Havens of Wealth . . NOTUnless you're buying with cash, good luck getting a loan when the Fed is done with it's wrecking ball.
See you at the bottom :)
Disclaimer : Not investment advice.
Interestrates
USDCAD 4Hr Analysis, NY Session 1/25 JanMarket Structure is Bullish on the Daily TF
However Market structure is bearish on the Weekly TF
Not super excited to buy at these prices
Looking for us to come back down to 1.257
Thats where I'd buy at least. This is Based off my
DXY Bias , Where I'm anticpating a pullback from our daily resistance zone for liquidity
in a trend. It is possible we continue to consolidate until
cad interest rates tomorrow. We also have FOMC tomorrow.
Head and Shoulders Retest - Adding to ShortsHeading into BOC rate decision tomorrow with some analysts forecasting an earlier than expected rate hike, we see USD/CAD rally up into the neckline of that head and shoulders pattern it broke through last week.
Partial profits were taken on Thursday last week and now I will be adding back on to this short position.
Looking deeper at the rate decision... it has been said for roughly the past year that the BOC would raise rates before The Fed, now that time is near. With The Fed forecasted to be raising rates in March and possibly even raising by 50 basis points, the BOC is being said to likely jump ahead and start with a quarter percent hike this week.
A quarter percent hike will shock markets, but not as much as what would happen if The Fed hiked by half a percent. The BOC historically has been more stable and acting ahead of the game in terms of raising rates and being more subtle than The Fed has been.
EURUSD awaiting FEDTomorrow we have important news for the USD.
The interest rate decision together with the press-conference that comes with it are currently the most important news for pretty much all markets.
They affect the USD directly and also the rest of the currency pairs.
In most cases, the market participants are not trading just before or during the news, but they patiently wait for the end of those events.
This is what we are doing right now.
Our expectations are that we will see big moves during the news and a possible rise to around 1,1400, followed by rejection afterwards.
In case of a signal candle after the news with a long wick to the upside, we will look for potential entries.
Before that we're just waiting and analyzing anything that happens.
Be patient and good luck!
Bitcoin Investors Proven RightOne year ago today the narrative for Bitcoin BITFINEX:BTCUSD was that the asset could be a hedge against inflation amidst the easy money policies of the Fed. A full year later with the stated inflation rate of 7%, the highest in 40 years, Bitcoin has returned over 11%... soundly beating inflation.
Bonds Rally with the Stock SelloffBonds have gotten a lift off the selloff in stocks. An influx of risk off sentiment gave ZN a much needed lift back to the 128 handle. We had dipped in the very lows of the 127 handle, and were appearing to get ready to break into the 126's, when the fallout from stocks caused a notable risk off shift. We have broken through our level at 127'22. As predicted yesterday, we crossed the vacuum zone and touched 128'10, the first level in the 128 handle, before retracing slightly. At the time of this writing, we are hovering just under this level. We will see if the fallout in stocks continues today, in which case, we can expect higher levels, the next target being 128'24. The Kovach OBV has turned solidly bullish, likely a bit more than it would if this were just a simple relief rally. But if the selloff continues, 127'22 and 127'08 are the next targets to the down side.
TNX - 10 YR T-Note Yield - Overblown?This thing is way ahead of where quarterly money flows suggest it should be - I think it will pull back and consolidate 1.10 - 1.150 range. Also looks to be exhibiting the same post-crisis recovery that it followed after the GFC. I'm pretty sure all of these anti-fed pumpers were out there barking about it back then as well.
Also, Bitcoin (all cryptos) still look like crud, barely hanging on minus over 30% and still tired.
Stocks looking real good in terms of quarterly money flows. This recent pull back looks like profit taking to me (maybe another 5% down and reverse but I think we are near the end of the correction. Oil also holding up and actually creeping higher, suggesting demand remains (for now); again, we know that the American consumer IN 2007 - FIFTEEN YEARS AGO - was able to support $100+ / barrel oil. Today we are tickling $86 / barrel.
Fear sells. Listen to the data.
God Bless.
#GoChiefs!
Stock Index selloff and key levels to watch on major marketsA rally in crude oil triggered more concern into inflation and interest rate rises which saw a stock market selloff. In the video I look through the key levels I am watching on major Indexes, US bonds and the USD.
Thanks for watching and please take some time to check out the website in my profile.
The market is overly complacent about interest rate riskMarkets Have Been Celebrating No Corporate Tax Hike
Stocks have been marching higher as the risk of a near-term corporate tax hike evaporated due to hard bargaining by centrist Democrats Joe Manchin and Kristen Sinema. Prediction markets are now putting the odds of no corporate tax hike at about 88%:
www.predictit.org
In fact, the single largest line item in the Build Back Better Act is actually a large tax *cut* which disproportionately benefits the highest earners. That's certainly a bullish development for markets, because it means more billionaire money chasing stocks.
But They've Been Ignoring the Risk That Interest Rates Will Rise
I think markets are ignoring interest rate risk, though. The passage of the Build Back Better act means that the US Treasury will be issuing a lot more treasury bonds over the next few years in order to fund new spending, and it will be doing so at a time when the Federal Reserve is tapering its bond-buying program. That means that private investors will have to absorb that over-supply of treasuries. And private investors are likely to demand higher interest rates than the Federal Reserve would. In other words, a supply-and-demand shock in the bond market could be about to send interest rates up.
Bonds May Have Just Flashed a Warning Sign Today
TLT (a major treasury bond ETF) made a big bearish engulfing candle today and closed below the 200-day EMA. (Bond prices move the opposite direction from rates, so rising rates = falling bonds.) The move came after the Fed's announcement that it will cut bond-buying in half this month and stop bond-buying altogether by mid-next year. I bought a TLT put yesterday and took profit on it today at the 200-day EMA for a 30% gain, but TLT actually continued downward and ended the day below the 200-day. It still has support from the 20-day EMA, so the question tomorrow is whether the 20-day will hold. If TLT doesn't hold support at the 20-day, then I think we're likely to see tech and pharma stocks follow it down. We could well be at the beginning of a significant correction for both bonds and stocks.
Rising rates would be bad for growth companies, and especially bad for cash-poor companies that finance their growth through debt. (Pharmaceuticals, for instance, could be especially hard-hit.) Rising interest rates make it harder for those companies to get financing. The Nasdaq index has recently been selling off whenever rates rise (and bonds fall). Rising rates are better for banks than for tech, and could lead to outperformance by XLF.
Smart Money Has Been Going Short Bonds for Months
For the last couple months, a lot of smart money has been going short bonds on the expectation that bond rates will rise and bonds will fall. Ordinarily I'd hesitate to pile into such a crowded trade, but sometimes the crowd is right. The put/call ratio on TLT is 1.7, a big bearish bet. And an indirect way to be short bonds is to be short tech. The put/call ratio on the tech-heavy QQQ right now is an even more bearish 2.0. If you have heavy long exposure, especially to tech and growth, now is probably a good time to put some hedges on.
Markets Have Been Celebrating No Corporate Tax Hike
Stocks have been marching higher as the risk of a near-term corporate tax hike evaporated due to hard bargaining by centrist Democrats. In fact, the single largest line item in the Build Back Better Act is actually a large tax *cut* which disproportionately benefits the highest earners. That's certainly a bullish development for markets, because it means more billionaire money chasing stocks.
But They've Been Ignoring the Risk That Interest Rates Will Rise
I think markets are ignoring interest rate risk, though. The passage of the Build Back Better act means that the US Treasury will be issuing a lot more treasury bonds over the next few years in order to fund new spending, and it will be doing so at a time when the Federal Reserve is tapering its bond-buying program. That means that private investors will have to absorb that over-supply of treasuries, and they are likely to demand higher interest rates than the Federal Reserve would. A supply-and-demand shock in the bond market could be about to send interest rates up.
Bonds May Have Just Flashed a Warning Sign Today
TLT (a major treasury bond ETF) made a big bearish engulfing candle today and closed below the 200-day EMA. (Bond prices move the opposite direction from rates, so rising rates = falling bonds.) The move came after the Fed's announcement that it will cut bond-buying in half this month and stop bond-buying altogether by mid-next year. I had bought a TLT put yesterday and took profit on it today at the 200-day EMA for a 30% gain, but TLT actually continued downward and ended the day below the 200-day. It still has support from the 20-day EMA, so the question tomorrow is whether the 20-day will hold. If TLT doesn't hold support at the 20-day, then I think we're likely to see tech and pharma stocks follow it down. We could well be at the beginning of a significant correction for both bonds and stocks.
Rising rates would be bad for growth companies, and especially bad for cash-poor companies that finance their growth through debt. (Pharmaceuticals, for instance, could be especially hard-hit.) Rising interest rates make it harder for those companies to get financing. The Nasdaq index has recently been selling off whenever rates rise (and bonds fall). Rising rates are better for banks than for tech, and could lead to outperformance by XLF.
Smart Money Has Been Going Short Bonds for Months
For the last couple months, a lot of smart money has been going short bonds on the expectation that bond rates will rise. (Bond prices move the opposite direction from rates, meaning that rising rates cause prices to go down.) Ordinarily I'd hesitate to pile into such a crowded trade, but sometimes the crowd is right. The put/call ratio on TLT is 1.7, a big bearish bet. And an indirect way to be short bonds is to be short tech. The put/call ratio on the tech-heavy QQQ right now is an even more bearish 2.0.
Inflation Numbers Will Determine Where We Go from Here
FOMC futures are currently forecasting that the Fed will hike rates 2-3 times by the end of next year, with a small chance of 4 rate hikes. As But as John Cochrane argues, FOMC futures have historically tended to be too hawkish:
johnhcochrane.blogspot.com
There's a lot of political incentive in Washington, D.C. to keep rates low, so the Fed almost certainly won't raise rates until inflation forces their hand. (Raising rates is primarily a tool to control inflation.) So keep an eye on the inflation numbers as we go forward from here. Inflation over the past decade has tended undershoot expectations, and many economists still believe that the current bout of inflation will prove to be transitory. So it may well turn out that we just get one or two rate hikes, and then inflation stabilizes and everything returns to normal.
For now, I am expecting a short-term correction in both bonds and stocks, but a stabilization in the medium term. Shipping prices have been falling:
And commodities prices look like they may start to come down as well:
Hopefully these are early signs that inflation will be transitory after all.
But the last reading on the Citi Inflation Surprise Index was an all-time high, so beware. If the pandemic has taught us anything, it's that there's definitely a limit to how far and fast we can push deficit spending before inflation kicks in. Pandemic deficit spending in 2020 caused high inflation in 2021. The question now is whether inflation will run away or normalize. This is an unprecedented situation, so nobody really knows. But a lot will depend on whether the Fed and Congress can practice some fiscal discipline, or at least convince markets that they will.
The bearish argument for lower Bond markets continues ....Bund 10Y Yields are back above zero for the first time in a couple of years.
We have been viewing the bond markets as building major tops for quite some time and if we take a look at the EU 10Y yield rate, which has just breached zero, we can see that there is clear evidence that rates are now in a longer term up trend and have been for well over a year. Note that the definition of an up move is for higher reaction lows and higher reaction highs, and this has been the case since October 2020.
From both a fundamental and technical perspective the bearish argument for lower Bond markets continues to build momentum. With Oil hitting multi-year highs amid growing geopolitical tensions in the Middle East and ongoing supply tightness, we are looking for further upside pressure on the energy markets, coupled with an upside surprise for the German ZEW Economic sentiment index yesterday (it jumped to 51.7 in January) the bond markets are suffering.
In fact, technically, the EU 10Y yields have completed a base and now look ready to maintain the break above the 200-week ma at -0.18. They have been contained within a up channel extending back to 2020 and this comes in at approx. 0.07/0.08 and is likely to offer some decent resistance ahead of much tougher resistance at 0.28/0.30 (approximate lows that were seen throughout 2018). Longer term the market has completed a large base, which offers measurements much higher than this…
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Gold Maintains the RangeGold has been holding the range between 1815 and 1826 nicely. We are seeing good support and resistance from above and below, respectively, confirmed by green and red triangles on the KRI at these levels. The price action is starting to 'round off' at highs, suggesting we be losing confidence in higher levels, and might be gearing up for a retracement. If support at 1815 does not hold, there is a vacuum zone down to 1715. If we can muster the strength to break 1826, then 1836 is the next target. The Kovach OBV has been holding steady at highs, suggesting the current range may hold for now, until we see more momentum come through either way.
Bonds Ranging Between Our LevelsBonds have edged up, but as predicted, are facing resistance at 128'24. We saw a red triangle on the KRI at this level to confirm resistance. Currently, we are seeking support at 128'10, which we also anticipated. Two green triangles on the KRI are suggesting support here. As discussed yesterday, bonds are establishing value between 128'10 and 128'24. The Kovach OBV has edged up, but has leveled off. If ZN is able to break through 128'24, then there is a vacuum zone to 129'11. Otherwise, we should see support at 128'00.
Inevitable US30 Short - Set Targets!Happy New Year!!
New chart for the Risktakers... Surprise, it's not crypto!!
The DOW Jones has to fall eventually & that may be *very* soon!
U.S. Federal Reserve's Chairman Jerome Powell speaks on Tuesday (a tell for tons of volatility), and now that employment figures are looking better (at least for now),The Fed will next complete the second task of its dual mandate -- Maintaining stable inflation rates. Interest rates have been historically and artificially low for 2 years now. When those rates hike up:
- US30 - Short
- Dollar (DXY) - Long
- BTC/USD - Short
- XAU/USD - Short
- XAG/USD - Short
The pop is inevitable. $tay Risky!
Blackrock at key supportAs you can see, the price has respected the 200sma (blue) since the break from Covid lows.
Risk-reward-ratio presented is interesting as you will figure out if you are right or wrong pretty quickly; especially since the Bollinger bands have been contracting as we have consolidated.
Trade setup:
Target around $1000 for profit-exit.
Loss-protection exit 1-2% under the 200sma.
Fundamental Analysis '
- The $TNX (interest rates) has broken out which is positive for financial institutions.
- There is a cyclical tilt to the market as high valuation companies in the technology sector are hit hard.
* Note: Earnings are starting at the end of next week for the financial sector.
THIS IS NOT A DIP - Bitcoin, EtherumFor weeks we have had warnings in price action that Bitcoin was entering a bearish phase. Articles, charts, and opinions that offer CONFIRMATION BIAS that the bull trend is just "having a dip" rise to the top because people read and share what they want to hear. I am not trying to prevent people from becoming crypto millionaires. I am trying to warn people against drawdowns, get them to reject the confirmation bias, and trade wisely!
Why is this happening? I've been talking for the last month about interest rate fears as the evidence was in the daily price action. NOW the financial media this week has picked it up as a talking point.
We'll talk more about this during today's Livestream, every Friday at 4pm Eastern.
The Federal Reserve Effect on AssetsHello friends, today I am showing you six charts - US Dollar (DXY), 10 Year Treasury Interest Rate, Gold, Bitcoin (BTCUSD), WTI Crude Oil and S&P 500 Index (SPX). These are some of the biggest traded assets in the world. The vertical lines on each chart represents the beginning of the month.
Over the three months since September 2021, the US Federal Reserve has been pointing to a reduction in balance sheet and dropping in hints of what the are considering (such as tapering, rate hikes and so on). This has directly impacted assets classes across the world as shown in these charts. There is no doubt that interest rates will go up if the Fed is openly saying they want to raise rates so it is with no doubt that the 10 year treasury is up. With that though oil has also been going up while other asset classes like Bitcoin, Gold and S&P 500 are going down. Interestingly the S&P 500 Index has not suffered as bad as Bitcoin has even though many consider them correlated in some way. This may be an indicator of what is to come soon. Lastly, the US Dollar seems to be getting stronger over the past few months and from my prior analysis of it (see ideas below), there is a strong potential for it to keep going higher. 2022 into 2023 will be a surely interesting year with what the Federal Reserve is looking to do.
There are many other asset classes I didn't review on this analysis. If you want to drop in others, feel free to do so. What are your opinions on this?
If you enjoy my ideas, feel free to like it and drop in a comment. I love reading your comments below.
Disclosure: This is just my opinion and not any type of financial advice. I enjoy charting and discussing technical analysis. Don't trade based on my advice. Do your own research!
The US Dollar Index Holds 96'sThe DXY has continued to hold the range between 96.00 and 96.44, currently hovering just below our level at 96.24. We appear to be forming a bull flag pattern, but are otherwise consolidating which could suggest a breakout soon. If we break out, then we must definitively break 96.44 to consider another bull rally. There are several levels in the mid 96's to provide resistance after that, with 96.56 being the next target. If we retrace further then 95.82 is the next level down, with 95.58 as the min lower bound for now.
Have Bonds Bottomed??Bonds have stabilized at lows, and have started to form a range, as we suggested yesterday. We have started to find value just above 128'10, and below 128'24, the exact range we identified in the last report. After plummeting two full handles since the beginning of 2022 it was time for ZN to reach some sort of equilibrium before its next move. From here we expect value to continue to form at current levels. A relief rally is not out of the question, especially after such a selloff. If so, we could make a run for the 129 handle again. There is a large vacuum zone above to 129'11, which should be considered a max upper bound at this point. The floor seems to be 128'10 for now. The Kovach OBV is still quite bearish, so there is little hope for a genuine bull rally any time soon.
Gold Dips, Hits our Target at $1784Gold has plummeted past our support level at 1795. We saw a brief attempt yesterday morning to make a pivot off of this level into the value area between 1795 and 1815, but this was swiftly sold back, and 1795 provided little support. However, the levels in the 1780's that we identified yesterday held well and we found support just above 1784. Currently, we are ranging between 1784 and 1795, with the current price at the time of this writing around 1790 or so. If we muster the strength to break through 1795, then we will have returned to the vacuum zone between 1795 and 1815. If we selloff further, 1777 is the level to watch, which seems to be a hard lower bound for now. But 1770 is the next level after that so be prepared just in case we dip further.
$Gold TA in 4H TF : 01.06.22 $XAUUSDWell, as you can see, yesterday in the 4-hour time frame, we saw the first and most important bearish signal with the opening of the New York market, and the price started to fall exactly from the $ 1830 range, and so far it is in the $ 1790 range. It has given us a return more than 400 pips. If $ 1785 support is broken, the next targets are $ 1777 and $ 1765.
Follow our other analysis & Feel free to ask any questions you have, we are here to help.
⚠️ This Analysis will be updated ...
👤 Arman Shaban : @ArmanShabanTrading
📅 06.Jan.22
⚠️(DYOR)
❤️ If you apperciate my work , Please like and comment , It Keeps me motivated to do better ❤️
Gold Dips, Finds Support at Our Levels as Expected 😎Gold has traversed the vacuum zone below and tested 1795 yet again, exactly as we have anticipated. From here, we got a nice pivot, and are currently in the middle of the value area between 1795 and 1815. From here it could go either way, but safe haven outflows may suggest we test lows again at 1795, the cluster of levels in the 1780's or 1777. The Kovach OBV has taken a sharp turn downward with the dump from 1826, and the small pivot we are seeing has not been enough to budge this indicator. But if we do make a run for higher levels, watch 1815 and 1826 for resistance.
Nasdaq 100 - The crucial support zoneNASDAQ:NDX
Nasdaq had a 3% fall on Jan 5, 2022. The fall is still well within the upward channel.
The strong support line of the upward channel is supported 5 times in post corona uptrend.
The crucial support zone for Nasdaq 100 is shown as grey box area.
Break to the 21 months old post corona uptrend can be confirmed once this grey box is broken downside i.e. 15,180 area.
The level is just 3.75% away from the present level.
US10Y-D1/W1- TREND REVERSAL CONFIRMED !TREND REVERSAL CONFIRMED ON THE DAILY CHART !!!
Price action, acceleration upside move, seen over the last couple of days confirmed the trend reversal, calling for higher levels.(Pullback failure attempt)
Indeed, the former daily downtrend line resistance has been broken and has also been confirmed by the Chico.span price action.
RSI above 50 @ 69
Only a clear breakout of the 1,5950 would put in danger the expected bullish (yield) scenario.
WEEKLY (W1)
The weekly downtrend resistance line in progress to be broken (confirmation would be given on a weekly closing basis tomorrow and also by the closing level of the Chikou-span which is currently in progress to also breakout this downtrend line resistance.
Ironman8848 & Jean-Pierre Burki
