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Has Gasoline Price Already Peaked?NYMEX:RB1! While the U.S. stock market performed miserably lately, energy commodities have a banner year. According to the American Automobile Association (AAA), the national average gasoline price reached an all-time high of $5.016 a gallon on June 14th. Diesel logged its own record on June 19th, at $5.816 a gallon. Crude oil price hike is certainly a major contributing factor. However, refined products have been rising a lot faster. AAA gasoline was at record high $4.114 in July 2008 when WTI crude oil made history at $147 a barrel. Last month, WTI peaked at $123, at 16% below the 2008 high. However, gasoline broke $5, a whopping 22% above its 2008 record. Since mid-June, WTI lost steam and entered a downturn. It trades below $110 today. Meanwhile, gasoline price barely moved and still stands above $4.80 per AAA data. In my view, the gasoline market has already peaked, and a downtrend would follow. RBOB gasoline wholesale price, currently at $3.68 a gallon, could fall 30% or more in the next year. I came to this assessment based on two key factors: Firstly, refining margins could decrease significantly due to mean reversion. Refinery is the process to turn crude oil into gasoline, diesel, heavy fuel oil and other petrochemical byproducts. Refining margin measures the revenue from selling refined products, subtracting the cost of crude oil and natural gas going into the process. Below is a simple formula: Refining margin = revenue (94% of crude processed) - costs (crude oil + natural gas used) Whereas refining revenue = 23% gasoline + 63% diesel oil + 8% heavy fuel oil A barrel of 42-gallon crude oil is processed into 40 gallons of refined. For each barrel, you would get approximately 25 gallons of gasoline, 9 gallons of diesel, and 3 gallons of heavy fuel oil. According to Polish oil refiner LOTOS Group, the latest daily model refining margin is $59.06 per barrel of crude oil. Before the Russia-Ukraine conflict, refining margin was below $10 in February. Margins were in single digits throughout 2021 and sometimes even turned negative. Crack Spread is a “quick and dirty” way to measure profit margin of a U.S. refinery. To calculate the 3:2:1 crack spread for a Gulf Coast refinery that processes Louisiana Light Sweet (LLS) crude oil, add the spot price for two barrels of Gulf Coast conventional gasoline to the spot price for one barrel of Gulf Coast ultra-low sulfur diesel. Then subtract the spot price for three barrels of LLS crude oil. Finally, divide the result by 3 to produce a crack spread in dollars per barrel. Once the summer driving season is over, I expect crack spread to go down due to a combination of market force (reduced demand) and political pressure. Secondly, gasoline demand could decline significantly in a U.S. economic recession. In the past 15 years, gasoline market has crashed three times. The first was in 2008, following the subprime crisis. The second time in 2014, driven by a 60% crude oil price fall. The latest was in March 2020 when COVID-19 broke out in the U.S., leading most states to travel restrictions, lock-down or social distancing. Today, a Federal Reserve tracker suggests that the U.S. has already entered a recession. The Atlanta Fed’s GDPNow, which tracks economic data in real time, sees second-quarter GDP contracting by 1%. Coupled with the first-quarter’s 1.6% decline, two consecutive quarters of negative GDP fits the technical definition of a recession. Gasoline market is very sensitive to changes in consumer spending. Automobile driving, which shows clear “seasonal patterns”, is the dominant demand factor. In my view, this is the defining price driver in RBOB. For viewers who read my previous writings, you would understand why I prefer RBOB over WTI in forming a trading strategy – it’s more straight-forward with fewer moving parts. A short position in NYMEX RBOB Gasoline Futures (RB) is a way to express this bearish view. The January (RBF3) contract is quoted at $2.779 on July 1st. RBOB futures is based on wholesale gasoline price. We could add $1 to RBF3 to get to a ballpark estimate of retail price in January. For the month after the Christmas holiday seasons, $3.80 a gallon seems to be overpriced. RBOB futures is quoted at USD per gallon. Each contract has a notional value of 42,000 gallons (1,000 barrels), equivalent to $116,760 in current market value. To place an order, $8,500 margin is required per contract. A move of 1 cent in gas price will result in $420 gain or loss to your account. Alternatively, if you are uncertain of which direction gasoline price would go, but agree that refining margin could revert to mean, we could Short the Crack Spread . A 3-2-1 short crack spread can be constructed by placing 3 Short WTI, 2 Long RB and 1 Long HO contracts. We can also monitor the following data points to be released to test the validity of these two trade set-ups: • Holiday driving data (July 4th, Labor Day, Thanksgiving and Christmas) • Q2 and Q3 earnings releases from the retail sector (Walmart, Target, Dollar General, etc.) • Q2 and Q3 GDP data • Monthly CPI data • Fed rate decisions (JUL 26-27, SEP 20-21, NOV 1-2, and DEC 13-14) Russia-Ukraine conflict poses the biggest risk to our trade. If the contagion risk intensifies and ripples through Europe, energy prices could hike sharply again. 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.
NYMEX:RB1!Short
by JimHuangChicago
76
Dollar DXY Top happens May-June - Biden Policy CatalystDXY can run a bit higher, based on fib extension and candle patterns, this should find a catalyst to move it back down lower. This Dollar Long Mania is similar to the Gold fake-pump at the beginning of Russia-Ukraine conflict WILMINGTON, Del. - President Joe Biden will draw a contrast between his economic plans and those of Republicans in remarks on Tuesday focused on inflation, a White House official said. BATTERED U.S. STOCKS MAY NOT BE BARGAINS AS INVESTORS BRACE FOR INFLATION DATA Biden, a Democrat who is suffering from low approval poll numbers ahead of the November midterm elections, has sharpened his rhetoric against Republicans in recent weeks, dismissing, for example, former President Donald Trump's "Make America Great Again" MAGA movement as extreme. President Joe Biden will draw a contrast between his economic plans and those of Republicans in remarks on Tuesday focused on inflation, a White House official said. (Getty Images / Getty Images) On Tuesday Biden will lay out his plan to fight inflation and "contrast his approach with Congressional Republicans' ultra-MAGA plan to raise taxes on 75 million American families and threaten to sunset programs like Social Security, Medicare, and Medicaid," the official said. GET FOX BUSINESS ON THE GO BY CLICKING HERE Last week Biden took aim at Republican U.S. Senator Rick Scott's economic plan, saying it would raise taxes on 75 million Americans, most of whom make less than $100,000 a year. Scott, who said he planned to cut taxes, is leading Republican efforts to get Republicans elected to the Senate.
ICEUS:DXYShort
by noam_chom
SPX Daily TA Cautiously BearishSPX Daily cautiously bearish. Recommended ratio: 20% SPX, 80% Cash. *Gold and treasuries are down, cryptos and equities are flat, USD and Oil futures are up; financial markets are still trying to price in a recession and it looks like there is still room left to fall on the Weekly chart for SPX. CPI report is due to be released on 07/13 and the next Fed funds rate hike (expected to be 75bps) is due on 07/27.* Price is attempting to avoid a retest of $3706 minor support after being rejected by the lower trendline of the descending channel from August 2021 (~$3950) and is currently trending up slightly at $3800. Volume is Low and currently on track to break a four session streak of seller dominance if it can close today's session in the green (if it closes today bullish but with Low volume this would be bearish). Parabolic SAR flips bearish at $3679, this margin is mildly bearish at the moment. RSI formed a trough at 41 and is currently trending up slightly at 42; the next resistance is at 53 and the next support at 38. Stochastic remains bearish and is currently forming a trough at 65, if it can break above 66 it would be a bullish crossover; the next resistance is at 76 and the next support at 48. MACD remains bullish and is currently trending up slightly at 67 as it is still attempting to defend -76 minor support; the next resistance is at -44. ADX is currently trending sideways at 23 as Price is currently resisting a move lower, this is neutral at the moment. If Price is able to bounce here it will likely retest the lower trendline of the descending channel from August 2021 at $3938 minor resistance . However, if Price continues lower here it will likely retest $3706 minor support before potentially heading lower to test $3508 minor support. Mental Stop Loss: (two consecutive closes above) $3900.
SP:SPX
by dailytaguy
Euro slides as inflation jumpsThe euro is sharply lower on Friday and is currently trading just above the 1.04 line, down 0.76%. Eurozone CPI for June was higher than expected, at 8.6% YoY. The estimate stood at 8.4% and inflation rose sharply from the May reading of 8.1%. This marked a record-high. There was better news from the core reading, which dropped marginally to 3.7% YoY, down from 3.8% in May. Investors have given the inflation data a thumbs-down today and sent the euro tumbling ahead of the weekend. With inflation continuing to accelerate and the ECB revising downwards its growth forecast, the spectre of stagflation in the bloc remains very real. The ECB is no doubt dismayed that inflation was higher than expected, but it's unclear if the record-high CPI release will be enough to deliver a supersize 0.50% hike for its lift-off next month. At this week's ECB forum, ECB head Lagarde talked tough and downplayed concerns over a recession, but there are plenty of dark clouds hovering above the eurozone economy. High inflation, weak growth and the energy crisis with Russia mean that there is certainly good reason to be concerned about a significant downturn in the eurozone economy. In the US, there are worrying signs that the economy is weakening. US Personal Spending fell to 0.3%, down from 0.6% (0.4% exp.). Inflation appears to be declining slowly and the labour market is in solid shape. CME's FedWatch is putting the likelihood of a supersize 0.75% rate increase at 75%, as markets expect the Fed to remain aggressive against inflation. Can a recession be avoided? Fed Chair Powell is saying all the right things in downplaying concerns about the "R" word, but many market participants have their doubts and feel that the US economy will not be able to avoid a recession. .
by OANDA
Have Treasury Yields Peaked?Soaring inflation and bond yields have hammered sentiment all year. But now there could be signs of yields peaking. A few patterns appear on this chart of the 10-year Treasury yield. First is the October 2018 high of 3.248 percent. TNX jumped above that level for six sessions before rolling over. It tried it again on June 28, but failed. That lower high may confirm long-term resistance remains in effect. Second is the rising trendline along the lows of March and May. The yield closed below that pattern yesterday. Has the trend broken? Third, MACD made a lower high in mid-June as TNX made a higher high. That kind of divergence is a potential reversal pattern. We’ve also seen widening losses in most non-oil commodities: copper, wheat, iron ore -- even natural gas. While inflation remains an issue, those declines could help lower yields. Finally, it’s noteworthy that the 30-year Treasury yield never even broke its 2018 high. That may also suggest that long-term inflation worries haven’t gotten completely out of control. TradeStation has, for decades, advanced the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more. Important Information TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. You Can Trade, Inc. is also a wholly owned subsidiary of TradeStation Group, Inc., operating under its own brand and trademarks. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means. This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates. Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: www.tradestation.com .
TVC:TNX
by TradeStation
US500/SPX enters into a bear market The last time this happened was in 2018 but the market some how management to rally which resulted in a false breakout. In 2020 the market came back to this level and spiked around this area before turning into an almost 2 year rally. 2007 was a different story as market broke structure and the result was a sell of that lasted one year. What will happen in 2022? Will the bulls take control and result in the SPX hitting another all time high. Or will we see similar events of what happened in 2007 which resulted in a huge sell off that one year.
OANDA:SPX500USDShort
by NDOBObanks
10 yr My W4 on weekly HTF chart is looking likely. If the Fed & ECB are in the debt market trying to stabilize the system via repo swaps then this dump is going to be a normalization process and the markets will chop around in some f**ked up range until W4 is complete around 1.9%-2.2% during this normalization period bullish momo will fizzle out and bears will short all pumps and win , but the greedy bears will get squeezed as all big dumps in markets will get bought up quick and change the direction b4 most traders know what even happened. I suggest only buying your core positions until w4 is finally done projected to finish July-Sept 2022. This would be a good move for the patient investors here to hold and add because once the W4 finishes and markets stabilize (if the fed pivots like I am saying above) W5 will line up on the 10 yr with W5 for stocks & crypto. Conversely If W4 becomes a fear trade (inflation narrative grows momo, war in Ukraine gets worst possibly nuclear war, china invades Taiwan or anything else unforeseeable) then W4 will decimate markets and 3200 SP500 is possible and $12K BTC.
TVC:US10Y
by Big_Mike716
US Inflation is Nearing a Harmonic PeakIf we are to base our views of this chart like we would any other price chart, the harmonics we see forming here would imply that US Inflation is reaching a peak and that we will see Inflation come down signfiicantly over the the coming years. If i were to give a target i'd say we'd wanna see it come down to atlest 3% as a first target but it could go down even more depending on how tight things get. The smaller harmonic is a Bearish Butterfly with a reversal zone between the 1.272 and 1.618 and the bigger one if we get that high is a Bearish Shark. Ideally we'd like to see the Butterfly playout and us not to have to go as high as the Shark.
ECONOMICS:USIRYYLong
by RizeSenpai
BOJ reaffirms policy, yen at 136The Japanese yen is one of those currencies that keeps investors on its toes, and it has certainly lived up to its billing in recent weeks. USD/JPY has shot up 5.79% in the month of June and is back above the 136.00 line. BoJ Core CPI, the central bank's preferred inflation gauge, ticked upwards to 1.5% in May, up from 1.4% prior and matching the forecast. There is no mystery behind the yen's sharp depreciation of some 17% in 2022. The currency has been at the mercy of the US/Japan rate differential, which has continued to widen. The Federal Reserve is in the midst of an aggressive rate-tightening cycle, with the Fed delivering a massive 0.75% increase at its last meeting. The Bank of Japan continues to take an opposite approach, that of an ultra-accommodative policy. The BoJ has maintained this stance at a time when other central banks are tightening, in order to boost the fragile Japanese economy. While other major economies are struggling with surging inflation, Japan's inflation is around 2% - quite low but nonetheless on the rise after some 15 years of deflation. Governor Kuroda reiterated on Wednesday that the BoJ would maintain an accommodative policy, insisting that the increase was mostly a result of higher energy prices. Kuroda has said in the past that the present bout of inflation is temporary and that the BoJ would not change policy until inflation was anchored by higher domestic demand and an acceleration in wage growth. With neither of those criteria likely to occur anytime soon, we can expect the BoJ to continue to tenaciously defend its yield curve control and do little more than jawbone about the exchange rate. This does not bode well for the yen, which could continue its sharp slide and fall below the 140.00 line. USD/JPY faces resistance at 1.3654 and 1.3785 There is support at 1.3540 and 1.3409
by OANDA
My plan for deploying cash over the next six monthsNTSX is an ETF that holds 60% S&P 500, 40% leveraged bonds. This is a highly efficient portfolio composition known as "return stacking" (recently popularized on Twitter by Corey M. Hoffstein). You get the best of several worlds: the lower volatility of the 60-40 portfolio, and the higher returns offered by leverage. Since leverage is used on the relatively safer part of the portfolio (bonds rather than stocks), it doesn't add too much extra risk. Stocks and bonds have sold off together over the last several months, creating a rare situation where there's been a large drawdown in 60-40 portfolios and in NTSX. I think there's an opportunity shaping up, but the hard part is going to be timing it. I've been sitting on a fair bit of cash for several months (you may have noticed I haven't posted much!) and am debating when to deploy it. It's likely still too early, but I think we're nearing good levels at which to deploy anywhere from a quarter to a third of it, and NTSX is a good vehicle for that. I'll likely hang onto the remainder of my cash till October. Macroeconomic Considerations Rates are soaring, and there's no question that will be a bit of a drag on growth. But it's offset by a strengthening dollar. The US is hiking rates faster than other developed markets, which has the dollar index soaring. A strong dollar is generally very good for US stocks. In fact, stocks usually rise as interest rates do, and it's only at the end of a rate hike cycle that we tend to see a recession. There's probably a recession coming in the next couple years, but we're not there yet. Several parts of the yield curve recently inverted, which usually signals a recession in the next 18 months. You might think that means it's time to get defensive, but stocks often go up quite a bit after yield curve inversion and before the recession hits. (Plus, this yield curve signal has been a bit wonky, because parts of the curve are steepening while others flatten. So it's hard to know how to interpret this recent inversion.) For the last several weeks, the Leading Economic Indicators index and the ECRI Weekly Leading Index have been steadily improving, a good sign for near-term growth. Meanwhile, commodities prices have weakened somewhat, with the GSG broad commodities ETF breaking its uptrend: It's possible we could even see some disinflation, which would obviate the need for the Fed to get so aggressive. There are certainly headwinds: China lockdowns, war in Ukraine, and rising US Covid cases. These headwinds need to be taken seriously. But there's also the possibility that any of these situations could suddenly improve at any time, especially if certain policymakers in Asia come to their senses. So I think it's worth having some exposure here. Policy Considerations So with the macro picture looking not too bad, why would I hold onto 2/3 of my cash? Because the Fed is about to start selling assets in May, including treasury and mortgage bonds. And when one of the biggest holders of assets starts selling, you probably don't want to be exposed. Now, the market has been front-running this move for the last several months, and bonds have already have gotten a lot cheaper. It's quite possible that a lot of it is already priced in, and that we could see some counter-trend asset buying that will offset selling by the Fed. The market is also pricing in really aggressive Fed rate hikes, with a 50 basis point hike at the May meeting and 75 basis points in June. That expectation may prove to be too hawkish. The Fed's own dot-plot projections imply a somewhat slower hiking cycle than the market rate does: www.cmegroup.com Any dovish surprise from the Fed might cause bond prices to pop. But I still think you want to play it somewhat conservatively here. The ten-year yield is still much too low for this level of inflation, so on balance, there's probably more downside than upside ahead for bonds. Seasonality Considerations Usually, May inaugurates the bullish season for stocks. But this is a mid-term election year, and mid-term election years are usually bearish from May to October. This may be an especially bearish year, because we're likely to hear a lot of talk tough from candidates about how they're going to stop inflation. The chart shows one possible scenario for how NTSX might move between now and October. I'm envisioning mostly sideways price action through July-August, followed by a summer selloff as we approach the election. If I'm right, then NTSX might even complete a full round-trip to pre-pandemic February 2020 levels by the end of the year. If this scenario does play out, then I'd probably deploy the rest of my cash around October. That might be the bottom, with the rate hike cycle mostly complete. Or it might be the beginning of a recession, as rate hikes cause the economy to blow up. But if it does turn out to be the start of a recession, NTSX won't be too bad a place to hide out. Stocks will go down in a recession, but bonds will likely go up as the Fed lowers rates to stabilize the market. That's part of what makes NTSX such an attractive vehicle.
AMEX:NTSX
by ChristopherCarrollSmith
6
GOLD Daily TA Cautiously BearishGOLD Daily cautiously bearish. Recommended ratio: 10% Gold, 90% Cash. **H&S WATCH. DEATH CROSS WATCH.** *USD is down a bit while energy, commodities, equities, cryptos are up and gold is relatively flat. The relief rally is primarily benefiting risk on markets as money begins to enter it from risk off markets (like gold and bonds); this is still just a technical relief rally that was precipitated by very oversold daily and weekly conditions, the Core PCE report due next Thursday (06/30) should give a clearer picture of what the Fed will do on 07/27/22 and therefore guide the markets in the near term.* Price is currently completing a H&S pattern and trending down at $1827 as it prepares to formally retest the uptrend line from April 2020 (~$1815) as support for the second time since 06/15/22. The 50 MA is currently trending down at $1860 as it quickly approaches the 200 MA at $1845 where it would technically form a Death Cross. Volume remains Moderate (high) and fairly balanced between buyers and sellers (which is indicative of consolidation before a next move). Parabolic SAR flips bullish at the 50 MA ($1860), this margin is neutral at the moment. RSI is currently trending up at 45 after bouncing off of 42 support for the third time in a month, the next resistance is at 67.24. Stochastic remains bearish and is currently beginning to form a trough at 43 as it is still technically testing 53.13 support. MACD is currently crossing over bearish at -8 as it hovers above -10.84 support. ADX is currently trending down at 10 (with little sign of trough formation) as Price is trending down as well, this is neutral at the moment; if ADX was to bottom and begin trending up as Price continued down this would be bearish. If Price is able to bounce here and resist a H&S AND Death Cross then it will likely retest the 200 MA at ~$1840 before potentially retesting $1867 minor resistance. However, if Price continues down here, it will likely formally retest the uptrend line from April 2020 at $1815 as support before potentially falling to retest the largest supply/demand zone on the chart at $1783 support. Mental Stop Loss: (two consecutive closes above) $1844.
G
by dailytaguy
GOLD Daily TA Cautiously BearishGOLD Daily cautiously bearish. Recommended ratio: 30% GOLD, 70% Cash. *H&S Formation Watch. In anticipation of a critical FOMC statement to be released tomorrow at 2pm (deciding on whether or not to raise FFR by 75-100bp to more aggressively combat inflation), the US dollar and treasuries are once again stealing the bullish spotlight as cryptos and equities remain relatively flat and Gold is taking a tumble.* Price is currently retesting the lower trendline of the ascending channel from April 2020 at ~$1810 after testing it back on 05/13/22 and failing to climb even halfway back up the channel; this is bearish. Additionally, Price has completed a second shoulder formation in the H&S and could see a short term bounce here before completing a potential H&S sell off. Volume remains Moderate (high) and is currently on track to favor sellers in a second consecutive session if it can close today's session in the red. Parabolic SAR flips bullish at ~$1880 (which coincides with the 50 MA); this margin is neutral at the moment. RSI is beginning to form a trough at 38 as it fast approaches a test of the uptrend line from April 2013 at ~37; if it breaks below this level, the next support is at 27.07 which hints that Price will have a bit of room to fall in a short amount of time. Stochastic remains bearish and is currently trending down at 33 as it approaches a test of 25.40 support. MACD is currently crossing over bearish at -9.60 which is just above -10.84 resistance (though it crossed above this level it still has not confirmed it as support). ADX is currently trending down slightly at 13 as Price is beginning to develop downward momentum; if ADX can begin trough formation here as Price continues to fall, this would be bearish. If Price is able to defend support at the lower trendline of the ascending channel from April 2020 at ~$1810, it will likely aim to retest the 50 MA at ~$1840 before either a) potentially moving higher or b) completing a H&S formation bull trap before plummeting lower. However, if Price breaks down here then it will likely formally retest $1783 support for the first time since 01/28/22. Mental Stop Loss: (two consecutive closes above) $1840.
G
by dailytaguy
Recession fears rekindle greenback appealEUR/USD 🔽 GBP/USD 🔽 AUD/USD 🔽 USD/CAD 🔼 XAU 🔽 WTI 🔽 Yesterday (23 June), as Federal Reserve Chair Jerome Powell said his team is "acutely aware that high inflation imposes significant hardship". Meanwhile, he also acknowledges "our actions affect communities, families, and businesses across the country" - admitting their monetary decisions could bring the economy to a recession. As a result, investors flocked to the US dollar to get shelter from possible economic turbulences. EUR/USD fell from 1.0575 to 1.0494, then closed at 1.0523. Germany's Manufacturing PMI in June underperformed with a 52.0 reading against a 54.0 forecast. The latest PMI figures for the UK were a mixed bag of results, while the Composite and Services PMI were slightly better than market projections, Manufacturing PMI fell short of expectations at 53.4. GBP/USD recovered from 1.2170 to a closing price of 1.2261. Later tonight, the UK Retail Sales will be available. The AUD/USD pair dropped 28 pips to 0.6899, and USD/CAD closed at 1.2994, while just retreating from 1.3013 today. The results of yesterday's Federal Reserve annual bank stress test show banks continue to have strong capital levels, maintaining their lending capacity. Gold futures briefly went to 1,846.6 a troy ounce then cooled off to close at 1,829.8. Oil prices experienced minor fluctuations, finally closing with a loss at 104.27 a barrel. More information on Mitrade website.
NASDAQ:XAU
by Mitrade_official
MEDIUM TERM OUTLOOK ON THE DOLLARFor the longest time, I have been debating whether or not to begin posting my trading sentiments since the trading community I look after & am a part of is a very private one. That said. we are in unprecedented times, a lot of people do not know what is coming their way. nevermind how to protect themselves/ take advantage of relevant opportunities. So I have decided to help those who are looking to understand financial markets not only from a trading perspective but from an actual investing perspective. So as my first post, let's take a look at a currency that impacts the rest of the global & emerging market currencies & that can help you plan your trading approach over the next 3 - 6 months. But before we do that kindly understand the following: As a former investment bank trading analyst. There is absolutely noway you can incorporate technical analysis without fundamental analysis. When I see retail traders/people just speak about technical analysis and understand nothing about fundamental dynamics & how it affects trading pairs/executions/decisions as a whole, not only do I laugh but it also makes me understand why there is truly only 5-10% of retail traders globally that are consistently profitable. But enough about that, let's get to the charts! DOLLAR INDEX OUTLOOK: Fundamental ( DOWNSIDE ): If another rate hike takes place & MONKEYPOX cases cross the 10K margin in the US &/or employment numbers (NFP) drop. Technical ( DOWNSIDE ): Should the above fundamental case happen, trading opportunities can be taken advantage of through the WXY scenario, where X represents the entry-point. Fundamental ( UPSIDE ): A rate hike & more stimulus money will see the dollar go up. Mid-term elections being favourable would also send the dollar much higher. Technical (UPSIDE ): The above fundamentals taking place would allow scenario ABC to take effect with point B representing the optimal entry-point for relevant trades. Let us see how it plays out, as for exact entry points and iterations to this post as time goes on, that will be given to members only. However, that said, I am willing to do analysis on different pairs/derivatives' on behalf of those who would appreciate an informed opinion on both the technical and fundamental sides. At the end of the day I want to see traders progressing and doing much better but the truth is you need to understand the markets from a technical & fundamental perspective in order to truly be successful as a trader & ultimately become an active investor in financial markets. If all you have been doing at this point in time is trading only incorporating technical analysis then all you are/have been doing is donating money to the market, your broker/s and my former employers in the investment banking/hedge fun world. :) Don't forget to like & comment, I look forward to beginning this new journey with all of you!! :)))
INDEX:DXY
by No-NonsenseFX_
SPX Daily TA Neutral BullishSPX Daily neutral with a bullish bias. Recommended ratio: 51% SPX, 49% Cash. *Fed Chair Jerome Powell testified before the Senate Banking Committee today and to no one's surprise reiterated the Fed's 'reaction function' (comprised of quantitative tightening and a higher federal funds rate (FFR)) working like it's supposed to. He mentioned that the market reacted appropriately by pricing in future rate hikes and repeated that the Fed will continue to move expeditiously (go beyond neutral) to bring Core PCE inflation down from ~5% to their target of 2%; according to Powell beyond neutral is beyond 2.5% FFR, the current FFR target rate is 1.5%-1.75%. With direct endorsement from Powell, the crypto and equity markets are correct in thinking FFR will be at or above 3.5% EOY (75bp July to 2.5%, 50-75bp September to 3%-3.25%, 25-50bp October to 3.25%-3.75%, 25-50bp to 3.5%-4.00%); obviously certain events can expedite or delay this but it seems like markets are beginning to price in the reality of a recession. It is important to remember that by the time the economy recognizes that it is in a recession, financial markets will already be pricing in the road to recovery. In other words, the economy is usually last to feel a recession. That said, it's still to premature to call a bottom (Jim Cramer hasn't told us to sell everything yet) but we could perhaps be in store for a short term rally. PMI report will be released tomorrow at 945am (EST) and Core PCE Inflation report will be released 06/30 at 830am (EST).* Price is currently trending sideways at $3759 after closing above $3706.52 minor support for a second consecutive session. Volume remained Moderate and has favored buyers for three consecutive sessions now. Parabolic SAR flips bullish at $3983, this margin is mildly bullish. RSI is currently trending sideways at 38.06 resistance as it attempts to flip it to support. Stochastic remained bullish for a second consecutive session and is currently testing 18.32 resistance. MACD remains bearish and is currently trending sideways at -105 as it continues to form a trough; it would need to break above -81 in order to cross over bullish. ADX is currently trending sideways at 27 as Price continues to decide whether to bounce here at $3706.52 minor support or go down lower, this is neutral at the moment. If Price is able to continue up from here then it will likely retest the lower trendline of the descending channel from August 2021 at ~$3900 as resistance. However, if Price breaks down below $3706.52 minor support, it will likely retest $3508.14 minor support for the first time since November 2020. Mental Stop Loss: (one close below) $3706.52.
SP:SPX
by dailytaguy
Bear Market is Far from OverCME_MINI:ES1! In the past six months, the S&P 500 has fallen from an all-time high of 4,818.62 to a fresh 52-week low of 3,636.82, down 1,181.8 points, or -24.5%. Following a brutal week, the U.S. stock market rose on Tuesday, as investors weighed the Fed rate hikes amid rising fears of a recession. The Dow rose 2.15%. The S&P popped 2.45%, and the Nasdaq climbed 2.51% at market close. Has the stock market correction ended? Let’s look at a 5-year chart. The previous peak of S&P 500 was 3,383 on February 10, 2020. It hit bottom on March 23 at 2,177, down 35.6%. Since then, the S&P has a great run for nearly two years, up 121%, with very little hiccup along the way. The new high was 40% above the pre-pandemic high. After recent steep fall, the S&P is still 400 points above the pre-COVID peak, which, in my view, is our first support line. If recession fear materializes into a real one, the post-COVID dip will become the second support. I believe that the bear market is far from over. My reasoning bogs down into two essential questions: 1. Will Government policies be effective in controlling the runaway inflation? 2. Will U.S. economic growth be sustainable at current high price level? On March 16, the Fed raised interest rates by 25 basis points (bps). A second hike followed on May 4, for 50 bps. On June 15, a big 75-bps move upped the Fed Fund Rate to 1.50%-1.75%. Meanwhile, U.S. inflation continues to rise. In May, the official Consumer Price Index rose 8.6% year-over-year. The core CPI (all items less food and energy) was also at a record high of 6.0%. While aggressive Fed tightening could reduce the excess money supply, it could not affect the record gas price, nor the supply chain bottleneck from China. President Biden will try to convince the Saudis to increase oil production during his visit. However, we need to understand it is the best interest of OPEC to maximize oil revenue. High oil price is good for them as long as it does not cause demand to decline. Besides, if Biden can’t control his own bike, do you really expect him to get OPEC to fall in line behind us? Removing the Trump era tariff could bring some relief to U.S. consumers. However, the extent of imported goods covered by tariff reductions remains unclear. From policy discussion to actual implementation, it would take months before we see price drops on store shelves. In a nutshell, my answer is NO for the first question. As to the second question, even if the Fed succeeds in bringing down the inflation, will the U.S economy sustain its growth momentum? Take the $5 gas price for instance. For an average family with two cars, the consumption of 100 gallons a month is budgeted at $500, and it is $200 more than when gas was $3/gallon. Record gas price has already resulted in less driving and reduced trips to grocery stores and supermarkets. A major impact of Fed rate hikes is higher mortgage payments for millions of homeowners. For a family with a $400,000 house and $300,000 mortgage, a 6.5%, 30-year-fixed loan will require $1,900 interest payment per month. This is $380 more than when the mortgage rate was 4.5%. High energy and mortgage costs trickle down to every corner of American life. Even if inflation is tamed, at current price level, everything is too costly for the economy to function properly. We need to have deflation, starting with energy and housing, to avoid a recession. With headwinds to the economy and massive overhang over the stock market, I’m not optimistic for the near-term U.S. economic outlook. A short position in CME E-Mini S&P 500 futures is a way to express this bearish view. The December (ESZ2) contract may be a good one, considering both liquidity factor and time to allow major market-moving events to play out. At 3,788.00, each contract has a notional value of $189,400 ($50 times index value). CME requires an initial margin of $10,500. Futures contract is marked to market daily. For a short position, a decline of 1 index point will result in $50 gain in your account balance because of the $50 multiplier. Likewise, an increase of 1 index point means a $50 reduction in your account. If you don’t want to deal with the daily profit and loss accounting, consider a Long Put Option on the same E-Mini S&P futures contract. For example, the out-of-the-money 3685-strike (100 points below market) is currently quoted at $9.00. To buy an option requires $450, again because of the contract multiplier of 50. When is the good time to place the order? The next market rebound. Put premium generally gets cheaper following a price rise in the underlying futures. 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_MINI:ES1!Short
by JimHuangChicago
7
BTC: Don't DCA YetMacro conditions couldn’t be any worse. Starting this month, the Fed unleashed its quantitative tightening (QT) plans, trimming the $9trillion balance sheet at an unprecedented scale (current run-off cap: $47.5bn/month initial; $95bn/month 3 month later; 2017 run-off: max $50bn/month). The last two quantitative tightening led to a sharp rise in yields in 2013 and a repo crisis in 2019 respectively. Unfortunately, this time around, the Fed has to deal with a much larger balance sheet and all-time high inflation rate since 1982. Without the ability to print real world supply of goods and services (factories, natural resources), the Fed has lever on the demand side, but lowering demand means hikes in unemployment (which the Fed is already targeting). With a 7% gap between short-term rate and inflation rate, can the Fed “just rise unemployment a little bit” without causing a recession? Extremely hard unless real world supply of goods and services picks up. For us crypto traders and investors, the question is - isn’t bitcoin an inflation hedge, and if global market enters a recession, wouldn’t bitcoin be the risk-off asset of choice? My take on this is not in this cycle. Bitcoin has not experienced a proper traditional finance bear market yet and has performed poorly during past tapering and quantitative tightening environments. Different phases of quantitative easing, tapering, and quantitative tightening are marked on the chart above. After three rounds of quantitative easing from 2010, the start of tapering in 2014 marked the beginning of bitcoin’s 2-year bear market. In 2017, quantitative tightening started in October, and the 2018 crypto crash soon followed. In other words, bitcoin’s inflation hedge narrative hasn’t been officially tested or widely accepted. With arbitrage opportunities, scams, hack risks, and run-on-bank fear, the crypto market is no doubt in its early stage. While superior security and scarcity give bitcoin the potential to replace gold in a new era of currency, early-stage demand side volatility makes bitcoin subject to wild price swings. The current reality is we see rising correlation between bitcoin and the equity market year after year, and the volatility is further heightened by the derivative market. In the current cycle, bitcoin’s inflation hedge value is overpowered by its volatility, and it is hard for bitcoin to rally under gloomy global macro conditions before the market matures and stabilizes. Do you agree? What’s your take on crypto under the current global macro? Support and comment below!
BITSTAMP:BTCUSDShort
by Phi-Deltalytics
18
US30 Intra-Week Analysis June 21stLast week us30 created another new low coming down to retest 29600 which are pre-pandemic highs and key level for price. We ended the week within the 30200-28800 range and demand zone failing to breakout in either direction. This week we've already began breaking out above 30200 and coming up to test 30400 key level. Our overall bias is still bearish on us30 especially with the potential for a 75 BPS rate hike in July. Until those economic factors are priced in we can expect to see a push to 31k if we break above 30500 or even continued bearish momentum to 32600 if we break above 31k.
U
by Itskaleel
ETHUSD Daily TA Neutral BearishETH Daily neutral with a bearish bias. Recommended ratio: 35% ETH, 65% Cash. *Cryptos are enjoying a technical relief rally that is still ongoing even though Binance didn't buy $2b of Bitcoin this weekend, the bulls are saying bottom but I think it's a bit premature with JPow due to testify before Congress on Wednesday (06/22) and PMI due on Thursday (06/23).* Price is currently defending $1k and beginning to form a U-shaped bottom in attempt to reclaim support of the descending channel from October 2021 at ~$1300; because Price only briefly touched $889 and never formally tested $775 support, it may see a corrective bounce here before heading lower. Additionally, Price hasn't tested the uptrend line from February 2017 (currently at ~$360) since July 2020. Volume is Moderate and on track to favor sellers if it can close today's session in the red (making the spread fairly balanced over the past week, indicative of consolidation). Parabolic SAR flips bullish at $1231. RSI is currently trending sideways at 28 as it attempts to reclaim support of the uptrend line from 01/22/22 at 26.50. Stochastic remains bullish for a second consecutive session and is currently trending up at 30 as it is still technically testing 22.98 resistance. MACD is currently forming a trough and trending up slightly at -252 as it aims to break above -227 to cross over bullish; the next resistance is at -197.34. ADX is currently trending up slightly at 52 and is beginning to form a soft peak as Price is bouncing here; this is neutral at the moment but would be bullish if ADX began to trend down as Price continued up. If Price is able to continue up then it will likely test the lower trendline of the descending channel at ~$1300 as resistance. However, if Price breaks down here, it will likely test $775.83 support for the first time since breaking above it in January 2021. Mental Stop Loss: (two consecutive closes above) $1300.
COINBASE:ETHUSD
by dailytaguy