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Macro Monday 3 - SPDR Homebuilders XHBMacro Monday SPDR Home builders ETF (XHB) This equal weighted index tracks 35 holdings of the homebuilders segment of the S&P Total Market Index (TMI) and is spread across large, mid and small cap stocks. These comprise of the Homebuilding sub-industry, and may include exposure to the Building Products, Home Furnishings, Home Improvement Retail, Home furnishing Retail, and Household Appliances sub-industries. The Chart - AMEX:XHB The Chart can be used as a leading indicator for the US housing market as the stocks in the XHB comprise of companies that provide the materials and products to build new houses and renovate homes. These products are higher up the supply chain and sold before construction commences or during. In the past the XHB chart provided a significant advance warning of the 2007 Great Financial Crisis which is illustrated in red on the chart. A similar negative divergence would be worth watching out for in the future. At present the performance of XHB is ahead of the S&P500. XHB is 5% from ATH’s at $87.00. This is in keeping with how this chart leads the market as it includes products and materials required for new builds and renovations. I would expect some resistance at the ATH which could act as a decision point for price. A break above the ATH with support established on it would be positive for price. A rejection off the ATH or a false break out and we would need to monitor price closely to see can price find support on the 10 Month SMA. If a lower high occurs on XHB (like in 2007), this could be an early warning signal of downward price pressure to follow on the S&P500. As noted on the chart the average performance post MACD cross is a price increase of 80%; - We are currently at $83.50 which is a price increase of 21% from the recent MACD cross. - A revisit of the ATH at $87.00 would be a price increase of 26% from the recent MACD cross. - An 80% average increase would lead us to the top of the parallel channel (see chart). - None of the above percentages are guarantees, we are just looking at probabilities. Factoring in that we are above the 10 month moving average and that it is sloping upwards, I remain positive about the continued performance of XHB, although I would not be surprised to see resistance at the ATH of $87.00 and a pull back to the 10 month SMA would be standard. If a weekly candle closed below the 10 month SMA, this is where I would start to get concerned and would then start to lean bearish. If we got follow through lower after that point, this would be alarm bells for me. We can draw a correlation here to the first Macro Monday chart I shared on July 3rd, the Dow Jones Transportation Average Index DJ:DJT which also established a lower high as the S&P500 CBOE:SPX continued its ascent. Both the XHB and the DJT demonstrated they can be leading economic indicators by establishing lower highs prior to the 2007 Great Financial Crisis. PUKA
AMEX:XHB
by PukaCharts
22
TSLA Approaches Major Resistance and May Stall into July 21Primary Chart: TSLA on Weekly Time Frame with a Downtrend Line from the All-Time High and Fibonacci and Measured-Move Levels Preliminary Comments TSLA is poised to stall soon, perhaps into July 21. By definition, a stall does not necessitate a crash or major trend reversal (at the primary degree of trend). A major reversal downward (crash) is always possible especially once shorts have been decimated—major downward reversals seem to always wait for clearing out of hedging and shorts, right? Although a major trend reversal could occur here given major resistance levels just overhead on higher time frames, no one has a crystal ball. Finding the time and price components of such a major reversal can be exceedingly difficult (note the conclusion section of this article about probabilities). And no one who were to have a crystal ball that worked properly would share it. And a securities regulator would be sniffing around for insider trading for sure with too many trades lining up too perfectly especially before major news catalysts. Humor aside, trying to be too clever by calling the exact top is a misplaced endeavor. But it can be prudent to analyze the charts and consider the idea of vulnerability for a trend’s continuation in the short-to-intermediate term, i.e., whether the move might encounter major resistance that could at a minimum cause a mean reversion or retracement of the recent rally . Trend Analysis The charts don’t lie. TSLA’s intermediate-term trend since January 6, 2023 remains upward. Similarly, short-term (2-6 weeks) and intraday trends remain upward. But the primary trend is still arguably sideways when considered over a 2-3 year period, while the secular trend since 2010 arguably still remains firmly upward. 1. Secular trend (since 2010): uptrend 2. Primary trend (since 2020/2021): sideways trend (range) 3. Intermediate / secondary trend (since early 2023): uptrend 4. short-term trend: uptrend near crucial resistance 5. intraday trends: uptrend near crucial resistance Supplementary Chart A: Primary Trend Supplementary Chart B: Secular Trend The intermediate term trend has run fast and furious for 1H 2023 (since the Jan. 6, 2023 low). That alone is not enough to expect a reversal. Shorting something merely because it seems to have risen too far is a well-known trading mistake comparable to catching a falling knife in a downtrend. Shorting powerful uptrends is not an easy way to make a living. But several charts suggest vulnerability for TSLA’s rally at this level. This comes right as earning will be reported this week along with a major monthly options expiration on July 21. Earnings reports like TSLA's upcoming one present a binary risk event that could stretch prices significantly in either direction, or it could a whipsaw price in both directions before settling on a final directional move (see the section below titled “Trend vs. Fundamentals.”) Supplementary Chart C shows that TSLA’s price is nearing a crucial Fibonacci level on a linear chart. This is the 61.8% Fibonacci retracement ($299.05) of its entire decline from its all-time high into the early January 2023 low. Coincidentally, this level shows confluence with other important resistance levels shown on the chart such as the down trendline from the all-time high. (Some prefer Fibonacci levels adjusted for a logarithmic chart, which is not shown. The next relevant upside Fibonacci level on a log chart, however, is the .786 of the entire decline at $306, which is not far from the .618 level at 295.05. Supplementary Chart C If the .618 Fibonacci retracement is overcome and held (not just a false breakout), this suggests prices may run higher to at least $314.67 or the next higher Fibonacci level at $347. But these are upside levels conditioned solely on the .618 retracement being overcome and held. Next, consider the down trendline from TSLA's all-time high. This is being approached at around $300, right were significant call OI exists. Trendlines can be somewhat rigid measures of trend, but they can provide some value especially when other support / resistance levels coincide with the trendline. The down trendline from TSLA's all-time high runs right into the measured-move zone, shown by the blue circle on Supplementary Chart D.1. Supplementary Chart D.1 Some traders prefer to look only at logarithmic charts, though here it doesn't add much to the technical picture since the trendline is quite close to where it lies on the linear chart. Supplementary Chart D.2 Finally, some bearish divergences in momentum and price/volume indicators suggest that price has become quite stretched right at a time when TSLA has reached some major resistance levels. Supplementary Chart E shows the Elder Force Index (EFI), a useful indicator that displays a combination of volume and price, weighing the extent of each price change along with the extent of volume. It tends to pick up divergences in the "force" or commitment behind a move with more sensitivity than RSI or other common momentum indicators, but with increased sensitivity often comes more noise (more false signals) which can be helped to some extent through indicator adjustment. Nevertheless, here is what that indicator shows for TSLA on the daily timeframe: Supplementary Chart E As TSLA has made higher highs, it has done so with less force and commitment for each high, creating a divergence between higher price highs and lower EFI highs. TSLA may make a new YTD high this week, and if so, it will be important to see where the EFI high prints for that new high. Given how low EFI is currently, it would take a lot of volume and price change to move the high to exceed the prior EFIs (erasing the divergence). In SquishTrade's view, EFI is unlikely to erase both the June EFI high and the January EFI high even if TSLA runs to $300-$320 post earnings. Supplementary Chart F shows RSI and ROC, two common momentum indicators which most readers understand well. ROC shows a series of three highs that each make a successively lower high while price made higher highs at the same time: January 2023, June 2023, and July 2023. RSI only shows a series of two highs where price made a higher high and RSI made a lower high. Supplementary Chart F Downside Targets TSLA's price seems poised to pullback / retrace at a minimum. But referring to downside targets may seem a bit premature as price hasn't confirmed even a short-term reversal or the start of a retracement / consolidation within the intermediate trend yet. The technical conditions for a retracement are present, so if confirmation lower does occur in the next week or so, price can fall to trend support, however one decides to measure that within one's trading system. Based on persistently and deeply inverted yield curves, many astute market players may be looking for more than just a retracement or consolidation within the intermediate uptrend. They want more than mean reversion, and that is understandable. Should TSLA followers expect that now? Today, July 15, 2023, confidence cannot exist about an impending trend reversal on higher time frames. Why? A major reversal where price retests / breaks January 2023 lows will likely coincide with recessionary economic data (e.g., rising UE rates), drastically changing EPS estimates based on disappointing earnings reports, and/or unexpectedly high interest rates across the curve because of sticky inflation won't budge further downward (the recent CPI print came in at 3% for headline but 4.8% for core for June 2023). Note: Fundamentals are discussed in greater depth in the next section below. But economic data has continued to come in better than expected. Recent real GDP print for Q1 2023 was recently raised to 2% and labor markets remain persistently tight as the Fed even has noted in its recent pressers. Inflation has cooled for June but this may result from basing effects. Most importantly, trend structure on the weekly and daily time frames (intermediate and short-term) has not been broken. Until the intermediate trend structure is decisively broken, forecasting a major top / trend reversal is rash and unfounded from a technical viewpoint. This intermediate-term trend structure is the up trendline from January 2023 lows or some other more dynamic or flexible measures of trend. So with the idea that price can run a bit higher before any retracement—since we haven't yet seen a confirmation lower yet—these downside targets remain conditioned on a short-term trend reversal. For now, the targets also must be considered corrective retracements / mean-reversion targets within the context of the current trend until the evidence proves otherwise. Conservative Target: $245-$250 Moderate Target: $232-$238 Aggressive Target: $199-$218 Trends vs. Fundamentals A purely technical analyst or technically oriented trend trader tends to consider only the trend and technical evidence supporting that objective. At critical junctures after retracements / corrective moves, this means favoring trend continuation rather than a reversal until the evidence says otherwise. And pure trend following means seeing the odds as favoring mean reversion when a trend gets too extended or stretched rather than reversal. Ambiguity as to trend on varying time frames often confounds the discussion of trends. This is why it's important to remain precise and focused on time frames. For example, a long term secular trend in a given index can be upward while a primary trend can be downward or sideways (retracing / consolidating within the secular uptrend) while an intermediate trend can be upward (retracing or consolidating the primary downtrend)—and intraday traders levered up on calls and riding the short-term rip may be so hyperfocused on a rip in the short term that they dismiss a long-term analyst’s accurate characterization of corrective rally within a primary downtrend. This is just a hypothetical example of how vagueness around terminology and time frames doesn’t can obfuscate the proper technical approach to a given security. As discussed, TSLA’s trend right now is upward on the intermediate trend and minor (short-term) trends. But the primary trend is still arguably sideways when considered from 2-3 years ago. And the secular trend since 2010 arguably still remains upward. But may a trend trader peek outside the trend? That is a complicated question without a definite answer. For those wanting to explore whether it’s prudent to look at non-technical evidence outside the scope of the trend (e.g., considering the fundamentals and the broader macro), the following post offers some cost-benefit analysis and suggestions: For those who wish to avoid being influenced by fundamental information, please skip this paragraph and read on to the next one. Andrew Dickson, the founder of Albert Bridge Capital and CIO of Alpha Europe Funds recently noted the following incongruities (downtrends) in EPS-estimate trends vs. price trends: 1. In late 2022, TSLA’s sell-side analysts expected $6.34 EPS in 2023 (about 9 months ago estimates). 2. After TSLA reported delivery numbers in early July, Dickson noted that “despite today's apparent 4% rev beat (implied from delivery-numbers) for Q2, 2023 EPS expectations have plummeted to $3.50. So earnings expectations for TSLA are now down -55% in 9 months and yet the stock is up +15%.” 3. He concluded that "the 2023 P/E multiple has expanded from 38x to 79x, or by 107%." Dickson’s comments show that price is often not driven by fundamentals. Exactly what was priced in when the stock plummeted to $100 in January? And what is different now has nearly doubled off the lows? Or maybe the question is whether the data that gets priced in has different (and ever changing) weightings depending on the type of data. For example, maybe the data that affects price is most heavily weighted toward liquidity, capital flows, sentiment, seasonality, rather than fundamentals. But David Lundgren, a combined technical and fundamental analyst for whom SquishTrade has utmost respect, highly regards technical analysis, and especially favors technicals in the short / intermediate term, but says that fundamentals always matter in the long run. Here is a quotation from Lundgren from notes I've taken on his commentary in interviews and articles: "In the long-term, actual fundamentals will simply overwhelm any short-term technicals, emotions, sentiments driving a security or market price action." Concluding Comments Traders think in terms of probabilities, not certainties. Further, traders' time frames, risk management, and position sizes vary dramatically, which is why it seems imprudent to blindly follow another person’s signal service (whether paid or free). One very knowledgeable TV follower of mine has shorted TSLA with a position size that gives him a sizable margin of error. In other words, he can wait and allow significant fluctuations in price before getting shaken out of the position. My inference from our conversations is that his short thesis is based on deeply and persistently inverted yield curves, volatility being at major lows, deteriorating fundamentals at TSLA and other broader macro problems. But macro and fundamentals can take a great deal of time to unfold, i.e., they do not play out immediately, and if they did, the big short should have been weeks or months ago. This year everyone thought a recession would be here by now, including experts with long-term experience managing or advising multi-billion dollar funds. This does not mean my fellow trader must be wrong. His thesis might yet succeed with time and patience, or it may yet experience more pressure or even be stopped out. This is why position size, risk management, and time frames matter. Before entering a trade or investment, one must consider time frame, position size, risk tolerance, risk management, technical or fundamental evidence, and an invalidation or stop level (which defines risk and relates integrally to position size). Shorter-term traders with leveraged, derivative, or supersized short positions would have already gotten crushed trying to short TSLA or other mega cap leaders the last few weeks or months.
NASDAQ:TSLA
by SquishTrade
175
XRP: FINALLY💥 RIPPLE Victory in SEC CaseHi Traders, Investors and Speculators of Charts📈📉 Congratulations to all the XRP HODLERS 🤩🥂 (quick recap) ...The SEC case against Ripple was a legal battle between the US Securities and Exchange Commission (SEC) and Ripple Labs, the company behind the XRP cryptocurrency. The SEC sued Ripple in December 2020, alleging that XRP is a security and that Ripple had violated securities laws by selling XRP without registering it with the SEC. Ripple Labs denied the SEC's allegations, arguing that XRP is not a security but a digital currency. The case went to trial in February 2023, and on July 12, 2023, Judge Analisa Torres ruled in favor of Ripple Labs. Torres found that the SEC had failed to adequately prove that XRP is a security, and she dismissed the case. The ruling is a major victory for Ripple Labs and the cryptocurrency industry as a whole. It could have far-reaching implications for the regulation of cryptocurrencies in the United States. 👉The SEC failed to prove that XRP is a security. 👉The ruling could have far-reaching implications for the regulation of cryptocurrencies in the United States. 👉The ruling is a major victory for Ripple Labs and the cryptocurrency industry as a whole. This furthermore confirms my bias for the beginning of AltSeason 2023, check it out here: _______________________ 📢Follow us here on TradingView for daily updates and trade ideas on crypto , stocks and commodities 💎Hit like & Follow 👍 We thank you for your support ! CryptoCheck
KRAKEN:XRPUSDLong
by CryptoCheck-
116
COIN H&S Breakout ContinuesCoinbase continues to gain after breaking up and out of the neckline of an inverse head and shoulders pattern, price is up +10% today - trade was initiated last week upon seeing the inverse head and shoulders breakout. Due to the pop in price today I've raised my stop-loss level to $85.75 in case price reverses on profit taking. This stop level ensures that I exit the trade with a gain if price reverses, while at the same time leaves some room for volatility if price begins to fluctuate. Lower PPO and TDI indicators are still reading bullish, but the green RSI line of the TDI indicator is now above the 80 level which is considered overbought meaning a correction to the downside can be expected. Buy Price: $79.21 Stop-Loss: $85.75 Take Profit: $136-ish Gain if I get stopped out at $85.75: +8.2% Gain if price reaches take-profit level: +71% This stop level will remain adaptive to price movement, price has gained another 3% in the few minutes it took me to write this and COIN is now up +13% on the day.
NASDAQ:COINLong
by PrepForProfit
25
NVIDIA - Bears, This Is Your ChanceIn a previous post on NVIDIA following its earnings gap all time high, I posited that a bearish three drives was a real possibility, which would involve the stock actually going down and then driving up a few more times in accordance with the overall market topping: NVIDIA - A Scenario Few Are Considering. Few. Few. Few. That never panned out, and instead what we're looking at instead, as you can tell with all the insider selling, is a very likely bump and run reversal. But distribution patterns take a very long time to manifest, and one of the biggest tells with NVIDIA is despite it going from $366 to $440, it really has never targeted the sell side, not even rebalancing the original gap. As far as this company goes... well, when you come across something like this whose CEO is a Taiwanese dude prancing around in a leather jacket for every photo op while it's trading like a Chinese Communist Party pump and dump, a number of red flags beyond the 250x P/E it's trading at should emerge. Companies and their officers who have connections to the CCP are very dangerous, for the geopolitical situation is tense. Much is at stake right now with Mainland China and whether or not Xi Jinping is intelligent enough to get rid of the Party. If Xi can't get rid of the Party, then the International Rules Based Order will do it for him and will go to install their own people from Taiwan in the Mainland. Xi always has the option to weaponize the 24-year persecution of Falun Gong, started by the Jiang Zemin faction that's rooted in Shanghai, to take down the Party and defend China from the groups that wish to invade. Live organ harvesting isn't a sin that can survive public scrutiny, really. None of this is healthy for the markets, and if you're long on stocks at the top, some of them aren't coming back. The indexes might come back, but many companies definitely go to zero and will be replaced by a future generation. When you look at NVIDIA on the monthly, does this look like somewhere that you want to go long? A monthly "gap" like this will certainly always be filled, and it just happens to be right around the actual level we're looking to target. The weekly bars are severely ranged compressed, which tells us that a big move is coming I have a call on that Nasdaq that we're about to get a pretty violent and serious correction, but that it will really be a bear trap: Nasdaq - The Great Bear Trap You might feel right now that stocks ONLY GO UPPY. But considering you're in a bear market and these things have been mooning for like an entire quarter right now, you might want to check that notion before that notion wrecks you. The problem with NVIDIA going and making a new high right now is it's failed to do so twice. Friday's end of the day was a big rejection on everything Nasdaq. And this is a time when price stopped just 1.8% short of the high. So what it was really doing was covering the old range, and taking stops over the most subordinate high to the all time high. Another big tell is the SOXS and SOXL 3x leverage semiconductor ETFs are simultaneously setup on weekly and daily candles to breakout/retrace, and both started to do that in sync on the Friday dump. NVIDIA is the top component of the index underlying the ETF at roughly 9%. The most obvious place for it to retrace to to start taking out sell stops is the $395 gap. But this is only 5% at this point and not very scary. Meanwhile, all the bulls and all the bears start selling on a break of $366, because Discord and Reddit told them to and some books and guru videos told them to "because confirmation." Once the gap is finally balanced, I believe that Nasdaq is going to rip to something like 16,000 before we're done, and NVIDIA will actually finish its lifespan with a 5-handle. So for bears: here's your opportunity. But you better have realistic expectations. For bulls: here's your opportunity. But you better have patience in buying the dip, and you'll find you "made a lot of money getting out of the market too early." And for bulls and bears: stay away from ponzi companies and social distance from the CCP and all the Marxist-Leninist and atheist things. If you don't, you'll face more than the liquidation of your brokerage accounts, to say the very least.
NASDAQ:NVDAShort
by LordWrymouth
159
Monero Cup and Handle Just flipped the Monthly SARIntroduction I have been waiting for an OG coin alt season for over a year now. A lot of the top 10 or top 20 coins from 2015, 2017 and 2017 massively over performed compared to bitcoin and Ethereum and have had to go through an even longer cooling off period than those cryptos did. Monero has dropped to the 20s in coinmarketcap.com’s rankings and some of the coins I favor as trades and ideologically are a lot lower. I got a bit excited around February/march of 2022 but did not get the follow through that I was hoping for. Now that I have see a flip of the monthly parabolic SAR I am a lot more optimistic that a high probability move to the upside is beginning in Monero and my choice alts. Since they are lower down in market cap one cannot build a position as easily as one could in a top 10 or 20 coin. There is a lot of wicks and slippage when entering a position too enthusiastically or carelessly. I cannot just market into a margin position without creating a wick that immediately puts me under water and messes up my margin level. But if I am right the gains will be worth it. Main Analysis The Parabolic SAR is quite a nice indicator on the higher time frames. It was literally named Stop And Reverse and was designed to find places where price can take a U turn. If you are expecting a multi-month or multi-year to happen based on whatever (analysis, fundamenals, etc) a flip of the SAR helps clear “technical resistance” much in the same way clearing the 200SMA in a bear market is a sign that a bull market is brewing. Another technical resistance we have cleared is the resistance line of the flag. We popped through quite nicely and have been going sideways for about 10 days after the initial move began. While there is a chance that we can retest the flag’s previous resistance as support I think it is more likely that price pumps. A lot of biases of a lot of traders should have flipped to bullish with the SAR. The bull season is still in the early stages and there is still a lot of doubt but generally the bulls will be winning. Other Charts The monthly chart for both other times the Parabolic SAR flipped bullish look amazing when viewed with Heiken Ashi candles. Massive 50-70 percent pull backs don’t seem to matter anymore when viewed on the HA chart. The idea that I can get into this trade the first week it is happening is pretty exciting. The Parabolic SAR is usually used with some momentum indicator and the inventor of the Parabolic SAR liked to use another of his creations, the ADX. Here is a simplified version. Looks promising. The chart below shows the long term SMA situation. Price is winding up for its next move between the 200 and 100 SMAs. I think it will be to the upside in a big way. My channels chart set up has the gaussian and Keltner channel (1 and 2 ATR multipliers). Price is struggling at the guassian midline and I think we will see an upside resolution. The chart also shows that the keltner midline (the 20 EMA is a good place to buy pull backs on this uptrend if it is similar to the 2016 uptrend. Lots of people like to talk about price action but don’t spend enough time talking about volume action. One of the best indicators for volume is the On Balance Volume and with some moving averages it is really easy to tell when the long term buying and selling pressure has flipped. I am very optimistic that XMR’s OBV SMAs will flip bullish. Since volume can vary by exchange here is Binance as well Where is the money going to come from? Money has to come from somewhere to pump XMR and the other OG coins I favor. I think it is going to be rotated out from the ETH ecosystem. Many times a W pattern will have price pump to a double top or even all time highs and then price returns to the rise between the valleys. The chart below shows that both XMR and LTC had price return to the rise between the valley. Also, my linked ideas will have my bearish post on NDX. I think the equity markets will be howling here shortly as price retraces deeper. My plan I am looking to add to my positions with a simple pull back strategy. When both the Log MACD and Stoch are below zero know we have just had a pull back and that pull back will have generated some support and resistance lines. I will look to buy when price is again above that resistance line and catch some momentum. This will help me not buy and have the price continue to fall which is always nice. I will not be buying the bottoms though. I do not like the idea of buying things and having it be the same price six months to a year later. Much nicer to buy the pull back and watch price climb out of the hole and not return. I have this planned for a lot of the OG coins, many of which are now in obscurity. Zcash and Dash are in the 70s and 90s. Very low market cap. XPR, BCH and others are still rather big but not as exciting but they are going to be bought on pull backs just the same. XMR also topped over 200 days before total 2 did on this last uptrend. I have to be prepared to rotate out of XMR and into other coins if XMR reaches its major targets.
KRAKEN:XMRUSDLong
by This_Guhy
25
Grains outlook hangs in the balance of the Black Sea Grain deal The failed rebellion by the Wagner group over the June 24th weekend brought to light not only the ineptitude of the Russian top military command but also the carefully crafted image of President Putin as the guarantor of stability. Putin’s assertion that the quick end of the 24-hour revolt had shown the unity of Russians behind him was contradicted by footage of adoring crowds cheering Prigozhin and his fighters as they came out of a southern city they had occupied. It is possible that Putin could step up the escalation between Russia and Ukraine to re-establish his position which currently appears weakened. The recent political turmoil in Russia lowers the probability of the Black Sea Grain deal being extended beyond mid-July (current deal expires on July 18th). No respite in Russia’s sabre-rattling Even prior to the failed coup in Russia, pessimism had been expressed by both the Russian and Ukrainian sides. One senior Ukrainian diplomat has even spoken of a 99% probability of Russia withdrawing from the agreement. Russia has repeatedly threatened to quit the deal, complaining that obstacles remain to its own exports of food and fertilizer. It has also demanded the re-opening of the ammonia pipeline as a condition for renewing the grain corridor deal through the Black Sea. However, the ammonia pipeline was damaged a day before the Kakhovka dam was destroyed on June 6. This increases the risk that Russia could after all follow through on its threat and revoke the grain deal as early as July. Grains outlook clouded by Black Sea Grain deal The original agreement brokered on 22 July 2022, by the United Nations and Turkey to open a safe maritime humanitarian corridor in the Black Sea helped to address the global food security crisis and lower grains prices. Participants on the agricultural markets remain anxious on the extension of the current deal and it could lend additional tailwinds to grains prices. According to data from the Commodity Futures Trading Commission, wheat, corn and soybeans saw a 21%, 43% and 35% decline in short positioning underscoring a shift in sentiment towards weather uncertainty and geopolitical risk premiums. Top wheat producers forecast weak supply outlook owing to adverse weather conditions The prospects for the wheat crop in key producer countries has disappointed of late owing to adverse weather conditions. Dry conditions and low soil moisture in the west and east coasts of Australia imply that much of the 2023-24 crop has been sown dry and will require adequate and timely rain to allow the plants to germinate. Wheat is a major winter crop in Australia with planting from April and the harvest starting in November. The expected onset of the El Niño conditions from July will likely see winter crop output fall significantly according to Australian Bureau of Agricultural and Resource Economics and Science (ABARES). Across the globe, wild weather is affecting crops elsewhere, including Americas and North Africa. Europe is also being impacted by high temperatures and scant rainfall, increasing the risk of damage to the continent’s wheat crops. On the flip side, Canada and Ukrainian wheat supply forecasts are positive. According to Statistics Canada, 26.9 million acres have been planted with wheat – not only is this the highest figure in 22 years, it is also 0.4 million acres more than the analysts surveyed by Bloomberg had expected . The Ukrainian Grain Association (UGA) predicts significantly higher yields this year, meaning that the crop – contrary to what has been expected so far – could actually turn out to be higher than last season. However Ukrainian farmers are likely to struggle to export their grain owing to the uncertainty surrounding the Black Sea grains corridor. Corn market remains bullish Dry weather in the US and Europe has seen the condition of the corn and soybean crop deteriorate resulting in a price positive environment for corn and soybean. The United States Department of Agriculture’s (USDA) in its latest crop progress report continues to highlight concerns for the US corn and soybean crop, given the current dry weather conditions. The USDA rates 50% of the corn crop in good-to-excellent condition compared to 67% seen at the same stage last year. Moreover, the rating of the corn crop is the lowest seen for this time of year since 1988. This implies that the USDA’s optimistic forecast of 15.3bn bushels for the us corn crop in 2023/24 will hardly prove reasonable any longer. The National Centres for Environmental Prediction said it expects many parts of the Corn Belt that have been turning dry over the past month will get more rain than usual for this time of year over the next two weeks marking a change from earlier indications that El Niño would limit rainfall for thirsty crops. Soybean is also facing a similar story with 51% of the soybean crop rated good-to-excellent condition compared to 65% at the same time last year . Growing pessimism over the extension of the Black Sea Grains deal beyond mid-July is also likely to lend an additional tailwind for corn and soybean. Weak Chinese imports through most of the 2022/23 season surged in May to over 14.8mmt of corn, wheat, and soybeans, which was the highest monthly total since June 2021 . However we would caution that a fairly muted crop-based biofuel quotas from the US Environmental Protection Agency could offset some of the strength in Chinese demand. The front end of the soybean futures curve has extended its backwardation, now providing investors a 6.4% roll yield compared to 0% last month . This material is prepared by WisdomTree and its affiliates and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of the date of production and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and non-proprietary sources. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by WisdomTree, nor any affiliate, nor any of their officers, employees or agents. Reliance upon information in this material is at the sole discretion of the reader. Past performance is not a reliable indicator of future performance.
N
by aneekaguptaWTE
7
FOMC Minutes in the Charts: EUR/USD & GBP/USDDuring their June meeting, minutes released on Wednesday indicated that almost all Federal Reserve officials expect further tightening in the future. Despite the majority's belief in upcoming rate hikes, policymakers chose not to increase rates due to concerns about over-tightening. They acknowledged the delayed impact of previous policies and other factors, which led them to skip the June meeting after implementing ten consecutive rate increases. Out of the 18 participants, all but two anticipated at least one rate hike to be appropriate within this year, while twelve members expected two or more hikes. The prevailing consensus that the US central bank will raise borrowing costs by 25 basis points at the end of the July policy meeting has lent some strength to the US Dollar and exerted downward pressure on the GBP/USD and EUR/USD. The DXY (US Dollar Index) surged above 103.30, reaching its highest level of the week. EUR/USD further declined to the 1.0850 region. The outlook for the Euro has turned negative as the EUR/USD pair dropped below the 20-day simple moving average (SMA). If the GBP/USD pair falls below 1.2700 and confirms that level as resistance, the next potential bearish targets could be 1.2680, 1.2658, 1.2647 according to fib retracement levels and previously pivot points.
by BlackBull_Markets
2
Halfway thereWe're halfway through the year of 2023. Mega Cap earnings season begins in July. The 8 largest companies by market capitalization are AAPL, MSFT, GOOGL, AMZN, NVDA, TSLA, BRK.B, META. Here's an 8 split frame, 6 month chart with financial data. AAPL 3.05 T +49% YTD Earnings 8/3/23 MSFT 2.53 T +42% YTD Earnings 7/25/23 GOOGL 1.53 T +36% YTD Earnings 7/25/23 AMZN 1.34 T +55% YTD Earnings 7/27/23 NVDA 1.04 T +189% YTD Earnings 8/23/23 TSLA 830 B +113% YTD Earnings 8/19/23 BRK.B 745 B +10% YTD Earnings 8/7/23 META 735 B +138% YTD Earnings 7/26/23 Revenue = The total amount of money brought in by a company's operations, measured over a set amount of time. EPS = Is calculated by subtracting any preferred dividends from a company's net income and dividing that amount by the number of shares outstanding. PE = The price-to-earnings (P/E) ratio is the ratio for valuing a company that measures its current share price relative to its per-share earnings. PB = The Price-to-book value (P/B) is the ratio of the market value of a company's shares (share price) over its book value of equity. PS = The price-to-sales P/S ratio is calculated by dividing the stock price by the underlying company's sales per share. FCF = Free cash flow (FCF) represents the cash that a company generates after accounting for cash outflows to support operations and maintain its capital assets. Cash to debt ratio = The cash flow-to-debt ratio is the ratio of a company's cash flow from operations to its total debt. A ratio of 1 or greater is best, whereas a ratio of less than 1 shows that a firm isn't generating sufficient cash flow to meet its debt obligations. PEG ratio = The price/earnings to growth ratio (PEG ratio) is a stock's price-to-earnings (P/E) ratio divided by the growth rate of its earnings for a specified time period. Generally, a PEG below 1 means a stock is undervalued. Current ratio = The current ratio is Current Assets divided by Current Liabilities. It's a liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year. In general, a current ratio of 2 or higher is considered good, and anything lower than 2 is a cause for concern.
NASDAQ:AAPLShort
by Options360
19
AAPL Upward Channel OverextensionAAPL has been leading the market over the past couple of months after running more than 55% from its recent bottom and hitting that mythic $3 trillion dollar market cap. For the past two months AAPL has been trading within a clear upward channel clearly respecting the top and bottom of the trend. AAPL has been making a series of higher lows and higher highs while making slight pullbacks to key demand levels. Last week AAPL finally broke up from the wedge pattern on the hourly to finally head up to test the top of the channel trend again. After the gap up and run last week AAPL is starting to look overextended on the hourly while we are also spotting a possible bearish divergence in the RSI forming. Careful going long on AAPL as so far it is being rejected at this supply zone and we have picked up bearish activity betting on a pullback to $191.50. Risk/reward doesn't favor going long as it is overextended even from EMAs. Bulls are looking for a break above the channel or $195, target $196.33 or our 0.619 fib extension. Bears are happy as long as AAPL doesn't break above the supply zone and remains below $195.
NASDAQ:AAPLShort
by optionsswing
21
Battle of the New EV NASDAQ ComponentsLucid and Rivian, both new components of the NASDAQ:NDX , have been showing up on the High-Volume Institutional Activity recently. NASDAQ:LCID has the beginnings of a bottom attempt developing with a Dark Pool buy zone emerging, but it's been slow-going for this EV company. Professional short-term trading is evident in the current run up, as it is in other EV companies this week, spurred by the bankruptcy of Lordstown Motors, many would say. NASDAQ:RIVN has a clearer Dark Pool buy zone developing at this bottoming level with the same Pro Trader footprint in the current run up. This type of bottom formation provides a sturdier support level--evidence of more conviction from the institutions? Both stocks have a lot of work to do to complete their bottoms for more than short-term trading at this time. Resistance AND competition are heavy ahead, as it's still early days in the race to dominance in EV Auto Manufacturing.
NASDAQ:LCID
by MarthaStokesCMT-TechniTrader
12
APPLE ATH Fueled by Quintet PowerhousesHow did APPLE make a new ATH? In the fiscal year of 2022, Apple Inc. amassed a staggering revenue close to $400 billion. The tech behemoth’s financial forecast predicts an even more dazzling $450 billion by 2023. What’s at the nucleus of this financial prowess? Here’s a dissection of the five products and services that are the linchpins in Apple's revenue generation. 1. iPhone: The Standard-Bearer Since its inception in 2007, the iPhone has been the lodestar in Apple's stellar performance, consistently accounting for over half of the company’s revenue. There was a lull in the iPhone's sales during 2015-2020, but the fiscal years of 2021 and 2022 witnessed a robust resurgence. Could it be the worldwide lockdowns that reignited consumers' affinity for this beloved gadget? One wonders. Moreover, Apple's unceasing innovation has been a catalyst in this resurgence. The company has been adept at understanding and adapting to market trends, releasing newer models with advanced features such as enhanced camera capabilities, cutting-edge processors, and improved battery life. The introduction of 5G technology in the iPhone 12 and subsequent models further bolstered its appeal. With the ever-evolving landscape of consumer preferences, Apple's commitment to innovation ensures that the iPhone continues to hold its enviable position in the market. 2. Services: A Diverse Armamentarium Apple's services segment is a multi-pronged affair. The App Store and Apple Music are the twin pillars, but AppleCare, Apple Pay, Apple TV+, Apple Card, and iCloud storage are significant contributors as well. It's been an upward trajectory for this segment since 2013, with no signs of abating. Additionally, the expansion of Apple's services is emblematic of the company's strategic diversification. As the digital landscape evolves, Apple has astutely tapped into the growing demand for integrated services. Its focus on user privacy and seamless integration across devices has been a strong value proposition. For instance, Apple TV+ enters a competitive streaming market but with original content and collaborations with high-profile creators. Apple’s services segment not only supplements its revenue but also enhances customer retention and creates a more entrenched ecosystem, encouraging users to invest more within the Apple universe. 3. Mac: The Unwavering Pillar The allure of personal computers has attenuated globally, and Mac's revenue plateaued between 2011 and 2020. However, the Mac remains integral to Apple’s ecosystem, not least because of its role in keeping users within Apple's interconnected iOS operating system. In recent times, Apple has sought to reinvigorate the Mac lineup through innovation and integration. The introduction of Apple's own M1 chip, as opposed to relying on Intel's processors, marked a significant turning point. The M1 chip has been lauded for its performance and energy efficiency, giving the Mac a competitive edge. Furthermore, the seamless integration between the Mac and other Apple devices through features like Handoff, Universal Clipboard, and Sidecar has reinforced the appeal of owning a Mac as part of the larger Apple ecosystem. This ongoing revitalization suggests that Apple is far from considering the Mac as a legacy product, and is instead positioning it for a renewed period of relevance and growth. 4. iPad: Upon their debut, iPads were an instant sensation, raking in an impressive $19 billion in the first year. There was a zenith in 2014, after which sales experienced a decline. Currently, iPad sales hover in the range of $20-30 billion, cementing their place in Apple’s revenue mix. 5. Wearables & Accessories: The Rising Contenders Under this category, one finds an array of products including Beats headphones, AirPods, and the Apple Watch. This segment has been climbing the ladder of success since 2015. Notably, AirPods are estimated to constitute a quarter of the revenue in this category. Apple's foray into the wearables and accessories market is indicative of its visionary approach to emerging consumer trends. The health and fitness boom, for instance, has been adeptly capitalized on through the Apple Watch, which offers features like heart rate monitoring, exercise tracking, and ECG. AirPods, on the other hand, have become something of a cultural phenomenon, merging high-quality audio with sleek design. These products are not just revenue generators; they are an extension of Apple's ecosystem, promoting brand loyalty and customer engagement. By continuously innovating and expanding in this sector, Apple ensures it remains not just a heavyweight in consumer electronics but a trendsetter in lifestyle technologies. Conclusion: Apple's ascent to become the first company to reach $1 trillion and subsequently $2 trillion in market capitalization is hardly fortuitous. The aforementioned quintet of products and services is the bedrock of its supremacy. With consumers' unabated ardor for Apple’s innovations and the brand loyalty it commands, NASDAQ:AAPL remains a formidable player in the stock market. Is Apple part of your investment portfolio?
NASDAQ:AAPLLong
by financialflagship
21
ETH's Nested Flags: Bull Flag within a Bear FlagPrimary Chart: Weekly Candle Chart of ETH/USD with Competing Flag Scenarios Longer-Term Analysis BITSTAMP:ETHUSD has been largely in a trading range since making its low in June 2022. Yes, some of the moves within that range have been quite substantial. The move off the June 2022 low to the early August 2022 high was about +130.59% higher. The next leg higher from the early November 2022 low to the April 2023 high was about a +99% move. In between those moves was a substantial -47.29% downdraft. (Downdrafts may have quite a smaller percentage because the starting point begins much higher than the starting point for an up move.) But big volatility, huge moves, don't guarantee a strong trend either way. A stock can chop up and down in a volatile way while its overall progress remains relatively insignificant given the volatility and moves. Consider the 1-year uptrend on the Primary Chart. The trend does not form a powerful, steep upward slope, moving sharply higher for many weeks consecutively like other charts we have come to see in recent months, e.g., NVDA, AAPL. Instead, the trend has largely been sideways with a modest uptrend with only a gradual incline despite the big moves within this well-defined channel. This could be a bear flag, though that is not yet confirmed. It's a scenario in any case that should be kept in mind on a break of the upward trendline from June 2022 lows. 1. Bear-Flag Scenario: Chart A (also shown on the primary chart) Notice how the VWAPs confirm the largely sideways ranging action. The VWAP from the all-time high and the VWAP from 2022 lows have been containing the price action YTD in 2023. Despite the gentle uptrend slope, the anchored VWAP from the all-time high reminds us of a more dynamic and flexible measure of trend, which is down from the all-time high in 2021. 2. Anchored VWAP from All-Time High: Chart B The anchored VWAP from the all-time high remains formidable to price. Notice is power in resisting price up until now. However, the last rejection did not send price to new lows. This confirms the choppy sideways thesis for now. While the dark-blue VWAP from the ATH did reject price in April 2023, price has remained well above the anchored VWAP from the major June 2022 low. Currently, the ATH-anchored VWAP lies at $2,038. A close above this level suggests at least further upside in the near term. Traders of all time frames should keep this area in mind—it's sort of like a super-highway. You don't want to run out in the middle of it without looking carefully both ways. The measured-move area is also shown here. Note that this is a logarithmic chart, so the measured move is somewhat higher than on a linear chart. This post will attempt to display measured moves on both. 3. Three Anchored VWAPS from Key Pivots: Chart C The anchored VWAPs on this chart confirm the consolidation thesis discussed above. The VWAPs are anchored to key swing lows and highs since the all-time high. NOtice how the VWAPs from these various pivots have been compressing and flattening for months. This signifies another major trend move is likely to occur when this long-term consolidation completes. Many hope it will be an upward move back to highs. SquishTrade is less confident of that conclusion given inverted yield curves (see prior posts on this); however, over the coming weeks, maybe months, choppy to somewhat higher prices can occur. 4. Triangle Patterns within Triangle Patterns: Chart D Triangles are consolidation patterns. The fact that we see triangle patterns within triangle patterns supports the idea that this 1-year channel is potentially consolidative of the move that preceded it. No guarantees, but that seems to be a logical inference. Some might counter that this is a major "cup base" though others may struggle to see anything resembling something that might hold one's tea. We'll see. Note: This is a linear chart, with a measured move based on the linear scaling. 5. Triangle pattern on a Logarithmic Chart: Chart E This chart shows a triangle on a logarithmic scale. So now, switching to log scale doesn't necessarily change the thesis just yet. The measured move for the log scale gives a 1-year measured move off of June 2022 lows around $2467. If we extend the measured move to a 1.272 projection of the first leg off the June lows, then it runs up around $3000. Long-term view summarized: As long as the uptrend from June 2022 lows holds, as well as the VWAP from that same bar, price can continue to remain supported, i.e., not crashing, sideways, rallies and dips within the defined ranges. In SquishTrade's view, $2,400 - $3000 is likely the maximum level ETH may achieve between now and the likely recession foretold by the yield curves. But higher-for-longer monetary policy in major European and North American countries may keep the ceiling even lower than that. Caution is warranted unless / until certain persistent (and 40-year record) yield curve inversions have proven that they finally gave a false signal for the first time ever. Shorter-Term Commentary Directional traders may be disappointed in the coming 2-3 weeks. A flag within a flag suggests more choppy price action overall—at least until a breakout of either occurs. The smaller flag may breakout first to the upside and lead us to the upper edge of the channel. The larger flag may breakout to the downside, and lead us to new lows. But neither has happened just yet. So price action for now may respect the ranges that are in play—both horizontal ranges and diagonal ones (channels). But it appears that price could largely could remain rangebound from a broader perspective for the coming weeks. Conclusion Traders and investors love a major directional move. It sparks adrenaline (maybe) and a combination of dreams / hopes or fears / frustration. Some traders wait eagerly at various levels to fade the move (long or short) once it has started to progress in earnest. Others who may have timed a good entry may be busy counting their profits, while trying to calm down enough to figure out a proper exit, and writing on their foreheads a reminder to "move the stop to breakeven." And still others may be sitting back patiently on the sidelines for months or years and hoping for an ideal capitulatory low after the dust has started to settle between buyers and sellers who may finally seem to have exhausted themselves. In short, the confusion and choppiness of sideways to slightly upward price action is merely the market doing price discovery between all sorts of players including long-term underwater buyers who bought above 3500 and keep hoping the price will rise just enough to make them whole (increased supply), long-term holders who are true believers in the holding (reduced supply unless emotions shake them out), short sellers (supply and potential demand when a squeeze starts), derivatives traders (supply and/or demand due to hedging flow), intraday traders, scalpers, and, let's face it, some gamblers too. In general, the market action is a device for transferring wealth from the impatient to the patient, according to one investing legend, Warren Buffett. But sometimes the patient can be the short-term trader and the impatient can be the long-term investor—because a long-term investor may lack the patience to enter or exit properly, and a short-term trader may have the patience and discipline to execute some excellent swing trades, provided risk is managed and entries and exits are well-planned, well-timed and well-executed. Minor disclaimer: This post is in no way advocating any particular investing or trading strategy. Short-term trading and long-term investing can both be either devastating or profitable (or somewhere in between those extremes) to the person engaging in it. And thanks for reading this and for your encouragement and support. ________________________________________ Author's Comment: Thank you for reviewing this post and considering its charts and analysis. The author welcomes comments, discussion and debate (respectfully presented) in the comment section. Shared charts are especially helpful to support any opposing or alternative view. This article is intended to present an unbiased, technical view of the security or tradable risk asset discussed. Please note further that this technical-analysis viewpoint is short-term in nature. This is not a trade recommendation but a technical-analysis overview and commentary with levels to watch for the near term. This technical-analysis viewpoint could change at a moment's notice should price move beyond a level of invalidation. Further, proper risk-management techniques are vital to trading success. And countertrend or mean-reversion trading, e.g., trading a rally in a bear market, is lower probability and is tricky and challenging even for the most experienced traders. DISCLAIMER: This post contains commentary published solely for educational and informational purposes. This post's content (and any content available through links in this post) and its views do not constitute financial advice or an investment or trading recommendation, and they do not account for readers' personal financial circumstances, or their investing or trading objectives, time frame, and risk tolerance. Readers should perform their own due diligence, and consult a qualified financial adviser or other investment / financial professional before entering any trade, investment or other transaction.
KRAKEN:ETHUSD
by SquishTrade
39
WTI: Crude Oil May Have Bottomed OutNYMEX: WTI Crude Oil ( NYMEX:CL1! ), Micro Crude Oil ( NYMEX:MCL1! ) The talk of inflation deceleration created a wishful misperception. Does a CPI read from 9.1% to 4.0% mean price relief for consumer? Certainly not. Something costed $1 last year will go up to $1.04 this year on average. What really comes down is the rate and the pace of price increase, but the absolute price level has forever gone up. This makes the real decline in energy prices more extraordinary: • On June 23rd, WTI crude oil ( NYSE:CL ) August futures settled at $69.16 a barrel. This is 44% below last June’s high of $123.70; • At $2.44 a gallon, RBOB gasoline futures ( SIX:RB ) declined 34% year-over-year; • At $2.37 a gallon, ULSD diesel futures ( EURONEXT:HO ) price dropped 45% YoY. • At the retail level, the American Automobile Association reports the national average regular gasoline price at $3.57 a gallon on June 25th, down 27% YoY; • The AAA diesel price is now $3.89/gallon, falling 33% YoY. However, the era of low energy prices may be coming to an end. I am convinced that the market dynamic has changed. Elevated geopolitical tension, higher demand and a weak dollar could help pull crude oil out of the bottom, and onto an upward trajectory. Global Tension Forms Solid Price Support A week after the start of Russia-Ukraine conflict in February 2022, Crude oil futures shot up 30% from below $90 to $115. WTI peaked at $121 in June as the fighting continued. Since then, high inflation and rate hikes raised the risk of global recession. As the demand outlook dimmed, oil price lost support and trended down in the past year. Geopolitical tension may have been placed on the back burner, but it never went away. Last Saturday, the Russian private army Wagner Group mounted a short-lived rebellion against the Kremlin. What this means to the Ukraine conflict and the stability of Russia itself remain to be seen. Geopolitical crisis could cause supply shock and raise the price of crude oil. My observation is that global tension will be at an elevated level throughout 2023 and 2024. Oil Demand is Expected to Recover Last July, I called the peak of gas price in this report. I discovered that record $5 gas had caused demand to fumble. AAA gas price surprisingly declined at the start of the traditional summer driving season. Things look different now. Retail gas price creeped up 50 cents (+13%) since December. Many stations popped up gas price ahead of the July 4th holiday. With a still strong job market and inflation in check, consumers are taking their summer vacations. A second key demand factor comes from the US government. The Biden Administration has drawn down the Strategic Petroleum Reserve (SPR) to fight high oil price in the last two years. The Energy Information Agency data shows that the SPR holds 350 million barrels of crude oil as of June 16th. This is 285 million barrels less than the level on January 24th, 2020, the week when President Biden first took office. SPR is now at a critical four-decade low level. The Department of Energy has begun replenishing the SPR. It announced buying up to 3 million barrels in May, and recently planned additional purchase of 6 million in August. Thirdly, the risk of global economic recession is now lower than what we previously feared. This is my most important reason for raising the outlook of future oil demand. • The Federal Reserve implemented ten consecutive interest rate increases since March 2022. US inflation rate has declined from the peak of 9.1% to 4.0% in May. Lowering inflation may have averted the US economy from falling on a hard landing. • The banking failures, from Silicon Valley Bank to Signature Bank, First Republic, and Credit Suisse, have met with swift government rescue efforts. We have so far managed to contain these from spreading to systemic risk. • The resolution of US debt ceiling crisis helped avoid a US default and a likely global financial crisis it may trigger. According to the USDebtClock.org, the US national debt is now $32.1 trillion, which is $700 billion more than the previous debt limit. • The Biden-McCarthy deal in federal spending limits ensures that government budget will not be cut. The federal government accounts for one quarter of the US economy. As bad as it may sound, government spending spree with borrowed money does contribute to near-term economic growth. We just kick the can forward and leave the debt burden to future generations. A Weak Dollar Supports Higher Oil Price Last year, the main investment theme of global commodities market was “Strong Dollar, Weak Commodities” and “High Rate, Low Price”. We are now in a reverse course. The US dollar index peaked at 114 in last September. While the Fed raised rates aggressively, other countries were slow in response, resulting in widening interest rate spreads between the US dollar and major foreign currencies. Since then, the Fed reduced the size of rate hikes from 75 bp to 50 and then 25, while UK and ECB caught up with bigger rate increases. The dollar index has fallen to 100 by April. The Fed paused rate increase in its June meeting. Although it emphasizes in fighting inflation, there is no question that the monetary tightening cycle is now in its last stretch. NYMEX WTI Crude Oil Futures With the key factors discussed above, plus the OPEC having incentive to cut output, I could see WTI going back to the $80-$90 range. December WTI (CLZ3) currently quotes $69.1 a barrel. Each contract has a notional value of 1,000 barrels. Margin requirement is $5,000 to place one contract. Hypothetically, if Dec futures goes up to $80, one long contract would gain $10,900 (=10.9*1000). Theoretical return would be +118% (=10,900/5,000-1), excluding transaction fees. The risk of long WTI is falling oil price. If CLZ3 falls to $65, a long position would lose $4,100. This would result in a Margin Call, with the Exchange requiring the trader to deposit fund and bring the account balance back to $5,000. Alternatively, we could consider the Micro Crude Oil Futures ( CSE:MCL ). Contract size is one tenth of the standard CL contract. And so is the margin requirement. Everything else works the same. Happy Trading. Disclaimers *Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services. CME Real-time Market Data help identify trading set-ups and express my market views. 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
NYMEX:CL1!Long
by JimHuangChicago
22
AI Hype is not different from EV Hype!In the past 2 years, 5 EV companies have lost 800 billion dollars of their market cap! Today, the aggregate market cap of the top 60 companies is $2.229 T. Long-term investors in TSLA, NIO, RIVN, LCID, and XPEV have lost money equal to Toyota, Porsche, BYD, Mercedes-Benz, BMW, Volkswagen, Ford, and Ferrari combined! The market always punishes people for FOMO..! The AI hype will have the same future, I have no doubt! Compare the NVDA balance sheet with TSLA and you will see what you should visit! If you have doubts check how many SHORT Analyses I have published in the past 2 yeas for these tickers! I have published 122 short analyses in the past 30 months for the top-mentioned EV makers!
NASDAQ:TSLA
by Moshkelgosha
48
Peeking into Super SevensIn our previous paper , we outlined how investors can use CME's Micro S&P 500 Futures to hedge beta exposure and extract pure alpha. The paper referenced that the Super Sevens stocks (Amazon, Apple, Google, Meta, Microsoft, Nvidia, and Tesla) will continue to outperform the broader S&P 500 index. Not only do these stocks benefit from passive investing and ESG investing, these firms also have solid fundamentals to back up their gargantuan valuations. Each of the firms in the Super Sevens offer unique value drivers. Each firm is a market leader in its space and has demonstrated resilient earnings capacity and solid growth potential. Still, each also has its own set of risks. Notably, with the Super Sevens the value drivers outweigh the potential risks. AMAZON VALUE DRIVERS • Blistering profits from AWS offering with dominant market share of 33%. • Market dominance in e-commerce and solid supply chain network. • Successful new categories: Kindle (publishing), Alexa (voice assistant), and Prime (video streaming). POTENTIAL RISKS • Heavy reliance on AWS for profits. Slowing growth in AWS due to slowdown in corporate IT spending. • Low profit margins in e-commerce business. Slowing growth due to lower consumer spending. • Rising competition in cloud services and e-commerce. ANALYST PRICE TARGETS • Across 54 analysts providing a 12-month price target, 42 (77%) having a strong buy rating, 7 (13%) of them have a buy rating, 4 (7%) suggest a hold, while just 1 (2%) has a strong sell rating. • Average 12-month price target stands at 137, with a maximum of 220 and a minimum of 85. TECHNICAL SIGNALS • Technical signals point to momentum deeply in favour of Amazon shares. Oscillators point to buy and Moving averages point to a strong buy. • In aggregate, technical signals point to a buy. APPLE VALUE DRIVERS • Product category definers. Dominant and still growing iPhone demand. • Solid eco-system which is extremely hard to displace. • Control over both software and hardware enables specialized tailored improvements. • Sticky services such as App store, Apple Pay, and potentially Apple BNPL. POTENTIAL RISKS • Apple is heavily reliant on external fabricators exposing it to supply-chain bottlenecks. • Heavily dependent on iPhone sales. • Rising dependence on future growth in unexplored new categories. ANALYST PRICE TARGETS • Across 42 analysts providing a 12-month price target, 22 (52%) having a strong buy rating, 6 (14%) of them have a buy rating, 13 (31%) suggest a hold, while just 1 (2%) has a strong sell rating. • Average 12-month price target stands at 187, with a maximum of 220 and a minimum of 140. TECHNICAL SIGNALS • Technical signals point to solid momentum favouring long position in Apple shares. Oscillators point to buy and Moving averages point to a strong buy. • In aggregate, technical signals point to a strong buy despite Apple trading at near its all-time-high. GOOGLE VALUE DRIVERS • Google is the dominant search engine (86% market share). • Phenomenally successful and effective ad-targeting capabilities. • Heavy investments in future innovation enabling leapfrog into new verticals such as Android, Waymo (FSD & Maps). • Successful early acquisitions such as YouTube, Android, Applied Semantics & DoubleClick (AdSense), Nest (Home Automation). POTENTIAL RISKS • Massive reliance on ad revenues via search for profits. Slowing ad spend as firms cut back on spending. • Non-trivial dependence on cloud revenue for growth exposes them. Slowing cloud revenue growth due to lower corporate IT spending. • Failure to expand into new domains such as social media, wearable tech, and gaming. ANALYST PRICE TARGETS • Across 52 analysts providing a 12-month price target, 40 (77%) having a strong buy rating, 7 (13%) of them have a buy rating, while 5 (10%) suggest a hold. None of the analysts have a sell rating. • Average 12-month price target stands at 131, with a maximum of 190 and a minimum of 100. TECHNICAL SIGNALS • Technical signals point to decent momentum favouring Google shares but prices are at tiny risk of oscillating downwards. Oscillators point to neutral while Moving averages point to a strong buy. • In aggregate, technical signals point to a buy. META VALUE DRIVERS • Market monopoly on social media with high penetration across global markets on multiple platforms. • Flagship Facebook platform continues to see growth with 2.9 billion monthly active users (MAU). • Successful acquisitions have provided them with a wide suite of social media platforms – WhatsApp (2 billion MAU) and Instagram (2 billion MAU). • Successful developer tools (Graph, Hydra, React) have allowed them to build useful SDK (Software Development Kit). Potential sources of enterprise revenue from these. POTENTIAL RISKS • Increasing competition from TikTok. • Privacy concerns have a direct revenue impact e.g., Apple’s new privacy policies. • Falling market share for flagship Facebook in advanced economies. • High reliance on ad-sales. Slowing ad sales as firms cut back on spending. • Shaky bet on the Metaverse which is starting to fade. ANALYST PRICE TARGETS • Across 60 analysts providing a 12-month price target, 39 (65%) having a strong buy rating, 7 (12%) of them have a buy rating, 10 (17%) suggest a hold, 1 (2%) sell rating, and 3 (5%) has a strong sell rating. • Average 12-month price target stands at 281, with a maximum of 350 and a minimum of 100. TECHNICAL SIGNALS • Technical signals point to decent momentum favouring Meta shares. Oscillators signal neutral indicating a tiny risk of shares shedding gains while Moving averages point to a strong buy. • In aggregate, technical signals point to a buy. MICROSOFT VALUE DRIVERS • Sheer dominance of Windows (74% market share) & MS Office. • Deep roots in MS Office enables the firm to straddle across consumers & enterprise. • Diversified software offerings - cloud (Azure), gaming (Xbox), enterprise (Windows Server and SQL), search (Bing), productivity (Office), collaboration (Teams), and AI (through Open AI's ChatGPT). • Active M&A activity to acquire assets - LinkedIn, OpenAI, GitHub, Skype, Mojang, Nokia, Activision-Blizzard (Pending). • Besides Windows, Microsoft controls dev frameworks such as .Net further strengthening their grasp on SW dev. POTENTIAL RISKS • Limited success in hardware offerings unlike Apple. • Multiple major acquisitions have fizzled – Skype and Nokia. • Limited adoption in enterprise software. ANALYST PRICE TARGETS • Across 51 analysts providing a 12-month price target, 37 (73%) having a strong buy rating, 6 (12%) of them have a buy rating, 7 (14%) suggest a hold, while just 1 (2%) has a strong sell rating. • Average 12-month price target stands at 345, with a maximum of 450 and a minimum of 232. TECHNICAL SIGNALS • Technical signals point to decent momentum favouring Microsoft shares. Oscillators are at neutral while Moving averages signal a strong buy. • In aggregate, technical signals point to a strong buy. NVIDIA VALUE DRIVERS • Market dominance in discrete GPU’s (80%). • Early mover in AI hardware which gives them a lead over the competition. • Raytracing, DLSS, Neural Network cores. • Nvidia’s CUDA is the primary choice for training ML models. • Market dominance in high-growth data centre graphics hardware (95%) and super-computing hardware. • Successful enterprise partnerships – car manufacturers using Nvidia software. • Emerging tech such as AI and VR require more graphics intensive processing driving demand for Nvidia’s products. POTENTIAL RISKS • Hardware-focused business model exposes it to supply-chain risks and bottlenecks. • Extremely high P/E of 225 dependent upon expectations of future growth in AI. • Losing market share in discrete GPUs and enterprise GPUs to AMD and Intel. ANALYST PRICE TARGETS • Across 50 analysts providing a 12-month price target, 36 (72%) having a strong buy rating, 6 (12%) of them have a buy rating, 7 (14%) suggest a hold, while just 1 (2%) has a sell rating. • Average 12-month price target stands at 444, with a maximum of 600 and a minimum of 175. TECHNICAL SIGNALS • Technical signals point to solid momentum favouring long position Nvidia shares. Oscillators point to buy and Moving averages point to a strong buy. • In aggregate, technical signals point to a strong buy despite Nvidia relentless and unrivalled price ascent. TESLA VALUE DRIVERS • Early mover in EV’s with dominant market share in US (62%). • Dedicated and loyal customer base. • Vertical integration of EV value chain allows it to reduce reliance on external suppliers. • Early investment in large factories that will allow them to scale output more efficiently. • Huge and monetizable supercharger network by opening it up to other EV makers. • Subscription model for software enables revenue generation after product sale. • Long term vision has allowed Tesla to create entirely new products such as supercharger network, battery banks, home power backup and solar roofs. • Tesla’s planned Robotaxi and entry into car insurance can be hugely disruptive. POTENTIAL RISKS • Increasing competition from automobile majors as well as Chinese EV firms. • Tesla’s brand is deeply entangled with Musk’s reputation. • Dependence on government incentives to make Tesla affordable. • Continued access to battery metal minerals. • Ongoing and unresolved production scaling challenges. ANALYST PRICE TARGETS • Across 46 analysts providing a 12-month price target, 18 (39%) having a strong buy rating, 5 (11%) of them have a buy rating, 17 (37%) suggest a hold, 1 (2%) has a sell rating, and a 5 (11%) hold a strong sell rating. • Average 12-month price target stands at 201, with a maximum of 335 and a minimum of 71. TECHNICAL SIGNALS • Technical signals point to solid momentum favouring Tesla. Oscillators point to buy and Moving averages point to a strong buy. • In aggregate, technical signals point to a strong buy. SUMMARY The Super Sevens are well positioned to continue outperforming the wider market. As mentioned in our previous paper , investors can use a beta hedge to nullify the effects of the broader market (S&P 500) and extract pure alpha from the growth of the Super Sevens. MARKET DATA CME Real-time Market Data helps identify trading set-ups and express market views better. 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 DISCLAIMER This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services. Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
NASDAQ:AAPLLong
by mintdotfinance
35
Will Palladium Slide Down To $1000?Palladium, which hit an all-time high of $3433 in March 2022, has since experienced a major downturn, plunging below the $3000 support level and losing 34% of its peak value by the end of that month. The downward trend persisted throughout 2022, breaching the critical $2000 level in October. A significant bearish move in February 2023 further pushed the price below the $1543 support level from December 2021, turning it into a formidable resistance level. This has led to a further drop to a four-year low of $1305. Now, with a total decline of over 58% from its all-time high, palladium may continue to fall towards the $1000 mark unless buying sentiment changes. If you enjoyed this post, make sure to like, and follow for more quality content! If you have any questions or comments, comment below. We reply to every comment! See below for more information on our trading techniques. As always, keep it simple, keep it Sublime.
TVC:PALLADIUMShort
by Sublime_Trading
23
Take Two | TTWO & GTA VIIs TakeTwo Interactive Software Fairly Valued? We use what is known as a 2 stage model, which simply means we have two different periods of growth rates for the company's cash flows. Generally the first stage is higher growth, and the second stage is a lower growth phase. To begin with, we have to get estimates of the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. Present Value of 10-year Cash Flow (PVCF) = US $9.1b The second stage is also known as Terminal Value, this is the business's cash flow after the first stage. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 5-year average of the 10-year government bond yield (2.2%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 8.5%. The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is US$27b. The last step is to then divide the equity value by the number of shares outstanding. Compared to the current share price of US$139, the company appears about fair value at a 14% discount to where the stock price trades currently. Valuations are imprecise instruments though, rather like a telescope - move a few degrees and end up in a different galaxy. Do keep this in mind. We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows. You don't have to agree with these inputs, I recommend redoing the calculations yourself and playing with them. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Take-Two Interactive Software as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 8.5%, which is based on a levered beta of 1.071. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. Valuation is only one side of the coin in terms of building your investment thesis, and it shouldn't be the only metric you look at when researching a company. DCF models are not the be-all and end-all of investment valuation. Instead the best use for a DCF model is to test certain assumptions and theories to see if they would lead to the company being undervalued or overvalued. For example, changes in the company's cost of equity or the risk free rate can significantly impact the valuation. For Take-Two Interactive Software, we've put together three pertinent items you should explore: Risks: To that end, you should be aware of the 1 warning sign we've spotted with Take-Two Interactive Software Future Earnings: How does TTWO's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart. Other High Quality Alternatives: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing! long story short Using the 2 Stage Free Cash Flow to Equity, Take-Two Interactive Software fair value estimate is US$162 and with US$138 share price, Take-Two Interactive Software appears to be trading close to its estimated fair value
NASDAQ:TTWOLong
by moonypto
14