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Interestrates

US Federal Funds Rate Prep (DXY)With the Fed Reserve expected to hike rates by 75bps tonight, the common question is "what would happen to the DXY". Typically, because the Fed Reserve communicates the expected hike, this leads to a priced-in scenario. The previous 4 rate hikes... 16 March, 25bps hike as expected. 4th May, 50bps hike as expected. 15th June, 75bps hike (expected 50bps). 27th July, 75bps hike as expected. Generally, the price trades lower following the release of the news, only to trade higher again several days after. Could this be the case again for the upcoming releases? Maybe the DXY could retest the support level of 109 before trading higher again towards the 112.50 resistance level.
TVC:DXY
by JinDao_Tai
2
EURUSD before FED Like we said already, today is FED Interest Rate decision. This will definitely cause some moves. Here's what you need to look for before you enter a trade. Direction : there is a higher probability for a strong USD, therefore we should see a new low on EURUSD. However, we should not sell right now! Levels: The support levels are 0,9878, followed by 0,9800 and in case of a breakout then 0,9685 will be next. Entry: There are a few ways to enter but the best one would be if we see a rejection wick above the previous highs. That wick should have formed after the news. You need those 3 things before every trade. Everything else is money management and confidence (psychology) in your position. In case of an upside move then we are not looking to enter a trade today!
Short
by ForexTrendline
1
Two Reasons Why the US Dollar May Have PeakedThe US dollar has topped out at 110.20, our target from last month. The last time we hit this target was earlier this month, then the markets started to anticipate that the inflation had plateued, and we saw a significant retracement back to the 107's. However, they were proven sorely wrong as inflation came in strong with CPI last week. Even with this surprise print and a looming Fed rate hike on the horizon, the DXY still has not broken highs. These two factors make us think that the DXY may have peaked and we might be due for a correction or reversal. A consistently strong dollar is already impacting import/export prices, and this will ripple through the economy. Additionally, the Fed is likely to backpedal from their hawkish rhetoric with potentially one more rate hike in the tank before they have to start cutting again. If the DXY can pick up then 111.37 is our next target. If not, we should have support in the 109's, then 108.50, with 107.20 a floor.
TVC:DXYShort
by quantguy
4
Stocks Brace for Fed Rate HikeStocks are edging lower yet again, as investors price in a potentially historic rate hike. In order to combat the highest inflation we have seen in 40 years, most agree that we are looking at a 75 bps rate hike , but some suggest it could be as high as 100 bps . However, multiple indicators suggest we are in the thicket of a recession, and after this rate hike, they are likely to pivot to a more dovish stance, with maybe one more rate hike in the tank before they're forced to start cutting again. The S&P has edged lower and dow futures have plunged more than 200 points as the market brace for the tightening. The S&P is testing 3848, and the Kovach OBV is still bearish. We do appear to be seeing some support here confirmed by green triangles on the KRI. If we can pivot, 3909 will be the next target, but we don't anticipate to break that any time soon. If we fall further, we should expect support at the base of the 3800's.
FX:SPX500Long
by quantguy
Why Bonds Might Be Nearing LowsBonds have continued their decline as the markets price in a potentially historic FOMC rate hike this week. Inflation data suggests that the Fed's rate hike trajectory is not really working and inflation is still soaring. On the other hand, multiple indicators suggest that we are in a recession, and the Fed will have to pivot their hawkish stance after this last rate hike. If that is the case, then we expect the bond market to be nearing lows. We have one more technical level before we will have to start using inverse Fibonacci extension levels to predict lows in bonds again, as 113'12 is our last technical level. The Kovach OBV also appears to be leveling off. The next targets from above are 115'03 and 115'29.
CBOT:ZN1!Long
by quantguy
2
$SPX downhill without brakesFear inside Wall Street The CNN Business Fear & Greed Index, which measures seven gauges of market sentiment, is once again showing signs of Fear on Tuesday as the broader market plunged. The VIX, a volatility index that is one of the seven components of the Fear & Greed Index, shot up nearly 8%. The Fear & Greed index was in Fear mode a week ago as well but it had recently moved back into Neutral territory following a 4-day winning streak for stocks. That streak is coming to a spectacular end thanks to the hotter than hoped for consumer price index report, as investors worry that the Federal Reserve is going to raise rates even more aggressively next week to fight persistent inflationary trends. Wall Street's mood has largely tracked the rapidly changing expectations regarding inflation and rate hikes. Just a month ago, before Fed chair Jerome Powell gave a speech that suggested more big rate increases were coming, the Fear & Greed Index was indicating levels of Greed, a sign of complacency.
SP:SPX
by icheeetah
NASDAQ TARGET 11541!!, MARK IT. i have made a detailed analysis, that why Nasdaq is falling, and based on different corrections, bear markets and from various crashes, i have made the support and resistance, which determines the supply zone. finally, the markets will not face any crash such, the Nasdaq is just falling because of the hike of interest rates, thats much. people and institutions are moving out from the markets, making the index to get corrected, and this selling pressure, is basically preventing from a huge crash(when the government will such announce hike in interest rates, in some future, just to correct the markets that far). so analytically, this selling pressure, is making the index to correct itself and preventing it from going in crash.
NASDAQ:NDXShort
by raghavchoudhary2016
2
The Market Has Spoken - "Liquid Staking" is the FutureFollowing this week's inflation report and the much-anticipated "The Merge" on Ethereum's ecosystem, the crypto markets took a massive dip - in particular, ETH itself. This is the classic "buy the rumor, sell the news" pattern as the hype towards the merge date neared, then the massive-selloff right after. But not all coins were in the red - COSMOS (ATOM) did very well this week, and showed a very strong decoupling pattern from the rest of the pack. Why? Because they currently offer the best staking rewards (15%+!) out there, beating both the banks and its competitors by a very large margin. If you wanted to sell ETH but stay in crypto, it was the most obvious option to go with, at least on paper. ETH2 has the problem of being illiquid (there is no set date for when you can withdraw your funds), as well as expensive - which will likely lead to the coin struggling over the long-term as coins that offer low-fee liquid staking (ADA, XTZ, DOT, MATIC, AVAX, etc.) has had a much longer time. ETH2 "final form" isn't likely to happen any time soon (some say as long as 6 years) so they are currently behind the curve of industry standards, not ahead. Whether they can catch up to the rest is yet to be seen. Now that ETH has de-coupled itself from proof-of-work, we're going to start to see public attention towards different aspects of Web3 and DeFi - and staking rewards is likely to be the talk of the town, especially as we go further into the recession.
Long
by RyanTanaka
Nasdaq 100 index analysis: US real yields dominateThe Nasdaq 100 index ( US 100 ) has moved in the opposite direction of US real yields ( DFII10 ), which are the difference between nominal Treasury yields and market-based inflation expectations (also known as Breakeven yields). Real yields serve as a measure of the Fed's rate tightening aggressiveness. The 30-day correlation between Nasdaq 100 and US real yields is currently at -0.83, indicating a strong and inverse negative relationship. US real yields have risen dramatically since the start of the Fed hiking cycle in mid-March, from -0.7% to around 1% as of this writing, reflecting increased market expectations of a more stringent monetary policy. This means that the nominal yield on a 10-year Treasury (3.45%) is currently about 1% higher than the market measure of inflation expectations for the next 10 years (2.45%). Positive real returns on a safe asset like US Treasuries undoubtedly act as a deterrent to investing in riskier assets like stocks. Technology stocks are also way more sensitive to changes in Federal Reserve interest rates than stocks in other industries. Higher interest rates reduce the long-term expected cash flows for tech companies. As a result, tech stocks fall more than the overall stock market. The Nasdaq 100 has underperformed the broader S&P 500 ( US 500 ), which is down 17.7% year to date versus -26.5% for the tech-heavy index. After the US inflation rate continued to beat market expectations this week, markets have already fully priced in a 75 basis point hike at the FOMC meeting next week. The chances of another 75 basis point hike in November are also increasing, which would bring US interest rates to 4% ahead of the December meeting. Stronger rate hikes could put additional pressure on the tech-heavy Nasdaq index .
NASDAQ:NDX
by Capitalcom
How Yesterday's CPI Impacted the US DollarThe DXY rallied massively, one of the only assets to benefit off a strong CPI reading which suggests the Fed will double down on their efforts to curb inflation. We had broken down into the 107's, then blasted through two handles to the 109's again. We are currently in the midst of our levels between 109.26 and 109.86, after testing and rejecting 109.86. We have to break through 110.20 before we can establish new highs and make a run for our next target at 111.37. If we retrace, 108.50 should provide support.
TVC:DXYLong
by quantguy
What Yesterday's CPI Means for the Fed and StocksA hotter than expected CPI print tanked stocks yesterday, wiping out this week's rally and then some. The markets were hoping that CPI, which is the Fed's favorite inflation gauge, would show that inflation is plateauing and that their policies are working. Under these assumptions it would be reasonable to think that after September's rate hike, they would take a more dovish position. However with red hot inflation beating expectations, this is clearly not the case, and some think the Fed will double down on their stance, hiking rates to 100 bps when 50 bps was more likely just a few days prior. The S&P 500 responded accordingly, smashing through the 4000's, and reestablishing the 3000's, finally finding support at our level at 3928. It is likely the markets will equilibrate as we digest CPI, so expect the S&P to remain bounded by 3909 and 4009 for now. We will need to wait for more data to come out this week (retail sales on Thursday and University of Michigan sentiment on Friday) to get a clearer picture of the state of the economy, and how the markets will react further.
FX:SPX500Short
by quantguy
Merge to the Splurge - Inflation and Inflated ExpectationsLots of things happening in finance today. US inflation is at 8.3% (higher than expected with no end in sight), which tanked both crypto and the stock market at the same time. Goes to show that there's still a lot of overlap between the two right now. Also coming up is the much anticipated "merge" on Ethereum (going to happen some time this week, according to Vitalik), which will finally migrate their chain from proof-of-work over to proof-of-stake. As interest rates start to get hiked further, crypto coins will likely need some sort of staking mechanism to survive - or at least offer some kind of utility beyond marketing hype. Some things to keep in mind: - The "merge" is not likely to affect ETH's gas prices, since that comes later during the "sharding" phase. Until then, most dApps created on the ETH ecosystem will still largely sit idle/abandoned. - During recessions, cash is king - and the coins that resemble that the most (projects that are used as currency, rather than speculation) is likely to perform better overall. That means coins that leaned into the "store-of-value" idea (and have oversaturated mind-share) may be in big trouble - which includes Bitcoin, as well. - Many Web3 "fintech" startups (including some very big ones) operated under the assumption that BTC/ETH was going to go up forever - some already made headlines this year as they imploded on itself after the downturn, but we're likely to see more of them pop up as we get further into the winter as a whole. - Coins that offer substantial staking rewards (Tezos, Algorand, Cosmos, Solana, TRON, etc.) are outperforming the banks right now by a very large margin, and may be a good position to grow as the banks continue to drag their feet. Holders of coins that were reliant on the "perpetual growth" model in order to offer staking rewards will likely see their rates shrink over time. (If they're desperate enough, it may even go negative. 😨) - ETH2 coins are, by default, "locked up" for an indeterminate length of time - lots of people signed up to be validators during the December launch in 21' but the legality of it will likely be in question. As the market dips further, many will want to liquidate and there will be more pressure put on the ETH team to do so. (If not, a few class-action suits may be in the pipeline.) - What happens to the miners after the "merge"? Up until now, ETH was by far, the most reliable and profitable coin to mine, but that will go away, overnight. Some competitors are trying to use the opportunity to fracture the ETH community by offering their own places to mine, but longer-term, PoW's real value lies in their ability to allocate their processing power to "useful" mining. (e.g. Gridcoin, Golem, etc.) We may start to see a shift in favor of those types of projects after miners start to do more research on their own. Long story short, the projects that were reliant on perpetual fundraising are likely to be out - replaced by projects that have revenue/profits and greater sustainability. The crypto winter may be brutal for some, but the silver lining is that we may finally get to see a crypto ecosystem that prizes utility and sustainability over short-term hype. It's going to be a crazy time either way - good luck, folks.
Long
by RyanTanaka
ARIASWAVE MARKET UPDATE - Markets Still in a Wave 2 Correction.In this video I update you based on my last Market Update this time with detailed labelling and explanations. I explain the way I believe the months ahead will unfold as we head into the end of the year. I expect volatility to begin increasing gradually right through the end of Wave 2 and into Wave 3 DOWN. (Stock Markets) The two things that I see continuing to skyrocket are interest rates\bond yields and the US Dollar. I do not believe we will see anything change until these patterns have completed. Understanding exactly how these fractal patterns evolve is the way I can make these assumptions. Remember to use Disciplined Money Management Principles to ensure longevity as a trader. If you don't know the long term pattern shouldn't you be doing your research instead of just following the crowd? Just remember: I am not a financial adviser, I suggest using this only as a guide. Always do your own research.
TVC:DXY
by AriasWave
1
During Recessions, Cash is King - Where Does Crypto Fit In?During recessionary economies, the money-classes that take the biggest hits are usually assets - stocks, real-estate, speculative assets, which, yes, also includes NFTs. As they say, during tough times, "cash is king". As we get deeper into it, we're going to see a big shift in the way people use and talk about their money. For crypto investors out there (or anyone in general who wants to prepare themselves for the new era that's about to unfold) the things to keep in mind are: - Asset ownership tends to skew upwards in the income bracket, which means that there will be lots of doom-and-gloom narratives coming from the top. For most people a "market crash" will be a good thing (better than getting priced out by inflation, anyway), and the result will be that the top earners will have slightly less money in relation to the bottom, evening the "playing field" so to speak. Take everything you read with a grain of salt, either way. - Cryptocurrencies are in an interesting position where they're able to function both as assets AND cash - even legally, the definition of where the technology lies in regards to the two is still unclear. But we see that some coins tend to "lean" towards one end of the spectrum more than the other. Bitcoin is largely classified as an asset ("store-of-value"), Ethereum is the former trying to move towards the latter (the "merge", "sharding"), though the fate of the latter is still unclear. Dogecoin, on the other hand, may actually see a bump in interest due to the fact that it's currently treated more as cash than an asset. (The chain also has plans on moving towards Proof-of-Stake, though the timeline is still unclear.) If cash is king, the loveable Shiba Inu mascot may, in fact, be the one to dethrone King Bitcoin sitting at the top. - The strategy for most investors during recessionary times will switch from "beating" inflation to "keeping up" with inflation - inflation will naturally drop as interest rates rise, eventually reaching an equilibrium. This presents an opportunity for coins that offer reliable staking rewards since they're currently beating the banks by a very large margin right now. (Some banks are still stuck at 0, for the record.) The average person is likely to benefit from this transition in the long run in the form of cheaper goods. (Especially for essentials, which are obviously out of control right now.) - The 0 interest rate decade-long experiment in the US economy is about to come to an end, having peaked during the COVID era where money-printing and cheap loans became at an all-time-high. (Some would describe it as the "apocalypse economy", but that's for another discussion altogether.) Many "Web3" startups of last year were part of that cash grab, and will likely run out of runway in 2023-24. (If you're having second thoughts about the "investments" you made last year, the time to get out would probably be now, in other words.) - As interest rates rise, it will get exponentially harder to raise money, even for Web3 projects. CEOs and founders will be chosen for their ability to generate revenue and turn a profit, rather than their marketing and fundraising skills. (The current crop of "thought leaders" we see in public today are a result of the low-interest "casino economy" we had over this past decade.) We're likely going to see a dramatic shift in the way people talk about startups in general, cryptocurrency projects included. - Higher interest rates will encourage people to save rather than spend, which will also change the focus of the types of products and services that companies and startups start to offer to the general public. The economy having been in overconsumption mode for so long, this will be a big adjustment for most people out there. -- Long story short, there will still be ways to "come out ahead" even during recessions, but the benefits will be more complex than seeing the numbers in your bank account simply going up. It's more that you're losing less money relative to everything else, which, in turn, increases your purchasing power overall. (If you're making the same money but rent gets cut in half, for example, you're still "winning".) I still do believe that in the long run the recession will be a good thing for most people, and that the economy will come out stronger after the dust eventually settles. The path to getting there, though, will be a rough one no matter how you put it. Good luck folks. 🤞
BITTREX:DOGEUSDLong
by RyanTanaka
10
Gold Attempts Higher LevelsGold keeps testing 1735, the next level above 1729, our 0.236 Fibonacci level. We are edging above this level at the time of this writing. It does look like we are forming a bull consolidation pattern around 1735, potentially gearing up for a breakout. If so, the 0.382 Fibonacci level at 1758 is a reasonable target. If we retrace, we should hit support at the base of the 1700's, with 1705 in particular standing out as it has provided strong support in the past.
COMEX:GC1!
by quantguy