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🟨 RECESSION? - TIGHTER CREDIT CONDITIONSFED CHAIRMAN POWELL'S STATEMENT 🎙️ Chairman Powell remains flexible regarding future rate hikes, emphasizing that decisions will be taken on a meeting-by-meeting basis. Notably, the removal of the word "anticipates" indicates a decrease in urgency for additional rate increases. Furthermore, the absence of the phrase "sufficiently restrictive" suggests that current policy has reached the desired level. LENDING AND CREDIT CONDITIONS 💳 The Federal Reserve is closely monitoring lending and credit conditions as tighter credit may replace some of the rate hikes that could have been necessary. The current approach can be described as a "hope and pray" policy, where the Fed relies on falling inflation and tighter credit conditions to achieve a sufficiently restrictive stance, while hoping no other issues arise. POTENTIAL RECESSION ON THE HORIZON? 📉 Tighter credit conditions might lead to a recession. However, it is essential to determine how much of this possibility has already been factored into the market.
FRED:DRTSCILMShort
by TintinTrading
Quality is back in focus, amidst the banking turmoilHistory never repeats itself, but it often does rhyme. The recent collapse of Silicon Valley Bank (SVB) and Signature Bank in the US and the forced takeover of Credit Suisse by rival UBS have triggered concerns of contagion across the global financial system. The current stress in the banking sector is reminiscent of the 2008 financial crisis. However, unlike the 2008 financial crisis, uncertainty is not centred on the quality of assets on bank balance sheets but instead on the potential for deposit flight. Tough ride for Banks ahead US regional banks have witnessed significant deposit outflows which, combined with unrealised losses on their security holdings, have seen banks consuming their liquid assets as a very fast pace. In turn, sentiment towards European banks has deteriorated. This is evident in the widening of debt risk premia, making it more expensive for banks to fund their operations. It’s important to note that banks were already tightening lending standards prior to recent events. So, lending conditions are likely to tighten further as deposits shrink at small and regional US banks and regulators respond to the new risk environment. The turn of events in the banking sector have led to higher uncertainty which is likely to be reflected in higher volatility in credit markets. So far, the impact on other sectors has been fairly contained, but a further deterioration of bank credit quality could drag other industries lower as well. We are still in the early innings, so the range of repercussions remains wide. Traditional defensive sectors offer more protection in prior weakening credit cycles On analysing the impact of a further rise (by 200Bps) in credit spreads on US and European debt (highlighted by the dark blue bars) we found that not all equity sectors will be impacted equally on the downside. In fact, traditional defensive sectors like utilities, consumer staples and healthcare could offer some protection in comparison to cyclical sectors such as banks, energy and real estate. Since March 8, 2023, the steepest price corrections have been centred around the banking and commodity related sectors such as energy and materials, while technology, healthcare, consumer staples and utilities have managed to escape the rout illustrated by the grey bars. The historical sector performance (in the light blue bars) during Eurozone debt crisis (the second half of 2011), confirm a similar pattern whereby the traditional defensive sectors tend to shield investors when spreads widen. Europe earnings hold forth despite the banking turmoil Interestingly despite the recent banking turmoil, the global earnings revision ratio continued to show resilience in March. Europe stood out as the only region with more upgrades than downgrades. Earnings remain the key driver of equity market performance. Europe has clearly gotten off to a strong start and it will be interesting to see if European earnings expectations can hold up as credit conditions deteriorate. Within Europe we analysed the sectors that were most exposed to the banking stress. By observing the beta of the sectors in the EuroStoxx 600 Index relative to regional banking spreads, we found that real estate, financials, industrials, materials, and energy were most exposed on the downside to the high banking stress. On the contrary, consumer staples, information technology, utilities and healthcare showed more resilience. When the going gets tough, quality gets going Investors should focus on companies with strong balance sheets which we often tend to find within the quality factor. Quality stocks, characterised by a higher earnings yield compared to its dividend yield alongside higher return on equity (ROE) and return on assets (ROA), would offer a higher margin of safety in periods of higher volatility. Conclusion While central banks in US, Europe and UK continued their hawkish stance at their most recent policy-setting meetings, the evolving banking crisis could alter the path for monetary policy ahead. Chair Powell conceded that tightening financial conditions could have the same impact as another quarter point rate hike or more from the Fed. Given the rising concerns on the risk of banking industry contagion, shrinking corporate profits and central bank policy ahead we continue to believe that positioning your equity exposure towards the quality factor would be prudent.
FRED:BAMLH0A3HYC
by aneekaguptaWTE
Ways to solve our overtrading issuesHello, I have an overtrading problem. There are solutions, they are just not on the internet on trading websites. They come up with the same useless nonsense you'd expect "take some time off the screen", "don't try to get rich quick", "defeat your overtrading", "get motivated get a plan and force yourself to stick to it", "be patient" 🤦‍♂️. What is next? "Brush your teeth be a good boy and do your homework"? Or even better "do not overtrade". My brain doesn't care that "less is more" my brain is thirsty. Really there is no such thing as "placing the threshold here". There is not such thing as "not (under/)overtrading". You always either overtrade or undertrade. If we want to compare this to drawing a line, or in other words placing a barrier, it would be like placing a barrier but not 2 or 3D, there would be 20 dimensions, and all opaque, and ever changing, and you do not know which one is more important which one is less. Good luck learning by heart how to do it in a book. Of the past 5 months 4 of those had nearly no good setups for me, it was very hard. I can't just do nothing. So I took really terrible setups. Way too many. Ok let's skip the excuses. Even if I am not trying to go only for the ideal stuff at all, I've been taking way too much, I went through my logbook and I would say I took 2-3 times too many. We want to compete, we want to play the game. Most people, and most people this idea is targeted to, are at an intermediate level to advanced. Beginners that do not even have an edge well overtrading is not really hurting them is it. They do not give back profits, there are no actual profits to give back! A word for beginners. Since we're going to end up investing anyway aren't we? Well perhaps they might as well start with managing a simple low risk portfolio. Build a solid base. Might as well start with the easiest part. Least difficult. And might help avoid overtrading from the start. If I could start over I would not hesitate. Once an intermediate has his niche, a few currencies, his favorite websites & tools, and an edge, well that just won't do will it. There is no resting on laurels until we really have plenty of knowledge, strategies, instruments we can handle. Constantly look for more edges. And progressively widen the business with more currencies. Can also add commodities. With time the base grows, like a strategy game. Might want to test the new strats on a separate low stakes accounts while running the core one on the real account. A player with several edges, and a wide array of instruments, as well as a couple years experience, is what I'd call advanced. At some point if we try adding even more instruments or strategies we'll just mess it up, it takes enough time to manage our vast business already. And after several years the strategies sort of come without looking for them anyway. Plus the markets do not have infinity opportunities to offer. Just keep doing research, improve your understanding of the market, keeping updated on everything... A serious advanced trader will be busy, no worries here. The issue is there are not enough opportunities. We want to compete, we are eager to fight. If nothing happens in the market, price is just random as far as we know (only retail day gamblers will say it's not and we know how well they perform), what to do? Well there are some tricks: - First use and abuse adding to winners. If you're going to overtrade anyway, might as well do it with a winner than some choppy garbage. Not ideal, use this in last resort. Adding to winners should probably have some rules to it. Better to have bigger winners than more losers. - Go manage a portfolio on the side, invest a little / position trade. And when the urge to take a trade comes, find a good winning investment and add to it. I would not start dreaming of adding and adding and adding to Forex, but with stocks, sure. Buying an additional S&P call is like taking a new trade. Better this than gambling on 2019 EURUSD. - If you have a severe addiction and just can't help it, well... I guess in last resort there is still the option of going day gamble on the side, but this should not take your attention from your main business. This can easily eat up time & focus, and mess up results without adding anything positive.
Education
by MrRenev
1
AUDUSD H4You look this Cross . We have a double Top with conditions. The condition is that the maximun 2 ... yes did a maximum but close down the maximum number 1. This pattern is mean to go Short. Now we have a support on 0.80410 . If the price broken the support and after touch a new time 0.80410 ( new resistance ) .... And you dont forget the MA 50 that will be broken.You can go Short. Open at 0.80410 with Stop Loss at 0.81122 and Target Price at 0.79590. Can to be ???? We hope. by Ulisse010 from Thailand with love
Short
by GianfrancoFidalis
13
BTCUSD DAILY CHART BITCOIN MARKET CONDITIONSBTCUSD pair is behaving as expected. If you follow my calls, you can notice consistent projections. Resistance zone was projected three weeks ago, and is holding tight. Support was barely tested 9/15 and we should expect another test if the market closes under 3750 today or under 3850 tomorrow. In this ocation I spot a downtrend continuation pattern, that can only be stopped by a daily close over 4250. Also, Stoch RSI about to cross over 90 signals overbought conditions This short idea would increase your BTC holdings by 17%, my last short idea increased BTC holdings by 34%, that is +56% BTC profit on a falling market. WNZ Get live updates and analysis of the cryptocurrency market: t.me Take a look at the big picture forecast here:
BITFINEX:BTCUSDShort
by WaineNZeddmo
LTCBTC 1H CHART LITECOIN MARKET CONDITIONSBearish triangle pattern rejected by upper support zone and Fib Retracement at 0.5 just before completion. RSI bullish divergence could lead to Bullish trend or at least Range conditions Between 0.015 and 0.017. Entries by SB above 0.016 should be safe with inmediate target at 0.017. A close above 0.017 will possibly establish a double bottom pattern taking market to 0.0185. WNZ Get live updates and analysis of the cryptocurrency market: t.me
Long
by WaineNZeddmo
OMGBTC 4H CHART OMG MARKET CONDITIONSA week after our last analysis, OMGBTC pair, is still in range and overbought, however, rising triangle still formed, with possible entry levels on the chart. A break bellow triangle should trigger Stop-loss and could lead to next resisatance zone near 0.00129 IMO, it is more likely a break bellow support rather than a break over resistance because of RSI bearish divergence. Market will tell. WNZ Get live updates and analysis of the cryptocurrency market: t.me
by WaineNZeddmo
5