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Developing A Dollar Bearish Strategy Using The Scientific MethodShould I Short USD? Yes or No? If yes, then how? If no, then why? The question is simple, but the answer may be complicated. Therefore, we will dive into the macroeconomics of the American economy, with consideration given the most significant factors influencing the value of USD. > OBSERVATIONS 1) Since March 2020, USD appears to have lost approximately 13% of it's market value. 2) Since March 2020, USD supply increased by $9.1 Trillion (COVID stimulus). datalab.usaspending.gov 3) Congress was recently asked to approve an additional $1.9 Trillion (COVID stimulus). context-cdn.washingtonpost.com > RESEARCH Part A: Three major external factors contribute to the value of USD... www.investopedia.com 1) Supply and demand: Exporting American products and services creates demand for USD, because foreign investors must exchange their currency for USD, in order to complete the transaction. Note: decreased exports = decreased demand = decreased USD value Note: decreased stock/bond issuance = decreased demand = decreased USD value 2) Sentiment and market psychology: Rising unemployment weakens the economy, reduces income, and slows consumption. If the US economy appears weak, foreign investors may sell-off their US securities, in favor of exchanging back to their national currency. Note: decreased employment = decreased consumption = decreased USD value Note: negative sentiment = decreased foreign investment = decreased USD value 3) Technicals: The release of government statistics (payroll data, GDP data, etc.) may help quantify whether the economy is strong or weak. Historical patterns generated by cyclical support/resistance levels and technical indicators also contribute to the movement of USD. Gross domestic product (GDP) is the total value of all the finished goods and services produced (in this case, within American borders) www.investopedia.com Note: decreased employment = decreased GDP = decreased USD value Part B: Four major internal tools (utilized by the Fed) contribute to the value of USD... www.federalreserve.gov 1) Discount rate: The interest rate reserve banks charge commercial banks for short-term loans. 2) Reserve requirements: The portions of deposits that banks must hold in cash in vaults or on deposit. 3) Open market operations: The buying and selling of U.S. government securities (T-bills, bonds, and notes). 4) Interest on Reserves: The interest paid on excess reserves held at reserve banks. > HYPOTHESIS Shorting USD will be profitable because the Fed is increasing money supply. Shorting USD will be profitable because the Fed is maintaining interest rates near zero. Shorting USD will be profitable because the Fed is maintaining reserve requirements at zero. Shorting USD will be profitable because the Fed is repurchasing government bonds on the open market. > EXPERIMENT Part A: Build a diversified dollar bearish portfolio. Include dollar bearish securities and commodities (FXC, FXE, UDN, GLD, IAU, DBC, DBP) Include International stock and emerging markets ETFs (open to all suggestions for this) Include foreign currencies (GBP, CAD, AUD, CNY, CHF, KRW, JPY, EUR) Include crypto currencies (BTC, ETH, LTC, and especially the DeFi sector) > RESULTS Pending... follow me for a monthly update to see if I get rekt, much love!
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ICEUS:DX1!Short
by UnknownUnicorn13791118
40
les merge | $eth $19k retestmacro count is a little easier to see on eth. similar to btc, eth showing 5 down wave A, so we should look for a wave b retest, followed by 5 more waves down. what's compelling about this play is it times up with a 'sell the news' type merge event. additional confluence, if we get $1900, a move to get us to our wave c zone would be equal to wave A. where eth is a little different than other charts atm is it's q3 vwap is actually at the low, when btc and others is closer to the top of this move, adding confluence for a revisit of the lows.
Long
by drcrypto14
2