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Gold Maintains the RangeGold has held the range between 1895 and 1956, that we discussed yesterday. At this time yesterday, we were roughly in the middle of the range, however since then we have started to edge up again. We are seeing notable resistance at 1956, as predicted due to the dense patch of technical levels above between 1956 and 1982. The Kovach OBV is starting to drift higher ever so gently, however the volume is still comparatively low. We will require much more momentum before we can break out either way. If we break down, there is a vacuum zone to 1876, then 1865. A breakout will face resistance from technical levels in the 1950's through the 1970's, but if we can clear these, 1999 is the next target.
COMEX:GC1!
by quantguy
Will the Bond Market Continue to Sell Off??Bonds have reached a relative high at 123'01 to the tick then promptly rejected this level. A red triangle on the KRI confirmed resistance and we headed straight back down to through the 122 handle to finally find support at 121'28. We are currently seeing some support here, confirmed by a green triangle on the KRI. However the Kovach OBV has taken a steep dive south suggesting the bear rout is about to pick up again. If so, the next target is 121'00, then 120'14. If we are wrong, we must break through 123'01 before we can consider higher levels.
CBOT:ZN1!
by quantguy
GOLD: The Short-term Structure Looks Bearish Fed hawkish policy to fight inflation is putting in a high on GOLD. It's also about the speculation of how many hikes may happen this year. However, if FED will suddenly turns out to be less aggressive then this will quickly stabilize the gold prices, but for now, it looks like the current tone will not change so metals have room for more weakness. At the same time I am also looking at DXY that is trying to break out of a triangle and towards 100 level. Have a nice trading week everyone. Grega
TVC:DXYShort
by ew-forecast
Mortgage Rates Explode Higher at Second Fastest Rate in HistoryThe monthly chart for US 30-year mortgage rates is exploding higher at a rate not seen since the 1970s. This chart shows that monthly rates are following the 3rd standard deviation higher, which is an extremely rare rate of increase. The Commodity Channel Index (CCI) is shown at the bottom of this chart. The CCI is a momentum oscillator used in technical analysis primarily to identify overbought and oversold levels by measuring an instrument's variations away from its statistical mean. It is currently at the second highest level ever (on the monthly chart), second only to the 1973 Oil Crisis. That crisis caused a bear market between January 1973 and December 1974 that affected all the major stock markets in the world. It was one of the worst stock market downturns since the Great Depression. The stock market lost 45% of its value during this time. How confident are you that the Federal Reserve will be successful at engineering a soft landing? How do you define a 'soft landing'?
FRED:MORTGAGE30US
by SpyMasterTrades
1
Gold Facing Resistance as it Tries to Break OutGold has encroached upon upper levels from its range between 1895 and 1956. We are currently facing resistance from a cluster of levels in the 1950's and 1960's. This dense patch of levels will continue until the 1970's or so. The Kovach OBV has picked up, and if we can break through all these levels we should be clear to test the 1980's, with 1982 in particular a likely target. If we break down, the former lower bound of our range at 1895 should provide support.
COMEX:GC1!Long
by quantguy
Bonds Bear Rout Bottoming Out??Bonds have stabilized for now after a brief relief rally. We tested higher levels at 123'15 or so, after falling 7 handles from the 129's to the 122's in less than one month. The rally was short lived, and just a technical respite into the overall bear trend, exactly as we had predicted here. The price promptly rejected this level, as anticipated, and headed back down to lows. We found support just above the low at 122'10 and have been equilibrating thereabouts, between this level and 123'01. There is nothing to suggest any deviation from the bear rout, overall except perhaps for small relief rallies. If the bear momentum picks up again our next target is 121'28.
CBOT:ZN1!Short
by quantguy
Fed's Catch-22A Catch-22 is a problem for which the only solution is denied by a circumstance inherent in the problem or by a rule. This is exactly the problem the Federal Reserve faces. Historic inflation continues to accelerate, becoming embedded into the market's expectations and risking a spiral effect In order to stop rapid inflation, and achieve its mandate of price stability, the Fed must raise interest rates as rapidly as inflation is rising. The Fed cannot raise interest rates as rapidly as would be needed to slow rapid inflation because it would rapidly begin to freeze liquidity in the corporate bond market. Rapid tightening would spillover to corporate earnings, asset prices, consumer borrowing and spending, economic growth and ultimately employment, countering the Fed's mandate of maintaining stable employment. The last time that investment grade corporate bond prices fell below their monthly EMA ribbon support was in March 2020, when the Fed made emergency purchases of corporate bond ETFs to ensure liquidity. Now the bond prices are falling below their monthly EMA ribbon support and the Fed is taking the exact opposite measure by calling for accelerated rate hikes. Is it possible to avoid a recession at this point? Only time will tell but the charts seem to doubt it.
AMEX:LQD
by SpyMasterTrades
4
Every Day a New Low for Bonds!!Bonds keep falling as yields are rising globally. It seems that we have to redo our levels to predict yet another new low in ZN. The Kovach OBV is solidly bearish and we have fallen 7 handles, from the 129's to 122's in the month of March. We are currently testing support at 122'10, but the bear rout shows no sign of stopping. It would be unwise to try to catch a knife here, although the probability of a relief rally increases with each rung down. Our next taget is 121'28. A relief rally could test 123'01 or 123'15.
CBOT:ZN1!Short
by quantguy
NASDAQ 100: Read the descriptionNasdaq 100 bounced back from the lows of 12950 and had trouble with staying under the 13000 level. Put call ratio for the market (PCC) have been falling, which indicates more calls are bought than puts. Looking at the past levels of the ratio it seems likely that the ratio is ready for mean reverting at this point. However put/call for equities (PCPS) are high, and could also be ready for a move lower while the general market put/call moves higher. Notice that the last weeks increase have not caused the put/call for equities to rise as much as previous when prices of nasdaq increased. this could again indicate that investors are less desire loading calls. Inflation expectations are still high (RINF), and FED indicated 6 more rate hikes to an expected federal funds rate of 1.9% end of year. VXX have been falling as a result of the increased price in stocks. But we could still see higher levels of VXX on the basis of increasing interest rates, high inflation and lower P/E ratios. High inflation (USIRYY) results in lower levels of consumer and business spending which lead to declining sales higher costs and therefore lower earnings. And a combination of high interest rates and high inflation leads to lower P/E ratio US03MY is also on the rise, and beta values for the 10 largest components of Nasdaq is over 1, which means in bear market, those stocks tend to fall more than the market. High risk free rate (US03MY) and high beta values will increase the CAPM cost of equity which again supports a price reduction in equities. The strategy is the same as before. Short every move higher (when in bear markets, the sudden and unexplainable and dramatic increase in stocks are brutal -this will shake retail out of their positions shorts and longs before moving lower. I still anticipate a move lower for 12000 level as the first low level. (I could be wrong for the move lower, but managing the right leverage will keep one from blowing up account or generating too much drawdown.) Everyone have FOMO right now of missing the bottom. Which is what the big guys want retail to have. Again i dont say that there are no bottom, we could have bottomed out, but when looking at all the indications I am convinced that we still can see lower price levels this year.
CME_MINI:NQ1!Short
by Fx-AlphaStrats
3
Stocks Blast Off After FOMC!!Stocks have rallied after the first rate hike in three years by the Federal Reserve. Novice traders might surmise that stocks would collapse off this news, however dedicated readers here should have been prepared. We called this rally days ago. Why? The rate hikes have been priced in months ago and we are seeing a 'relief rally' which follows with more clarity on monetary policy.We pivoted from 4144 and shot up through multiple levels to break highs at 4327. When the decision came we saw a brief pullback then a subsequent rip to even higher leves (A friend bought at 4261 and crushed it, cheers MJ!!). From here we can expect either ranging or higher prices, but will likely see resistance at 4421. We must break this level to see anything higher. Currently, we are seeing a brief pullback to 4327, where we should find support. If we retrace further 4293 should provide further support.
FX:SPX500Long
by quantguy
Litecoin Rallies Ahead of the FOMCLitecoin has spiked up with the rest of the crypto market as investors anticipate the FOMC decision today. The Fed is expected to lift interest rates by 0.25% (25 basis points) to combat inflation. We blasted up through $105, and attempted to cross the vacuum zone to $114, but a sharp retracement took us back to $105. We appear to be getting a lot of support from this level which once provided significant resistance. Despite the volatility, the Kovach OBV has increased substantially, though has now leveled off as the volatility has subsided. If the fervor dies down, then the value area of $101-$105 will act as a magnet. If not, we must break $114 to see higher levels.
BITSTAMP:LTCUSDLong
by quantguy
Ethereum Lifts as Fed Decision LoomsEthereum got a lift with the rest of the crypto market as investors prepare for the FOMC decision today . Crypto's are behaving increasingly more like risk on assets, and this asset class (which also includes stocks) got a nice lift in what is known as a 'relief rally'. We blasted through $2651, and after some volatility, continued the uptrend into the vacuum zone between $2651 and $2762. The Kovach OBV has shot up notably, suggesting there may be some real legs to this rally. But we must break $2762, which has proven to be a prohibitive barrier in the past, before we can see higher levels. If we reject these higher levels then we are likely to seek support around $2500 (that previous range) once more.
BITSTAMP:ETHUSDLong
by quantguy
Relief Rally in Stocks ahead of FOMCStocks got a major lift ahead of the FOMC rate decision today. As we are all well aware, the Fed is expected to lift rates by 25 basis points (one quarter of a percent) to begin their 'firefight with inflation' . The rate hikes were heavily priced into the markets, and when the decision is made, we can expect a relief rally as the uncertainty is lifted. Inflation is weighing on global stocks, so the action could help ease investor fears. The Kovach OBV has picked up sharply with the buying, taking us all the way back up the entire range to 4327. If you recall this was our exact level from yesterday's report. It is likely that the majority of the rally has taken place, but we could test as high as 4421, a relative high. If we face resistance, however, we could retrace the entire rally back to support at 4144.
FX:SPX500
by quantguy
EURUSD before FED Today is the FED Interest Rate decision. This will definitely cause some moves which will present us with some trading opportunities. We saw price holding yesterday which probably means that the market is awaiting the news to find its next clear move. Like we said in our analysis yesterday, best case scenario would be to see price pushing up to 1,1200 and then a sharp drop to follow. That will give us great entry levels and we can then expect a continuation down. We're not looking to buy now or not even after the news. We're still following the downside bias and we're waiting for the best entry levels!
by ForexTrendline
15
Is the US Federal Reserve hiking 25 basis points tomorrow?The US Federal Reserve kicked off its Federal Open Market Committee (FOMC) meeting on Tuesday, with the markets widely anticipating a 25 basis-point hike in what would be the first interest rate increase since 2018. Fed Chair Jerome Powell had earlier raised the prospect of a 25bp hike, telling a House financial services committee hearing two weeks ago that he is "inclined to propose and support” the increase as inflation has sat above 2% and as the United States’ labor market continued to recover. High inflation underscores need for tightening With the US consumer inflation soaring to a 40-year high of 7.9% in February, a rate hike this week is highly anticipated, although uncertainty lies in how much the Fed will have to tighten to tame inflation. Markets are also pricing in up to six or seven hikes this year, one for each of the upcoming FOMC meetings. Higher inflation expectations among US consumers, according to surveys by the New York Fed and Cleveland Fed, also ramp up the likelihood of a more hawkish Fed. 50bp hike also on the table Although many market watchers anticipate a 25bp hike when the Fed caps off its meeting on Thursday, some economists say a 50bp is also likely. Last month, St. Louis Fed President James Bullard called for a full percentage-point hike by July 1. ING Bank’s Chief International Economist James Knightley in a note last week said it wouldn’t be surprising “to see maybe two FOMC members vote for 50bp.” Knightley and other economists from the Dutch bank most recently said markets are back to pricing 160bp hikes in six meetings in total for 2022, although the Fed may have five rate hikes planned for the year. Russia-Ukraine war places Fed in a precarious spot However, the worsening conflict between Russia and Ukraine, which has reached its third week, puts the Fed on alert due to expectations that the war could worsen inflation and result in a potential global economic recession that could derail the United States’ recovery momentum. Still, the Fed appeared to be undeterred by the crisis, with Powell saying in a recent speech to Congress that the near-term effects of the war and Western sanctions on Russia remain highly uncertain. "Making appropriate monetary policy in this environment requires a recognition that the economy evolves in unexpected ways. We will need to be nimble in responding to incoming data and the evolving outlook,” Powell said. Squeezing household income A rate hike in the US — the first since the COVID-19 pandemic emerged — could further squeeze household income at a time when gas prices hover around record highs. Gasoline prices in the US surged to an all-time high of $4.33 on Friday, before retreating over the weekend, according to data from the American Automobile Association. Higher interest rates will raise borrowing costs in banks, lifting variable rates on credit card debt and affecting interests on auto loans and mortgages. This could further weigh on consumer’s spending habits.
by BlackBull_Markets
Bond Yields at Highest Levels Since 2019Bonds have edged out new lows as investors weigh deescalation of the war in Ukraine and increased expectations for a Fed rate hike . Yields in ZN, the 10 year treasury note, are the highest they've been since July 2019. We have sliced through multiple technical levels below, and have established new lows, yet again. We do appear to be seeing a brief pivot from lows at 124'19, but 125'07 is providing resistance confirmed by a red triangle on the KRI. If we are able to continue the rally and break through resistance, then 125'17 and 126'00 are the next targets above. If we continue to sell off, then 124'06 is the next target below.
CBOT:ZN1!Short
by quantguy