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EUR/USD Daily Chart Analysis For Week of Dec 1, 2023Technical Analysis and Outlook: After completing our designated Inner Currency Rally 1.099 target this week's session, the Eurodollar performed as flagged in our EUR/USD Daily Chart Analysis for Nov 24 by dropping it to a primary pivotal squeeze to Mean Sup 1.087. The current price action suggests a dead-cat bounce to Mean Res 1.092 with a potential rise to retest the completed Inner Currency Rally 1.099 with a follow-through squeeze.
by TradeSelecter
$US10Y -Important Close *Weekly- US 10 Years Government Bonds(Yield) TVC:US10Y experienced a pull back in the fourth week of August, after having rallied previously for five (5) consecutive Weeks, printing only green *W candlesticks. The Weekly pullback retraced to a Weekly price level of 4.09% for $U10Y (key level marked on dashed green line) We can clearly see TVC:DXY being dragged higher as well during Yields uptrend (indicating a weak and fearful state of other Major Financial Markets). Seen on Weekly Timeframe, we can easily spot a triangle pattern being formed on $US10Y. Triangle Pattern's Apex can be stretched as far as 238Days from where it currently is. In case Pattern is violated to the downside, a considerable Support-Resistance zone lays just underneath dating back ever since 1912. Below that would be the catching up dynamic support of 200EMA on the Weekly, as well the support-trendline coming from Pandemic Lows. TVC:US10Y uptrend resumption seems very likely from here, especially after bouncing at the key level marked on dashed green line. What is more important to be monitored is the correlation of TVC:DXY going higher in the same time with TVC:US10Y . That would be a nightmare scenario for an investor, and a golden opportunity for those who are on the sidelines and waiting to be heavily invested in diversification .
TVC:US10Y
by Mr_J__fx
S&P 500 Daily Chart Analysis For Week of Nov 24, 2023Technical Analysis and Outlook: In this week's abbreviated trading session, the S&P 500 index has again shown a constant upward trend. Current price action exhibits a solid indication to hit our completed Inner Index Rally 4590 on July 27, 2023, and move higher to Inner Index Rally #1 4647 and #2 4713, respectively. However, it's important to note that the market may experience transient pullbacks at this level, causing severe drawdown. Once the market successfully achieves these targets, the subsequent squeezes will likely be significant and turbulent. Traders and investors should, therefore, be cautious and watchful during this phase, as it could considerably impact their trading and investment approach.
SP:SPX
by TradeSelecter
EUR/USD Daily Chart Analysis For Week of Nov 24, 2023Technical Analysis and Outlook: After a pullback, the Eurodollar aims for our designated target, Inner Currency Rally 1.099. This comes after the currency repeatedly hit strong Key Res 1.092 in this week's price action. This suggests that the Eurodollar may experience an imminent rally to Inner Currency Rally 1.099 in this upcoming session, potentially bringing it to a primary pivotal squeeze with an extension all the way to Mean Sup 1.087.
by TradeSelecter
Bitcoin(BTC/USD) Daily Chart Analysis For Week of Nov 24, 2023Technical Analysis and Outlook: Like last week, Bitcoin's price has remained within the 37800 Inner Coin Rally range and the robust 35600 Mean Support level. This indicates that the market has been relatively stable, with neither bulls nor bears having a strong grip on it. On the upside, there is potential for intermediate upward momentum in Bitcoin's price, which could lead to a breakout above the current Inner Coin Rally of 37800. If this occurs, the next price target would be at the Outer Coin Rally #1 of 39200, followed by #2 of 41200 and #3 of 43700. This suggests that there is significant room for expansion in the near future, which could attract more investors/traders to the market. On the downside, the Mean Support level of 35600 is expected to support Bitcoin's price strongly. If the price were to drop, it would likely find support at this level. Overall, the market is consolidating, with prices trading within a relatively narrow two-thousand-dollar range.
BITSTAMP:BTCUSD
by TradeSelecter
US & Headline CPI - October Release/Overview US CPI US Headline and Core CPI for October both came in lower than expected (decrease). US Headline CPI: YoY – Actual 3.24% / Exp. 3.3% / Prev. 3.7% (Green on chart) US Core CPI: YoY – Actual 4.02% / Exp. 4.2% / Prev. 4.13% (Blue on chart) The chart below illustrates the direction of the current YoY down trend for both Headline and Core CPI however we are still not at the historical moderate levels of inflation desired. You can see these moderate levels of inflation between 1 – 3% from 2002 – 2020 below. Nice to see the Core CPI come down, almost down, into the moderate historical averages PUKA
ECONOMICS:USIRYY
by PukaCharts
Economic Lessons From 2023We entered 2023 with a pessimistic consensus outlook for U.S. economic performance and for how rapidly inflation might recede. As it happened, there was no recession, and personal consumption posted sustained strength. Inflation, except shelter, declined dramatically from its 2022 peak. The big economic driver in 2023 was job growth. Jobs had recovered all their pandemic losses by mid-2022 and continued to post strong growth in 2023, partly due to many people returning to the labor force. When the economy is adding jobs, people are willing to spend money. The key for real GDP in 2023 was the strong job growth that led to robust personal consumption spending. For 2024, labor force growth and job growth are anticipated by many to slow down from the unexpectedly strong pace of 2023, leading to slower real GDP growth in 2024. And there is still plenty of debate about whether a slowdown in 2024 could turn into a recession. Followers of the inverted yield curve will point out that it was only in Q4 2023 that the yield curve decisively inverted (meaning short-term rates are higher than long-term yields). It is often cited that it takes 12 to 18 months after a yield curve inversion for a recession to commence. Using that math, Q2 2024 would be the time for economic weakness to appear based on this theory. Only time will tell. The rapid pace of inflation receding in the first half of 2023 was a very pleasant surprise. Indeed, inflation is coming under control by virtually every measure except one: shelter. The calculation of shelter inflation is highly controversial for its use of owners’ equivalent rent, which assumes the homeowner rents his house to himself and receives the income. This is an economic fiction that many argue dramatically distorts headline CPI, given that owners’ equivalent rent is 25% of the price index. Once one removes owners’ equivalent rent from the inflation calculation, inflation is only 2%, and one can better appreciate why the Federal Reserve has chosen to pause its rate hikes, even as it keeps its options open to raise rates if inflation were to unexpectedly rise again. The bottom line is that monetary policy reached a restrictive stance in late 2022 and was tightened a little more in 2023. For a data dependent Fed, inflation and jobs data for 2024 will guide us as to what might happen next. Good numbers on inflation or a recession might mean rate cuts. Otherwise, the Fed might just keep rates higher for longer. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com By Bluford Putnam, Managing Director & Chief Economist, CME Group *Various CME Group affiliates are regulated entities with corresponding obligations and rights pursuant to financial services regulations in a number of jurisdictions. Further details of CME Group's regulatory status and full disclaimer of liability in accordance with applicable law are available below. **All examples in this report are hypothetical interpretations of situations and are used for explanation purposes only. The views in this report reflect solely those of the author and not necessarily those of CME Group or its affiliated institutions. This report and the information herein should not be considered investment advice or the results of actual market experience.
CME_MINI:ES1!Education
by CME_Group
12
Japan Inflation Overview JAPAN CPI Japan Headline and Core CPI for Sept both came in lower than expected. Japan Headline CPI: YoY – Actual 3.0% / Exp. 3.2% / Prev. 3.2% (green on chart) Japan Core CPI: YoY – Actual 4.2% / Exp. 4.3% / Prev. 4.3% (blue on chart) The chart below illustrates that Core CPI appears to be plateauing with Headline CPI decreasing from 4.3% to 3% since Jan 2023. Similar to the Eurozone chart you can we are long way from the moderate levels of inflation between -1.5 – 1.5% from 2015 – 2020 below. Japan’s economy contracted by 2.1 per cent during the third quarter of 2023, following an expansion in the previous two quarters. Analysts fear the country might slip into a recession. The contraction was sparked by a combination of sticky core inflation holding close to its 4.2 – 4.3% ceiling since May 2023, the slowing of exports, and low pay rises that appear to have led to weak domestic consumption. “Given the absence of a growth engine it wouldn’t surprise me if the Japanese economy contracted again in the current quarter. The risk of Japan falling into recession cannot be ruled out.” - Takeshi Minami – Chief Economist Norinchuckin Research Institute
ECONOMICS:JPCCPI
by PukaCharts
S&P 500 Daily Chart Analysis For Week of Nov 17, 2023Technical Analysis and Outlook: The S&P 500 index has been showing a consistent upward trend for a while now, and it has reached our designated Mean Resistance level of 4515 in this week's price action. This price level indicates a strong indication of retesting our completed Inner Index Rally 4590 on July 27, 2023. However, it's important to note that the market may experience a temporary pullback at this level, causing it to fall back to Mean Support of 4487. This transient retracement is essential for gathering momentum for the next rally phase. If the market successfully retests the completed Inner Index Rally, the subsequent pullback will likely be significant and turbulent. This means traders and investors should be cautious and watchful during this phase, as it could considerably impact their trading and investment approach.
SP:SPX
by TradeSelecter
3
EUR/USD Daily Chart Analysis For Week of Nov 17, 2023Technical Analysis and Outlook: The Eurodollar has experienced a notable recovery after successfully achieving the designated target of Inner Currency Rally 1.077. This means the Euro has bounced back significantly and shows positive momentum in the currency market. However, as the Eurodollar approaches the next selected mark, Key Res 1.092, it may encounter significant resistance. The price of this resistance level is essential, suggesting whether the Eurodollar will likely fall further. Furthermore, if the Eurodollar fails to surpass the Key Res 1.092 level, it could continue its downward momentum and reach the Mean Support level of 1.084. This crucial support level will offer a substantial price platform against further downward movements. Therefore, it is also essential to keep an eye on the Eurodollar's performance at this level.
by TradeSelecter
Bitcoin(BTC/USD) Daily Chart Analysis For Week of Nov 17, 2023Technical Analysis and Outlook: Currently, the price of Bitcoin has been contained within our completed Inner Coin Rally of 37800 and vital Mean Sup of 35600. This has resulted in a trading tunnel that is particularly beneficial for those experienced in active trading. However, it is worth noting that the price is currently dropping towards the Mean Sup of 35600, and there could be a possibility of a further correction to the Mean Sup of 33900. On the upside side, Bitcoin's price has the potential to reach the Next #1 Outer Coin Rally of 39200, #2 41200, and #3 43700. This indicates a prospect for upward momentum in the near future. Observing these price-action developments closely is crucial, as they could allow investors/traders to profit from the market. Understanding these price fluctuations and knowing when to act can be extremely beneficial in maximizing returns.
BITSTAMP:BTCUSD
by TradeSelecter
Understanding GDP Growth: A Key Indicator of Economic HealthIntroduction Gross Domestic Product (GDP) growth is a crucial economic indicator that provides insight into the overall health and performance of a country's economy. As a comprehensive measure of a nation's economic activity, GDP growth reflects the value of all goods and services produced within a country over a specific period. In this article, we will explore the significance of GDP growth, its components, and the impact it has on various aspects of a nation's well-being. Definition and Components of GDP GDP is the total value of all goods and services produced within a country's borders in a given time frame. It is commonly calculated quarterly and annually. There are three main ways to measure GDP: the production approach, the income approach, and the expenditure approach. Each approach provides a unique perspective on economic activity. Production Approach: This method calculates GDP by adding up all the value-added at each stage of production. It includes the value of intermediate goods and services to avoid double counting. Income Approach: GDP can also be measured by summing up all the incomes earned by individuals and businesses within a country, including wages, profits, and taxes minus subsidies. Expenditure Approach: This approach calculates GDP by summing up all the expenditures made in the economy. It includes consumption, investment, government spending, and net exports (exports minus imports). Importance Here are some of the primary reasons why GDP growth is considered important: Economic Health - GDP growth is a fundamental measure of a country's economic health. A positive growth rate indicates that the economy is expanding, producing more goods and services over time. This growth is essential for creating jobs, increasing incomes, and improving overall living standards. Job Creation - A growing economy often leads to increased employment opportunities. As businesses expand to meet rising demand for goods and services, they hire more workers, reducing unemployment rates and contributing to a more robust labor market. Income Generation - GDP growth is linked to the overall income generated within a country. As the economy expands, incomes generally rise, providing individuals and households with more financial resources. This, in turn, contributes to an improvement in the standard of living. Investment Climate - Investors and businesses often use GDP growth as a critical factor in assessing the attractiveness of a country for investment. A growing economy suggests potential opportunities for businesses to thrive, encouraging both domestic and foreign investments. Government Policy - Policymakers use GDP growth data to formulate economic policies. High GDP growth rates may lead to expansionary policies aimed at sustaining economic momentum, while low or negative growth rates may prompt policymakers to adopt measures to stimulate economic activity. Consumer and Business Confidence - Positive GDP growth contributes to increased confidence among consumers and businesses. When people perceive a growing economy, they are more likely to spend money, and businesses are more inclined to invest and expand. International Competitiveness - A country with a strong and growing economy is often viewed as more competitive on the global stage. A robust GDP growth rate enhances a nation's economic influence and can attract international trade and investment. Government Revenues - Higher GDP growth rates can lead to increased tax revenues for the government. This additional income can be used to fund public services, infrastructure projects, and social programs, contributing to the overall development of the nation. Debt Management - Economic growth can help manage a country's debt burden. A growing economy typically generates more revenue, making it easier for the government to service its debt without relying excessively on borrowing. Poverty Reduction - Sustainable GDP growth is often associated with poverty reduction. As the economy expands, opportunities for employment and income generation increase, helping to lift people out of poverty. Conclusion In conclusion, Gross Domestic Product (GDP) growth stands as a cornerstone in understanding and evaluating a nation's economic well-being. Through its comprehensive measurement of all goods and services produced within a country, GDP growth provides valuable insights into economic health, job creation, income generation, and various other facets that collectively contribute to the overall prosperity of a nation. The three approaches to measuring GDP—production, income, and expenditure—offer distinct perspectives, ensuring a holistic understanding of economic activity. The importance of GDP growth cannot be overstated, as it serves as a fundamental gauge of a country's economic trajectory and influences crucial decision-making processes at both the individual and policy levels. The positive correlation between GDP growth and job creation underscores the role of a thriving economy in fostering employment opportunities and contributing to a robust labor market. Additionally, the impact on income generation translates into an improved standard of living for individuals and households, reflecting the tangible benefits of economic expansion. Investors and businesses keenly observe GDP growth as a key indicator when evaluating the potential for investment. Government policymakers, armed with GDP data, craft strategies to either sustain economic momentum or stimulate activity, underscoring the pivotal role GDP growth plays in shaping economic policies. The ripple effects of GDP growth extend to consumer and business confidence, international competitiveness, government revenues, and effective debt management. A growing economy not only instills confidence but also attracts global trade and investment, positioning the nation favorably on the international stage. Perhaps most importantly, sustainable GDP growth is intricately linked to poverty reduction. As the economy expands, opportunities for employment and income generation increase, contributing to the uplifting of individuals and communities from poverty. In essence, the study of GDP growth goes beyond mere economic statistics; it serves as a compass guiding nations towards prosperity, inclusive development, and an improved quality of life for their citizens. Recognizing the multi-dimensional impact of GDP growth enables policymakers, businesses, and individuals to make informed decisions that foster long-term economic well-being and societal advancement.
FRED:GDPEducation
by financialflagship
Wholesale Inflation Posts Its Biggest Decline in Over Three YearA powerful one-two combination of data pointing to softening inflation is continuing to support investor sentiment and a strong equity rally with Producer Price data this morning showing weaker-than-expected price increases among wholesalers. The data follows yesterday’s release of the Consumer Price Index, which showed no m/m change. Stocks are also gaining additional support from data this morning depicting declining retail sales, which equity players are perceiving as disinflationary rather than contractionary. Markets are bifurcated today, however, with yields and the dollar higher, as bond and currency traders pare back some of yesterday’s bonanza. Consumers Rein in Spending The U.S. Commerce Department reported this morning that retail sales declined sharply in October, as consumer spending slowed from the third quarter’s blistering pace. The resumption of student loan repayments definitely had an adverse impact, as a portion of wages were allocated to debt service rather than consumption. Retail sales declined 0.1% month-over-month (m/m) in October, the first decline since March. October’s figure arrived better than the -0.3% projection, however, while slipping from September’s 0.9% growth rate. Retail sales excluding automobiles and excluding automobiles and gasoline rose 0.1% on both fronts, worse than the 0.8% figures from September. Sales Contraction is Broad Based Seven out of thirteen categories contracted during the period, with the following categories experiencing the noted m/m declines: Furniture showrooms, 2% Miscellaneous stores, 1.7% Automobile dealerships, 1% Sporting goods retailers, 0.8% Building materials shops, gasoline stations and general merchandise also had declines but of lesser degrees. Gains were led by health and personal retailers, with sales increasing 1.1%. Other categories produced the following increases: Grocery stores, 0.6% Electronics and appliances retailers, 0.6% Dining establishments, 0.3% Ecommerce, 0.2% The apparel category was flat. Wholesalers Hit with Price Declines Wholesale inflation cratered at its fastest rate since the depths of the pandemic in April 2020. October’s Producer Price Index (PPI) declined 0.5% m/m, less than projections of a 0.1% increase and September’s 0.4% growth rate. Core PPI, which excludes food and energy, was unchanged and weaker than the 0.3% estimated and the previous month’s 0.2%. On a year-over-year (y/y) basis, headline and core producer prices rose 1.3% and 2.4%, compared to the previous period’s 2.2% and 2.7%. Leading the wholesale price decline were a 6.5% drop in energy products, a 0.7% decline in trade services and a 0.2% contraction in food. Transportation and warehousing wholesale prices rose at a sharp 1.5% rate, meanwhile. Services overall came in unchanged m/m while goods excluding food and energy rose 0.1% during the period. Equities Gain, but Positive Sentiment Eases Optimism sparked by yesterday’s CPI and this morning’s PPI appears to be easing, with stocks off their highs of the day while yields and the dollar have given back a good chunk of Monday’s gains. Still, all major U.S. equity indices are higher, with the small-cap Russell 2000 leading, having gained 0.8% while the Nasdaq Composite, S&P 500 and Dow Jones Industrial indices are higher by 0.3%, 0.3% and 0.2%. Sectoral breadth remains impressive, with all sectors higher while the defensive health care and utilities sectors are 0.1% and 0.4% lower. Leading the sectors are materials and consumer staples, with each gaining 0.6% as technology looks tired from its recent monster run. Indeed, to secure more gains going forward, the market will need to broaden out and begin to exhibit momentum in cyclical and value stocks. The dollar and yields are higher, with the 2- and 10-year Treasury maturities up 8 and 10 basis points (bps) to 4.92% and 4.55% while the greenback’s index is up 22 bps to 104.30. The dollar is gaining relative to the euro, yen and pound sterling while it loses ground versus the franc, yuan and Aussie and Canadian dollars. Crude oil is down 1.3% or $1.02 to $77.14 per barrel in response to the Energy Information Administration reporting a 17-million-barrel inventory increase in the U.S. over two weeks. Buoyant supply, continued concerns about weakening demand and waning worries over a potential escalation of the Middle East crisis are weighing on the commodity’s price. Consumers Cut Spending and Seek Bargains Target’s third-quarter results illustrate how consumers are cutting back on discretionary purchases while results for TJX highlight how consumers are increasingly turning to off-price retailers for low-cost items. At Target, comparable sales, which is derived from stores operating for 12 months or more and online channels, fell 4.9% during the third quarter. It was the second-consecutive quarter of declining same-store sales. On a y/y basis, the company’s revenues dropped from $26.5 billion to $25.4 billion, a 4.3% contraction. The result, however, exceeded the $24.24 billion anticipated by the analyst consensus. On another positive note, the company’s earnings per share (EPS) of $2.10 exceeded the consensus expectation of $1.48 and increased from $1.54 in the year ago quarter. The quarter was impacted by Target aggressively discounting merchandise as it sought to reduce an inventory glut, a strong trend among retailers. Target also attributed its third-quarter earnings growth to improved sales of “high-frequency items” such as groceries and beauty items, the addition of a new line of trendy kitchenware, and other new items. Target also said it has continued to reduce its inventory which as of the end of the third quarter was down 14% y/y. TJX, which operates discount retailers T.J. Maxx, HomeGoods and Marshall’s, raised its full-year guidance and said its third-quarter results benefited from capturing market share as its off-price stores attracted cost-conscious consumers. The company expects to generate a full-year EPS of $3.71 to $3.74, up from its earlier guidance of $3.66 to $3.72. TJX expects same store sales to increase 4% to 5%, an increase from its earlier guidance of 3% to 4%. During the third quarter, its sales revenue of $13.27 billion jumped approximately 9% from the $12.17 billion generated by the company in the year-ago period. Analysts expected $13.09 billion. Its overall same-store sales, furthermore, climbed 6%. TJX also posted an EPS of $1.03, which climbed significantly from $0.91 in the year-ago period. The recent quarter EPS exceeded the analyst consensus expectation of $0.99. In addition to benefiting from shoppers seeking bargains, TJX is also benefiting from its suppliers having excess inventory. The company provides discount prices by acquiring surplus items that retailers are removing from their inventories. Washington Makes Progress of Avoiding Government Shutdown In Washington, the House of Representatives appears to have avoided a government shutdown by passing a plan that will extend government funding until early next year. The measure is expected to be approved by the Senate and was passed by the lower chamber even though, it delays political battles over spending for border security and the Ukraine-Russia War while failing to make budget cuts in other areas of government spending. The House Freedom Caucus opposed the continuing spending resolution because it doesn’t include budget cuts and address border issues. The Balancing Act Today’s weak economic data highlights an important consideration going forward. Is data decelerating slow enough to be supportive of a soft landing, or is activity falling sharply and more consistent with recessionary conditions? The question is of the essence for capital markets as we operate within late-cycle monetary policy tightening, the riskiest juncture. While the former case would be supportive of current earnings estimates, the latter case would certainly point to projections falling from the $240 expected in 2024 for the S&P 500.
SP:SPX
by IBKR
12
S&P 500 Daily Chart Analysis For Week of Nov 10, 2023Technical Analysis and Outlook: The Spooz index pivoted briefly from the completed Inner Index Rally 4375. This transition allowed traders with long positions to exit with prudence. The current momentum is solid and targets a Mean Resistance of 4515. Traders expect this momentum to ultimately lead to a retest of our completed Inner Index Rally 4590 on July 27, 2023. However, it's worth noting that the market can be quite reactive, and sudden fluctuations in either direction may occur. As such, traders should remain vigilant and have a sound strategy in place to deal with unexpected market movements.
SP:SPX
by TradeSelecter
2
EUR/USD Daily Chart Analysis For Week of Nov 10, 2023Technical Analysis and Outlook: The Eurodollar has undergone a notable downtrend movement from our Key Resistance level of 1.075, a significant level of resistance that the currency has been unable to break through. As a result, it is now expected to gradually move towards the Mean Support level of 1.061, which is strategic support for the currency. Furthermore, the Eurodollar may extend its bearish momentum and reach the Mean Support level of 1.056, which is a firm level of support. However, it is worth noting that the currency could rebound toward uncompleted Inner Currency Rally 1.077 and Key Res 1.075, a level of resistance that the Eurodollar tested in this week's trading session. If the currency breaks through these two levels, it could complete the current Inner Currency Rally 1.077 and continue its upward trend.
by TradeSelecter
Bitcoin(BTC/USD) Daily Chart Analysis For Week of Nov 10, 2023Technical Analysis and Outlook: The latest update on Cryptocurrency indicates that it has completed the Inner Coin Rally 37800 and is currently in the correction phase. The correction is expected to take it down to the intermediate target of Mean Sup 35600, but there is also a possibility of the correction extending further to Mean Sup 33900. On the upside, there are two crucial levels that investors/traders should keep a close eye on. These are the Outer Coin Rally 39200 and the Outer Coin Rally 41200. These levels are significant as they can influence the future trend of Cryptocurrency.
BITSTAMP:BTCUSD
by TradeSelecter
Economy: A Social Science Shaped by Human Behavior and HistoryThe world of Forex trading, with its ever-fluctuating currency exchange rates and intricate financial instruments, may seem like a realm dominated by numbers, charts, and algorithms. However, beneath the surface, the Forex market is a vivid testament to the intricate relationship between economics and social behavior. In this idea, we will explore how the economy is a social science at its core, and how historical events have consistently reshaped and influenced economic dynamics. Economics as a Social Science At its essence, economics is not just about money; it studies how societies allocate their limited resources to satisfy their various wants and needs. The behaviors, decisions, and interactions of individuals, groups, and nations inherently influence this process. Economics is, therefore, a social science, as it explores the dynamics of human behavior and the collective choices we make. Historical events, such as wars, pandemics, and technological advancements, have consistently demonstrated the profound impact of social behavior on the economy. Let's delve into some examples to understand this connection better. World Wars and Economic Transformation The two World Wars of the 20th century provide an excellent illustration of how historical events can shape the economy. These catastrophic conflicts forced nations to mobilize their resources and allocate them to the war effort. The result was significant shifts in economic priorities, with governments heavily investing in military production and infrastructure. These investments not only led to economic growth but also spurred technological innovation, such as radar and nuclear energy. Furthermore, the post-war period witnessed the creation of international economic institutions like the Bretton Woods system, which set the stage for a more interconnected global economy. The forex market played a pivotal role in this period by facilitating international trade and currency exchange, reflecting the evolving economic landscape. The 2008 Financial Crisis and Behavioral Economics The 2008 financial crisis, driven by the bursting of the housing bubble and reckless lending practices, revealed the profound impact of human psychology and behavior on financial markets. Behavioral economics, a subfield of economics, studies how psychological biases and cognitive errors influence decision-making. During the crisis, fear, panic, and herd behavior contributed to market volatility, massive losses, and a global recession. Understanding these behavioral aspects is essential for forex traders, as they need to navigate the market's emotional swings and avoid succumbing to the irrational exuberance or fear that can drive price movements. Technological Advances and Financial Innovation The emergence of the internet and electronic trading platforms has revolutionized the forex market, making it more accessible to individual traders worldwide. This technological shift highlights the ongoing impact of social behavior on financial markets. As more people participate in online trading, the collective decisions and sentiments of traders, often amplified through social media, can sway exchange rates in real-time. In summary, the Forex market is not just a financial platform but a reflection of the intricate relationship between economics as a social science and human behavior. Historical events have repeatedly demonstrated how social behavior shapes economic outcomes, whether through the impact of wars, financial crises, or technological advances. To succeed in the Forex market, traders must understand and adapt to the ever-changing landscape influenced by the behaviors and choices of societies, governments, and individuals. Do nothing.
Education
by donothing_lab
6
S&P 500 Daily Chart Analysis For Week of Nov 3, 2023Technical Analysis and Outlook: The stabilized selloff in the bond market in this week's price action sent the index raging upward all the way up to Mean Res 4378 and completing our Inner Index Rally 4375. On the downside, the index will likely go down toward the Mean Sup 4238, followed by a series of price targets marked on the chart. However, due to the reactionary nature of the market, sudden fluctuations in either direction are possible.
SP:SPX
by TradeSelecter
13
🔥 The Number 1 Recession Indicator Signals Great Danger 🚨 The Sahm Rule Recession Indicator (white) is on the rise. Historically, a rise in this indicator has always signaled a recession and a corresponding fall in asset prices. How it's calculated: "The Sahm Rule identifies signals related to the start of a recession when the three-month moving average of the national unemployment rate (U3) rises by 0.50 percentage points or more relative to its low during the previous 12 months." In other words, once unemployment starts to rise quickly, this indicator moves up and a recession is on the horizon. Since it's inception in the 1950's, every time this indicator reaches above 0.3, the trend seems to be irreversible and only reverses back after the recession is "over". See the orange line for the performance of the SP500: it has an inverse relationship with the SAHM indicator. Keep a close eye on this indicator. Seeing how fast it's rising, there's historically a huge probability that the US economy will see a recession somewhere in the next few months. Keep an eye out for bearish price action in stocks and crypto during this time.
FRED:SAHMCURRENTShort
by FieryTrading
30
Why Burry Bet Against the US MarketBurry has frequently expressed his views on Twitter (X), asserting that the market has not made a genuine recovery and is headed for a recession. He believes it's just a matter of time before we witness the ultimate impact. Many individuals consider Burry to be an extreme pessimist, contending that he consistently focuses on the negative aspects. However, in the lead-up to the 2008 market crash, people also criticized him for being overly pessimistic and opposed his ideas. The purpose of this post is to delve into his perspectives and examine some recent information I've been investigating in order to determine whether the market situation is indeed in line with his claims Who is Michael Burry? Michael Burry is a renowned American investor and former hedge fund manager. He gained widespread recognition for accurately predicting the 2008 financial crisis and profiting from it through his hedge fund, Scion Capital. Burry is also known for his contrarian investment style and is a proponent of value investing. His story is prominently featured in Michael Lewis's book, "The Big Short.” Today, we will examine data that reveals the current state of the American market. Through this data, we will learn to understand the reasons behind why the market may be weaker than it appears, despite all the hype and the notion that the American market has "recovered.” What’s Burry Concerns Economic Concerns: Despite positive stock market performance and GDP projections, Burry, along with other notable investors like Warren Buffett, sees potential issues in the global economy. Federal Reserve Actions: Burry and others believe this situation is unsustainable and may lead to economic stagnation next year, characterized by weak growth, rising inflation, and labor shortages. 1. Michael Burry said is Velocity is nominal GDP/Money Supply (M2 here). QT + higher rates starting to use M2 down. Yet we are seeing a tick up in velocity, emerging from narrative obscurity, In 1978-79, rising velocity trumped failing money supply to drive inflation higher and higher redux would shock Full Explanation: "Velocity" is like the speed at which money moves in the economy. Imagine money as a car. The car's speed (velocity) is how fast it's moving. "Nominal GDP" is the total value of goods and services produced in the economy. "M2" is a measure of the money supply, including things like cash, checking accounts, and savings accounts. Now, let's break it down: If the economy's car (money) is moving faster (velocity), it can boost economic growth (Nominal GDP). "QT" means Quantitative Tightening, which is when the central bank reduces the amount of money in the economy. "Higher rates" means they raise interest rates. When you reduce the amount of money (QT) and raise interest rates, the car (money) slows down (Velocity decreases). When you reduce the amount of money (QT) and raise interest rates, the car (money) slows down (Velocity decreases). Recently, we've seen the car (Velocity) speeding up, even though the central bank has been reducing money (QT) and increasing interest rates. In the late 1970s (1978-79), a similar thing happened. The car's speed (Velocity) became more important than the amount of money (Money Supply) in driving up prices (inflation). "Redux" means a repeat of something. So, the statement suggests that if we see a repeat of the 1978-79 situation, it would be surprising and could lead to higher inflation. In simple terms, it's like saying that even though the central bank is trying to slow down the economy by reducing money and raising interest rates, we're still seeing fast economic growth. This reminds us of a situation in the late 1970s when fast economic growth led to higher prices. If this happens again, it would be surprising and could cause inflation. 2.The second thing Burry believes is that there is a bubble in the housing market, similar to the one in 2008. Instructions chat above green (rising market) yellow (small drop market) Red (absolute bear market) He believes that housing prices are over inflated and that many homeowners are still carrying significant levels of debt he is warned that a housing market downturn could trigger a wave of default that would Ripple through the banking system and The Wider economy finally bury has expressed concern about the vulnerability of the banking system which he believes is over leveraged and under-capitalized he has warned that a wave of bank failures could trigger a major crisis similar to the 2008 financial crisis overall buries prediction that another major financial crisis is on the horizon. Explanation for chart above As you can see from the chart , we are not yet showing strong signs of a collapse like in 2008. However, there is a chain of signs that it is beginning to slow down and approach a potential downturn. When a higher time frame displays characteristics in yellow between red, there is a chance of an impending collapse. For now, we must treat this information as neutral and avoid letting our biases guide us. 3.The Third thing is Burry concern about the current state of the stock market. Instructions chat above green (rising market) yellow (small drop market) Red (absolute bear market) Bury has expressed concern about the current state of the stock market, the housing market, and the banking system, all of which he believes are overvalued and vulnerable to a major downturn. Burry has also expressed concern about the high levels of debt in the U.S. economy, which he believes are unsustainable and could trigger a major crisis. He has pointed to the rising levels of corporate and government debt, as well as the growing number of (companies that can only service their debt but not pay it down), as evidence of this. Burry has also expressed concern about the current state of the stock market, which he believes is again overvalued and driven by speculation rather than fundamentals. Explanation for chart above As you can see in the chart, the market has not yet fully recovered despite the recent increases in the S&P 500 and NASDAQ. It's evident that the rally is weak compared to previous years. This analysis indicates a temporary market weakening, with no strong signs of a full recovery at the moment Let's now take a deeper dive into less visible yet crucial information. We'll focus on areas that require understanding their unusual aspects and the reasons behind them. What do I mean? To uncover something unusual, patience and extensive economic research are required. Through this process, we can discover intriguing insights that provide valuable context to the economic situation in the USA. For example, let's examine: a. M2 - MONEY SUPPLY In the graph, you'll notice something that hasn't occurred since 1963. With the help of a tool, we can observe periods of increase (green) and slight decrease (yellow), but no instances of absolute decrease (red). What does this signify? What's the context behind it? After conducting research, I found an explanation. I'm referring to: Financial Stress and Banking Issues: A sharp decline in M2 may indicate underlying financial stress or problems within the banking and financial sector. This is a significant reason as it highlights potential vulnerabilities in the financial system, which could have broader implications for the economy. It might prompt regulators and policymakers to address these issues to prevent a more severe crisis. Do you still find this unremarkable? Remember, this is just one perspective on the situation. b. Unemployment Rate It is crucial to examine the Unemployment Rate, and I've specifically focused on the Unemployment Rate in California. This is because, in the end, the fundamental Unemployment Rate tends to converge to a similar outcome. Currently, in the graph, we observe the color white, which indicates the start of an uptick in unemployment, representing slow growth. White denotes a slow growth momentum or a potentially deceptive rally. Therefore, it's important to note that we have not yet reached the green phase, which signifies a definite increase in the Unemployment Rate. Historically, every time the Unemployment Rate has turned green, it has been followed by an economic downturn. it is essential to remain vigilant. If the Unemployment Rate continues to rise steadily, it may lead to economic stress. On the other hand, if M2 money supply is shrinking or experiencing volatility while the Unemployment Rate is increasing, it points to economic stress and potential issues. A declining money supply reflects reduced liquidity, making it harder for businesses to access capital for growth and causing financial stress. Simultaneously, a rising Unemployment Rate indicates that more people are struggling to secure jobs, further straining the economy. This situation can result in reduced consumer spending, decreased investment, and heightened economic uncertainty, potentially contributing to a market downturn or recession. c. Gold Investors Currently, there's something intriguing happening among certain investors worldwide. Over the past few months, some investors have been stockpiling gold. Since March 2023, gold has displayed a (green) signal, indicating a bullish trend. This suggests that people have been accumulating gold from March until now, similar to the trend seen in 2003. It's possible that some investors perceive the market as risky and view gold as a safety net. However, it's important to note that there can be instances of deception, as seen in 2016 and 2017 when gold turned green but didn't perform significantly and even dropped by 10 percent on three occasions. Such situations occur periodically and not consistently. For instance, investors also purchased gold from 2019 until the end of 2021 (despite the significant impact of COVID-19 starting in 2020), indicating that some investors can spot signs ahead of time. There are more examples from the past. Hence, it's fascinating to closely monitor recent developments in the gold market to see if it can break records or experiences setbacks like in 2016-2017. There are many more examples, but I will stop here. The purpose of this post is to emphasize that thinking outside the box is often more fruitful. Instead of sticking to a linear approach, gather as much information as possible, seek connections between two factors, then three, and continue to cross-reference vast datasets. By effectively cross-referencing, we enhance our ability to assess probabilities and reduce uncertainty. This reflects my personal viewpoint. I observe that the market has reached a plateau in the SP500, NASDAQ, and most markets. There is a possibility that this is a temporary phase, or it may indicate an impending decline. My focus is on monitoring real-time data and responding accordingly, rather than attempting to predict the future. Whenever I perceive the market as (red), I take action. Likewise, when I see it as (green), I take action. Ultimately, my goal is to remain adaptable and respond to prevailing market conditions. In the future, I will continue to provide updates in the event of shifts in market conditions, inflation, new data, and additional information. This will contribute to assembling a comprehensive puzzle that offers clarity on the overall situation.
SP:SPX
by BlackMammoth
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