rather than new taxes. The security umbrella provided by the US during the Cold War and afterwards over much of Eastern Europe is rapidly fading and threatens to fail entirely in the years ahead as the US looks east at far more serious economic and military rivals. French President Macron, backed by a Draghi moving to stave off Italy’s own rise of the populists, rolls out a vision for an “EU Superfund” that will address the three-fold priorities of defence, climate and the related clean energy transition. Given the EU’s aging population and heavy tax burdens, policymakers know that it will be impossible to finance the Superfund with higher taxes on incomes or other traditional tax revenues. Instead, France has a light-bulb moment as it seeks to overhaul its pension system and looks at Europe’s enormous pensions. It decides that all pensions for all workers above the age of 40 must allocate a progressively larger portion of their pension assets into Superfund bonds as they age. This allows new levels of fiscal stimulus in the EU even with the sleight-of-hand trick of hiding the spending in inflation and negative real returns on low-yielding Superfund bonds that are actually EU bonds in disguise. At the same the younger generation enjoys a stronger job market and less unfair tax burdens as the system proves such a success that income taxes are lowered progressively. Market impact: Bond yields harmonise across Europe, leading to German Bunds underperforming. EU defence, construction and new energy companies are some of the best performers. 6. Women’s Reddit Army takes on the corporate patriarchy Summary: Mimicking the meme stock Reddit Army tactics of 2020-21, a group of women traders launch a coordinated assault on companies with weak records on gender equality, leading to huge swings in equity prices for targeted companies. Women are not willing to wait any longer. Tired of the lack of progress, 2022 sees a massive grass-roots effort based on social media platforms to force companies that break civil rights laws to address unfair and sexist, racist, ageist and ableist practices. Although women have been struggling with lower salaries, they have higher saving rates than men. Those savings will now come in handy as they decide to take the situation into their own hands and throw their considerable influence around in a #metoo movement in financial markets. In contrast to the often-nihilistic original Reddit Army, the Women’s Reddit Army will be more sophisticated, with women traders coordinating a long squeeze by shorting stocks of selected patriarch companies. At the same time, they will direct funds to companies with the best metrics on female representation in middle management and among executives. Instead of condemning the development, politicians worldwide welcome and support their cause, putting even more pressure on companies with outdated patriarchal attitudes, poor gender equality in pay, and under-representation of women on boards and in management to address the errors of their ways. Market impact: The movement gets real results as the broader market catches on to the theme and joins in, forcing targeted company prices sharply lower, which sees companies scrambling to change their ways. It marks the beginning of a gender parity renaissance in markets. 7. India joins the Gulf Cooperation Council as a non-voting member Summary: The world’s geopolitical alliances will lurch into a phase of drastic realignment as we have an ugly cocktail of new deglobalising geopolitics and much higher energy prices. Countries reliant on imports for the majority of their energy inputs in a rapidly deglobalising world will need to move fast to strategically reorientate strategic alliances and secure long-term energy supplies. One such alliance could involve India, with its mighty technology sector, joining the Gulf Cooperation Council (GCC) as non-voting member, or in some sort of free trade zone. This alliance would see a reduction in India’s energy insecurity as it secures long-term import commitments. Interregional trading zones will secure “closer to home” production and investment, combined with the security of reliable supplies from India’s point of view, and a reliable destination market from the GCC’s point of view. The alliance helps lay the groundwork for the GCC countries to plan for their future beyond oil and gas and for India to accelerate its development via huge new investments in infrastructure and improvements in agricultural productivity together with fossil fuel imports, bridging the way to a post-carbon longer-term future. Market impact: The Indian rupee proves far more resilient than its EM peers in a volatile year for markets. The bubbly Indian stock market corrects with other equity markets in early 2022 but proves a strong relative performer from the intra-year lows. 8. Spotify disrupted due to NFT-based digital rights platform Summary: Musicians are ready for change as the current music streaming paradigm means that labels and streaming platforms capture 75-95 percent of revenue paid for listening to streamed music. In 2022, new blockchain-based technology will help them grab back their fair share of industry revenues. While the early days of NFTs have looked chaotic and dangerous for asset buyers, the outlook is bright for NFT technology. Not only does an NFT-based platform offer a new way to verify the ownership of rights, but also a way to distribute rights without intermediaries, i.e., a completely decentralised system obviating the need for a centralised platform. The use case for NFTs could prove particularly compelling in the next step for the technology for content generators in the music industry as musicians feel unfairly treated by the revenue sharing models of the current streaming platforms like Spotify and Apple Music. These models don’t guide individual subscribers’ fees to the actual music an individual subscriber listens to. Rather, all subscription fee revenues are aggregated and distributed based on every artist’s share of total streams. In addition, the platforms take a substantial cut, which together with the cut paid to labels is some 75 percent or more of the total revenue. In 2022, an NFT-based service takes hold and begins offering music from notable stars – perhaps the likes of Katy Perry, The Chainsmokers and Jason Derulo, all of whom have recently backed an effort to create a new blockchain-powered streaming platform. Other well-known artists begin pulling their music from the now “traditional” streaming platforms, which suddenly find themselves terminally disrupted. Investors see the eventual writing on the wall for podcasts, movies and other forms of digitisable contents as well. Market impact: Investors recognise that Spotify’s future is bleak, sending its shares down 33 percent in 2022. 9. New hypersonic tech drives space race and new cold war Summary: The latest hypersonic missile tests are driving a widening sense of insecurity as this tech renders legacy conventional and even nuclear military hardware obsolete. In 2022 a massive hypersonic arms race develops among major militaries as no country wants to feel left behind. In 2022, it is clear from funding priorities that hypersonics and space are the heart of a new phase of the deepening rivalry between the US and China on all fronts—economic and military. Other major powers with advanced military tech join in as well, likely including Russia, India, Israel and the EU. Hypersonic capabilities represent a game-changing threat to the long-standing military strategic status quo, as the technology brings asymmetric new defensive and offensive capabilities that upset the two massive pillars of military strategy of recent decades. The first is the potential for devastating hypersonic tech defence against the conventional attack capabilities of long-range bombing aircraft, as well as the so-called “deep water” navy of ships that can bring the fight to any corner of the globe without refuelling. The second pillar of the old Cold War era was the principle of mutually assured destruction (MAD) in the event of nuclear war, under which it was pointless to launch a nuclear war as long as there was still time for the opponent to launch an equally destructive ICBM counterattack from land- and submarine-based ballistic missiles. But the speed and agility of hypersonic tech introduces the belief that superior defence could thwart an attack entirely and even allow for new first-strike capabilities. Market impact: massive funding for companies like Raytheon that build hypersonic tech with space delivery capabilities and underperformance of “expensive conventional hardware” companies in the aircraft and ship-building side of the military hardware equation. 10. Medical breakthrough extends average life expectancy 25 years Summary: Young forever, or for at least a lot longer. In 2022, a key breakthrough in biomedicine brings the prospect of extending productive adulthood and the average life expectancy by up to 25 years, prompting projected ethical, environmental and fiscal crises of epic proportions. The year 2022 sees a breakthrough from a multi-factor approach, as a cocktail of treatments is put together that tweaks cell-level processes in order to extend their life and thus the life of the organism composed of those cells. It’s not cheap, but it’s effective and has already been demonstrated on laboratory mice containing human DNA, extending their lives some 30% and more. The prospect of a massive leap in human quality of life and life expectancy are huge wins for mankind but bring an enormous ethical and financial quandary. Imagine that almost everyone can look forward to living to an average age of 115 and more healthily. What would this mean for private and government pensions, or even the ability or desire to retire? And what about the cost to the planet if it is set to support billions more people, not to mention whether or not there is enough food to go around? And then there is the ethical question of whether it is humane to not make the cocktail available to everyone. In short, how would our value systems, political systems and planet cope?
December Monthly

December Monthly

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

Hawks Triumph, Doves Lose, Gold Bulls Cry!

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

RBA Jettisons Yield Curve Control but Continues to Resist Market Pressure

Marc Chandler Marc Chandler 03.11.2021 10:54
Overview: The third record close of the S&P 500 failed to lift Asia Pacific and European shares today.  In Asia, the large bourses fell, except South Korea, which rallied a little more than 1%.  Europe's Stoxx 600 is threatening to snap a three-day advance, while US index futures are soft.  The US 10-year yield is firm, around 1.56%.  European bonds are rallying.  Peripheral yields are off 8-9 bp, while core rates are 3-5 lower.  The Reserve Bank of Australia formally abandoned its yield-curve control, and the local debt market was quiet, but the Australian dollar is selling off and dragging the other dollar-bloc currencies lower.  Only the yen, among the majors, is gaining on the greenback.  Emerging market currencies are faring better, led by Asian currencies and most central and eastern European currencies.  The JP Morgan Emerging Market Currency Index is rising for the first time in five sessions.  Gold continues to consolidate within the range set before the weekend (~$1771-$1801) but is a bit softer on the day.  Oil prices are firm, and the December WTI contract is at the upper end of the $80-$85 range that has prevailed since mid-October.  Copper initially moved higher but reversed lower, and a break of $432 could signal another two percent decline.   Asia Pacific The Reserve Bank of Australia formally jettisoned its yield-curve control of targeting the April 2024 bond yield at 10 bp.  The market expected this after the RBA had been missing in action as the yield soared.  Today, the on-the-run 3-year yield fell six basis points after falling 21 yesterday.  It has now returned below 1%.  Governor Lowe did not fully capitulate but is trying to hold on to a middle ground.  He said the central bank will be patient on rates, and it is still plausible not to raise rates until 2024. However, he acknowledged rates could be lifted in 2023.  The swaps market is pricing in almost 80 bp of tightening over the next 12 months, with a 10 bp hike seen in six months.   European and American equities have recovered from the wobble in mid-September that sparked fear that Evergrande's losses would trigger a Lehman-like event.  Yet, the problem with Chinese property developers continues, even though Evergrande took advantage of its 30-day grace period, it serviced its debt.  China's high yield bond market is dominated by the property development sector.  The yields rose for eight consecutive sessions through yesterday and briefly rose above 20% last week.  Estimate debt servicing costs amount to around $2 bln this month.  House sales and prices are falling, a separate challenge to the economy than the energy crunch and high commodity prices.  It is still unclear whether Chinese officials are prepared to take more decisive action to support the economy, like a cut in reserve requirements.  New economic initiatives may emerge from the Communist Party's Central Committee meeting (November 8-11).  Officially it will focus on the achievements in preparation for the 20th Congress next year that will likely confirm another term for President Xi but possibly shuffle other senior posts.   The dollar rose to almost JPY114.45 yesterday and has come back offered today.  It has slipped below the 20-day moving average (~JPY113.55) for the first time since September 23.  Last week's low was closer to JPY113.25.  A break of JPY113.00 could signal losses toward JPY112.60 initially.  The price action is lending credence to the JPY114.50-JPY115.00 being the top of the new range. The lower end of the range is less clear.  The Australian dollar's 4% rally led the majors last month, but it stalled near the 200-day moving average (~$0.7555) and is breaking down today.  It has taken out last week's lows (~$0.7465) marginally, but the downside momentum has continued in the European morning.  There is near-term scope toward $0.7435 and maybe $0.7410.   The PBOC set the dollar's reference rate at CNY6.4009, firmer than the median (Bloomberg) forecast of CNY6.3986. The gap was slightly wider than it has been.  The last time the gap was more than 20 pips was October 20. So if it is a protest, it is still faint. Meanwhile, stricter virus curbs took a toll on Chinese equities. The greenback has risen above CNY6.40 on an intraday basis but continues to struggle to sustain it on a closing basis.   Europe The EMU final manufacturing PMI was slightly lower than the preliminary estimate, owing to a softer than expected Spain reading and a downward revision in Germany.  The aggregate stands at 58.3, down from 58.5 initially and 58.6.  It is the fourth consecutive decline, but it can hardly be considered weak.  Germany's manufacturing PMI was lowered to 57.8 from the 58.2 preliminary projection and 58.4 in September.  The French reading was tweaked up to 53.6 from 53.5.  It is still down from 55.0 and is the fifth straight loss.  Spain disappointed with a 57.4 report.  It was projected to be unchanged at 58.1, which seemed optimistic from the get-go.  Italy offered an upside surprise.  Its manufacturing PMI rose to 61.1 from 59.7.  Economists had expected some slippage.   Some pressure on the euro appeared to be coming from the cross against the Swiss franc.  Since the Fed met in September through the end of last week, the euro fell about 3.35% against the franc. Sight deposits rose steadily in October after falling in the first half of September.  Last week's increase was the most in two months as the euro broke below CHF1.08 for the first time since  May 2020. The rise in sight deposits is consistent with stepped-up intervention by the Swiss National Bank.  Yesterday, the euro fell against the Swiss franc, even as it rose against the dollar.  Clearly, the intervention is not arresting the euro's weakness. SNB is more likely moderating the decline.   Moreover, if the SNB also seeks to maintain a certain currency allocation of its reserves, it needs to acquire dollars after acquiring euros.  And if it does not want to grow reserves like Japan or China, it will sell some of the euros for dollars, minimizing the intervention effect on reserve accumulation.  The value of the SNB's reserves declined slightly in the year through September.    The pace of the euro's decline against the franc has accelerated in the past two sessions and closed below the lower Bollinger Band (two standard deviations below the 20-day moving average) for the second consecutive session.  Last year's low was set near CHF1.05 and yesterday, the euro pushed briefly through CHF1.0550.  It is now near CHF1.0570. The next technical support may be around CHF1.0250. However, speculators in the futures market see it differently.   They have the largest net short franc position (~19.3k contracts) since December 2019 and the smallest gross longs (~1245 contacts) since 2003.   French President Macron is holding back from imposing retaliatory measures against the UK over the fishing license dispute.  Reports suggest that Jersey is considering granting temporary licenses to French trawlers.  Separately, despite some confusing gas flows yesterday (from Germany to Poland), Russia says Putin's promise to boost gas shipment to Europe starting next week, after Gazprom completely rebuilding its domestic inventories, remains intact.  Look for results shortly of the auctions for pipeline capacity.   After falling a little more than 1% before the weekend, the euro bounced back yesterday and managed to close above $1.16. Follow-through buying was limited to about $1.1615, but it has struggled to sustain the positive momentum.  There is an option for 1.8 bln euros at $1.1585 that expires today.  A break signals a test on nearby support seen in the $1.1540-$1.1560 area.  Last week's low was about $1.1535, and the year's low is closer to $1.1525.  Sterling is off for the third consecutive session.  It reached $1.3630, the lowest level since October 14, which is about the (50%) retracement objective of last month's rally.  Some sales may have been related to the GBP316 mln option at $1.3650 that expires today.  The next (61.8%) retracement is by $1.3575.  America Today is the quietest day of the week for North American economic data. However, there is one feature, monthly autos sales.  Due to the supply chain disruptions, especially semiconductor chips, auto production has been crushed, and by extension, auto sales.  This is not limited to the US by any means.   Yesterday, Japan reported that October auto sales are off slightly more than 30% year-over-year in October. European auto registrations, a proxy for sales, were down 23.1% year-over-year in September.  Last week's Q3 GDP showed that growth was halved to 4% but the problems in the auto sector.  In September, US auto sales were about 25.5% below September 2020 sales.  Bloomberg's survey found a median forecast for October sales of 12.5 mln vehicles (seasonally adjusted annual basis), which would be the first increase since April.  Cox Automotive warns of another decline to 11.8 mln vehicles. The US Treasury unexpectedly boosted its Q4 borrowing needs to about $1.02 trillion, or around $312 bln more than it anticipated in August.  It appears to be largely a function of adjusting its cash balances and the calculations around the debt ceiling.  It is projecting Q1 22 borrowing needs at less than half of the Q4 sum.  Of course, it is assuming that the debt ceiling will be raised or suspended. Still, tomorrow's quarterly refunding announcement is expected to reduce its coupon offerings for the first time since 2016.  Separately, but not totally unrelated, the Democratic Party is still struggling to agree on the infrastructure initiative.   The US dollar continues to consolidate against the Canadian dollar but is enjoying a firmer tone today.  The Bank of Canada met on October 27, and it surprised the market by ending its bond-buying program and acknowledging the risk of an earlier hike.  The US dollar covered a range of roughly CAD1.2300 to CAD1.2435.  It has remained in that range since then. We note that speculators in the futures market switched to a net long position for the first time since early September in the week through last Tuesday.  The greenback is knocking on initial resistance in the CAD1.2400-CAD1.2410 area, and a break could signal a move toward CAD1.2430-CAD1.2450.  An option for about $900 mln expires tomorrow at CAD1.2450.  The greenback has a five-day rally in tow against the Mexican peso.  Earlier today, it pushed above last month's high (~MXN20.90), but it has stalled.  It is trading little changed on the session around MXN20.8500 as the North American session is about to start.   Still, unless it can break below MXN20.80, we look for higher levels.  That said, the pace of the dollar's rally is threatening the upper Bollinger Band (~MXN20.95)
Considering Portfolios In Times Of, Among Others, Inflation...

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

Marc Chandler Marc Chandler 08.11.2021 09:57
The US dollar turned in a solid week's performance, rising against most currencies and recording a marginal new high for the year against the euro.  Sterling and the Australian dollar competed for the worst performer.  Both central banks pushed against market expectations for aggressive near-term tightening.  The central banks triggered a short squeeze in the bond market, where 10-year benchmark yields from 10 bp in the US to 34 bp in Italy.  UK 10-year Gilts and French Oats yields fell nearly 22 bp.  Germany lagged with an almost 18 bp decline.  The speculative market had its largest net short Treasury note futures position since March 2020.  It has swung from its largest net long position in four years (~181k contracts) in early October to a net short position of almost 270k as of November 2.  The macro focus shifts back to inflation next week with American and Chinese reports.  Rising inflation in the world's two largest economies may arrest the rally in the bond markets. We anticipated the dollar to move broadly higher this month, and the move we envision does not appear over.  However, important support has been approached in a sharp thrust that has penetrated Bollinger Bands, suggesting some patience may be needed.  The dollar did close relatively softly, especially given the stronger than expected employment report.   Dollar Index: A new high for the year was recorded after the employment report was slightly above 94.60.  The momentum indicators are trending higher, and the five-day moving average crossed back above the 20-day moving average.  Recall that the 94.50 area is (38.2%) retracement of the sell-off since the March 2020 peak (~103).  The high from last September was closer to 94.75, but above there, nothing stands out until the 95.70-96.10 band. Yet ahead of the weekend, it finished poorly and formed a potential bearish shooting star candlestick.  Initial support is seen around 93.80.   Euro:   The single currency was virtually flat last week, but it does not hide the fact that a new low for the year (~$1.1515) was recorded.  The MACD and Slow Stochastic are moving lower, and the price action has been poor.  The $1.1490 area corresponds to the (50%) retracement objective of the rally from the March 2020 low (~$1.0635).  The next retracement (61.8%) is found a little below $1.13.  The euro finished on a firm note near session highs, suggesting scope for some corrective gains at the start of the new week. The new momentum shorts are frustrated with the lack of follow-through and maybe in weak hands.  A close above $1.1620 would lift the technical tone.  Japanese Yen:  The Japanese yen was the strongest of the major currencies, gaining an inconsequential 0.25% against the dollar.  The decline in US rates helped drag the dollar lower against the yen.  In terms of market positioning, short-yen carry trades had become momentum trades, too and the unwind was also supportive of the yen.   The dollar-yen exchange rate continues to track US 10-year yields.  The 10-year yield fell below 1.50% for the first time in a month ahead of the weekend, and the dollar made a new low for the week near JPY113.30.  Recall that in the big picture, we have suggested a range-trading affair between around JPY113.00 and JPY114.50-JPY115.00.  That still seems reasonable.  However, we note the dollar's momentum is flagging, and the five-day moving average slipped below the 20-day for the first time since late September.   The Slow Stochastic and MACD are trending lower.  A break of JPY113.00 signals the next leg down into the JPY112.00-JPY112.50 band.  British Pound: After the Bank of England confounded market expectations, sterling was spanked, falling more than 1% for only the second time this year (the other was on September 28, which arguably was more of a dollar move).  Expectations, partly facilitated by official comments, for tighter monetary policy spurred a roughly 4.3-cent rally in sterling last month.  If the BOE is saying, "sorrow about the mate, you misunderstood the conditionality and our job," it seems only fitting that sterling return to the late-September low near $1.3400.  It did so ahead of the weekend to $1.3425.  Ahead of the weekend, it settled below the lower Bollinger Band for the second consecutive session.  The momentum indicators are still falling. However, it managed to close near session highs, and a potential hammer candlestick may have been formed.  However, if $1.34 does not hold, it is difficult to find much chart support ahead of the $1.3165-$1.3200 area should $1.3400 be convincingly broken.  Canadian Dollar:  The Canadian dollar fared better than the other dollar-bloc currencies but still lost about 0.5% against the US dollar.  Since meeting the head and shoulders objective near CAD1.23, the US dollar has been consolidating and forming a rounded bottom.  The five-day moving average crossed back above the 20-day for the first time in a month.  The greenback finished the week bumping against the 200-day moving average (CAD1.2480), while the momentum indicators suggest there is more to come.  A retracement (38.2%) of the greenback's slide since September 20 high (~CAD1.29) is found near CAD1.2520, and the next retracement (50%) is slightly below the neckline of the head and shoulders pattern (~CAD1.2600).     Australian Dollar:  The Australian dollar's pullback has been more profound than the other majors.  It dropped almost 2.6% from the late October higher (~$0.7555), which was its best level since early July, and retraced half of last month's rally at the pre-weekend low (~$0.7360).  The momentum indicators are still falling, and the five and 20-day moving averages have crossed for the first time in nearly a month.  The next (61.8%) retracement target is closer to $0.7315.  Still, it closed firmly and with a possible bullish hammer candlestick, suggesting a bounce early next week is likely. The $0.7430-$0.7450 area may be the first important hurdle.  The Reserve Bank of Australia, like many other central banks, is emphasizing labor market developments in their forward guidance. Given the gap between what the RBA is saying (no hike likely until 2024) and what the market is saying (the swaps market implies nearly 70 bp of tightening over the next 12 months), next week's October jobs data may have greater impact.  Australia lost almost 285k jobs in August and September amid the lockdown.  A modest recovery is expected. In fact, the worst was probably in August. Full-time positions increased by almost 27k in September.   Mexican Peso:   The peso staged a brilliant recovery last week, but only after first falling to its lowest level since March.  The fall in US rates helped take pressure off the peso and emerging markets more broadly.  The strong US employment report bolstered risk appetites and lifted the JP Morgan Emerging Market Currency Index, which had been lower on the week, ahead of the data.  The dovish FOMC tapering announcement saw the dollar record a key downside reversal against the peso by reversing lower after making new highs and closing below the previous session's low.  Modest follow-through selling pushed the dollar through the (61.8%) retracement objective (~MXN20.46) of the rally that had begun in late October (from ~MXN20.21), ahead of the FOMC meeting and jobs report.  Before the weekend, it settled at the lows for the week (~MXN20.30).  Initial support is seen near MXN20.20.  The central bank meets next week (November 11).  Most expect a 25 bp hike, but an acceleration in CPI last month ( to be reported on November 9) may boost the risk of a 50 bp move.   Chinese Yuan:  The yuan's 2% gain this year puts it in third place globally, behind the Russian ruble (4.5%) and the Canadian dollar (2.3%).  The yuan has drifted higher in recent weeks.  It has risen for the past three months for a cumulative gain of a little less than 1%.  For the past several weeks, the PBOC consistently set the dollar's reference rate above market expectations (median projection in Bloomberg's survey) but did not do so ahead of the weekend.  Last week the dollar traded quietly within the range seen in the past two weeks.  The dollar recorded four-month lows in October in front of CNY6.38.  Given the official penchant for stability, the issue now is the upper end of the range, and it seems to be CNY6.40-CNY6.41.  Since late September, the dollar has not settled above the 20-day moving average (~CNY6.4075), the middle of the Bollinger Bands.  China's 10-year bond yields peaked in mid-October near 3.05% and last week finished below 2.90% for the first time in several weeks. It is the only country whose 10-year yield has fallen this year (~25 bp).  The October inflation gauges are the market's focus, but trade and lending figures may generate more insight into the economic drivers.   Disclaimer
Intraday Market Analysis – Gold Awaits Breakout - 03.12.2021

Intraday Market Analysis – Gold Awaits Breakout - 03.12.2021

John Benjamin John Benjamin 03.12.2021 09:42
XAUUSD tests key support Gold treads water as markets await US jobs data release. The metal remains under pressure after it failed to maintain bids above 1780. Sellers are testing the daily support at 1760. A bearish breakout would shatter hopes of a swift rebound and send the price to last September’s low at 1725. That move could then threaten the integrity of the uptrend on a longer timeframe. 1806 is a fresh resistance and sellers could be waiting to double down at a better price. On the upside, a bullish breakout may propel the metal to 1845. EURUSD attempts bullish reversal The euro recoups losses as traders reposition ahead of today’s nonfarm payrolls. A bullish RSI divergence indicates a slowdown in the bearish push. The pair has found support near June 2020’s lows around 1.1190. Then successive breaks above 1.1270 and 1.1370 have prompted short interests to bail, paving the way for a potential reversal. 1.1460 next to the 30-day moving average would be the target and its breach may turn sentiment around. 1.1240 is a key support to keep the rebound relevant. US 500 heads towards daily support The S&P 500 continues on its way down as investors jump ship amid the omicron scare. The latest rebound has been capped by 4650, a sign that the bears are in control of short-term price action. A combination of pessimism and lack of buying interest means that the index is stuck in a bearish spiral. An oversold RSI may cause a limited rebound as intraday sellers cover their positions. 4450 at the origin of a previous bullish breakout would be the next target. 4360 is a second line of defense that sits in a daily demand zone.
Bridge Too Far

Bridge Too Far

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

FX Update: Omicron whiplash for USDJPY

John Hardy John Hardy 29.11.2021 13:42
Forex 2021-11-29 13:00 4 minutes to read Summary:  The Friday meltdown in USDJPY and JPY crosses was all about position squaring as we had just come from a place of anticipating a more hawkish shift from central banks, particularly the US Fed. The sense of whiplash was most acute in USDJPY, which had just been up testing multi-year highs before the deleveraging across markets on the new omicron covid variant clouding the outlook. FX Trading focus: Narrative whiplash for JPY traders on omicron variant concerns The news of the new omicron variant of covid could not have come at a more difficult time for the market to absorb for at least two reasons. First, of course, was the poor liquidity when US markets were closed Thursday and only open part of Friday due to the Thanksgiving holiday. Second was that we had just earlier the same week seen Fed Chair Powell and Brainard elevating the relative focus and position of grappling with inflation in their acceptance speeches, which had sent Fed rate hike expectations to new highs for the cycle early last week before the news hit. That ratcheting up of Fed rate anticipation had helped take USDJPY to new highs since early 2017 above 115.00 and EURUSD to new lows below 1.1200. But the positioning build-up in USDJPY has been far more extreme and the reaction in JPY crosses on Friday was fully in fitting with the JPY’s old status as a safe haven. Note that AUDJPY had its worst single-day drop since the heart of the pandemic outbreak panic in March of last year, while EURJPY has poked below the important 128.00 area that would suggest a break-down if the move holds. EURUSD rose sharply, as the sudden repricing of the Fed saw the EU-US yield spread tightening sharply, but the move would have to extend as far as 1.1500 to start having more profound technical implications. Has the market taken the news too far? That is not for me to judge, as it will take some time to assess the status of the reach of the current outbreak transmissibility, virulence and vaccine-evading characteristics of this new variant, all while real damage is being done as some countries are limiting travel, some merely from the areas where the new variant was discovered in southern Africa, while Japan has announced a full ban on inbound travel starting tomorrow. US President Biden will speak on the new variant later today. What does the best outcome look like? The omicron variant proves very transmissible, but is considerably milder and/or not particularly good at getting around the existing vaccines. Worst case involves some combination of significant vaccine evading characteristics and virulence that is anywhere similar to prior variants. I suspect that without immediate good news (real news surely requires at least a week from here?), the uncertainty could see risk-correlated trades dragged lower before things can improve, but a significant further deterioration in risk assets would likely require actual bad news emerging rather than merely an extension of the uncertainty. Regarding a timeline for learning more about the risks from the omicron variant, it’s best perhaps to admit that I have no clue, but a Reuters article suggests the major vaccine makers may be able to determine efficacy of existing vaccines in about two weeks. Chart: USDJPYWhile other JPY crosses were bigger movers on Friday, the technical development in USDJPY was the most remarkable, as it came off new cycle- and multi-year highs. The damage is significant locally, but would turn more severe if the 112.73 pivot low from October is broken and then goes on to challenge the more structurally significant 111.50-111.00 area. Source: Saxo Group Looking at the week ahead, we would normally be touting the importance of the next set of US survey numbers (November Consumer Confidence and November ISM Manufacturing on Wednesday and ISM Services on Friday) and November jobs and earnings numbers on Friday, but instead, we’ll have to juggle the ongoing news flow and headlines from the new virus variant and may have to file these data away for a later “pent-up” reaction if the omicron variant impact dissipates. Besides the US dollar and the JPY, I will watch all points on the US yield curve and risk sentiment measures closely for how the market is reading the situation. Powell is out today with opening remarks at some event - more interesting is testimony tomorrow, together with Treasury Secretary Yellen, on the policy response to the pandemic, which could see interesting exchanges on inflation, etc.  Table: FX Board of G10 and CNH trend evolution and strengthThe JPY is in a very different place from where it was a week ago or even two trading sessions ago and looks to remain the high-beta currency to whether the virus news drags market sentiment. The SEK reading looks extreme, but difficult to fade in terms of picking levels – downside put spreads in EURSEK the cautious way to proceed for those interested in fading this move now rather than waiting for a reversal pattern to develop. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.Talking trends is treacherous business when the market goes into headline reactivity mode, but note that USDJPY and CNHJPY turning negative (if they close lower today) would make it a clean sweep for the JPY across the board. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1300 – Germany Nov. Flash CPI 1330 – Canada Oct. Industrial Product Prices 1530 – US Nov. Dallas Fed Manufacturing Survey 1715 – ECB President Lagarde to speak 2000 – US Fed’s Williams (voter) to speak 2005 – US Fed Chair Powell gives opening remarks at conference 2350 – Japan Oct. Industrial Production US President Biden to speak about omicron variant 0030 – Australia Oct. Building Approvals 0100 – China Nov. Manufacturing and Non-manufacturing PMI 0200 – Australia RBA’s Debelle to speak
Intraday Market Analysis – USD Accumulates Support

Intraday Market Analysis – USD Accumulates Support

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

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

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

The Greenback Finds Traction ahead of the Jobs Report

Marc Chandler Marc Chandler 03.12.2021 12:19
December 03, 2021  $USD, Australia, Canada, China, Currency Movement, EMU, FOMC, Inflation, Japan, jobs, UK Overview:  The Omicron variant has been detected in more countries, but the capital markets are taking it in stride.  Risk appetites appear to be stabilizing.  The MSCI Asia Pacific Index rose for the third consecutive session, though Hong Kong and Taiwan markets did not participate in the advance today.  Europe's Stoxx 600 is struggling to hold on to early gains, while US futures are narrowly mixed.  The US 10-year yield is a little near 1.43%, down around six basis points this week.  European yields are slightly softer. Core yields are off 5-6 bp this week.  The dollar is firm ahead of the jobs data.  The Antipodeans and Swedish krona are the heaviest, falling around 0.6% through the European morning.  The Swiss franc and euro are up about 0.1% and are the most resilient so far today.   The JP Morgan Emerging Market Currency Index is trading lower for the third session and is set to extend its losing streak for the fourth consecutive week.  Accelerating inflation is the latest drag on the Turkish lira.  The 0.6% decline today brings the week's drop to around 10.5%.  Gold is little changed within yesterday's range.  Last week, it settled a little above $1802.  Now it is below $1775  Oil is extending yesterday's recovery. Although OPEC+  unexpectedly stuck with plans to boost output by 400,000 barrels a day next month, it warned it could change its collective mind at any point.  January WTI recovered from around $62.40 yesterday to close at $66.50.  It is trading close to $68.20 before US markets open.  US natural gas fell nearly 25.5% over the past four sessions but is bouncing by around 3.7% today. European gas (Dutch) is stabilizing after yesterday's 5.6% decline.  Still, it is posting gains for the fifth consecutive week and is up more than 35% over the run.  Iron ore and copper prices are little changed.   Asia Pacific At the same time that Chinese officials are cracking down on the "variable interest entity" form of offshore listings for domestic companies, the US SEC is moving to enforce the 2002 laws that require foreign companies to allow greater scrutiny by US regulators.  Didi, the ride-hailing service, which listed in the US over local official objections, is now in the process of reversing itself.  The press reports that China and Hong Kong companies are the only ones to refuse to acquiesce to US demands.  This seems to be another facet of the decoupling meme.  Note that the NASDAQ Golden Dragon Index that tracks 98 Chinese companies listed in the US has fallen for five consecutive sessions coming into today, for a cumulative loss of about 10%.  China's Caixin service PMI was weaker than anticipated at 52.1, down from 53.8.  This, coupled with the softer manufacturing reading, shaved the composite to 51.2 from 51.5.   In contrast, Japan and Australia's flash service and composite PMIs were revised higher.  In Japan, the service PMI was revised to 53.0 from 52.1 and 50.7 in October.  The composite was revised to 53.3 from 52.5, to rise for its third consecutive month.  Australia's service PMI stands at 55.7, up from the flash reading of 55.0 and 51.8 in October.  The composite PMI is at 55.7, its third consecutive monthly rise as well.  Japan and Australia's PMI contrasts with the disappointment in China and Europe, and the US. This is because they are recovering from the long emergency (Japan) and lockdowns (Australia).   Trading remains choppy, and market confidence is fragile.  The dollar remains in the range set against the yen on Tuesday((~JPY112.55-JPY113.90).  Today's high has been just below JPY113.50, where options for $520 mln expire today.   Options for around $1.3 bln at JPY113.00 also will be cut today.  The greenback settled last week slightly below JPY113.40.  The Australian dollar has been sold to new lows for the year a little lower than $0.7050.  We have noted that this area corresponds to the (38.2%) retracement of the Aussie's rally from the March 2020 low near $0.5500.  The next area of support is seen around $0.7000.  It is the fifth consecutive weekly decline that began in late October above $0.7500.  The US dollar's two-day rise against the Chinese yuan is ending with a minor loss today. Similarly, the greenback posted gains for the past two weeks and has given it all back this week.  The PBOC set the dollar's reference rate at CNY6.3738, just below the median (Bloomberg survey) projection of CNY6.3740.   Offshore investors appear to have bought the most Chinese stocks today via the connect-link in a couple of weeks.  Also, note that China extended the tax exemption for foreign institutional investors from the interest tax through the end of 2025.    Europe German and French PMIs were revised lower, while Spain and Italy surprised on the upside.  The revisions shaved the gains initially reported for the service and composite PMIs.  Still, the German composite rose for the first time in four months to stand at 52.2 from 52.0.  The French composite PMI stands at 56.1, up from 54.7.  It is the first increase since June.  Separately, France reported a 0.9% rise in October industrial output, which is better than expected, but the September contraction was revised to -1.5% from -1.3%.   Spain's service PMI rose to \59.8 from 56.6 and was well above expectations.  The composite reading is 58.3, up from 56.2.  It is the first gain in five months and is the highest since August.  Italy's service PMI rose to 55.9 from 52.4.  Economists had expected something closer to 54.5.  The composite rose to 57.6 from 54.2.  It has softened in September and October, and the November reading is the best since August.   The UK's service and composite PMI were revised to show a slightly larger decline than initially seen in the flash report.  The service PMI slipped to 58.5, from 58.6 preliminary estimate and 59.1 in October.  The composite PMI was shaved to 57.6 from the 57.7 initial estimate and 57.8 in October.  The November weakness was disappointing after rising in September and October to snap a three-month decline.  The December short-sterling interest rate futures consolidated in a choppy activity this week after the implied yield fell for eight consecutive sessions previously.  The market is discounting about a 1 in 3 chance of a hike at the BOE meeting on December 16.  The euro slipped to a three-day low slightly above $1.1280 in late Asian turnover before resurfacing the $1.1300 area in the European morning.  Still, we suspect the upside is limited.  The 20-day moving average is near $1.1350, and the single currency has not traded above it since November 9.  The euro remains within the range set on Tuesday (~$1.1235-$1.1385).  Given the divergence of monetary policy, resistance looks stronger than support.  For its part, steering is holding barely above its three-day low near $1.3260.  It, too, remains within Tuesday's range (~$1.3195-$1.3370).  Recall that the $1.3165 area corresponds to the (38.2%) retracement objective of the rally from the March 2020 low near $1.14.  Meanwhile, the euro is pressing below CHF1.04.  It has not closed below there in six years.   America Fully cognizant of the irony here, but barring a shockingly poor report, today's US employment data may have little last impact on the market.  If there was any doubt about it before, since Federal Reserve Chair Powell spoke, there isn't.  The Fed has shifted from helping to facilitate recovery to preventing inflation expectations from getting entrenched.  That means that even a mediocre report today will be overshadowed by next week's CPI, which will likely show that inflation is still accelerating.  Conventional wisdom holds that the White House prefers doves at the Fed, but that does not hold now.  President Biden's public approval rating is low, and the Vice President's is lower still. Polls suggest that inflation is a knock against the administration.  When Biden announced the re-nomination of Powell and Brainard's nomination to Vice-Chair, both candidates reaffirmed their commitment to combat inflation.  What is true of the employment data also holds for the final services and composite PMI, factory orders, and the service ISM.  There may be headline risk but little implication for policy.  The Senate passed the stop-gap measures to keep the federal government funded through February 18.  Meanwhile, the debt ceiling is expected to hit between December 21 and late January.   Canada's labor market has recovered quicker than the US.  Today's another constructive report will likely solidify expectations that the Bank of Canada may hike rates in the March-April period.  The Bank of Canada meets next week.  Of course, it may be cautious with the unknowns surrounding the Omicron variant, but the economic recovery is solid after the weakness in Q2.  Trade tensions with the US are rising.  The US doubled its anti-dumping and countervailing tariffs on Canadian softwood imports (almost 18%).  US January lumber prices were limit up ($45) Wednesday and yesterday and have risen by more than 19% so far this week to reach five-month highs. There is a dispute over Canadian potato exports as well.  There are also disputes over some US initiatives' "Buy American" thrust, including electric vehicles.   The US dollar is at its best level against the Canadian dollar since late September.  It is pushing near CAD1.2840. The September high was closer to CAD1.29, and the late August high, which is also the high for the year, was near CAD1.2950. Barring a reversal, this will be the sixth consecutive week of the greenback's gains.  The swaps market has the first hike discounted for March 2022.  The US dollar began the week with a seven-day advance against the Mexican peso in tow.  It ended with a 1%+ pullback on Monday and again on Tuesday.  It consolidated Wednesday and fell another 1%+ yesterday.  It is little changed today near MXN21.29.  Next week, the November CPI will be reported.  It looks set to accelerate from about 6.25% to around 7.25%.  The central bank meets on December 16, after the FOMC meeting.  A 25 bp rate hike is the consensus, but an argument can be made for a 50 bp increase from the current 5.0% target.   Disclaimer
Ready, set, silver, go

Ready, set, silver, go

Korbinian Koller Korbinian Koller 03.12.2021 12:56
The most obvious first step is: “How much?” Depending on your time horizon and if your approach is purely diversification for your overall portfolio, a percentage of total investment capital needs to be set. This percentage should be higher on a more aggressive wealth preservation strategy and higher expected returns on beating inflation. Another aspect is if silver is traded as the only hedge or alongside other precious metals. Silver already has a leverage factor in relationship to gold. For example, gold’s response to covid was a 37% up move, while silver moved up 80%. This volatility leverage works both ways, increasing the risk for silver if not purchased on low-risk entry points and traded with appropriate money management. We have pointed out various reasons why we find silver an extremely attractive play long term in this year’s chart book releases. Monthly chart (a week ago), Silver in US-Dollar, ready: Silver in US-Dollar, monthly chart as of November 26th, 2021. The above chart was posted in our last week’s publication. We wrote:” The monthly chart shows a high likelihood for November’s candle closing as an inverted hammer. Consequently, it provides for silver prices approaching the low end of the last 17-month sideways range near US$22.” Monthly chart, Silver in US-Dollar, set: Silver in US-Dollar, monthly chart as of December 3rd, 2021. We were spot on. The anticipated entry zone has been reached. We added to our physical holdings and shared the trade live in our free Telegram channel. Silver in US-Dollar, weekly chart, silver: Silver in US-Dollar, weekly chart as of December 3rd, 2021. We asked, “how much?” and in what diversification, which leaves us with the question of what denomination. The rule of thumb is that the smaller the weight amount is and the more recognizable the brand, the higher the cost. In addition, valuable numismatic collector’s coins have premiums as well. Generally, we find the added cost of brand items (Canadian maple leaf, American eagles, Austrian Philharmonic, and alike) to be of value since it adds to liquidity at a time of sale. While we would stay away from the added cost of numismatic collectible coins, we find there to be value to have a mix of coins and larger bars to arrive at a reasonably low-cost basis with a high degree of liquidity at the time of sale (larger bars are harder to sell than one-ounce coins). The weekly chart above illustrates that as much as we have entered the “shopping zone” for silver, there is a probability that we might see a quick spike down as we have seen at the end of September. As pointed out in the previous chart book, the goal of physical acquisition should not be the ultimate lowest price but availability and execution itself. We make a point of this, especially since we noticed that physical acquisition prices have in percentage retraced much less than the spot price right here, and once the turn is complete, could proportionally faster jolt up. Silver in US-Dollar, quarterly chart, go: Silver in US-Dollar, quarterly chart as of December 3rd, 2021. It is essential to have an exit strategy in place before entry. These exit projections are necessary to measure risk/reward-ratios. Moreover, with the entire plan clear, there will be no debate while in the trade. This part of exit psychology is often overlooked, but a low-risk entry point alone does not provide a good strategy. We expect a price advance on silver within the next six to eight quarters to a price target of US$74.40! Significant profits allowing for an outstanding risk/reward-ratio. Ready, set, silver, go: Last week, we anticipated the market’s direction correctly and find ourselves now at the desired low-risk entry zone. With possible additional questions about physical acquisition answered today, we might have reduced doubt. The devil is in the details, and due to the various countries, their taxation law, and the wide variety of official precious metal dealers, we did not dive into the details on where to take possession of your possibly desired purchase.  Nevertheless, our multinational membership in our free Telegram channel might provide helpful information to your specific situation. We hope we have provided enough knowledge to erase doubt. We encourage participation since we see procrastination towards a wealth preservation strategy as the poorest choice in this challenging time for your hard-earned money. Feel free to join us in our free Telegram channel for daily real time data and a great community. If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can also subscribe to our free newsletter. This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting. By Korbinian Koller|December 3rd, 2021|Tags: Crack-Up-Boom, Gold, Gold/Silver-Ratio, inflation, low risk, Silver, silver bull, Silver Chartbook, silversqueeze, technical analysis, time frame, trading principles|0 Comments About the Author: Korbinian Koller Outstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.
FX Update: EURCHF lower has been the Teflon trade

FX Update: EURCHF lower has been the Teflon trade

John Hardy John Hardy 03.12.2021 13:50
Forex 2021-12-03 13:28 4 minutes to read Summary:  A look across FX shows many of the usual suspects weakening with the recent bout of risk aversion, with commodity currencies near important levels versus the US dollar. While the JPY has traded erratically of late on conflicting themes and has not shown its safe haven status of yore, the Swiss franc has, managing to thrive when the focus is on inflation and when it is on weak risk sentiment as the SNB seems to have quietly stepped away from reining in franc strength. FX Trading focus: EURCHF lower has been the Teflon trade The most consistent trending pair in G10 FX of late has been the slide in EURCHF, which has even slipped below the prior six-plus-year low near 1.0500 over the last week. Remarkably, the pair has maintained its consistent ride lower through some remarkable jolts in the background, including the more hawkish shift from the Fed and the omicron news. This may suggest that the move is not being driven by strong speculative flows – which might have shown significant volatility in line with other currency pairs recently, but rather by consistent flows as the Swiss National Bank has apparently stepped away from the assumed stout defense of the 1.0500 level. The last two weeks of sight deposit data have shown no growth, i.e., no signs that the SNB is leaning against this move after doing so the prior four weeks. Also, when inflation fears dominate as they have at times recently, CHF strength is an easy way to avoid importing inflation without rocking the boat with monetary policy signals, while CHF strength is also a natural safe haven play when volatility spikes as it has in recent weeks. The consistent trend may be set to extend here, with parity in EURCHF a natural target. Elsewhere in FX, most of the smaller currencies are lining up on the usual risk-on, risk-off fault-lines, with commodities currencies and Scandies all weak as sentiment has softened again today, although it will be interesting to see if oil prices can make a stand after the reversal of the sharp sell-off yesterday despite nominally bearish news. Big next levels coming into view include 1.3000 in USDCAD and 0.7000 in AUDUSD. On the strong side, the EUR, USD and JPY are jockeying for the upper hand in addition to the strong CHF noted. The reaction function around today’s US jobs report (can a strong average hourly earnings add further energy to Fed upside expectations on top of an already momentous shift, and how much will residual omicron uncertainty hold back that pricing for now?). Chart: EURCHFEURCHF has weakened steadily since mid September in line with the weakening in EURUSD, but far more steadily than the latter, as this trend has managed to sustain through recent volatility elsewhere and shifting focus. The technical situation is without remarkable variation and there are no signs that the SNB is leaning against the move of late. Could the move extend all the way to within reach of parity? Source: Saxo Group Elsewhere, notable BoE hawk Michael Saunders was cautious sounding in comments today on the omicron variant uncertainty, prompting the sharp slide in sterling today. He said that the omicron development is a key consideration for whether to hike in December and sees some advantages in the BoE waiting for omicron data, which may sideline any hike potential at the December 16 meeting, with the market currently putting low odds on a move (difficult to measure – the idea has developed that the BoE will hike 15 bps to 0.25%, with about a 5-7 bps of hiking priced). Saunders still favors policy tightening soon and said today that the rate rise would be limited if the BoE gets going soon. Table: FX Board of G10 and CNH trend evolution and strengthThe impressive CHF rising nearly all the way to the top of the table here, as the left/right split of the G10 currencies is nearly perfect, with all of the five “smalls” in the red, most of them deeply so. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.Plenty of bright orange readings in the daily ATR shadings – these indicate very significant volatility relative to the last 1000 trading days (top 10% ranking), , while it is interesting to note something like the EURUSD supermajor still trading with still quite low intraday volatility. AUDNZD is trying to flip back to negative, while USDCHF and USDJPY have yet to follow through lower after their recent flips to the negative in the “trend” reading. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1300 – ECB Chief Economist Philip Lane to speak 1330 – US Nov. Change in Nonfarm Payrolls 1330 – US Nov. Average Hourly Earnings 1330 – US Nov. Unemployment Rate 1330 – Canada Nov. Net Change in Employment 1330 – Canada Nov. Unemployment Rate 1415 – US Fed’s Bullard (voter in 2022) to speak 1500 – US Nov. ISM Services  1500 – US Nov. Factory Orders
Bonds Didn‘t Disappoint

Bonds Didn‘t Disappoint

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

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

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

S&P 500 – Is a 5% Correction Enough?

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

Weekly Close Out

Luke Suddards Luke Suddards 04.12.2021 17:45
Omicron: In today’s weekly I’ll be dedicating some digital ink for the latest information on the new variant omicron. Ok so what are the major points of importance. New admissions to hospitals in Gauteng increased by 144% last week (hospitalisations lag cases by around 1-3 weeks). So far the early data shows the majority of these hospitalisations are from the unvaccinated (if that trend remains that’s positive). However, a recent study released from South Africa indicates reinfection risk is 3 times higher than previous variants. In terms of the deadliness of this variant, the early data looks good with Australia’s Chief Medical Officer Paul Kelly stating that of the 300 cases recorded worldwide all were very mild or had no symptoms at all. However, the sample size is too small so we can’t draw solid conclusions at this stage. The major vaccine makers have offered timelines of two to six weeks for assessing the vaccine escape properties of omicron via in-vitro lab tests. Interestingly, Moderna is less optimistic than Pfizer about expecting current vaccines needing to be tweaked to fend off the omicron variant. Volatility will remain high as the market remains on tenterhooks as new information drips through. Dollar Index (DXY): The greenback is flat on the week, with many quite perplexed by the lack of gains (particularly against the euro) given the hawkish Fed pivot and risk sentiment remaining on edge. The dollar coming in flat is a combination of gains against high-beta cyclical companies offset by losses against traditional safe haven currencies. Just take a look at the charts of USDJPY and AUDUSD. In terms of the euro, I’ll chat more about that below in the EURUSD paragraph. The big domestic news for the dollar this week was Jerome Powell’s hawkish rhetoric. The word transitory is to be retired as he admits the threat of persistently higher inflation has grown. On the QE purchases side of things, he remains open to it being wrapped up earlier than originally expected with a discussion on a faster pace taking place in 2 weeks at their December meeting. He elucidated his thoughts on the employment side of their mandate, stating that a great labour market requires a protracted expansion and in order to achieve this price stability has to occur. I see this as inflation now taking primacy over employment goals, indicating a shift in the Fed’s thinking with regards to inflationary pressures. The hawkish commentary from FOMC members this week such as Daly, Quarles, Barkin and Bostic would certainly suggest this is the case. STIRs are showing rate lift-off for practically June 2022 (96%) and over 2.5 hikes through December 2022. All attention now falls to the Non-Farm Payrolls number out today. The preliminary indicator such as ISM manufacturing index, ADP and jobless claims all pointing towards decent numbers from the jobs report today disappointed as NFP numbers missed expectations by a significant amount. Price moves have been muted as traders may be reluctant to place any fresh positions on and chase with the risk of adverse news over the weekend regarding omicron. Bottom line - traders should expect cross-asset volatility to remain higher over December. Next week we’ll receive November US inflation data, which is expected to remain elevated. DXY has regained the upper trend line of its ascending channel, putting some distance between price and its moving averages. The 21-day EMA continues to provide some dynamic support to price dips. The RSI has held above the key 55 level of support. Targets wise keep an eye out on the 96.5 on the upside and to the downside the 21-day EMA and former support around 95.5. EURUSD: So why did EURUSD strengthen on the market sell-off due to omicron on Friday and has remained fairly defensive throughout this week? It’s certainly not because the euro is a safe-haven currency in times of risk aversion. This price action has more to do with its use as a funding currency. Traders borrow euros to search for higher yield globally which is a decent strategy when risk conditions are favourable, however, when that risk dial flips in other direction we see the typical carry trade unwind, leading to flows back into the euro. Additionally, because expectations for rate hikes with regards to the eurozone are already significantly low, it’s at much less risk of a dovish repricing working favourably in terms of spread differentials with the dollar. Political pressure is rising on the ECB to act, particularly from Germany. A Reuters article out mid-week pointed towards some members wanting to rather hold off declaring their asset purchase intentions at this December meeting due to uncertainty caused by omicron. However, the ECB's Muller stated that he doesn’t think omicron is a reason to shift the scheduled end date for PEPP. Following this line of thought just today Madame Lagarde expressed that she feels certain that PEPP will cease in March as planned, saying markets require clarity in December. On the data front we had better than expected inflation prints from Germany (5.2% YoY) and the eurozone (4.9% YoY). It’s quiet in terms of economic data next week with the ZEW survey out as we lead up to a crucial ECB meeting in two weeks. EURUSD is drifting lower from its 21-day EMA. The RSI has stalled around the 40 level. Looking at the technicals clearly EURUSD is in a downtrend. Rallies in my opinion should be short lived with sellers coming in. Key levels to monitor in both directions are 1.135 (21-day EMA) and on the downside 1.12. GBPUSD: With a vacuum of economic data for the UK, the words of central bankers took centre stage. Bailey didn’t provide much meat at his speech this Wednesday. However, Saunders (leans hawkish) who spoke today has caused a repricing lower in the probability of a 15bps rate hike come December (only an additional 4bps now from around 8bps pre-speech). He expressed the need for potentially taking a patient approach with the uncertainty from omicron. Cable is lower as a result. On the virus front, the UK regulator has given the green light for booster doses to be offered to all adults. Additionally, the government has signed a contract for 114 million vaccine doses from Pfizer and Moderna, including access to modified vaccines if they're needed to tackle omicron and other future variants of concern. On the political front, domestically the Tories held the seat of Old Bexley and Sidcup, however, with a reduced majority. On Brexit, it’s been quiet of late with some optimism around the granting of additional fish licences to French fisherman in Guernsey, Jersey is the more important zone though prone to flare ups in tension. However, temperatures remain high between France and the UK on issues related to immigration. Next week sees UK October GDP data released. EURGBP has been moving higher on the back of dovish commentary (given he’s a hawk) from Saunders as well as benefiting from any souring in risk-sentiment. The 200-day SMA isn’t far aware, which has previously capped price gains. Cable continues to -plumb fresh YTD lows and is now nearing 1.32. The RSI is near to oversold territory but with some room remaining to eke out further losses. Moving averages are all pointing downwards. Targets wise, on the upside the 1.335 and above there former support around 1.34 (21-day EMA too). USDJPY: This pair continues to trade on US 10-year yield moves and now it’s status as a safe-haven currency has kicked back in. Early Friday morning has seen a bid coming in, which could be some pre NFP positioning on expectations of a move higher in the back end of the US yield curve. Put EURJPY on your radar, price is at a key support level around 128. USDJPY is finding support around its 50-day SMA, 113 round number and the 38.2% Fibonacci level. Price is trying to overcome resistance from the 50-day SMA. The former range support is providing some resistance around 113.5. The RSI is trying to get back into its range support around 46. Targets wise on the upside, 114 will be important and on the downside 112.5 (this week's lows). Gold: Gold has slipped below the $1775 support level as the hawkish fed leads to higher short term rates, kryptonite for the shiny yellow metal. Fears over inflation have failed to help gold stay propped up as well as risk-off fears from omicron. Inflation data out from the US next week will be a risk event for gold traders as well as the Fed meeting the following week. Today’s NFP hasn’t ignited much excitement in gold markets. Gold is trying to reclaim the $1775 support level. The 50-day SMA has made a very minor cross above the 200-day SMA. The 21-day EMA has been capping further gains. The RSI is in no man's land around 38. Targets wise, if $1775 is cleared then $1800 opens up (moving averages just below there). On the downside, $1750 comes into view. Oil: Crude fell sharply into a bear market this week as risk-off, Fed tightening, fears over further lockdowns and travel bans from the new omicron variant led to a repricing on the demand side of the equation. OPEC+ the main event for crude traders this week, decided to stick to their scheduled 400k bpd for January, but caveated this with the meeting remaining in “session”, meaning changes to the supply side could be made before their 4 January meeting if omicron causes a further deterioration. This led to yo-yo style price behaviour. Until there is more clarity regarding omicron, I expect oil’s price to remain choppy without a solid price trend. Backwardation spreads have narrowed, indicating a more balanced supply and demand equation. Iranian Nuclear Negotiations began the week positively, but sentiment turned pessimistic towards the end of this week, providing further short-term bullish tailwinds to crude’s price. JPM has some very bullish forecasts with the bank expecting crude to hit $150 by 2023. Oil is having a run at its 200-day SMA. The RSI has moved out of overbought territory and is a fair distance below its 50-day SMA (some mean reversion). Right now price will remain choppy within a range as omicron news flow prevents a trend from forming. Targets wise, on the upside the 200-day SMA and $73.50 dollar mark will be key. On the downside $68 support is important.
Gold's 1780s Are Driving Us Crazy!

Gold's 1780s Are Driving Us Crazy!

Mark Mead Baillie Mark Mead Baillie 06.12.2021 08:31
The Gold Update by Mark Mead Baillie --- 629th Edition --- Monte-Carlo --- 04 December 2021 (published each Saturday) --- www.deMeadville.com In completing its 48th trading week of 2021, Gold settled yesterday (Friday) at 1784. 'Twas the eighth week this year that Gold has settled in the 1780s (the first occurrence being on 19 February). Indeed, Gold's median weekly settle price year-to-date is 1788. Yet as anybody engaged in the Gold Story knows, Gold first traded in the 1780s a decade ago on 09 August 2011, the U.S "M2" money supply that day at $9.5 trillion; (today 'tis $21.5 trillion). So to reprise that from the "You Cannot Be Wrong Dept.": should anyone ask you "off the cuff" what is the price of Gold, your instantaneous response of "1780" shall (so 'twould seem for the foreseeable future) not only be correct, but enhance your dazzling intellectual image. To reprise as well "The M Word" crowd, clearly their parking place of preference is Gold's 1780s. Of the 233 trading days year to date, 27 of Gold's closures exceeding 1800 have -- within the five ensuing trading days -- found price settle in the 1780s, or lower. "1800? SELL!" Sheesh... Gold's 1780s are driving us crazy! Regardless, Gold -- and moreover Silver -- are doing what markets do when their technicals turn negative: price goes down. Per our Market Magnets page, Gold from 1861 on 18 November found price then pierce down through its Magnet: "SELL!" From our Market Trends page, Gold from 1847 on 19 November found the "Baby Blues" of trend consistency begin to plummet: "SELL!" From our Market Values page, Gold from 1805 on 22 November crossed below its smooth valuation line: "SELL!" More mainstream technical signals have since followed to "SELL!" And recall -- just prior to it all in our anticipating near-term selling -- we nonetheless deemed the 1800s as "safe": "WRONG!" Having thus now driven you crazy, we obviously deem holding and buying Gold as "RIGHT!" especially as the stock market -- be this another false signal or otherwise -- finds the S&P 500 doing its dance of a snake in death throes. To be sure we've seen such before, only to see the Index magically survive, indeed thrive. You veteran readers of The Gold Update may recall some six years ago (on 23 January 2016) our characterizing the S&P as being in such "death throes", the ensuing three weeks then finding the Index fall 5% from a "live" price/earnings ratio of 43x; (today 'tis 47x). "But don't forget it's now time for the Santa Claus Rally, mmb..." Yet another conventional wisdom notion there, Squire, via your appreciated "leading comment". Irrespective of what "everybody says" and expects, Santa Claus doesn't always come to Wall Street. Since 1980, as measured yearly from 01-to-24 December, Santa has skipped gifting the stock market 11 times. "WHAT?" 'Tis true. For those of you scoring at home, the S&P recorded net losses across that festive stint in '80, '81, '83, '86, '96, '97, '00, '02, '08, '15 and '18, the latter being a 409-point (-14.8%) loss. (Advice to the stocking stuffer: buy coal ... nudge-nudge, wink-wink, elbow-elbow). Moreover, have you been monitoring the major market dislocations of late? Talk about the maligning of conventional wisdom! In yesterday's session, the €uro, Swiss Franc, ¥en -- and yes the Dollar Index too -- all closed higher. "WHAT?" 'Tis true. Still, even as there is Dollar demand given the prospect of it paying a positive interest rate, the yield on the U.S. Treasury Bond continues to fall: 'twas 2.177% on 08 October, but is down now to 1.678%. In fact across our BEGOS Markets (Bond, Euro/Swiss, Gold/Silver/Copper, Oil, S&P 500), the price of the Bond is the only component with a positive 21-day linear regression trend. "WHAT?" 'Tis true. And then there's Oil: by our Market Values page, Black Gold settled yesterday 15 points below its smooth valuation line (66.22 vs. 81.51), even as Oil Inventories fell. "WHAT?" 'Tis true, (albeit OPEC is gonna keep a-pumpin'). Still, by that measure, Oil's price is massively, -- indeed deflationarily -- dislocated near-term from value. Too as noted, the Price of the S&P continues to be ridicously dislocated from the support of its Earnings; but if you get your dumbed-down P/E of 28.1x from the media, when 'tis honestly 47.4x, go ahead and say it: "WHAT?" 'Tis true. 'Course, the ongoing and most overwhelming dislocation is the price of Gold vis-à-vis our Scoreboard Dollar-debasement valuation (1784 vs. 4008). Say no more, Igor. A December to remember? Early on, 'tis the season to be dislocated. To which naturally (as subtly stated) we find Gold located in the 1780s. Why expect it to be anywhere else? So spot-on is Gold in the 1780s that per the following graphic of weekly price, the rightmost close is right on the dashed regression trendline. So are the 1780s driving you crazy, too? At least Gold's parabolic trend still is Long, although the aforementioned negative technicals have kept on the lid, (to say nothing of "The M Word" crowd?). Note as well the 79.1x reading of the Gold/Silver, ratio, essentially at a two-month high, the white metal having been terribly on the skids of late: Anything but skidding these last couple of months has been our Economic Barometer, it now having reached its highest oscillative level in better than three years. Whilst nominally last week's 13 incoming metrics were quite mixed, their overall effect net of prior period revisions and consensus expectations was to launch the Baro higher still as we here see: Amongst the improvers were November's Unemployment Rate and Average Workweek, plus both the Manufacturing and Services readings from the Institute for Supply Management, along with October's Construction Spending, Factory Orders and Pending Home Sales. However: November's ADP Employment data, Labor's Non-farm Payrolls and Hourly Earnings, the Chicago Purchasing Managers' Index and the Conference Board's read on Consumer Confidence were all weaker. Therein, too, is the red line of the S&P 500, its aforementioned snaky death throes throwing the Index all over the place this past week. The S&P's intra-day runs were as follows: Mon +48, Tue -86, Wed -143, Thu +91, Fri -113. Want some perspective for that? The entire trading range of the S&P 500 for the year 2004 was less than this past Wednesday's session alone. "WHAT?" 'Tis true. 'Course, back in 2004, 'twas a greater percentage range, but at least the average P/E for that year was a "reasonable" (vs. today) 26.4x. Thus again is begged the question: "Has the S&P crashed yet?" Obviously not, but we're feelin' very leery 'bout January. "As goes January..."(although you regular readers know we've demonstrably debunked that conventional notion as well). BUT... As for the Federal Reserve's removing of the punch bowl, Atlanta FedPrez Raphael "Ready to Raise" Bostic again says its time to step up the Taper of Paper Caper, whilst FedGov Randal "Have No" Quarles says 'tis time for The Bank to prepare to raise. And as noted in last week's missive: were it not for the "Oh my! Omicron!" scare, we could well see a FedFunds rate hike in the FOMC's 26 January Policy Statement. So just keep wearing your masque such that everything's great, and in turn let the Fed increase its rate! Here's another positive from the "Good Is Bad Dept.": the StateSide government shan't run out of money this time 'round until 18 February. Low on dough? To Congress you go! Just ask TreaSec Yellen, for she's in the know! Ho-ho-ho... Either way, west of The Pond "inflation" remains the watchword -- or if you prefer the real word -- as the word "transitory" is being transited away. East of The Pond, the EuroZone (just 23 years young) sees its inflation level hitting record high levels; but should it be peaking, 'tis thought any European Central Bank rate rise shan't next year materialize. And lacking any upside mobility of late (duh) are our precious metals, the following two-panel graphic bearing along as butt ugly. On the left we've Gold's daily bars from three months ago-to-date, their cascading "Baby Blues" reinforcing price's downtrend, (although price never really departs the 1780s, right?). On the right similarly is the same story for Sister Silver, who clearly is suffering the ravages of DDS ("Dangerfield Disrespect Syndrome"), by which she's none too happy. For from the precious metals' respective highs of just three weeks back, Gold has dropped as much as -5.8% ... but Silver more than double that at -12.6%! "WHAT?" 'Tis true: Meanwhile, still dwellers in their Profile cellars are Gold (below left) and Silver (below right). Here is the entirety of their trading across the last two weeks, the high volume price apices as labeled. And that is a lot of overhead work to do: So after all of that, are you ready to tune out? You can't be so blamed. Gold's 1780s have got us all crazy! Puts us in mind of that iconic glamour rock hit by Sparks from back in '83 -- supportive of the film by the same name -- "Get Crazy"Tune it in on your radio dial: sure to bring a you a Golden Smile! Cheers! ...m... www.deMeadville.com
Intraday Market Analysis – USD Shows Weakness

Intraday Market Analysis – USD Shows Weakness

John Benjamin John Benjamin 06.12.2021 10:44
USDCHF struggles to bounce The US dollar softened after November’s nonfarm payrolls missed the mark. The pair has met stiff selling pressure at 0.9270, a former support that had turned into a resistance. The bullish RSI divergence suggests a slowdown in the sell-off though there is no confirmation yet for a sustainable bounce. 0.9120 is a key demand area on the daily timeframe and a bearish breakout would invalidate the November rebound. Buyers may switch sides as sentiment further deteriorates, exacerbating volatility to the downside. CADJPY breaks higher The Canadian dollar surged after November’s unemployment rate fell to 6%. A bearish MA cross on the daily chart still indicates a pessimistic mood. An oversold RSI on the hourly chart caused a limited bounce as short-term traders took profit. Sellers are eager to fade rebounds with the latest being at 89.20. 87.20 at the base of the October rally would be the next support. A deeper correction may send the loonie to 85.90. The bulls will need to lift said resistance before they could initiate a reversal. UK 100 attempts to rebound The FTSE 100 recouped some losses bolstered by a weaker US jobs report. The index saw buying interest over the psychological level of 7000 which sits in the daily demand zone. The RSI’s double-dip in the oversold area has attracted a ‘buying-the-dips’ crowd in this congestion area. A close above the immediate resistance at 7150 is an encouraging sign of a bullish attempt. 7310 is a major hurdle ahead, its breach could short circuit the correction. 7060 is the closest support in case of weakness in the rebound.
Cryptocurrency survived key levels after Saturday's shake-up

Cryptocurrency survived key levels after Saturday's shake-up

Alex Kuptsikevich Alex Kuptsikevich 06.12.2021 10:54
The cryptocurrency market experienced a shock shakeout on Saturday morning. Low trading activity and the relatively narrow previous trading range created a situation where stop orders were placed close to the market price. Outside forces, such as the stock market pressure on Friday, triggered a snowball. On Saturday morning, the fall below the previous day's low at $52K triggered a sharp liquidation of positions, with the price falling to $42K at one point. Other altcoins also fell 10-25% as investors could not stay away from such a drop. By the end of the day, buyers brought BTCUSD back to $48K, but they still lacked the strength to push it above $50K. Over the weekend, news came in that MicroStrategy and El Salvador were again using this drawdown to build up their bitcoin holdings. We wonder if these big buyers are ready for a change of trend from bullish to bearish, which happens quite regularly. Will corporate and government finances be able to withstand the new crypto winter? If not, it will only increase the blow to the market when it runs the risk of being flooded with forced sell orders, a kind of margin call and subsequent depression. From the tech analysis perspective, Bitcoin is experiencing a crucial moment. The bulls managed to get the quotes back neatly above the 200-day moving average, and the RSI index touched level 20, an oversold territory. A stabilisation and even a slight pullback would form a positive picture of how the bulls defended the global upside trend. If the rate is below $48K by the end of Monday, it will signal that the bears didn't finish their play, and we should expect a further decline, potentially to the $40K area. ETHUSD, which at one point on Saturday was losing more than 17% to $3500, also managed to defend its significant $4000 level. But still, on Sunday and Monday morning, there is evident caution. A mutual ability for Ether to stay above $4000 and for Bitcoin to stay above its 200-day average (now $48K) would be a serious sign of staying within the bullish trend. A failure of these levels promises to escalate very quickly into a new liquidation of long positions. It will move the timing and levels of the local bottom in cryptocurrencies further down. Overall, the market remains under pressure, and its total capitalisation has lost 2.8% to 2.26 trillion in the last 24 hours, down 14% from Friday morning's levels. The cryptocurrency Fear and Greed Index has fallen to 16, its lowest level since July. These levels can safely be called attractive buying on a downturn, but cautious traders should still wait first for solid indications that the Greed and Fear Index has formed a bottom and is headed for growth.
Semblance of Stability Returns though Geopolitical Tensions Rise

Semblance of Stability Returns though Geopolitical Tensions Rise

Marc Chandler Marc Chandler 06.12.2021 12:39
December 06, 2021  $USD, China, Currency Movement, EU, Hungary, Italy, Russia Overview:  The absence of negative developments surrounding Omicron over the weekend appears to be helping markets stabilize today after the dramatic moves at the end of last week.  Asia Pacific equities traded heavily, and among the large markets, only South Korea and Australia escaped unscathed today.  Europe's Stoxx 600 is trading higher, led by energy, financials, and materials.  US futures are narrowly mixed.  Similarly, Asia Pacific bonds played a little catch-up with the large Treasury rally ahead of the weekend.  The US 10-year had approached 1.30% but is now up almost four basis points to almost 1.39%.  European yields are also a little firmer, though Italian bonds are outperforming after the pre-weekend credit upgrade by Fitch. The dollar is mixed.  The yen and Swiss franc are the heaviest, while the Scandis lead the advancers.  Among the emerging market currencies, most liquid and freely accessible currencies are higher, while India, Indonesia, and Turkey are trading lower.  The JP Morgan Emerging Market Currency Index has a four-week drop in tow and is starting the new week with a small gain.  Gold initially moved higher but is now little changed.  Iron ore and copper remain firm.  January WTI is trading firmly within the pre-weekend range, while natural gas, which collapsed by 24% in the US last week, extended its sell-off today.  European natural gas (Dutch benchmark) is trading lower after rising for the past five weeks.   Asia Pacific As tipped by Chinese Premier Li last week, the PBOC cut reserve requirement by 0.5%.  This frees up an estimated CNY1.2 trillion.  Many market participants had anticipated the timing to help banks pay back borrowing from the Medium-Term Lending Facility.  Banks owe about CNY950 bln on December 15 and another CNY500 bln on January 15.   Separately, several property developers have debt serving payments due and Evergrande is at the end of a grace period today.  Lastly, the US and a few other countries are expected to announce a diplomatic boycott of the Winter Olympics.  This is seen as largely symbolic as few diplomats were going to attend due to the severe quarantine imposed by Chinese officials.   China needs bargaining leverage if it is going to influence US policy.  It might come from an unexpected source.   While recent press reports focused on China's attempt to project its power into Africa, they have missed a potentially more impactful development.  Consider the Caribbean, which the US often acts as if it is theirs.  Barbados became a constitutional republic last week, though it is still a member of the UK Commonwealth.  The left-of-center government is friendly toward Beijing.  Under the Belt Road Initiative, Barbados and Jamaica have received several billion dollars from China.  Moreover, a recent US State Department report found that the two countries have voted against the US around 75% of the time at the UN last year.   This week, the regional highlights include the Reserve Bank of Australia (outcome first thing tomorrow in Wellington) and the Reserve Bank of India (December 8).  The RBA may revise up its economic outlook, yet, it is likely to continue to push against market expectations for an early hike.  The derivatives market appears to have the first hike priced in for late next summer.    India is expected to be on hold until early next year but could surprise with a hike.  China is expected to report trade figures tomorrow and the November CPI and PPI on Wednesday.  Lending figures may be released before the weekend.  Japan's highlights include October labor earnings and household spending tomorrow, the current account, and the final Q3 GDP on Wednesday.   The dollar's range against the yen on November 30 (~JPY112.55-JPY113.90) remains dominant.  It has not traded outside of that range since then.  The rise in US yields and equities has helped the dollar regain a toehold above JPY113.00.  The pre-weekend high was near JPY113.60, which might be too far today.  The Australian dollar traded below $0.7000 before the weekend and again today, but the selling pressure abated, and the Aussie has traded to about $0.7040. A band of resistance from $0.7040 to $0.7060 may be sufficient to cap it today.   The dollar has been in essentially the same range against the Chinese yuan for three sessions (~CNY6.3670-CNY6.3770).  If the dollar cannot get back above CNY6.38, a new and lower range will appear to be established.  The PBOC set the dollar's reference rate at CNY6.3702.  The market (Bloomberg median) had projected CNY6.3690.   Europe Germany's new government will take office in the middle of the week.  It has three pressing challenges.  First is the surge in Covid, even before the Omicron variant was detected.  Second, the economy is weak.  Last week's final PMI reading picked up some deterioration since the flash report and the 0.2 gain in the composite PMI more than 10.0 point fall in the previous three months. Third, today Germany reported dreadful factory orders.  The market had expected a slight pullback after the 1.3% gain in September.  The good news is that the September series was revised to a 1.8% gain.  However, this is more than offset by the 6.9% plummet in October orders.  If there is a silver lining here, it is that domestic orders rose 3.4% after falling in August and September.  Foreign orders plunged 13.1%, and orders from the eurozone fell by 3.2% (after falling 6.6% in September).  Orders outside the euro area collapsed by 18.1%.  The sharp drop in factory orders warns of downside risk to tomorrow's industrial production report.  Industrial output fell by 3.5% in August and 1.1% in September. Before today's report, economists were looking for a 1% gain.  Germany also reports the December ZEW survey tomorrow. Again, sentiment is expected to have deteriorated.  The third issue is Russia.  Reports suggest the US has persuaded Europe that Russia is positioned to invade Ukraine early next year.  US intelligence assessment sees Russia planning a multifront offensive.  Putin and Biden are to talk tomorrow.  Meanwhile, Putin makes his first foreign visit today in six months.  He is in India.  India is buying an estimated $5 bln of Russian weapons, including the S-400 anti-aircraft system that Turkey purchased to the dismay of Washington, which banned it from the F-35 fighter jet program.  India is a member of the Quad (with the US, Japan, and Australia), a bulwark against China.  A Russian official was quoted in the press claiming India sent a strong message to the US that it would not tolerate sanctions against it.  The regional alliances are blurry, to say the least. The US maintains ties with Pakistan.  India has had border skirmishes with China.  Russia and China have joint military exercises.   Before the weekend, Fitch upgraded Itay's credit rating one notch to BBB.  It cited the high vaccination rate, increased public and private spending, and confidence in the Draghi-led government's ability to spend the 200 bln euro funds from the EC prudently.  Recall that last week's composite PMI rose to 57.6 to snap a two-month decline.  The market (Bloomberg median) sees the Italian economy as one of the strongest in Europe this year, expanding around 6.3%.  The IMF sees it at 5.8%. The euro has been confined to about a quarter-cent range on both sides of $1.1300.  It is within the pre-weekend range (~$1.1265-$1.1335).  It was offered in Asia and turned better bid in the European morning.  Still, the consolidative tone is likely to continue through the North American session.  A move above the 20-day moving average (~$1.1335), which has not occurred for over a month, would help lift the technical tone.  Sterling tested $1.3200 before the weekend, and it held.  The steadier tone today saw it test the $1.3265 area.  It will likely remain in its trough today, though a move above the $1.3280-$1.3300 area would be constructive.   America Today's US data includes the "final" look at Q3 productivity and unit labor costs.  These are derived from the GDP and are typically not market-movers.  The US also reported that the October trade balance and improvement have been tipped by the advance merchandise trade report.  October consumer credit is due late in the session, and another hefty rise is expected ($25 bln after nearly $30 bln in September.  Consumer credit has risen by an average of $20.3 bln this year.  It fell last year and averaged $15.3 bln in the first nine months of 2019.  No Fed officials speak this week, and the economic highlight is the November CPI report at the end of the week.   Canada reports October trade figures and IVEY survey tomorrow.  The highlight of the week is the Bank of Canada decision on Wednesday.  It is not expected to do anything, but officials will likely be more confident in the economic recovery, especially after the very strong jobs report before the weekend.  The Canadian dollar's challenge is that the market has five hikes already discounted for the next 12 months.  Mexico reports November vehicle production and exports today.  The economic highlights come in the second half of the week.  November CPI on Thursday is expected to see the headline rate rise above 7%.  Last month alone, consumer prices are projected to have risen by 1%.  On Friday, Mexico is expected to report that industrial output rose by 0.9% in October after falling 1.4% in September.  Brazil reports its vehicle production and exports today and October retail sales on Thursday before the central bank meeting.  A 150 bp increase in the Selic rate, the second such move in a row, has been tipped and will put the key rate at 9.25%.  Ahead of the weekend, the IPCA measure of inflation is due.  It is expected to have ticked up closer to 11% (from 10.67%).  Lastly, we note that Peru is expected to deliver another 50 bp increase to its reference rate on Thursday, which would lift it to 2.5%.   The US dollar posted an outside up day against the Canadian dollar ahead of the weekend.  The risk-off mood overwhelmed the positive implications of the strong jobs data.  There has been no follow-through selling of the Canadian dollar today.  The pre-weekend US dollar low near CAD1.2745 is key.  Last Wednesday's range remains intact for the greenback against the Mexican peso (~MXN21.1180-MXN21.5150).  So far today, it has been confined to the pre-weekend range.   Initial support is seen near MXN21.16.  The cap around MXN21.50 looks solid.  Meanwhile, the US dollar closed above BRL5.60 for six consecutive sessions coming into today.   Disclaimer
Awaiting US CPI And Speaking Of Disney and Uber. SEK And PLN As Central Banks Moves

COT: Specs exit commodities on Omicron and Fed worries

Ole Hansen Ole Hansen 06.12.2021 12:33
Commodities 2021-12-06 10:50 Summary:  Futures positions and changes made by hedge funds across commodities, forex and financials up until last Tuesday, November 30. A week that encapsulated the markets very nervous reaction to the Omicron virus news as well as Jerome Powell's increased focus on combatting inflation. While global stocks and US long end yields dropped, a 7% correction in the Bloomberg commodity index helped trigger the biggest and most widespread hedge fund exodus since February 2020. Saxo Bank publishes weekly Commitment of Traders reports (COT) covering leveraged fund positions in commodities, bonds and stock index futures. For IMM currency futures and the VIX, we use the broader measure called non-commercial. Link to latest report This summary highlights futures positions and changes made by hedge funds across commodities, forex and financials up until last Tuesday, November 30. The reporting week encapsulated the markets very nervous reaction to the Omicron virus news as well as Jerome Powell confirming inflation is no longer being transitory. His comments to the Senate banking committee raised expectations for faster tapering with the first full 0.25% rate hike now priced in for July next year. The US yield curve flattened considerably with virus related safe-haven demand driving down the yield on 10-year US treasury notes by 22 basis point. Global stocks slumped with the VIX jumping 8%. Hardest hit, however was the commodity sector after the Bloomberg commodity index slumped by 7%, thereby triggering the biggest and most widespread hedge fund exodus since February 2020. Commodities Hedge funds responded to heightened growth and demand concerns related to the omicron virus, and the potential faster pace of US tapering, by cutting their net long across 24 major commodity futures by 17% to a 15-month low at 1.8 million lots. This the biggest one-week reduction since the first round of Covid-19 panic in February last year was triggered by net selling of all but three livestock contracts. Energy: Hardest hit was the energy sector where renewed demand concerns sent the prices of WTI and Brent down by more than 15%. In response to this, hedge funds accelerated their pace of futures selling with the combined net long slumping by 90k lots to a one-year low at 425k lots. The loss of momentum following the late October peak has driven an eight-week exodus out of oil contracts, culminating last week, and during this time the net length has seen a 35% or 224k lots reduction. Potentially setting the market up for a strong speculative driven recovery once the technical and fundamental outlook turns more friendly.Latest: Crude oil (OILUKFEB22 & OILUSJAN21) trades higher following its longest stretch of weekly declines since 2018. Today’s rise apart from a general positive risk sentiment in Asia has been supported by Saudi Arabia’s decision to hike th