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Macroeconomics

Beginning of a Violent Crash for SPX?Looking at the SP:SPX 1-month chart, I’m seeing some strong indications pointing at SPX being at the top of a potentially violent crash. Evidence For – Indicators that Support SPX Being at the Beginning of Crash: MACD Support Trendline: Broken with Some Distance – In the previous two crashes, the beginning of the crashes coincided with the MACD support trendline (red) being broken (with a reasonable amount of distance from the trendline). This has already happened on the 12 MA (cyan). Also notice, that both times in the past two crashes, the 12 MA (cyan) tested the MACD support trendline, found resistance, then dropped. Could see that play out soon. RSI Wave 5 Support Trendline: Broken, Tested and Becomes Resistance – Though the 2000 crash didn’t create an Elliot Wave Pattern on the RSI, if we create a support trendline (pink) on the RSI that corresponds to Wave 5 on price, you can see this pattern of broken, tested then resistance occurs. 2007 is even clearer. To me, where we’re at now, looks very similar to 2007. Price Wave 5 Support Trendline: Body of Red Candle Breaks Through – In the previous two crashes, the beginning of the crashes coincided with the price support trendline (pink) in Wave 5 being broken with the body of a red candle. In 2000, the price did not come back up to test the trendline as resistance, in 2007 it did, currently it’s on its way to test it for a 3rd time. Perhaps it will even test it a fourth time if it can’t breakthrough this time or perhaps breaks through briefly as it did in October/November. RSI Correction Wave A: Distinctive “E” Shape - All three patterns create a distinctive capital “E” type shape (green rectangles) to start out Correction Wave A, with the bottom of the “E” defining the resistance trendline (purple) in 2007. Angle of the trendline in 2000 wouldn’t have been far off if drawn there either. While I’m guessing this is not a common pattern used in charting, it does seem to be a pattern. Evidence Against: Indicators that DO NOT Support SPX Being at the Beginning of Crash Bollinger Bands/EMA: No Bounce Off EMA – In the two previous crashes, the following occurred with the correction wave – 1) correction Wave A completed at the lower BB 2) shot up to the EMA (middle yellow line) 3) Bounced off the EMA - completing Wave B. This go ‘round, 1) and 2) occurred, but instead of bouncing off the EMA to complete Wave B, it blew right through it. Perhaps it will bounce off the Wave 5 resistance trendline (pink) though like it did in 2008 or perhaps we’re still in Wave A and need to test the lower BB again before starting Wave B. MACD Support Trendline: 26 MA Hasn’t Broken Through – The 26 MA (purple) has yet to break through the MACD support trendline (red), even though the 12 (cyan) created some good distance. Not too worried about that though – the MACD on the daily chart looks poised for a crossover to the downside, and the 12 MA on the weekly looks like it’s ready to start heading down as well. I’m not a pro trader (YET). This is not investment advice (AT ALL). I’m just a guy who has spent a lot of time learning about technical analysis in the past 18 months or so. I would really appreciate any feedback, especially if you disagree with anything so I can see the other side or if find anything technically wrong with this chart that would help me improve going forward.
SP:SPXShort
by JDCryptoATX
7
THE BIG EIGHT: Where is the world heading?In this screencast I review 8 important markets. There are some common levels and patterns of price movements. The India50 is the odd man (woman) out. The forecast of a global recession has been made (not by me). This is related largely to global debt now standing at around $233 TRILLION US-Dollars and debt in America currently around $22 Trillion US-Dollars. The picture is complicated by trade tensions, political and other macroeconomic events. Our inheritance is will be the result of a decade of ultra-low interest rates and quantitative easing (aka printing of money), now complicated by global geopolitical and macroeconomic issues. Stock markets (and related indices) have a complex but important relationship to the Forex markets.
FX:US30Education
by Captain_Walker
STERLING: Not in a good placeIf you believe big media news headlines you'd be thinking that GBP is on some mega path of recovery. It ain't. The evidence is that GBP is in serious trouble as seen by most of the big daily trends. Unless something miraculous happens big trends like these especially GBPUSD create further probabilities for the south. But on the geopolitical-economic circuit, many in Britain are actually preparing for a 'Hard Brexit'. Should that materialise there is not only gonna be further big trouble for the pound, but for Forex and Stock Markets around the world. Stay tuned folks! Get your popcorn ready. :)
Short
by Captain_Walker
No, Halvings Don't MatterAs I dig deeper, the Bitcoin picture becomes clearer. I'm starting to believe that Bitcoin is the penny stock of the world's finance. I'm comparing Bitcoin to a fund that manages a basket of EM-related assets. This is the reported breakdown as of October: China 19.95% Other 16.59% South Korea 14.78% Taiwan 11.39% Russia 8.23% Brazil 8.01% South Africa 6.33% India 5.97% Cash & Cash Equivalents 5.29% Peru 3.46% You can see the almost direct relationship between crypto and the fund. As Bitcoin has grown, the behaviour has become more and more similar between the two. Even back in 2012 there was already a developing parallel. This has lead me to believe that more than crypto being at the mercy of the dollar, in order for the space to be bullish, the world's finance has to have the right conditions. Investors need to be so confident that they move not only into emerging markets, but go all the way into the penny stock of the world. It isn't yet completely clear to me why EMs top first, but it may have something to do with the low cap nature of crypto. As for the bottoms, there isn't a clear relationship either. I'm inclined to say that crypto rallies first, once again, due to its low cap nature. This isn't always the case, but it could be a good explanation. Beyond the fact that crypto might simply be a penny stock for people on a macro scale, it seems that "domestic" issues, such as halvings, hacks, news, forks, etc. only seem to affect either the slope of the trend or very localised movements. If we look back at the 2013 rally it doesn't make it implausible to have a move to 10-15k by December. Furthermore, meme lines won't predict or find the real bottom. What you can do is start looking into real world issues. The overall financial world needs a very confident outlook in order for crypto to move. That being said, I feel that emerging markets will have a breather soon, allowing crypto to have a partially bullish move. TL;DR halvings don't matter for macro trend. For moon or crash you need to look at emerging markets.
BITSTAMP:BTCUSDLong
by UnknownUnicorn1038536
3
The Big one: showing serious potential trouble ahead. I do not trade this index. In this screencast I show how there was a major struggle in the world economies between February 2018 and today 28th October 2018. I explore potentials for Bitcoin and Gold. A major corrective move south n the MSCI-ACWI has happened. This index is an aggregate of world indices. What we see on this chart is: 1. Price struggling to stay afloat between February 2018 and October 2018. 2. Price has suddenly collapsed without sign of a significant rebellion (so far). What's all this about? It's about joining some important dots (not all): 1. The world is in a deepening financial crisis. 2. The IMF warned in early October quoting from reputable sources, that risks to the global economy are rising unsupported by increasingly unsustainable policies. They warned that, "The extended period of ultra-low interest rates in advanced economies has contributed to the build-up of financial vulnerabilities" 3. Global debt has reached unprecedented levels. 4. The American economy which tends to influence the world, is living on borrowed time. 5. The European Union is in a state of financial crisis: Italy more recently. Some have forgotten about Portugal, Greece and Spain (part of what is commonly known as the P.I.G.S - nothing derogatory implied] 6. The ECB will stop quantitative easing in December 2018 (it says). 7. Uncertainties about Brexit still loom and probabilities point to greater chance of a hard-Brexit. 8. Trad tensions are high with China and Russia. 9. Emerging market around the world are being hammered. The US stock market is the last in line for a potential beating. 10. Low interest rates over the last 10-15 years in many western countries have created a setup for boom bust cycles. In recent times global interest rates have been creeping up (on average), at among least major economies. Will reality win over hope and greed? We shall see. .
NASDAQ:ACWI
by Captain_Walker
US Dollar under potential threat as de-dollarization sets in.In this screencast, I'm looking ahead for potential moves, possibly south in the US-Dollar. This is about preparedness. In the video I explore emerging geopolitical and macroeconomic issues that are taking place. The US-Dollar strength has big influence at this time on: 1. Commodities 2. Metals - especially Gold and Silver 3. Oil 4. Stock markets in the US and elsewhere. 5. US-Dollar currency pairs. - and more. This thing is big! There is reliable information about a silent forex war happening largely unseen as China, Russia and Japan are giving up US debt, and moving into Gold and Crytocurrencies. I don't do predictions, so I'm unable to say what this would mean for the future. Do not take my word for it - check out this stuff on reliable information channels (unable to give further information here - but PM me if you wish).
FX:USDOLLAREducation
by Captain_Walker
The Dragon, The Eagle And The Elephant Investors seem to have started shifting their focus from equities and rates onto the US dollar. We believe that if this dollar rally accelerates it will be a major headache for emerging markets i.e. China, India, and Russia. In part 1 of this report I would like to talk about the Dragon the Eagle and The Elephant, first let’s start with the dragon; China.Over the first few months of 2018, we observed that the PMI’s (leading economic indicator) of China had peaked resulting in a slowdown in the Chinese economy as an economy slows down the prices of commodities tends to follow to the downside. Read more at www.patreon.com
Education
by couragepharm
BTCUSD - The Blockhain CrashTo start off this little essay I'd like to start off with a disclaimer - I'm no visionary and unfortunately still incapable of exact event-prediction, therefore this analysis is a pure digression through my thoughts and an exposition of ideas and my current bias in the whole crypto-sphere. I've grown to become a believer that Trading Analysis without a background of research on the current political and economical state of affairs is a blind attempt at finding direction in the repetitive cycle that a trend leads to its own continuation until a reversal happens. Through my trading experience I've seen myself exiting early positions in trades purely due to the fear of reversal as key points (TP zones) were being targeted). This has always felt somewhat counterproductive and while I don't dismiss TA as an accurate way to set targets for profit and to cut losing trades short, I also think that it needs some form of validation to increase your awareness towards the move with higher probability. This is achieved by understanding the mind of the key investors and the overall sentiment across the world. So lets begin, shall we: - The crypto-sphere is in a very similar stage to the the tech startups of the late 90s. The overall understanding of the technology and its potential it's still very shallow and its potential overestimated. Cryptocurrency startups raise millions of dollars on the basis of a (quite-often poorly constructed) white paper exposing the theory behind their proposed blockchain technology. Revolutionary ideas for sure, some of them with a working product already but the number of business cases is still lower than low. The excitement and customer confidence in this new technology is what increases demand for the purchase of what a lot of the retail investors see as the equivalent of equity in a company, while in actuality these coins are pure stores of value. This has led to a massive discrepancy between real value and perceptual value. While the uptrend was definitely a sign of reflexivity in which the trend increases buyers and buyers will continue the tend, by January a state of doubt/reality check started to make an appearance. We're now seeing reflexivity applied to the downtrend. It was triggered by a fear that cryptos are still in an early stage and in risk of being obliterated by big financial corps/regulatory measures, yet currently we're seeing a strong downtrend increase sellers and that therefore continuing the trend. There's an embedded bearish state of mind in investors and a belief we're heading lower. This will more than likely be the reality - From a political standpoint we're seeing the western worldwide moving to an aggressive right-wing mentality. We're seeing protectionist regulations being implemented (most recently the US tariffs on Alluminum, steel and quite possibly on Chinese imports)/immigration and border control taken to extremes (Brexit, dismantlement of coalitions, states and cities trying to become independent...), all this suggests we're heading towards trade wars or at least trade restrictions until the smoke settles and new coalitions have been formed. We're witnessing an exhaustion of the current political and trade partnerships. (next comment)
BITSTAMP:BTCUSDShort
by ikc7979
1
Trading the News: How Dueling Speeches Affected the GBPUSDJust wanted to document how tracking the news should be an important part of EVERY trader's practice... Take for example, an hourly chart of this week's GBPUSD... In particular, notice how this week's MOST significant price action corresponds with two major speeches by UK officials. In the first instance, BoE governor Mark Carney delivered a "dovish" speech where the headline message was "no rate hikes yet" www.bloomberg.com However, no less than 24 hours later, Chief Economist and UK-MPC Andy Haldane delivered a "hawkish" speech which put him directly at odds with Carney. www.theguardian.com Both speeches initiated a 100pips movement (1st decline, then rally) in a relatively short period... So, the lesson to take from this moment...? Stay on top of your news..!!! (For those who don't know: I highly recommend ForexFactory as a great source of fundamental announcements as well as breaking news...) Good Luck and Always Trade Mindfully...! ...$B...
Education
by DollarBuddha
1
Civilian Employment to Population Ratio -great toolThe head and shoulders formation is a classic sell setup that traders are familiar with. A close below the neck line is a sell signal for traders. Well, as you can see this was a signal of an economic downturn and it predicted it in the summer before the market crash in the fall. This would have alerted people to prepare for the impending doom and for traders to sell short like Dr. Michael Burry of Scion Capital did with his hedge fund. The market low was set in the spring but the employment low occurred later. The previous lows set in 1961 and 1975 gave an angled level of support at which the recent 2011 low was set. We are now at civilian employment to population ratio levels of 1985! Let that sink in, 1985. This was a severe economic crash that we have yet to recover from. This data is from 1948 until 2017. I wish it started with data before the crash of 1929. What pattern was given then to signal a crash? I think this is a chart to keep an eye on every now and again.
FRED:EMRATIOEducation
by oakman
1
Is Another Financial Crisis Coming to the United States?"In general, we find that monetary policy should react to asset prices and should try to “prick” or “burst” asset bubbles." (Roubini 2005) Though it is clear they have not done so, anyone can see that there is an asset bubble in the stock, bond, and housing markets yet the FED continues their Zero Interest Rate Policy, and continues to print money at unprecedented rates while increasing debt and the deficit. The government's refusal to curb asset prices many years ago has led to a massive asset bubble that is waiting to collapse as soon as they raise interest rates, but now because commodity prices are very depressed as compared to 2007 "then the level of corporate debt remains beyond that which can be financed out of the depressed cash flows of a recession, and debt continues to accumulate, setting off a chain reaction of bankruptcies." (Barnett 2000) This asset bubble has been exasperated by "investment managers are willing to bear the low probability “tail” risk that asset prices will revert to fundamentals abruptly, and the knowledge that many of their peers are herding on this risk" which is particularly problematic in "an environment of low interest rates following a period of high interest rates" and can lead to "sharp and messy realignments" (Rajan 2005) A "sharp and messy realignment" will lead to massive deflation in asset prices and force the government to increase their deficit spending to maintain their 2% inflation target, and because the primary way to finance a larger deficit in a depressed economy will be to print more money, and because "large budget deficits financed by money creation are widely believed to be the primary force sustaining prolonged high inflation processes." (Kiguel 1989) then this could lead to hyperinflation as deficit spending reaches unsustainable levels and the only way to conceivably pay it back is through hyperinflation or default. If the FED would have raised interest rates many years ago when an asset bubble was becoming apparent then we could have possibly avoided such a big mess, but since they let this bubble extend out as far as possible without any attempt at curbing it when it does correct the FED is now left with very few tools to stimulate the economy. Interest rates are out. This leaves them primarily with printing money and deficit spending to raise inflation rates. They also have a few other tools, like raising the price of commodities artificially (see Gold Reserve Act). All of these methods will lead to the eventual destruction of the dollar and of any debts that are denominated in dollars, if and when another recession comes the government is left with the only option of destroying the dollar to save the economy. Now a destruction of the dollar is obviously a far off tale right now, but if this next recession comes then it is very likely to be the government's last resort to stimulate the economy and prevent a total financial collapse. Chances are it won't work to prevent a total collapse and the US will lose its position as the reserve currency of the world and we will fall into an extended period of economic turmoil. This will continue until there are "Substantial reductions in the budge deficit, monetary reform, and a fixed exchange rate." (Kiguel 1989) with outright elimination of the deficit being the most important factor.
DJ:DJIShort
by Intuit
10
Trading Diverging Monetary Policies: EURUSD In "The Sweet Spot"There are occasions where central banks policies diverge, either by one being hawkish the other being dovish, or by one being less accommodative while the other leans to provide further easing, in general these diverging moments are cyclical habits of markets, they come in various and actually unlimited ways and tastes, where the divergence of central banks policies is just one example. These occasions usually provide a great medium term trading opportunities and I like to call it the sweet spots. However; for those opportunities to turn out effective, short term price fluctuations triggered by surprising economic, political or geopolitical inputs should be discarded or ignored, as market will tend to correct itself in line with monetary policy. Finally, those trading opportunities are mainly applicable under normal market conditions, thus in the times of turmoil and abnormal economic or political events; when the fear factor dominates the scenes markets tend to be irrational and derived by haven demand. To clarify more; I will illustrate the idea by a potential real time example, the EURUSD: The ECB: The recent ECB meeting triggered a major sell-off, as the central bank was extremely dovish, decided to be more supportive cutting interest rates, and hinted ready to do more if needed, as the ECB sights risks of deflationary pressures are the main threat to the EU. On the other hand, The Federal Reserve: I believe the FED is at the end of its easy policy cycle, the effect of government shutdown wasn't that harmful as earlier expected, jobs data are surprisingly solid within the past months, and the FED had already hinted that its starting tapering soon. Technically Speaking, the EURUSD has broken its four-month ascending channel, indicating further debasement in the near term, probably towards its main longer term ascending trend line, which if broken may signal further long term downside. Technical notes and targets are outlined on chart. Happy Trading twitter.com thefxchannel.com
Short
by Technician
6