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Is EURUSD Ready To Change The Direction Of The Short-Term Trend?Looking at the technical picture of EASYMARKETS:EURUSD on our 4-hour chart, we can see that the pair made its way back to its short-term tentative downside resistance line drawn from the high of 18th of July. This happened after finding support near the 1.0765 territory. Given that the downside line currently remains intact, according to the TA rules, we have to stick to the downside scenario and aim lower. That said, we will most likely go with that plan, if we see strong rejections near that trendline. If that happens, we will then aim for the 1.0842 obstacle, or even the 1.0783 and 1.0765 levels. A break of the latter one would confirm a forthcoming lower low, possibly inviting even more sellers into the game. As we also know, the more tests a trendline experiences, the more chances for a break there is. If the previously mentioned trendline surrenders to the bulls and we also see a push above the current high of this week, at 1.0892, this may spook the bears from the field for a while. FX_IDC:EURUSD could then make its way to the high of last week, at the 1.0930 zone, or the psychological 1.1000 territory. @DariusAnucauskas Disclaimer: easyMarkets Account on TradingView allows you to combine easyMarkets industry leading conditions, regulated trading and tight fixed spreads with TradingView's powerful social network for traders, advanced charting and analytics. Access no slippage on limit orders, tight fixed spreads, negative balance protection, no hidden fees or commission, and seamless integration. Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, are intended only to be informative, is not an advice nor a recommendation, nor research, or a record of our trading prices, or an offer of, or solicitation for a transaction in any financial instrument and thus should not be treated as such. The information provided does not involve any specific investment objectives, financial situation and needs of any specific person who may receive it. Please be aware, that past performance is not a reliable indicator of future performance and/or results. Past Performance or Forward-looking scenarios based upon the reasonable beliefs of the third-party provider are not a guarantee of future performance. Actual results may differ materially from those anticipated in forward-looking or past performance statements. easyMarkets makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or any information supplied by any third-party.
by easyMarkets
23
Macro Monday 9~ Initial Jobless Claims MACRO MONDAY 9 Initial Jobless Claims Historical Analysis and Important upcoming levels Initial claims are new jobless claims filed by U.S. workers seeking unemployment compensation, included in the unemployment insurance weekly claims report. "Initial claims" refers to the government report on the number of workers applying for unemployment benefits for the first time following job loss First-time jobless claims can be a useful leading indicator because elevated numbers tend to lead to further economic weakness, and to decline ahead of a recovery Initial claims show the recent layoffs trend and does not a full picture of the labor market however it can provide more frequent data points indicating the trend in layoffs based on the recent decisions of U.S. employers. The layoffs trend can be particularly telling at economic turning points. With that in mind lets look at the chart and its historic patterns. The Chart The chart looks complicated but is incredibly simple and can be summarised as follows. - Recessions are in red - Increases to Initial Jobless Claims prior to recessions are in blue - It is clear that prior to recessions Jobless Claims typically increase but for how long and by what amount? - The min/max increase in claims prior to recession is between 35k - 127k - The min/max timeframe of increasing claims prior to recession is 7 - 23 months - The average of the above is a 71k claims increase over a 14 month period. - At present we are below that average at 49k increase over 11 months @ 230,000 claims. - I have set out levels on the chart for us to monitor going forward in line with the min and max claims amounts and timelines as above. We can monitor these levels on trading view going forward just by pressing play and seeing if we are nearing or hitting the indicative levels. - Once we reach the average increase amount at 252k or the average timeline of 14 months in Nov 2023, we are entering into higher risk recession territory. Currently, the max increase in claims prior to recession is projected to be at the level of 308,000 (based on historic claims) and the max timeframe is out to Aug 2024 (based on historic timeframes) thus indicating that between Nov 2023 and Aug 2024, subject to continued increasing initial claims (above the average level of 252,000) it is probable that there will be a recession within this time window (Not guaranteed). If initial claims fall below their recent low of 200,000 I believe this might invalidate the possibility of a recession or at least have a significant lagging effect on time horizon. At present this outcome seems unlikely but anything is possible and we can monitor this on an ongoing basis. The current yield curve inversion on the 2/10 year Treasury Spread provided advance warning of recession/capitulation prior to all of the above recessions however it provided us a wide 6 - 22 month window of time from the time the yield curve made its first definitive turn back up to the 0% level (See Macro Monday 2). September will be the 6th month of that 6 – 22 month window and thus we are closing in on dangerous territory very fast. From reviewing initial jobless claims we can see how from Nov 2023 we are stepping into a higher risk zone on this chart also (subject to continued higher increases in claims). Should we have claims higher than the average of 252,000 we will be confirming another step towards a higher risk of a recession. Factoring in yield curve inversion and the initial jobless claims we could consider the months of Sept-Oct 2023 as Risk level 1 (yield curve inversion time window opens) and Nov-Dec 2023 as stepping into a higher Risk Level 2 (Jobless claims average timeframe hit). Should the yield curve continue to move up towards being un-inverted and should Jobless Claims increase then Jan 2024 forward could be considered a higher Risk level 3. Adding to the above concerns is that M2 Money supply is still reducing (Macro Monday 8) and Global Net Liquidity is continuing to reduce (Macro Monday 4) as the S&P 500 is hitting a major resistance zone when accounting for M2 money supply (Macro Monday 8). At present it is clear that liquidity is reducing both globally and in the US. Currently fiscal stimulus appears to be filling the gaps and may be causing additional lagging effects to the changes we have seen imposed by Federal Reserve (balance sheet reduction and increased interest rates). Keep in mind that the Fed is also targeting higher unemployment to help quell the effects of inflation thus adding to the relevance of the Initial Jobless Claims numbers. Continued jobless claims are another metric that is not covered here today. Continued Jobless Claims accounts for the continuation of claims over a time period, thus indicating that those workers who made the first “Initial claims” have remained unemployed thereafter and have not managed to get new work. We might cover this in a future Macro Monday. Let me know if you want it sooner than later? We need all the help we can find in managing risk going forward and I hope all these charts can help you with that. We can monitor all these charts on my trading view just by pressing play and seeing where things are going. Regardless ill be providing updates along the way. Be safe out there PUKA
ECONOMICS:USIJC
by PukaCharts
37
Looking at USD/TRY following the huge rate rise last weekLast week, the Turkish central bank made a significant move by raising rates by 750 basis points. This caused a sharp downward movement in the US dollar relative to the Turkish lira. Since then, there has been a notable response, with the market showing a sharp rebound. During times of such volatile market reactions, it's valuable to examine Fibonacci retracements. These retracements help us predict potential new support and resistance levels in the market. Looking ahead, we can pinpoint key levels of support and resistance. The first is the 38.2% retracement, approximately at 26.00/25.98. The second notable level is the 78.6% retracement, approximately at 26.80. It's likely that the market will move within these boundaries as it absorbs and adapts to the unexpected rate increase. Disclaimer: The information posted on Trading View is for informative purposes and is not intended to constitute advice in any form, including but not limited to investment, accounting, tax, legal or regulatory advice. The information therefore has no regard to the specific investment objectives, financial situation or particular needs of any specific recipient. Opinions expressed are our current opinions as of the date appearing on Trading View only. All illustrations, forecasts or hypothetical data are for illustrative purposes only. The Society of Technical Analysts Ltd does not make representation that the information provided is appropriate for use in all jurisdictions or by all Investors or other potential Investors. Parties are therefore responsible for compliance with applicable local laws and regulations. The Society of Technical Analysts will not be held liable for any loss or damage resulting directly or indirectly from the use of any information on this site.
by The_STA
4
The Evolution Of Streaming Platforms For Movies And SeriesIn this work, we will analyze the evolution of streaming platforms for movies and series, from the emergence of the first video rental stores to the present day. We will compare the main companies in the sector, such as Amazon, Netflix, Warner Bros. and Disney, and evaluate their technical and fundamental performance in the stock market. Our thesis is that streaming platforms are a phenomenon that revolutionized the entertainment industry, but that also face challenges and controversies in a turbulent economic and social scenario. 1. The origin of streaming platforms Hollywood, located in Los Angeles, in the state of California, became very famous for producing movies and series that are consumed worldwide. This made Los Angeles one of the 5 most profitable cities in the world. In the 80s, there was a popularization of VHS tapes and, because they had a slightly higher cost, several video rental stores appeared, where they lent these tapes in exchange for a monthly fee or separate rentals. And so, with technology maturing, they started to integrate these movies into DVDs, where access became much easier than VHS tapes, but also brought the entry of piracy, which became very popular in countries with underdeveloped governments, such as Brazil, Mexico, Colombia, Turkey and among others. Even with the advancement of technology, the film industry did not stop, which brought a lot of profitability to the state of California and to the city of Los Angeles, which was the main film hub in the world. And while this was happening, the internet evolved. What was already something interesting with telephone stairs lines or radio signals gradually became what would replace video rental stores, giving rise to the first streaming platforms. Netflix, which originally was a physical video rental store, started to integrate a very well-designed library of movies and series for a low subscription cost. 2. The popularization of the internet and online content Over the years, it seemed that this internet thing would work out very well. The Justin.tv platform allowed people to broadcast everyday and normal events. This site saw a significant increase in internet users, which led to the creation of Twitch, focused on games and interaction with viewers. Note that at this point there was still no transmission of movies, as it was not something that happened much at the time. Also with the popularization of YouTube, from Google, which belongs to Alphabet Inc., people started to consume videos made by ordinary people about some content made by these same internet users. And there was a maturation on the part of people, who hired platforms like Netflix to watch movies and YouTube to watch other types of content that did not air on television. Since this type of content was for cable TV, where there was a variety of exclusivities. With abusive prices for cable TV and several repetitions by broadcasters, since the content of closed channels always repeated programming, where it became a snowball of reruns and that gradually stressed the consumer, who gradually abandoned the idea of using cable TV and switched to the internet. There were several clandestine sites, where people started watching movies and series online, without having to resort to cable TV. However, with many annoyances of ads and pop-ups with an unpleasant courtesy to those who watched. With that, with the popularization of these clandestine sites, Netflix also became popular, which offered its services without having any type of annoying ads. So, people started to pay for it so they don’t have to resort to clandestine sites. And those who didn’t pay watched within these sites anyway. What happened was that since DVD, where piracy was born, the internet also managed to mature it a lot with these clandestine sites that pirated content. 3. The competition and diversification of streaming platforms Obviously, the strike will hinder some plans for major streaming platforms. Well, this shows that with all the evolution we described here, the fight for exclusivity and copyrights has become increasingly fierce and competitive. And of course competition also generates performance and what also attracts investors. Bringing now 5 actions from these respective companies. Starting to do a study, where we will analyze first the paper from Amazon. Because it acquired Justin.tv, launched in 2007, and Twitch, being a branch, being launched in 2011. And so in 2014, Justin.tv being discontinued. Also in the same year, it was acquired by Amazon. It also has a streaming platform that has rivaled Netflix quite a bit, which is Amazon Prime Video. In addition to having another streaming system aimed at music, which has also rivaled Spotify quite a bit, which is Amazon Music Unlimited and Amazon Prime Music. Speaking now about Netflix, which is a company that has a great history and that has been around for a long time. In addition to a streaming service, it also now started to develop movies and series to fill the catalog that were removed due to copyrights. Of course Netflix is a controversial company, loved by many and hated by others, for addressing issues that are not very receptive by a large part of the public, such as gender ideology or something related to the queer public. And even with all the controversies and controversies about Netflix, it is a great company with good numbers. Speaking now about Warner Bros., which is another company that is in the streaming business, betting heavily on HBO Max. What worked out very well in 2021, where the paper rose a lot. Warner is a very reputable company, which has been around for a long time, owning several successful movies and brands. In addition, they are also in the music business, calling themselves Warner Bros. Music Inc. But we can’t say that just like Amazon and Netflix, Warner suffered a lot from the American macroeconomy, with high inflation acceleration. Also dropping the paper, going from 74 to below 9 USD. Having a devaluation of 81.9%, which is a very high value for the investor who had a lot of losses by holding this paper. Despite all this, Warner is trying to reinvent itself, as it has made productions that have not pleased the large community. So they have bet on a reboot in the cinematic universes of their respective scripts. And lastly, now we will talk about Disney. It is a mega-company, not only acting in movies, but also it has several amusement parks. Being the most famous Walt Disney World, located in Orlando, Florida. Just like the other companies mentioned here, Disney was also badly hurt in 2022 with some economic problems in the United States. But with the high of 2021, which was a placebo effect of pandemic recovery. And also with the success of the Disney+ platform, which made the company rise to the level of 200 USD. Just like Netflix, Disney has been heavily criticized for tirelessly addressing gender ideology issues, changes in ethnicity of consolidated characters, in addition to several controversial accusations about reproducing content to sexualize children. The path of diversity and liberalism has bothered a large part of investors, who are not pleased with the company’s policies. In addition, it also felt the effects of high American inflations, causing the paper to plummet a lot. All this together with the effect of fundamental analysis. 4. The technical and fundamental analysis of the main companies in the sector Let’s look at the technical and fundamental analysis of each of the companies we mentioned, and see how they have behaved in the stock market. 4.1 Amazon Let’s look at the technical analysis of this asset: Notice that in 2022 there was a drop in Amazon. This was normal, since the S&P itself felt this drop. So all companies in the index were affected, including the Nasdaq Composite asset. Within this downtrend channel, in November 2022 they started to form a range, where the first test is done without enough supply for the price to drop further. And again in March we have another test with lower sales than the last purchases. With that, an uptrend channel started, where it returned to the top of September 2022 and to the region of the VWAP of 750 periods. It seems that we can see Amazon’s paper plummet a little. Maybe there in the range of 120 to 125. And if there is no buyer interest in this price range, we can see the market fall further. But reaching this price range and happening to enter buyer flow, they can hold the price at 125 and make it return to the same top of the region of 135. Now we will be analyzing the fundamental data. Source Yahoo Finance The company has a strong market, good cash generation and high growth, but it also has an uncertain valuation, high costs, high risks and high debt. This means that it can be an investment opportunity for those seeking high long-term returns, but it can also be a pitfall for those unwilling to take the risks involved. The company does not pay dividends, which can be a negative point for those looking for passive income Well, this is not a good foundation, but it is open to interpretation. Seeing this and the technical scenario, things may not be so good for Amazon. In addition to a very stretched price at a top of the VWAP of 750 periods, it is also not very convincing in fundamentals. But that doesn’t take away from the fact that the Amazon empire is a wonderful and successful company. 4.2 Netflix Let’s look at the technical analysis of this company and see what the chart along with the fundamentals want to say? Source: Yahoo Finance The company has good growth, good profitability and good cash generation, but a poor market value and does not pay dividends. Your margin, ROE, and ROIC metrics are good, but your asset turnover is bad. Its current liquidity is good, but its total debt to equity is high. Therefore, the company may be a good fit for investors looking for growth, but not for those looking for passive income or low risk. It is a company that, doing a technical study on it, has not corresponded so much. If we look closely, the part where Netflix had more appreciation was after the pandemic, where there is a spike in price and forming a very common pattern in technical analysis called zig zag pattern. Which is very common during reversal movements. From 2022 it was very bad for Netflix, which suffered a very abrupt drop, leaving 696 and coming to fetch 171. Which was indeed very worrying. She even managed to return to 416. However, this top, as we saw in the first chart, Netflix may be heading for another reversal. That is, being this high just a corrective movement. Because if we notice well, buyer interest has been falling more and more. And besides, she lost the region of the VWAP of 50 periods, showing that there is an acceleration in price. So in the most optimistic hypothesis, she could look for 360 USD. Source Yahoo Finance The company has good growth, good profitability and good cash generation, but a poor market value and does not pay dividends. Your margin, ROE, and ROIC metrics are good, but your asset turnover is bad. Its current liquidity is good, but its total debt to equity is high. Therefore, the company may be a good fit for investors looking for growth, but not for those looking for passive income or low risk. Observing that Netflix’s fundamental data have been good, despite some bad indicators. Even with good fundamentals, it has conflicted a bit with the technical part. However, as I said, being very optimistic, she may look for 366. And of course, if buyer interest appears there, they can accumulate. Even looking at the good fundamentals that the company has. This is because investors make decisions not only because of the good fundamentals of the company. They also take macroeconomics into account. 4.3 Warner Bros. Let’s look at the technical analysis of this asset: It seems that things are not very good. We will now do a fundamental analysis. Source Yahoo Finance The company has a bad market value, negative profitability and does not pay dividends. Your margin, ROE and ROIC metrics are bad, as is your EV/EBITDA. Its cash generation is good, but its current liquidity is poor and its total debt to equity is very high. Therefore, the company can be a bad option for investors, as it presents high risk and low return. With regular to regular fundamental data, fundamental analysis confirms the downward bias along with technical analysis. We know that Warner has a lot of growth potential and that despite all the problems she went through, she can turn things around. If you do good management of the company. 4.4 Disney We will be doing a technical analysis study on the asset. Here we have the presence of 3 charts, where we can clearly see that Disney has been going through a very worrying moment. At least on the technical analysis part, it has shown decline. You can’t tell how far it really goes, due to some proportions. For example, we know that Covid Bottom’s barrier is a psychological support, where participants took advantage of a panic moment there in 2020 to be able to spin the market. However, it seems that it is becoming unsustainable and we can see Disney fall a lot if it happens. It can also happen not to fall and there is buyer interest. But we have no technical evidence to show us buying at the moment. Now we will be observing the fundamentals: Source: Yahoo Finance The company has good market value, good cash generation and good EBITDA, but low P/E and low ROE. Its operating margin and current ratios are fair, but its net profit and total debt-to-equity ratios are weak. Some indicators are not available like DY, DP, ROIC, gross margin and asset turnover. Therefore, the company may be a moderate option for investors but the technical analysis leaves a lot to be desired, which can be worse. We can see that Disney’s fundamental data are regular, but not exactly the worst on the list. But it also does not present security to investors in a turbulent economic moment. 5. The conclusion and future prospects In conclusion, we can affirm that streaming platforms are a phenomenon that revolutionized the entertainment industry, but that also face challenges and controversies in a turbulent economic and social scenario. Through the technical and fundamental analysis of the main companies in the sector, we saw that they have presented varied performances in the stock market, depending on factors such as the quality of service, the diversity of catalog, customer loyalty, competition, innovation, reputation and macroeconomics. For the future, we hope that streaming platforms continue to grow and adapt to the demands and preferences of consumers, but also that they are responsible and ethical in relation to the content they produce and distribute.
NASDAQ:WBD
by Victoredbr
8
NVDA has topped. Sell it now.2023 has been an incredibly strong year for stocks. The Nasdaq rallied 38% in the first six months for one of the best starts to a year in history. This rally has been primarily led by an AI/tech theme that has been responsible for the bulk of these gains. That part of the rally is likely over, however… at least for now. Every bull market has a “theme” with leading stocks that set the pace. In the late 90s that was the dot-com bubble. In the 2009-2020 bull market that was big tech like Facebook, Amazon, Netflix, Apple and Google (hence the FAANG stocks moniker). The 2020-2021 bull market was led by “work-from-home” stocks like Zoom, Teladoc and Peloton. The 2023 bull market has been led by artificial intelligece. The leading stocks have been Meta, Microsoft, Dynatrace, MongoDB, Palantir, AMD, and the biggest leader of them all, Nvidia. Over the last 4-6 weeks we have witnessed many of these leading names roll over and retrace beneath their 50-day moving average – a key level that generally supports top stocks through the move higher. Despite the recent pullback in the market, Nvidia has held at its highs. Wednesday after the close, Nvidia reported earnings. And the results were better than anyone could have expected. Earnings $2.70 per share versus estimates of $2.08. Sales were $13.5 billion – 20% above expectations. And the company raised forward guidance (how much they expect to bring in next quarter) from $12 billion to $16 billion. They also announced a $25 billion share buyback which should act to propel the stock price even further. Investors got everything they wanted and then some. NVDA stock shot up 10% after hours. The news was so good, the entire Nasdaq index shot up 1% on the news. But Thursday, in the first few hours of trading, all of those gains were gone. The Nasdaq opened higher, and immediately began selling off. It fell 3% during the session. And NVDA was back where it closed the day before. This, to me, is a clear signal that the 2023 rally in tech stocks is over. The high was likely made on July 19th, and I doubt we see that level again this year. In a bear market, like we had in 2022, what you want to see is the market going UP on BAD news. This is the sign that the low is in, and buyers are coming back in. We saw this on October 13, 2022. After a government inflation report revealed the worst numbers yet – far worse than expectations – the market gapped down and opened a full 3% lower than it was the day before. However, stocks immediately began to rally, and the index surged 5% that day. This was the signal that the low was in. On the other hand, in a bull market, we want to watch for times when the market goes DOWN on GOOD news. This often signals a top. And I believe we saw that on Thursday. Nvidia was the only stock that could have reversed this pullback. The earnings report was better than even the most optimistic investor had hoped. This should have absolutely put an end to the pullback and caused the market to rally higher. Instead, we saw the opposite. So, what does this mean? First of all, and let me be clear on this, I am NOT saying the market is about to crash. I simply believe the “easy money” stage is over. I expect to see fairly choppy conditions for the next few weeks or months, and investors can no longer rely on the bull market to push everything higher. I believe tech stocks have seen their highs for 2023. Those with large open gains in stocks like Meta, Amazon, Apple, Google, Nvidia and the like may consider selling to lock in those gains here. There will still be stocks that go up, some of them by substantial amounts. But I believe this is now a more selective stock picker’s market. Personally, I sold the index funds in my long-term account and moved to cash ( I also went short the Nasdaq via QID). As of yesterday, those index funds funds were up 37% year-to-date. That is a phenomenal year, and I do not want to risk giving those gains back. To me, this is a low-risk decision. The worst-case scenario is that I am wrong or something material changes that propels stocks higher. If this happens, and the Nasdaq makes new highs this year, I will simply buy those funds back. All I will have missed is a 6% move.
NASDAQ:NVDAShort
by rossgivens
79
SPX vs. Money Supply A fellow trader on Tradingview turned me on to the idea of tracking the US money supply and its effect on the S&P 500 and let me tell you, was this an all consuming rabbit hole or what! In this post, I will look at the relationship between the US money supply and the S&P. Well, that was what it was supposed to be. It then turned into a look at how global money supplies affect indices in general because it is a really interesting rabbit hole indeed. So let’s get into it. Does Money Supply Affect the Stock Market? The general consensus that I could find in economic research and reports is that, in general, the US money supply and, more generally, global money supplies influence stock markets indirectly. The most obvious way is, money supply is needed to fund global investments in markets. Without money, there would be no way to invest. But there are also some indirect ways that money supply (MS) can influence the stock market. The most notable way is by creating liquidity and influencing behaviour. This is probably the most fresh example as it was arguably one of the biggest fuels on the post-COVID recovery bull run we had. The Federal reserve enacted monetary policy that made borrowing attractive and promoted investment, borrowing and leveraging (which took advantage of very low interest rates). If we take a look at the chart above, this chart depicts the US money supply against $SPX. The data is standardized in Z-Score format to be able to do side by side, direct comparisons. We can see that immediately following the COVID crash, the US money supply began rapidly increasing. This was the result of federal reserve policy aimed at quantitative easing. This was arguably one of the leading causes to the unprecedented growth of the S&P in such a short timeframe. How has the US Money Supply Affected the S&P 500? If we zoom out on the above chart and look at the US money Supply since 1959 overlayed against the S&P, we can see, visually, how the US money supply has impacted the S&P 500: The first thing of note is there is a high degree of correlation between SPX and the US Money Supply, which has a Pearson correlation of 0.98. This is a strong, positive correlation . This means that as the US Money Supply increases, so too should the S&P and vice versa. We can also see that, for the most part, the S&P’s growth is comparable to the US money supply. As the Money Supply increases, the S&P grows to match this supply. The exception to this was a stint of time between 19843 and 2002 where the S&P outpaced the US Money Supply: The dotcom crash ultimately led to the S&P correcting back below the US Money supply, where it then recovered to catch back up to the US money supply, and the money supply actually became resistance in 2007. We then again outpaced the money supply in 2018. This likely could have been a cause to the 2018 correction, which actually brought the S&P back down in line with the current supply at that time: We then outpaced the money supply again in 2021, which was corrected during the 2022 bear market. However, we have ,yet again, in 2023, surpassed the current monetary supply: Calculating Money Supply & SPX Price The relationship between the monetary supply and the S&P is so strong, we can actually calculate the expected range of the SPX based on the current monetary supply. We can also reverse this and calculate what the monetary supply should be to support the current price of $SPX. To calculate the expected range of SPX based on the money supply, we would use this formula: SPX price = US Money Supply x 1.918^-10 – 114.426 This would calculate what the price of SPX should be within +/- 228 points. To calculate the needed money supply to support the price of SPX we would use this formula: Money supply needed = SPX price x 4970424901 + 8.204^11 This would calculate the money supply needed to match the SPX. So let’s do these calculations. As of August, the current US Money Supply is 20.903 Trillion. So we substitute: SPX Price = 20.903 Trillion * 1.918^-10 – 114.426 SPX Price = 3895.01 +/- 228 So the range that SPX should be in based on the money supply is between 4,123 and 3,667. What about our monetary supply? What should that be to support the current price of SPX? Well, let’s do the calculations. As of Friday August 25th, SPX closed at 4,405. Monetary supply needed = 4,405 x 4970424901 + 8.204^11 Monetary supply needed = 23.63 Trillion So the SPX should be at ~23.63 Trillion in order to support the current price of SPX. That is roughly a 13% increase from where we currently are. How does an Index surpass Monetary Supply? This is a great a question and one that I am not qualified or knowledgeable to answer very in-depth. But one way in which the SPX can sustain itself at levels above the current domestic monetary supply is through foreign investment. Indices and stocks are traded internationally and are not dependent on their own domestic currency alone. Where this gets interesting is if we start looking at global monetary supply. Now, there are no tickers or indices that look specifically at global monetary supply, but what we can do is take the monetary supply of a few nations that have a high degree of international trade and compare the monetary supply among those countries. You will notice the strong degree of correlation between all the nations in this table. (Keep in mind, these nations were randomly picked based on extent of their involvement with international and U.S. based trade.) If we were to standardize the data into Z-Score format (where we are just looking at the standard deviation) and put it into a line graph, this is the result: When we standardize data, the difference is very indiscernible. This is because, monetary supply naturally increases at a steady and controlled rate, as to keep inflation under control and create supply and demand. How does the SPX’s Growth Compare to Global Monetary Supply? In researching for this post, I was curious how SPX’s growth looked in relation to the global monetary supply. The reason being, the thesis is that SPX’s growth above monetary supply can only be supported by the global interconnectedness of nations and the ability of foreign investment to supplement domestic investment. To do this, I standardized SPX in the same way and overlayed it with the random sample of countries monetary supply. The results are displayed in Chart 1 below. I found this particularly interesting. I wondered if perhaps this was an American thing where everyone is just simply flocking to US investments. So then I thought to plot out some other indices, namely the TSX (Canada), NIFTY (India), DAX (Germany), and FTSE (U.K.). The results are listed in Chart 2 below. Well, colour me shook. For the longest time it was actually the DAX and TSX that were just growing beyond the average monetary supply. Who would’ve thought? However, in 2019, SPX began exponentially growing, where it currently sits at approximately 0.7 standard deviations above the average monetary supply. So what does it all mean? So the logical question is what does it all mean and how does it help me? And unfortunately, this is a question more for an economist than for me. But I and you yourself can speculate by looking at all the data. If we turn back to our SPX chart overlayed with the US monetary supply and apply Tradingview’s Cycle lines, we can see that the SPX operates in cycles in relation to the monetary supply: And using the Sine function: Essentially, these things are cyclical. We can see the same type of cyclical behaviour when we compare the individual indices to the SPX directly: All this means is that we should eventually correct back down to the monetary supply, during which time another index will outperform the SPX and take the lead. Then rinse and repeat. My personal take away from this little research project is twofold. First, diversification in foreign markets is a smart idea and provides somewhat of a hedge against putting all your eggs in one market and one economy. Second, you should pay attention to where and when you are investing in relation to the current monetary supply. If we look at the chart above, the most stable and healthy gains were achieved when SPX was below the monetary supply. Whenever it was trading above, it would frequently experience drops of, on average, 2 standard deviations back down to the monetary supply in a matter of months until eventually correcting with a bear run and then resuming a healthy bull run. That doesn’t mean you need to wait for a crash or calamity before investing, but its good to pay attention to the extent that a stock may exceed the current money supply. If we look for example at NVDA: This is not a place I would buy NVDA because this move is likely not sustainable. But if we look, for example, at a stock like Ford ( NYSE:F ): You will see that it is in a much more enticing area for a potential long entry. Final Thoughts: Hopefully you found this interesting, I sure did! I want to just say, that I am not saying SPX is going to crash or that we will experience another bear market any time soon. The reality of the situation is SPX has a track record of spending years trading above current monetary supply before correcting. Therefore, its not really realistic to expect SPX to suddenly come crashing down in a matter of weeks and correct back to the levels that the current MS supports. During the 1980s and 90s, it took over 15 years to correct! As well, only looking at the MS is probably going to be insufficient if its all you are looking at in planning your trades. Its just one of many things to consider when you are researching your investments for your portfolio with the ultimate decision coming from weighing out all factors holistically. But it is definitely something to be mindful of! And that concludes the lengthy post. Thank you for reading! Leave your comments and questions below!
SP:SPX
by Steversteves
49
A comparison between AI and EV Bubble!In this article, you will see the comparison between the different stages of EV and AI bubbles! Post-Pandemic Bubble: TSLA, NIO, WKHS: Bubble Burst: TSLA experienced +50, while NIO went Down -30% and WKHS went down -80%: TSLA bubble burst: February 18, 2021: I published this article The market front-runner industry (EV makers)seems exhausted ..! and I received comments like this: Compare this with The comments I received these days: TSLA: While revenue increased 82%, the price is now 43% below All-Time High Conclusion: We are going to experience an accelerated drop soon!
NASDAQ:NVDAShort
by Moshkelgosha
33
Unveiling Crypto Market Insights: Bitcoin CyclesGreetings, fellow crypto enthusiasts! We are thrilled to initiate a series of posts dedicated to educational market content, with a central focus on crypto markets. To kickstart this series, we will delve into the cyclical nature of Bitcoin and introduce the key terms pivotal to our upcoming detailed reports. In this analysis of Bitcoin cycles, the cycle's start is identified as the lowest point following the peak of the preceding cycle within a multi-year timeframe. Historically, the duration between low points in Bitcoin cycles has been around 4 years. This encompasses a 3-year bullish phase (approximately 150 weeks) represented by the green chart area, followed by a 1-year bearish phase (about 50 weeks) depicted in red. The cyclical nature of Bitcoin is influenced by various factors, including the Bitcoin halving. This event reduces the block reward, thereby diminishing new supply, by 50% approximately every 4 years. The upcoming Bitcoin halving is anticipated in April/May 2024. We are currently trading in week 40 of the current bull phase of the cycle, which lasted ca. 150 weeks in previous two cycles we presented on the charts. Bitcoin is approximately 35 weeks away from the halving. What are your price expectations as we approach this event? In which week of the cycle do you expect current cycle top to occur? Let us know in the comments.
BITSTAMP:BTCUSD
by Bitstamp
32
Tesla $TSLA vs Lithium PricesTesla NASDAQ:TSLA vs Lithium Prices Tesla was faced with crushing increases in the price of lithium which created a feedback-loop spiral to the downside for investor and speculator expectations. There were many other factors going on at the same time for Tesla's big slide from $400+ down to $100+ per share, but this picture paints a picture and story which is easy to remember. One of the biggest costs of producing battery-electric-vehicles (BEV's) is the cost of lithium. This massive run-up in the price of lithium may have exposed Tesla to the uncertain pricing of lithium supplies and may also have encouraged Tesla to begin their own lithium extracting and processing operations. Clearly, this was a problem and it fed into investor expectations and drove the stock lower and lower until finally the fever broke and lithium prices have crashed. Keep an eye on Lithium prices here at TradingView and set alerts for a heads-up on sharp increases or decreases in the price to have a heads-up on what is happening under the surface. Tim 10:02AM 8/22/2023 EDT
COMEX:LTH1!
by timwest
9
A Traders’ Week Ahead Playbook; destination Jackson Hole The big market themes last week were trading increased China risk and a resilient US economy with higher US ‘real’ yields (TradingView - TVC:US10Y-FRED:T10YIE ) – the result was broad USD strength and global equity weakness. GBP longs also saw tailwinds from the UK data flow, with GBPNOK the best performing major currency pair on the week – Services PMI could test GBP longs this week, although pullbacks should be shallow. US equity and index options expiry may have played a part in the equity drawdown, with dealer’s net short gamma and delta hedging through shorting S&P500 futures and single stock names. Let’s see how options dealers/market makers deal with this inventory of short positioning/hedges this week, as it may be unwanted - suggesting risk that they buy-back short S&P500 futures hedges (to close), which could cause an early relief rally in equity. Positioning will play a huge part this week and it wouldn’t take much to see US real rates a touch lower, with the USD following in its wake. As the new trading week cranks up, news flow on China will drive and should the HK50 and CNH find further selling interest, then I’d be aligned, with a bias to look at short GER40 trades. The China property sector remains the elephant in the room, with the market finding little tangible fiscal support to reprice risk higher – the price action in the HK50 reflects that, with rallies quickly sold into. It’s time for Chinese authorities to step it up. We get PMI data out throughout the week, but as the week rolls on the attention should turn to Jackson Hole, where Jay Powell takes centre stage. While this forum has been the setting for some bold changes to monetary policy in years gone by, it doesn’t feel like this time around we’ll be treated to such action. The USD remains front and centre this week – biased long, I acknowledge positioning is rich and could easily be vulnerable to profit taking into Powell’s speech. The marquee data to navigate: • China loan prime rate decision (21 Aug 11:15 AEST) – after the PBoC surprised the market and eased the Medium-Lending Facility last week, we should see the PBoC ease the 1- and 5-year Prime lending rate by 15bp respectively. Unless we see the Prime Rate left unchanged, Chinese equity markets will likely overlook any policy easing here and funds should continue to shy away from HK50, CHINAH, and CN50 longs. USDCNH finds support below 7.3000, but few are buying yuan with conviction other than to cover yuan shorts. • Eurozone manufacturing and services PMI (23 Aug 1800 AEST) – the market eyes the manufacturing index at 42.6 (from 42.7) and services at 50.5 (50.9). A weaker services PMI, especially if the data prints below 50 (the expansion/contraction line) and we could see better EUR sellers, with the GER40 eyeing a break of the July lows of 15,500. Tactically warming to EURCAD shorts. • UK manufacturing and services PMI (23 Aug 18:30 AEST) – the market looks for manufacturing to come in at 45 (45.3) and services at 50.8 (51.5). GBP – the best performing major currency last week - could be sensitive to the services print. • US S&P Global manufacturing and services PMI (23 Aug 2345 AEST) – with much focus on China’s markets, US real rates and Jackson Hole, there is less concern about US growth metrics. As a result, the outcome of this may have a limited impact on the USD – it is still a risk to have on the radar. Jackson Hole Symposium – Fed chair Jay Powell will be the highlight of the conference (speaks Sat 00:05 AEST) – again, it’s still premature for Powell to declare victory in the Fed’s inflation fight and will likely emphasise there is still more work to be done. He may also spend time exploring a higher for longer mantra (for interest rates), with a focus on where they are modelling the neutral fed funds rate; possibly one for the PhDs and academics. Powell should re-affirm his view that rate cuts are not in their immediate thinking. From a risk management perspective, I am sensing Jackson Hole/Powell’s speech to be tilted on the hawkish side, and therefore modestly USD positive. Although given the bull run in the USD one could argue a hawkish Powell is largely priced. Other Jackson Hole speakers: • Fed members Goolsbee and Bowman (23 Aug 05:30 AEST) • Fed member Harker (25 Aug 23:00 AEST) • ECB president Lagarde (26 Aug 05:00 AEST) BRICS Summit in South Africa (Tuesday and Wednesday) – It’s hard to see this as market moving and a risk event for broad markets. However, with BRICS countries (Brazil, Russia, India, China, and South Africa) accounting for 32% of global GDP and some 23 countries wanting to join the union, there will be increased focus on their expansion plans. Some have linked the BRICS to an acceleration of global de-dollarization, and while a global reliance on the USD will likely fall over time, the movement is glacial. A common currency for this union – while possibly getting headlines at this summit - is not something that seems viable anytime soon. Key corporate earnings: US - Nvidia report earnings (aftermarket) – many will recall the 24% rally in the share price in Q1 earnings (in May) and hope for something similar. Given the incredible run and heavy positioning, it may need something truly inspiring to blow the lights out. The market prices an implied move on earnings is 10.2%, so one for those who like a bit of movement in their trading. Australia – 68 ASX200 co’s report, including – BHP, Woodside Petroleum, Qantas, Northern Star and Wesfarmers
TVC:US10Y
by Pepperstone
15
BTC Bitcoin Technical Analysis and Trade IdeaBitcoin has reached a crucial support level after a decline in bullish momentum. The price has become significantly overextended, leading to the question of whether we can expect more downward movement or a substantial retracement. In the video, we delve into the trend, price action, market structure, imbalances, and other essential aspects of technical analysis. As always, the video provides a detailed explanation of everything discussed, and it's important to note that this content should not be interpreted as financial advice.
OANDA:BTCUSD
by fxtraderanthony
45
Is Ethereum about to correct to 700 dollars?There is growing evidence for it. On the above 10-day log growth chart price action has been riding the ‘mean’ log growth line for a little over 1 year now. Throughout this whole time price action trades within an ascending channel, a bear flag. Within this bearish channel a smaller bear flag is printing. A measured move on the smaller bear-flag confirmation would see a 40% correction in price action. A measured move on the larger bear-flag confirmation would see a 60% correction in price action, <700 dollars. This is a fascinating level for two reasons: 1) It would be a correction to the golden ratio as was with the 2019 correction. 2) It would be a correction to the lower log growth curve, which is expected before the next bull run FOR Ethereum. Lastly there is the Ethereum/Bitcoin chart. Two significant events: 1) The GRM (Golden Ratio Multiplier) has now failed as support (green line), a bull market requires support. 2) Price action has exited a large bear-flag. Is it possible price action keeps rising? Sure. A convincing break of 2300-2400 would void this outlook. Is it probable price action keeps rising? No. For the bulls, price action must break above 2300-2400 and hold it for a 2-3 weeks. For the bears, a correction to 1750 and under is a green light. It is not all bad news. Would you like to Time-warp back to January 2016 and buy Ethereum for $2? It is possible and no one is talking about it. Will say elsewhere. Ww Weekly ETH/BTC pair. 2-week ETH/BTC large bear flag confirmation
INDEX:ETHUSD
by without_worries
372
Paypal could flash a 10% earnings yield this yearPaypal is expected to earn 4.95 eps this year 2023 and yet the stock is lagging the sp500. If risk avoidance returns in the sp500, it is possible that paypal underperforms further if the paypal downtrend continues. However, wouldnt that be a value buying opportunity? if paypal reaches the 50 level and paypal continues to grow its earnings power (as analysts expect), the earnings yield on paypal would be around 10% earnings yield. Value investors would be happy to consider a stock earnings 10% which at the moment is almost twice the treasury rates and twice the AAA corporate bond yields. Growth investors might also find paypal meeting PEG ratio buy parameters, since analysts expect 15-18% growth annually. If paypal weakens further, a 50 handle would be tempting. Analysts still show a 21 $ eps for for 2032 which could warrant a valuation for future 2032 between 400-600 per share in good times, 9-10 years from now.
NASDAQ:PYPLLong
by optionfarmers
26
Gold Price on Cusp of Testing June LowThe price of gold appears to be on track to test the June low ($1893) as it extends the series of lower highs and lows from last week. Gold Price Outlook The price of gold seems to be tracking the negative slope in the 50-Day SMA ($1941) as it registers a fresh monthly low ($1903), and failure to defend the June low ($1893) may push the Relative Strength Index (RSI) towards oversold territory as it slips to its lowest level since June. A break/close below the $1886 (23.6% Fibonacci extension) to $1896 (61.8% Fibonacci retracement) region may push the price of gold towards $1843 (50% Fibonacci retracement), with the next area of interest coming in around the March low ($1809). Nevertheless, the price of gold may attempt to retrace the decline from the start of the month if it holds above the June low ($1893), with a move above $1937 (38.2% Fibonacci extension) raising the scope for a move towards the monthly high ($1966).
FOREXCOM:XAUUSD
by FOREXcom
6
Micheal J Burry is not Alone!Who is Micheal J Burry and Why everyone talks about him Today? Today on most social media pages everyone talks about this news: Michael Burry just shorted the market with $1.6B Bought $890M of AMEX:SPY Puts Bought $740M of NASDAQ:QQQ Puts This now makes up 93% of his entire portfolio To me, Michael J Burry is a True Living Legend! Michael J. Burry is an American investor, hedge fund manager, and physician. He is best known for being among the first investors to predict and profit from the subprime mortgage crisis that occurred between 2007 and 2010. In 2000, Burry founded the hedge fund Scion Capital. Scion Capital was a very successful hedge fund, and Burry made a lot of money for his investors. However, Scion Capital closed in 2008 after the subprime mortgage crisis. Michael Burry made a personal profit of $100 million and more than $700 million for his investors during the subprime mortgage crisis. This represents a profit of over 489% for Scion Capital, Burry's hedge fund, between its inception in 2000 and its closure in 2008. Burry's profit was the result of his bet against the subprime mortgage market. He believed that the market was overvalued and that the housing bubble would eventually burst. He shorted mortgage-backed securities (MBS), which are investments that are backed by pools of mortgages. When the housing bubble burst in 2007, the value of MBS plummeted and Burry's bet paid off handsomely. Burry's bet against the subprime mortgage market was a very risky one. Many investors thought he was crazy, and he was even sued by some of his own investors. However, Burry's bet turned out to be correct, and he made a lot of money for himself and his investors. Burry's story is a reminder that it is possible to make a lot of money in the stock market by being a contrarian. He was willing to go against the crowd and bet against the subprime mortgage market, even though most investors thought he was wrong. His bet paid off, and he made a lot of money. From a Statistical point of view, there are lots of similarities between now and November 2021, Here are some other famous hedge funds that made money from the subprime mortgage crisis in 2007: John Paulson's Paulson & Co. made a profit of $20 billion during the crisis. Paulson was one of the first investors to bet against the subprime mortgage market, and he made a lot of money when the housing bubble burst. David Einhorn's Greenlight Capital made a profit of $2 billion during the crisis. Einhorn was also a contrarian investor, and he bet against the subprime mortgage market. Seth Klarman's Baupost Group made a profit of $1 billion during the crisis. Klarman is a value investor, and he saw the subprime mortgage market as being overvalued. George Soros is another famous hedge fund manager who made money from the subprime mortgage crisis. Soros's Quantum Fund made a profit of $1.7 billion during the crisis. Soros was one of the first investors to warn about the dangers of the subprime mortgage market, and he bet against the market. The NAAIM Exposure Index is a measure of the average exposure to US equity markets reported by members of the National Association of Active Investment Managers (NAAIM). The index is released weekly on Thursdays. Each week, NAAIM members report their exposure on the stock market using a scale of 1 to 5, with 1 representing 100% cash and 5 representing 100% invested in stocks. The NAAIM Exposure Index is a contrarian indicator. This means that it tends to move in the opposite direction of the stock market. When the stock market is rising, the NAAIM Exposure Index tends to fall, and when the stock market is falling, the NAAIM Exposure Index tends to rise. This is because the NAAIM Exposure Index is based on the sentiment of active investment managers. When active investment managers are bullish on the stock market, they tend to increase their exposure to stocks. This drives up the NAAIM Exposure Index. However, when active investment managers are bearish on the stock market, they tend to reduce their exposure to stocks. This drives down the NAAIM Exposure Index. The NAAIM Exposure Index can be used as a tool to identify potential turning points in the stock market. When the NAAIM Exposure Index is high, it suggests that active investment managers are bullish on the stock market and that a correction may be coming. However, when the NAAIM Exposure Index is low, it suggests that active investment managers are bearish on the stock market and that a rally may be coming. The NAAIM Exposure Index has been on a downward trend for the past 3 years. In August 2020, the index was at 75.93, which is considered to be a neutral level. However, the index has since fallen to 65.49 in August 2023, which is considered to be a bearish level. Conclusion: It is highly likely that Micheal J Burry is not Alone!
NASDAQ:QQQShort
by Moshkelgosha
44
Are The Bulls Back? ES1! SPY SPXAre the Bulls making a comeback in the S&P? 🐂💪 Get ready for an exclusive analysis! In my latest video, I delve into why the Bears have been dominating the market lately, but there's a glimmer of hope for the Bulls in the S&P. Sadly, the Nasdaq and Russell 2000 haven't joined the party just yet. 📈🚀 Let's talk confirmation and the essential indicators I rely on: Beacon Indicator, Bollinger Bands, Auto Anchored VWAP, and a 5 Day Moving Average. Check out the video to discover the key levels I'm closely monitoring in the S&P 500 ES1!, Nasdaq 100 NQ1!, and Russell 2000 RTY1! Futures Markets. Time to trade wisely! 💼💰 #StockMarket #Trading #BullsVsBears
CME_MINI:ES1!
by anthonycrudele
8
Falling Wedge in Microsoft Technology stocks have retreated this month as the AI frenzy cools. Microsoft, in particular, has pulled back. The first pattern on today’s chart is the narrowing range since the slide began in late July. MSFT has made lower highs, but lower lows at a shallower pace. That could have produced a descending triangle, which is potentially bullish. Second, consider the rally between April 25, when results beat estimates, and July 18, when the company announced pricing for its AI services. The current pullback represents about a 50 percent retracement of that move. Third, the software giant has remained above its 100-day simple moving average (SMA) since January. But now prices are returning to the vicinity of this longer-term trend indicator. Finally, stochastics have been in oversold territory for more than a week. TradeStation has, for decades, advanced the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more. Important Information TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means. This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates. Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: www.tradestation.com .
NASDAQ:MSFT
by TradeStation
13