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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
1
S&P 500 Daily Chart Analysis For Week of Oct 27, 2023Technical Analysis and Outlook: In this week's price action, the index bounced back to our expected target Mean Resistance of 4255 but quickly fell to retest our previously completed Inner Index Dip at 4212. It then hit the strategic point of the next Inner Index Dip at 4150 and is currently resting at a Mean Support of 4113. On the downside, the index will likely go further down toward the Inner Index Dip at 4055, followed by Next #1 at 3961 and Next #2 at 3850. All this is just for starters. However, there is a possibility of it bouncing back to Mean Resistance 4156.
SP:SPX
by TradeSelecter
EUR/USD Daily Chart Analysis For Week of Oct 27, 2023Technical Analysis and Outlook: As projected, the Eurodollar completed our Inner Currency Rally of 1.070 and retracted to the designated price target Mean Sup 1.053. The intermediate price action suggests the continuation of the Reignited Pivotal Down Move to retest Key Sup 1.047 and completed Outer Currency Dip 1.045 with an extension on the horizon of Next Outer Currency Dip 1.035. Rebound to Mean Res 1.060 is a possibility.
by TradeSelecter
2
Bitcoin(BTC/USD) Daily Chart Analysis For Week of Oct 27, 2023Technical Analysis and Outlook: The Bitcoin smashed our projections: Inner Coin Rally 30900, Outer Coin Rally 31700, and 34000, resting at completed Inner Coin Rally 35000. The next target is the Next #1 Inner Coin Rally 36300 Next #2 37800, with a near-term final projection of Outer Coin Rally 39200. Be aware that there may be some intermediate pullbacks along the way with the main target 39200. Nevertheless, the market may fall to the Mean Support 32600 before resuming its upside movement.
BITSTAMP:BTCUSD
by TradeSelecter
Again macro conditions don't foretell a crash soonIn May and August I made posts saying "Macro conditions don't foretell a market crash soon." Time has passed and it's all pretty much the same. BUT!! Current world events might change everything. And see my other posts re likely imminent drops in the market. This post is just about macro. Once again, some points here looking back to 2001. (2020 was an irregular event). Sorry for all the colors here, but everything is connected. 1. The Fed Rate (FEDFUNDS dark purple) falls before unemployment rises and recession. Note that the market rose while the interest rate was at its peak in 2006-2007 and 2019. So a further interest rate rise in November shouldn't be a worry, not that it seems likely today looking at the CME Fedwatch Tool www.cmegroup.com 2. There are still more job openings than people to fill them (JTSJOL Non-Farm Job Openings minus USCJC US Continuing Jobless Claims - dark blue). Still unchanged since May. 3. Unemployment Rate (UNRATE dark gray) rises before SPX (yellow) drops. Currently UNRATE is up to 3.8% and unchanged August-September. Relatively static and close to multi-year lows. 4. Note that since May: * Initial Jobless Claims (USIJC light blue at the bottom) have dropped * Continuing Jobless Claims (USCJC light gray) are unchanged * Non-farm Payrolls (USNFP green) are unchanged * Job openings (JTSJOL light purple) fell slightly and rose back to the May level. At over 9m there are more available jobs that any time pre-COVID. * The number of Employed Persons (USEMP light pink) is rising continuously and is now at 161.5m - almost 3m more that pre-COVID. There's your economic growth. 5. After a year in decline, M2 Money Supply rose during the summer but might now be falling - a negative indicator? 6. The SPX drop last year was a result of inflation -> rate rises -> fear. But the recession didn't happen and the economy still looks strong Conclusion is that macro conditions still don't foretell a market crash in the immediate future. NOT TRADING ADVICE. DO YOUR OWN RESEARCH.
FRED:JTSJOL
by lavoriamo
USDPLN Breakthrough: Rally Ahead or Resistance at Play?The rising USD against PLN has finally broken through its descending trendline. This strength in the dollar can be attributed to rising bond yields (amid an unmoved Federal Reserve) and the prevailing economic challenges in Poland and the European Union (recessions). On a technical note: The USDPLN pair has successfully broken out of a descending trendline on the daily timeframe that was evident since October 2022. Post breakout, a retest of this trendline occurred and the pair has since persisted in its upward journey. When zooming in to the 4-hour chart, the upward trend remains unblemished. However, a key observation here is our current position relative to the 'overbalance' level, which stems from February's bullish correction phase. Should the USDPLN manage to breach this overbalance threshold, we could be looking at potential resistance in the 4.27 - 4.33 region. This zone not only houses the 200-day moving average but also coincides with January's previous low and the 38.2% Fibonacci retracement level. #USDPLNAnalysis #ForexTrends #BondYieldImpact #TechnicalBreakout #FiboWatch #CurrencyTrading #EuropeanEconomyInsights
Long
by formaaaa
S&P 500 Daily Chart Analysis For Week of Oct 13, 2023Technical Analysis and Outlook: The Spooz index price exceeded our previous Mean Resistance point of 4336 and closed at the location of a notable event. The recent downward trend suggests that the Mean Support level of 4294 may be reached, with a possibility of extending to the Mean Support of 4228 or even the next Inner Index Dip at 4150. If the index finds support at 4294, it may move up to the newly established Mean Resistance at 4378.
SP:SPX
by TradeSelecter
5
DXY Bearish while Bitcion BullishHello Crypto Traders!! Lets take a look at these two charts side by side. You'll notice that when the DXY decides to PUMP, Bitcoin decides to DUMP and when the DXY decides to DUMP, Bitcoin decides to PUMP. A massive long term strong bullish trend has finally been broken for the DXY and if it cannot find its way above the trendline, it will continue to DUMP which should make Bitcoin PUMP. This is a great area to long BITCOIN using the right risk management. Calculate Your Risk/Reward so you don't lose more than 1% of your account per trade. Every day the charts provide new information. You have to adjust or get REKT. Love it or hate it, hit that thumbs up and share your thoughts below! This is not financial advice. This is for educational purposes only.
TVC:DXY
by Navitility
🟩 Margin Debt with brokers points upWhen we look at the first chart the Margin Debt with brokers (aka how much the brokers are deploying margin) - we see a positive relationship with the times when brokers are on margin (aka buying a lot) and the market going up. When we analyse the Rate of Change of this stat for the last 15months we can see that currently we are getting to a state of bearishness close to the 2008 and 2002 periods. This of course is a contrarian indicator and could point to a move higher. This is a long term assessment, but it is a good point to include in your analysis. However remember we NEVER have confirmed of the NET NEW HIGHS - hence this market has still not confirmed Bull Status, at best we have Bull-transition. So be very cautious of the market.
FRED:BOGZ1FL663067003QLong
by TintinTrading
GOLD - Positive real rates is negative for GoldThe attractiveness of Gold is tarnished When cash instruments yield a positive rate of return More and more people are getting on board of higher interest rates (Dimon, Santelli) But u can see the Gold price has been inversely correlating with the rate of return for decades. It's bull run in the 2000's along with the commodity bull , coincided with real rates trending to less than zero. Gold Topped a few months prior to that negative reading in 2012! The current triple top that has been in place for he past 3 years , seems to be in danger of breaking down if rates continue up the next few years. The key level to watch is last year's lows in October around $1611 Which I believe is a distinct reality if rates head up to 7%
COMEX:GC1!
by BallaJi
Qualitative Fundamental Analysis of US Economy Oct.2023The most important factor for the economy is the behaviour of GDP. Several economic indicators are tracked to determine the overall economic situation and GDP growth. A technical recession is defined as 2 consecutive quarters of negative real GDP. If GDP grows less than 3% on average for the year, the economy is not growing fast enough and this will lead to unemployment. At its core, the Federal Reserve has dual mandate policy: price stability(2% inflation for a year) and maximum employment (max Unemployment rate 4%) . CPI Inflation projection: inflation is forecast at 4.7% in 2023 and is expected to further slow down to 3.0% in 2024. Actual CPI : 3.7 % PCE Inflation projection: inflation to be 3.3 percent in 2023, 2.6 percent in 2024, and 2.2 percent in 2025, and the Federal Reserve expects a similar outlook of 3.3 percent, 2.5 Actual PCE : 3.5% Unemployment rate projection: The unemployment rate reaches 4.1 percent by the end of 2023 and 4.7 percent by the end of 2024 before falling slightly, to 4.5 percent, in 2025. Actual: 3,8% GDP Growth projection: Real GDP increases by 1.5 percent in 2024 and by 2.4 percent in 2025. Actual: 2,4% Interest rates projection:The Fed now expects its benchmark federal funds rate to close out 2024 at an effective rate of 5.1%, which is higher than its June forecast of 4.6% Interest rates: 5.5% MONEY MARKET Yields From the chart above we can see when the recession is coming. The 10Y-2Y has already fallen below 0 and we should prepare for a recession when it comes above 0. The yield curve (all yields) is slightly inverted, but only because of the 20-year yields. The overall curve is normal, which means that investors are not worried about the future, at least for now and they invest more in long-term bonds. According to the FED, we should expect a mild recession at the end of this year. The SP500 seems to be consolidating for the next few months. Corporate Bonds and Credit Spread Spreads are relatively stable. They do not point to a recession. Money Supply M2 The money supply is also stable, which means that the printer is not running. This is a good sign considering the banking crisis. interest rates The last time IR was so high was during the last recession in 2008. History could repeat itself. At the last FOMC meeting, the FED paused rates but said they would remain high. This could be exactly what happened in 2007. FED paused after aggressive hike and recession came. SERVEYS ISM PMI, NMI The historical correlation between real GDP growth and the ISM PMI/NMI is 85%. PMI/NMI are leading indicators and they will predict how GDP will move. It is a short to long term prediction (within 12 months). The reading continued to point to another albeit smaller deterioration in the manufacturing performance, as contractions in output and new orders softened. Meanwhile, sufficient stocks of inputs and finished items, alongside still subdued demand, led firms to reduce their purchasing activity sharply again and firms continued to work through inventories in lieu of expanding their input buying, which contributed to a further improvement in supplier performance. Consumer Sentiment Index(UMCSI) The level of consumer confidence in stability and future prospects can be used to understand the overall trend in the economy. Still, consumers are unsure about the trajectory of the economy given multiple sources of uncertainty, for example over the possible shutdown of the federal government and labor disputes in the auto industry. From a technical perspective the chart looks very suspicious. Like bullback before the new swing. Will see. Building Permits The jump in permits suggested that new construction continues to thrive, driven by a shortage of homes available in the market, despite the dampening effect of rising mortgage rates on housing demand. NFIB Business optimism index Twenty-three percent of small business owners reported that inflation was their single most important business problem, up two points from last month. Also, the number of small business owners expecting better business conditions over the next six months declined (seven points from July to a net negative 37%). “With small business owners’ views about future sales growth and business conditions discouraging, owners want to hire and make money now from strong consumer spending,” said NFIB Chief Economist Bill Dunkelberg. “Inflation and the worker shortage continue to be the biggest obstacles for Main Street. Overall the business is not optimistic for the near future. Leading Economic Index The Leading Economic Index provides an early indication of significant turning points in the business cycle and where the economy is heading in the near term. The US LEI continues to signal a recession. Combined with the yield curves, it looks like a recession could be coming very soon. INFLATION Total Inflation = 30% CPI (demand) + 40% PCE(supply) + 30% other factors) CPI The FED's target may be 2%, but the reality is that inflation is between 2-4%. Inflation has risen again in recent months and current oil prices suggest that it will remain high. Investors are worried about future prices. The same thing happened in the 80s. The FED does not want the same to happen today, which is why they have been so hawkish recently. Core CPI This projection is very scary, but if the economy goes crazy, it can happen, just like in the 80s. I am not predicting that core CPI will rise that much, just pointing out the similarity. PCE Inflation The US personal consumption expenditure price index rose 3.5% year-on-year in August 2023, the most in four months, after an upwardly revised 3.4% rise in July and in line with market expectations. PPI / Core PPI The producer price inflation in the United States accelerated to 1.6% year-on-year in August 2023. This is the second consecutive month. GOVERNMENT Balance sheet The balance sheet is falling, which is deflationary. On the one hand, this is good and gives us an indication that inflation should be contained, but on the other hand, it is a sign of recession. [b ]Cyclical Commodities Trade weighted US Dollar Index Rising trade indices are actually deflationary for the economy. Commodities They stable prices do not give us a clear picture of the near future. Stocks The benchmark indices are falling. The failed to make new HH, suggesting that the will consolidate or fall. Sometimes they are seen as a leading indicator of future GDP and recession. Summery The current pause in interest rates, with the hawkish narrative that rates will stay high for a long time, could be the second phase of the business cycle. The next one is recession. Yield curves have also suggested that the recession is not as far away as we think. The surveys are relatively stable, but the overall picture is not so optimistic. Inflation is on the rise again, which may lead the FED to be more aggressive. They have said many times that they would rather have a recession than a price explosion. They have even warned about a mild recession, how mild we will see. The unemployment rate is still below 4%, but in recent months it has risen from 3.5% to 3.8%. Rising unemployment is a sign of recession. Stock indices have risen in recent months, but future expectations of a new recession, combined with high interest rates and business optimism, are bearish factors for the stock market.
FRED:T10Y2Y
by SerpentForexClub
2