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TLT: Trade Idea Before More Fed QEThe signal I was waiting for to start buying bonds was whenever the Federal Reserve stopped or slowed raising interest rates. The Fed held another rate policy meeting this week and only raised the Federal Funds Rate by +.25% instead of the +.75% that had been the trend. We've gone from seeing a +.50% hike in Dec, to +.25% in Jan to +.25% this week after 4 prior straight +.75% hikes in mid to late 2022. Now that banks are failing and layoffs are starting to tick up, this weeks rate hike was likely the last for a bit unless inflation doesn't stay flat or go down before the next Fed rate meeting. You can search "2023 FOMC meetings" for the full schedule. My thought here is that within the next 12-18 months the Federal Reserve will lower rates and begin buying treasuries again(aka money printing), and I think the time to start front-running that trade in to bonds is now for those who like to accumulate a larger position over time. The best way for the average trader or phone app investor to get into bonds is via "TLT", the iShares 20+ year Treasury Bond ETF, which tracks the 20-year treasury bond price rather than the interest rate on the 20-year bond. As rates go up, bond prices go down and vice versa. Right now I'm betting on rates having topped out(or close to it) and that bond prices are going to go back up over the next year or so as recession fears kick in and stock prices go lower. We've had a deep and long yield curve inversion to boot and those almost always precede a US recession. I have a recent post showing the yield curve inversion vs stocks vs US recessions for reference. TLT price is trading at decade lows and holding above $100 after a dip down to $90. Seeing the price of any asset hold above nice round numbers is always a good sign, psychologically traders like round numbers. The lower PPO momentum indicator is showing signs of a potential reversal in momentum from negative to short-term positive, and this is a monthly chart so it would be a significant event. A bullish crossover is what we want to see which is when the green signal line crosses above the purple base line in the lower PPO indicator. That would indicate a short-term return to bullish momentum on a monthly basis.
NASDAQ:TLTLong
by PrepForProfit
4
Federal Reserve Balance Sheet Projected to Exceed $19 TrillionWave structures on these Economic Indexes tend to play out fairly often, such as in the case for Various CPI and Interest Rate Charts which can bee seen in the Related Ideas tab below. With that in mind, I now turn to The Federal Reserve Balance Sheet; and when I look at the Balance Sheet what I see is that since the Inception of this chart, it has traded within an Equidistant Channel that can be easily viewed and plotted in Log scale. When I look deeper into this I can also see that since around the end of the 2008 GFC when mass bailouts occurred, the RSI on the Balance Sheet has typically stayed Elevated and Above the Bullish Control Zone: meaning any time spent below the level of 70 has typically been followed by insane expansionary rallies, thus huge continuations in the rapid increases of the Balance Sheet. Additionally, it can also be seen that as of recent times (notably since the mid 2010s) the MACD has become a great indicator in the form of Hidden Bullish Divergences appearing just before huge continuations to the upside; these mid 2010 events align with the blunder that were the taper tantrums in which the fed ultimately capitulated on their monetary tightening stance and decided to expand the Balance Sheet Exponentially Higher and now looking at the chart we can see yet another Hidden Bullish Divergence forming that will be confirmed at the close of the month after the next trading week signaling that another big wave up is about to begin. Lastly, when zooming all the way out and taking in all the data at once, it can be seen that we are in what looks to be an AB=CD wave structure in which the first expansion was a 400% Expansion and the Current Expansion is on the way to being yet another 400%. We are currently about halfway there and the AB=CD Wave Structure would suggest that the Federal Reserve will more than double it's Balance Sheet by 2026 as the Federal Reserve capitulates yet again in an attempt to save the current fragile economic system.
FRED:WALCLLong
by RizeSenpai
3
XAUUSD Technical Analysis 23.03.2023 1h chart– Previous Daily candle closed Bullish at 1970.100 forming new Daily Support at 1940.600. – Buys on close above 1974.500 targeting 4h Resistance at 1981.500, Leaving Runners to the Daily Resistance formed at 1988.500. – Sells on close below 1961.000 targeting 1h previous Resistance formed at 1953.500, Leaving Runners to the 1h Support at 1946.200. – We have High Impact News data ahead on the New York session with Unemployment Claims and New Home Sales
OANDA:XAUUSD
by SalimFX20
GBP & Gold Reaction to UK Inflation and US Rate HikeTwo significant events have occurred within the past 12 hours, causing both GBPUSD and gold prices to surge. The first event was the unexpected rise in UK inflation, which jumped from 10.1% in January to 10.4% in February 2023, marking the first increase in four months. The primary factor behind this increase was the soaring food and drink prices, which surged at the fastest pace in 45 years. This inflation reading may fuel arguments that the Bank of England needs to boost interest rates again. However, the data might have arrived too late to impact the Bank's interest rate decision, which is due tomorrow. Nevertheless, the GBP rallied against the USD, before subsiding, and then rallying again on the news of the second event. The second event occurred an hour ago, with the US Federal Reserve announcing its latest interest rate decision, which included a 25-basis-point hike. While most of the market had anticipated this move, some participants believed that the Fed might pause its rate hikes. In the post-decision address, Fed Chair Jerome Powell acknowledged that recent economic indicators, particularly job data, have come in stronger than expected. However, Powell noted that the recent turmoil in the banking sector should result in tighter lending conditions, which will help combat the robust economic data. Nonetheless, Powell added that it was too early to determine how monetary policy should respond to the recent banking crisis, but it will play a role in future rate hike decisions. Gold is following a similar path to the GBP/USD and appears to be encountering some resistance at $1,970.
by BlackBull_Markets
EUR/USD Moves Towards 1.0800 Ahead of Fed's DecisionThe EUR/USD pair has advanced modestly on Wednesday as investors remain sidelined ahead of the Federal Reserve Open Market Committee (FOMC) decision. At the time of writing, the EUR/USD pair is trading at the 1.0790 zone, 0.23% above its opening price. All eyes are on the Federal Reserve decision to be released at 18:00 GMT, which will be accompanied by the statement and the dot plot with updated members’ projections. Half an hour later, Chairman Jerome Powell will speak at a press conference. Hours ahead of the verdict, the CME FedWatch Tool points to a 25 bps rate hike as the most likely outcome (89.3%) versus no change (10.7%). While the banking turmoil seems contained, at least at the time being, the Fed is far away from taming inflation. A 50 bps rate increase seems out of the table, so if the Fed surprises with such an increase, the dollar could rally across the board. Investors will also scrutinize the statement, the dot plot and Powell’s wording. While the technical picture becomes less relevant ahead of the highly anticipated decision, the EUR/USD maintains a bullish short-term bias according to indicators on the daily chart while the price continues to rise above its main moving averages. The EUR/USD pair needs to reclaim the 1.0800 zone to pave the way higher, with 1.0900 –psychological level and 50% retracement of the 1.2266-0.9535 decline – as the next target and critical barrier on the upside. On the flip side, immediate supports are seen at 1.0700 and the 20-day SMA at 1.0640. The broader perspective will remain positive if the pair manages to hold above 1.0500 after the Fed event.
by Alex_Boltyan_FXAnalyst
FED Interest Rates and it's mechanism BINANCE:BTCUSDT In the United States, the federal funds rate is the interest rate at which depository institutions (banks and credit unions) lend reserve balances to other depository institutions overnight on an uncollateralized basis. Reserve balances are amounts held at the Federal Reserve to maintain depository institutions' reserve requirements. Institutions with surplus balances in their accounts lend those balances to institutions in need of larger balances. The federal funds rate is an important benchmark in financial markets. The effective federal funds rate (EFFR) is calculated as the effective median interest rate of overnight federal funds transactions during the previous business day. It is published daily by the Federal Reserve Bank of New York. The federal funds target range is determined by a meeting of the members of the Federal Open Market Committee (FOMC) which normally occurs eight times a year about seven weeks apart. The committee may also hold additional meetings and implement target rate changes outside of its normal schedule. The Federal Reserve uses open market operations to bring the effective rate into the target range. The target range is chosen in part to influence the money supply in the U.S. economy Financial institutions are obligated by law to hold liquid assets that can be used to cover sustained net cash outflows. Among these assets are the deposits that the institutions maintain, directly or indirectly, with a Federal Reserve Bank. An institution that is below its required liquidity can address this temporarily by borrowing from institutions that have Federal Reserve deposits in excess of the requirement. The interest rate that a borrowing bank pays to a lending bank to borrow the funds is negotiated between the two banks, and the weighted average of this rate across all such transactions is the effective federal funds rate. The Federal Open Market Committee regularly sets a target range for the federal funds rate according to its policy goals and the economic conditions of the United States. It directs the Federal Reserve Banks to influence the rate toward that range with open market operations or adjustments to their own deposit interest rates. Although this is commonly referred to as "setting interest rates," the effect is not immediate and depends on the banks' response to money market conditions. Separately, the Federal Reserve lends directly to institutions through its discount window, at a rate that is usually higher than the federal funds rate. Future contracts in the federal funds rate trade on the Chicago Board of Trade (CBOT), and the financial press refer to these contracts when estimating the probabilities of upcoming FOMC actions. When the FOMC wishes to reduce interest rates they will increase the supply of money by buying government securities. When additional supply is added and everything else remains constant, the price of borrowed funds – the federal funds rate – falls. Conversely, when the Committee wishes to increase the federal funds rate, they will instruct the Desk Manager to sell government securities, thereby taking the money they earn on the proceeds of those sales out of circulation and reducing the money supply. When supply is taken away and everything else remains constant, the interest rate will normally rise. The Federal Reserve has responded to a potential slow-down by lowering the target federal funds rate during recessions and other periods of lower growth. In fact, the Committee's lowering has recently predated recessions, in order to stimulate the economy and cushion the fall. Reducing the federal funds rate makes money cheaper, allowing an influx of credit into the economy through all types of loans.
Education
by INVESTRONE
3
BTCUSDIn the daily time frame, with increasing expectations of a 0.25% increase in interest rates or even keeping it constant due to the financial crisis of banks in America, Bitcoin will cross the heavy resistance of 25,000 and at the level of 28,500 in lower times, we can see the weakness of the trend, which can indicate The market rest for the next move according to today's economic data and Powell's speech. If the level of 25000 is rejected, it can be the key support for the correction to continue the upward trend, but with the positive impact of the result of tonight's session, the levels of 32000 and 38000 are the next targets of this accelerated movement, which seems to be different from the very bullish expectations. In the market, it is necessary to continue the upward movement of a correction, which Mr. Pavel can have a surprise for the market. (You have to see if he has the phone in his hand or not 😉)
BITSTAMP:BTCUSD
by MrHunterTradeInsight
NQ Power Range Report with FIB Ext - 3/22/2023 SessionCME_MINI:NQM2023 - PR High: 12874.75 - PR Low: 12862.25 - NZ Spread: 28.0 Evening Stats (As of 12:15 AM) - Weekend Gap: N/A - 8/19 Session Gap: -0.04% (open > 13237) - Session Open ATR: 260.79 - Volume: 14K - Open Int: 214K - Trend Grade: Bear - From ATH: -23.2% (Rounded) Key Levels (Rounded - Think of these as ranges) - Long: 12959 - Mid: 12392 - Short: 11820 Keep in mind this is not speculation or a prediction. Only a report of the Power Range with Fib extensions for target hunting. Do your DD! You determine your risk tolerance. You are fully capable of making your own decisions.
CME_MINI:NQM2023Long
by mv3trader5
XauUsd Fed's Rate Decision | Will it retest or drop below 1915Last week 1915 was a decisive resistance for price to reach 1990. Upcoming Fed Decision, Will it retest 1915 support or will it trade below 1915? Upcoming Fed Rate Decision, I am confident Fed will rise Interest rate despite having a dilemma like SVB. However, it pausible Fed will stop interest rate at 5% IF inflation rate in bearish This is based on my personal opinion. momentum. Recent date show Inflation rate is at 6.04%. It was peak at 9.06% in June 2022. Drop 3.02% in 8 month. We will expect another 8 months or less until inflation lowered to 2% or 3%.
TVC:GOLDShort
by Khairi_RL
2
XauUsd Fed's Rate Decision | Will it retest or drop below 1915Last week 1915 was a decisive resistance for price to reach 1990. Upcoming Fed Decision, Will it retest 1915 support or will it trade below 1915? Upcoming Fed Rate Decision, I am confident Fed will rise Interest rate despite having a dilemma like SVB. However, it pausible Fed will stop interest rate at 5% IF inflation rate in bearish momentum. This is based on my personal opinion. Recent date show Inflation rate is at 6.04%. It was peak at 9.06% in June 2022. Drop 3.02% in 8 month. We will expect another 8 months or less until inflation lowered to 2% or 3%.
TVC:GOLDLong
by Khairi_RL
DXY and the FED coming tomorrowImagine YOU were the FED You have enough Liquidity to bail out the important banks, been setting it up for days. The Shrimp banks can default, happened before in 2008 and the DXY INCREASED in Value You HATE Crypto, its taking Your money Increase Rates by 50- job done ? This is a very real scenaro as far as I am concerned. Traditional finance is under attack by Crypto. Traditonalists will run to save banks but , if you think about it, WHY ? Banks are a prime example of "Filter down" but most of the time, it is more a trickle is anything at all..and THAT is what people like the FEDERAL RESERVE ( A PRIVATE organisation, NOT governmental) are tryin gto protect.Their monopoly. There has NEVER been a cradable challenge to the Banking industry - Now there is and it is WAR As mnetioned above, 2009 saw many banks collapse but look at the DXY...It Rose 22% over the next 12 months. DXY did not suffer in anyway and this could happen again and, in fact, is VERY likely to. And THAT is the FED's job - thats what it does. So, Will they raise the rates tomorrow ? 12? 50 ? 75 ? The mission is to Kill Crypto or save a Business ? We will find out tomorrow
TVC:DXY
by Orriginal
EurUsd Fed's Rate Decision | Sideway or Downtrend? My personal opinion on price movement based on Fed Decision. Fed Decision: 1. Interest rate Increase (Most likely) USD temporarily become strong. Price will drop until 1.05300 and slowly climb back to 1.07500 2. No Changes in Interest Rate (Pausible) Price will retest at 1.06500 or Will possibly break resistance 1.08000 3. Interest rate Decrease (Unlikely) Price break above 1.08000. Market will trade between 1.08000 - 1.10000.
Long
by Khairi_RL
1
XAUUSDKeep in mind this week we have exceptionally heavy fundamentals, on Wednesday. The FED announces its Interest Rate hikes. traders are waiting across the board for the number (if there's going to be one..) JPMorgan and Goldman Sachs expect 25 basis points. Please trade carefully. After the banking crisis (not over yet.) The FED has to intervene. In the past week, the FED has printed another $ 300 Billion in a second to support the failing banking industry. hence we are looking to short XAU, however, be mindful that this is a short-term setup and we expect XAU to offer an excellent buy opportunity. Let's see what markets and the FED has for us! _____________________________ We can try for a Sell entry at this area around the 50% fib however we do expect the Asian session to try to reach the higher fib areas before selling off.
OANDA:XAUUSD
by FastFx_Ltd
Gold Shines amid Global Financial DistressCOMEX: Micro Gold Futures ( COMEX_MINI:MGC1! ) Gold prices surged Friday as a wave of banking crises shook global financial markets. Spot gold climbed 3.1% to $1,977.89 per ounce, its highest level since April 2022. Gold price is now within $100 of its all-time high of $2,074.88. In the futures market, the nearby April contract of COMEX gold futures settled at $1,973.5, where the far-month June 2024 contract closed at $2,076.9. The year-long Fed rate hikes cracked the US banking system. Within two weeks, we have witnessed the collapses of Silvergate Bank and Silicon Valley Bank in California and Signature Bank in New York. First Republic Bank, a mid-sized bank in California, received $30 billion emergency injection from 11 largest American banks, led by JP Morgan. Interestingly, it was J.P. Morgan who organized a $30 million rescue plan to avert the collapse of Wall Street in 1907. That crisis led to the creation of Federal Reserve System. A century later, the cost of bank bailout increases by 1,000 folds. However, bank runs have already spread. Credit Suisse, a prestigious investment bank, is under distress. On Sunday evening, fellow Swiss bank UBS announced that it is acquiring Credit Suisse. Gold Price Rises in Times of Major Crises In the past two decades, gold price peaked in times of market turbulence. • The 2008 financial crisis • The 2010 European debt crisis • The 2018-19 US-China trade conflict • The outbreak of COVID pandemic • The Russia-Ukraine conflict • The March 2023 bank run Gold price is also negatively correlated with the US dollar. Last year, when Dollar rose on the back of Fed tightening, gold took a beating. Now, as investors expect the Fed to slow rate hikes, gold shines through the chaos. Investing in Gold: what in there for you? • Diversification: Gold helps reduce the overall risk of your portfolio by providing a hedge against inflation and currency devaluation • Tax efficiency: Long-term capital gains on gold investments are taxed at a maximum rate of 28%, which is lower than 37% for other long-term capital gains • Protection against rising prices: Gold has historically been a good hedge against inflation, and it can help protect your purchasing power • Liquidity: Gold ETFs and Gold Futures are highly liquid financial instruments. Many brokers also buy and sell gold bars and gold coins, with a commission. • Hedge against difficult economic conditions: Gold is a global store of value, and it can provide financial cover during geopolitical and economic uncertainty • Portfolio diversifier: Gold can act as a hedge against inflation and deflation alike, as well as a good portfolio diversifier In a previous writing, I showed that gold did not work well as a hedge against inflation. However, gold holds up extremely well during major crises where other assets lost value. Hedging against Known and Unknown Risks Risk on, gold goes up. Risk off, gold declines. Some risks are expected, while others come as a surprise. Fed rate actions are scheduled events and can be considered known or expected risk. CME FedWatch Tool shows the likelihood that the Fed will change the Federal target rate at upcoming FOMC meetings. It analyzes the probabilities of changes to the Fed rate and U.S. monetary policy, as implied by 30-Day Fed Funds futures pricing data. As of March 19th, FedWatch estimates a 38% chance of Fed keeping the current rate unchanged at 450-475 bp, and 62% odds of increasing 25 bp to 475-500 bp. By providing $300 billion in emergency lending to member banks, the Fed has effectively put Quantitative Easing at work. In my opinion, the Fed has switched its priority from fighting inflation to crisis management. Managing the systemic risk in the US banking system outweighs the battle against inflation at this time. It’s a matter of priority. What’s unknown is the potential failure of any bank not yet exposed in the news. US banks are estimated to sit on unrealized loss in hundreds of billions of dollars in their bond portfolio, largely consisted of Treasury and US agency bonds. As the “held-to-maturity” asset will be sold or marked down, these banks could run into trouble by a run of depositors and investors. In this unusual time, no news is good news. Short-term Trading Strategies The upcoming FOMC meeting on March 22nd make a compelling reason for event-driven trades on Micro Gold Futures. Here is my logic: • If the Fed keeps the rate unchanged, stock market would rally. As a major risk is removed from the financial system, gold price would fall • If the Fed raises 25 bps, stock market would fall, and gold price would rally, potentially breaking the current record high Micro Gold Futures (MGC) contract has a notional value of 10 troy ounces. At $1,993.4, an April 2023 contract (MGCJ3) is valued at $19,934. Initiating a long or short position requires a margin of $800. This is approximately 4% of contract notional value. If gold price moves up to $2,050, a long futures position would gain $566. Relative to the initial margin, this would equate to a return of +70.8%, excluding commissions. If gold price moves down to $1,900, a short futures position would gain $934, a theoretical return of +116.8%. Unexpected market event could be a trigger for gold price to rally. An event-driven trade idea could be constructed around it. In my opinion, comparing to the distress of regional banks, the systematic risks triggered by a Big Bank failure could send global market in shock at ten times the magnitude. If the Fed raises rate next week, I expect more bank failures to coming in the next few months. 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
COMEX_MINI:MGC1!Long
by JimHuangChicago
1