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Better labour market is not equal better indices this time S&PFollowing last week's release of stronger-than-expected economic data, investors are recalibrating their expectations concerning aggressive Federal Reserve (Fed) rate cuts. The market sentiment is shifting, with investors scaling back their anticipation of imminent rate cuts. This change in perception is amplified by the surge in bond yields, indicating a rising consensus among institutional traders to build short positions. The rationale behind these actions lies in the growing belief that the Fed might maintain its current restrictive policy stance for a longer duration than initially anticipated. This shift is underpinned by the robust health of the labor market, as evidenced by declining unemployment rates, diminishing jobless claims, and notably higher Non-Farm Payrolls reported last week. The entry level aligns favorably for execution, especially just before the commencement of the London session. Two Take Profit (TP) levels have been identified for this trade. The initial TP is strategically positioned at the upcoming 4-hour (4H) support zone, reflecting a prudent approach to secure early gains. For a more assertive yet realistic approach, the second TP is set at the 200-day Moving Average (200MA) on the Daily time frame (TF). Historical backtesting indicates a tendency for the market to approach or touch the 200MA during anticipated drops similar to the current market scenario. This second TP level, although more aggressive, presents a viable opportunity based on historical trends. Comment your opinion below . . .
VANTAGE:SP500Short
by Elite_Forex
MACRO MONDAY 28 ~ Discretionary Index Vs Staples IndexMacro Monday 28 – Discretionary Vs Staples Today we are going to look at the following two very interesting SPDR Indexes and their relationship to one another to help us understand where the U.S. consumer is at present. SPDR Select Sector Funds (“SPDE SSF”) 1. Consumer Discretionary SPDR Fund AMEX:XLY 2. Consumer Staples SPDR Fund AMEX:XLP For reference the SPDR (AKA the Spider) is a short form name for a “Standard & Poor's Depository Receipt”, an exchange-traded fund (ETF) managed by State Street Global Advisors that tracks the Standard & Poor's 500 index CBOE:SPX What are Discretionary Expenses? Discretionary expenses are defined as “a cost that a business or household can survive without, if necessary”. These are the nonessentials like meals at restaurants, entertainment costs, vacations and 50” flat screen TV’s. What’s in the SPDR Consumer Discretionary Index? The SPDR Consumer Discretionary Index seeks to provide focused exposure to companies that provide discretionary nonessential services or produces such as hotels, restaurants and leisure; textiles, apparel and luxury goods; household durables; automobiles; automobile components; distributors; leisure products; and diversified consumer services. The SPDR Consumer Discretionary Index top 10 holdings are: 1. Amazon 22.62% 2. Tesla 17.76% 3. McDonalds 4.63% 4. Home Depot 4.58% 5. Nike 3.80% 6. Lowes Cos 3.70% 7. Booking 3.62% 8. Starbucks Corp 3.24% 9. TJX Companies 3.22% 10. Chipotle 1.85% Now we understand exactly what the SPDR Consumer Discretionary Index is and what its main components are. We know that the index itself is driven by stock prices from a collection of companies that offer discretionary services and products in the U.S. Now lets have a look at the SPDR Consumer Discretionary Chart Chart 1 – SPDR Consumer Discretionary - AMEX:XLY At a glance the chart demonstrates the following: ▫️ In December 2007 price fell below the 200 Week Moving Average (WMA) which coincided with the exact date the Great Financial Crisis commenced (from Dec 2007 – June 2009). ▫️ Interestingly price got back above the 200 WMA in February 2010, 8 months after the recession had ended. ▫️ Since 2009 Consumer Discretionary spending appears to be in a general up trend with a lot of volatility in recent years however still in an uptrend. ▫️ The 200 WMA is still rising and sloping upwards, and price is now back above it which indicates strength. ▫️ Recently we made a potential lower higher and this is something we should look to confirm over the coming months. Should we break higher this would be obviously bullish, another lower high and we know to be cautious. ▫️ In the event we breach the 200 WMA, we should start to get more cautious. This has occurred twice since 2020 and price got back above the 200 WMA however we are very aware that a breach of the 200 WMA can signal a recession as it did so accurately in Dec 2007. ▫️ If we fall below the “INITIAL SUPPORT” marked on the chart, consider this an initial serious warning. ▫️ If we breach the “MUST HOLD SUPPORT” this would be extremely bearish. - you will see that volatility to the downside on Consumer Discretionary can be quiet something in our comparison charts below. It is worth noting the level of increased volatility since 2018 on the chart. We have not really seen anything like it before dating back to 1998. Lets move onto the Consumer Staples and see what they are, what they consist of and what the chart is telling us here. What are Staples? The term consumer staples refers to a set of essential products used by consumers. This category includes things like foods and beverages, household goods, and hygiene products as well as alcohol and tobacco. These goods are those products that people are unable—or unwilling—to cut out of their budgets regardless of their financial situation. What’s in the SPDR Consumer Staples Index? The SPDR Consumer Staples Index seeks to provide a focused exposure to companies that providing consumer staples distribution & retail; household products; food products; beverages; tobacco; and personal care products industries in the U.S. The SPDR Consumer Staples Index top 10 holding are: 1. Proctor & Gamble 14.11% 2. Costco Wholesale 11.56% 3. Pepsico 9.49% 4. Coca Cola 9.36% 5. Philip Morris Int 4.54% 6. Walmart 4.53% 7. Mondelez Int 4.47% 8. Altria Group 3.40% 9. Colgate Palmolive 3.06% 10. Target 3.00% We now know exactly what the SPDR Consumer Staples Index is and what its main components are. We know that the index itself is driven by stock prices from a collection of companies that offer Consumer Staple services and products in the U.S. Products/services people cannot do without, products they need day to day. Now lets have a look at the Chart Chart 2 – SPDR Consumer Staples Index AMEX:XLP At a glance the chart demonstrates the following: ▫️ The high in Consumer Staples in Dec 2007 coincided with the beginning of the Great Financial Crisis. In Chart 1 above on Consumer Discretionary we seen that a breach of the 200 WMA coincided with Dec 2007 GFC. Both charts demonstrated some synchronicity in advising caution from Dec 2007 forward. ▫️ Nine months later in Sept 2008 a lower high formed in Staples and after that the lower support line was lost following which capitulation occurred. I have marked up a similar “MUST HOLD SUPPORT” line for the current price structure. We have made a lower high similar to 2008. A breach above that lower high would be bullish, continued lower highs would indicate weakness. ▫️ Since 2009 Consumer Staples still appear to be in a general up trend with increased volatility in recent years however still in an uptrend. ▫️ The 200 WMA is still rising and sloping upwards, and price is now back above it now again which indicates strength. ▫️ All the same levels are apparent here as above in Chart 1. The 200 WMA, the “INITIAL SUPPORT” and the “MUST HOLD SUPPORT”. Now that we are familiar with the charts, their price history, the important levels to watch and some synchronicities, lets have a look at how these charts compare when you line them up together on the same scale. Chart 3 – Discretionary versus Staples SUBJECT CHART AT TOP OF ARTICLE We will take three main things away from this chart: 1. The big obvious finding on the chart is just the extent at which the Consumer Discretionary Index (orange) has risen above Consumer Staples(blue). This wide gap between the orange and blue lines is really stark and it appears it may be starting to close. 2. Historically Consumer Discretionary (orange) revisits and falls lower than Consumer Staples (Blue), particularly during recessions. We have a long way to go for this to happen again. See Chart 1 and Chart 2 above for important support levels to watch (for both). 3. Consumer Discretionary (Orange) started to make a series of lower highs prior to the Great Financial Crisis (see black arrow on chart), something similar may be occurring now. We are also already aware that Consumer Discretionary fell below the 200 WMA in exactly December 2007 which was the first month of the Great Financial Crisis. This is also the exact date when Consumer Staples topped in 2007. At present Consumer Staples made a top in April 2022 and Consumer Discretionary made a potential lower high in Dec 2023, however it has not fallen below and remained below the 200 WMA (making this a key line in the sand to watch going forward). Chart 4 – The Relative Strength of Consumer Discretionary In this chart I just wanted to illustrate the relative strength of the Consumer Discretionary over the Consumer Staples over the longer term. You can create this chart by inserting XLY/XLP into TradingView. As you can see this chart has been trending up and to the right since 2008. Discretionary spending appears to be on a long term uptrend and this is worth noting as a long term potential shift towards spending on services, experiences and higher end electronics. Technology Index’s in prior Macro Mondays are showing strength and we have to consider that if we do not breach the important support levels marked in Chart 1 and Chart 2 above, we may have a secular shift in spending habits towards discretionary (until support levels are broken). Granted this may be the least probable and least accepted view given recession fears, liquidity concerns and the yield curve un-inversion likely to occur in 2024. We do however need to keep an open mind, a COVID-19 type event might bring us down to the bottom trend line only to bounce off it after another stimulus hits the market. If we lost that lower support line, we can say unequivocally that the secular trend of discretionary spending strength is over. We now have a two more Indexes to watch that give us a good idea of the impact consumer spending is having on companies in the marketplace. We have our levels to watch and a good understanding of the risks and potential trends. Use it wisely. All my charts are on TradingView and you can revisit them at any time and press play to see have we breached any important levels to the upside or downside. Thanks for reading. PUKA
AMEX:XLP
by PukaCharts
2
Is Bitcoin broken? Why isn't it going up? A lot of folks are scratching their heads, wondering why Bitcoin isn't taking off like a rocket 🚀. Some even reckon it needs to take a nosedive before we see any action. But what's the deal with Bitcoin? Why does it seem like we're just going sideways? Let me break down a few things that, in my humble opinion, are affecting Bitcoin's price and what I think might go down. **1️⃣ Miners Offloading Bitcoin** Let's talk about mining. Miners are the backbone of the Bitcoin network. They validate transactions and keep the blockchain secure. But here's the kicker: Bitcoin's got this thing called "halving," where the rewards miners get are cut in half. In a few months, the cost of mining will double as the block reward drops from 6.25 to 3.125 BTC per block. So, miners are stocking up to cover their costs after the halving. Most of this selling happens on the down-low to avoid messing with the price, hence the sideways action. **2️⃣ Big Picture Stuff** Bitcoin was born in the ashes of the 2008 banking crisis, where Quantitative Easing (QE) was the name of the game, meaning cheap money galore. But now, we're in a period of Quantitative Tightening. Interest rates are sky-high, making money expensive. People are holding onto their cash, expecting a possible recession down the line. Geopolitical tensions and global shake-ups don't help either. **3️⃣ It's All About the Cycles** Take a look at the Bitcoin price chart, and you'll see cycles every four years. Bull run after the halving, hitting a peak, then dipping into bear territory. Rinse and repeat. BTC hasn't broken its all-time high before the next halving so far, and I don't see why it would now. ✅ So, what's the outlook, you ask? 📍 We're probably in for more sideways action, at least until we get close to the halving. Here's what's on my radar: **1️⃣ BlackRock's ETF:** They wouldn't bother filing for an ETF if they didn't think it'd get the green light. The expected decision date is March 30th, 2024, right before the next BTC halving. **2️⃣ Scarcity on Exchanges:** Unlike past halvings, there's hardly any BTC sitting on exchanges. This scarcity could lead to some wild price swings. **3️⃣ The Halving:** As Satoshi said, "The price of any commodity tends to gravitate toward the production cost." After the halving, production costs double, so BTC's gotta climb to catch up. Miners will try to hold onto their BTC to turn a profit, making it even scarcer. **4️⃣ End of QT:** When people stop spending, and the economy tanks, we'll likely see a shift from Quantitative Tightening (QT) back to Quantitative Easing (QE). That's a good sign for BTC and investment in general. ❓ When's all this gonna happen? My gut says not much until the second half of 2024, but if those four factors line up nicely, we might get a Bitcoin rally reminiscent of 2017, rolling into 2025. 🚀 🎙️Got thoughts? Share 'em in the comments and hit that like button if you found this overview useful. Don't forget to follow for more ideas.
BITSTAMP:BTCUSD
by Profit_Through_Patience
42
Dr copper potential more downside moveHello traders, lets take a look at copper which testing an important resistance area and see what can possibly happen and what are the consequences of possible bearish move in other markets like us equities. first lets talk technical, price overall bearish Daily move in copper formed a standard #head_and_shoulder pattern in form of consolidation in downtrend move and as we know this chart pattern in the middle of a move showing continuation. As it can be seen price formed clear H&S pattern and now forming possible LH at key resistance area below Daily EMA and at the 4H timeframe 200 EMA. more importantly price failed to close above 3.80$ in the past 3 days. Also we know that copper as one of the most important commodities is very sensitive on economic data, and since central banks are in raising interest rate campaign in order to take control inflation this can be interpreted as lower economic growth and as a result les demand for industrial commodities like copper which can bring prices lower. so now obvious chart pattern and a valid downtrend, price testing important resistance area and failed to break above it and more importantly we have fundamental aspect inline with technical analysis which all together gives good odd to find a trigger to short.
CAPITALCOM:COPPERShort
by mohemati
Qualitative Fundamental Analysis of US Economy Oct.2023The most important factor for the economy is the behaviour of GDP. Several economic indicators are tracked to determine the overall economic situation and GDP growth. A technical recession is defined as 2 consecutive quarters of negative real GDP. If GDP grows less than 3% on average for the year, the economy is not growing fast enough and this will lead to unemployment. At its core, the Federal Reserve has dual mandate policy: price stability(2% inflation for a year) and maximum employment (max Unemployment rate 4%) . CPI Inflation projection: inflation is forecast at 4.7% in 2023 and is expected to further slow down to 3.0% in 2024. Actual CPI : 3.7 % PCE Inflation projection: inflation to be 3.3 percent in 2023, 2.6 percent in 2024, and 2.2 percent in 2025, and the Federal Reserve expects a similar outlook of 3.3 percent, 2.5 Actual PCE : 3.5% Unemployment rate projection: The unemployment rate reaches 4.1 percent by the end of 2023 and 4.7 percent by the end of 2024 before falling slightly, to 4.5 percent, in 2025. Actual: 3,8% GDP Growth projection: Real GDP increases by 1.5 percent in 2024 and by 2.4 percent in 2025. Actual: 2,4% Interest rates projection:The Fed now expects its benchmark federal funds rate to close out 2024 at an effective rate of 5.1%, which is higher than its June forecast of 4.6% Interest rates: 5.5% MONEY MARKET Yields From the chart above we can see when the recession is coming. The 10Y-2Y has already fallen below 0 and we should prepare for a recession when it comes above 0. The yield curve (all yields) is slightly inverted, but only because of the 20-year yields. The overall curve is normal, which means that investors are not worried about the future, at least for now and they invest more in long-term bonds. According to the FED, we should expect a mild recession at the end of this year. The SP500 seems to be consolidating for the next few months. Corporate Bonds and Credit Spread Spreads are relatively stable. They do not point to a recession. Money Supply M2 The money supply is also stable, which means that the printer is not running. This is a good sign considering the banking crisis. interest rates The last time IR was so high was during the last recession in 2008. History could repeat itself. At the last FOMC meeting, the FED paused rates but said they would remain high. This could be exactly what happened in 2007. FED paused after aggressive hike and recession came. SERVEYS ISM PMI, NMI The historical correlation between real GDP growth and the ISM PMI/NMI is 85%. PMI/NMI are leading indicators and they will predict how GDP will move. It is a short to long term prediction (within 12 months). The reading continued to point to another albeit smaller deterioration in the manufacturing performance, as contractions in output and new orders softened. Meanwhile, sufficient stocks of inputs and finished items, alongside still subdued demand, led firms to reduce their purchasing activity sharply again and firms continued to work through inventories in lieu of expanding their input buying, which contributed to a further improvement in supplier performance. Consumer Sentiment Index(UMCSI) The level of consumer confidence in stability and future prospects can be used to understand the overall trend in the economy. Still, consumers are unsure about the trajectory of the economy given multiple sources of uncertainty, for example over the possible shutdown of the federal government and labor disputes in the auto industry. From a technical perspective the chart looks very suspicious. Like bullback before the new swing. Will see. Building Permits The jump in permits suggested that new construction continues to thrive, driven by a shortage of homes available in the market, despite the dampening effect of rising mortgage rates on housing demand. NFIB Business optimism index Twenty-three percent of small business owners reported that inflation was their single most important business problem, up two points from last month. Also, the number of small business owners expecting better business conditions over the next six months declined (seven points from July to a net negative 37%). “With small business owners’ views about future sales growth and business conditions discouraging, owners want to hire and make money now from strong consumer spending,” said NFIB Chief Economist Bill Dunkelberg. “Inflation and the worker shortage continue to be the biggest obstacles for Main Street. Overall the business is not optimistic for the near future. Leading Economic Index The Leading Economic Index provides an early indication of significant turning points in the business cycle and where the economy is heading in the near term. The US LEI continues to signal a recession. Combined with the yield curves, it looks like a recession could be coming very soon. INFLATION Total Inflation = 30% CPI (demand) + 40% PCE(supply) + 30% other factors) CPI The FED's target may be 2%, but the reality is that inflation is between 2-4%. Inflation has risen again in recent months and current oil prices suggest that it will remain high. Investors are worried about future prices. The same thing happened in the 80s. The FED does not want the same to happen today, which is why they have been so hawkish recently. Core CPI This projection is very scary, but if the economy goes crazy, it can happen, just like in the 80s. I am not predicting that core CPI will rise that much, just pointing out the similarity. PCE Inflation The US personal consumption expenditure price index rose 3.5% year-on-year in August 2023, the most in four months, after an upwardly revised 3.4% rise in July and in line with market expectations. PPI / Core PPI The producer price inflation in the United States accelerated to 1.6% year-on-year in August 2023. This is the second consecutive month. GOVERNMENT Balance sheet The balance sheet is falling, which is deflationary. On the one hand, this is good and gives us an indication that inflation should be contained, but on the other hand, it is a sign of recession. [b ]Cyclical Commodities Trade weighted US Dollar Index Rising trade indices are actually deflationary for the economy. Commodities They stable prices do not give us a clear picture of the near future. Stocks The benchmark indices are falling. The failed to make new HH, suggesting that the will consolidate or fall. Sometimes they are seen as a leading indicator of future GDP and recession. Summery The current pause in interest rates, with the hawkish narrative that rates will stay high for a long time, could be the second phase of the business cycle. The next one is recession. Yield curves have also suggested that the recession is not as far away as we think. The surveys are relatively stable, but the overall picture is not so optimistic. Inflation is on the rise again, which may lead the FED to be more aggressive. They have said many times that they would rather have a recession than a price explosion. They have even warned about a mild recession, how mild we will see. The unemployment rate is still below 4%, but in recent months it has risen from 3.5% to 3.8%. Rising unemployment is a sign of recession. Stock indices have risen in recent months, but future expectations of a new recession, combined with high interest rates and business optimism, are bearish factors for the stock market.
FRED:T10Y2Y
by SerpentForexClub
2
Dollar Bullish Momentum Continues Despite Global Challenges The global economy is facing a number of challenges, including rising inflation, slowing growth, and geopolitical tensions. These challenges have led some economists to warn of a potential stagflation environment, characterized by high inflation and low economic growth. Overall, the dollar had a few battles with other intermarket factors that tried to halt its bullish momentum, which has been ongoing for months. The euro had many indications last week that it plans to strengthen its currency by increasing interest rates in the near future. Germany, which is the eurozone's largest economy, supported this with its ZEW economic sentiment, which came back better than expected, causing short-term weakness during the New York session. Fuel was then thrown on the fire, making the dollar aggressively bullish with the statements made during the ECB press conference. In addition, the unemployment claims and retail sales being better than expected fueled the dollar's ongoing bullish momentum. With the upcoming Fed rate, where do you think is the next destination for the dollar?
TVC:DXYLong
by CandlesofKarma
EURAUD: When China's news make Aussie and other Asians strong! My dear friends, Thursday, 14 September, 2023 and ECB interest rate decision is on the way. We'll wait for confirmations. But before ECB meeting, series of several bad economical news over China's financial stability were published. Market reacted to them rationally. Suddenly the red dragon start to regain it's reputation. Good news for China means stronger Aussie, Kiwi and Yen! A personal belief: Markets are not optimist to China's long-term relations with the free world and it makes them avoid longer term investing on Asian currencies. We could expect a more bearish weeks for them in next months, however, we don't hold that much so a mid-term bearish correction could be a opportunity for us! Regarding the weekly chart, some more corrective weekly candles are expected. snapshot Considering the daily timeframe, market structure has changed so there could be a stop hunt around 1.68950 snapshot The horizontal level could be a high probable and good R-to-R entry point. Levels are based on: Order-blocks, Pivot Points, Support and resistance and Reversal points.
Short
by AliSignals
Navigating a Prolonged Correctional WaveThough I long term bullish on Bitcoin, my opinion remains unchanged from my former analysis in 2022. In which I believe the crypto market remains in a prolonged correctional wave. Since the initial analysis, interest rates have risen dramatically, mid/low cap equities have continued to bleed, and I myself believe crypto has yet to enter the next bull cycle. Looking a bit deeper into the situation we see a lack of volatility and liquidity. Often resulting in similar PA from 2018 which was commonly known as the bart market. Slow and sudden PA is mostly due to lack of liquidity and market participation. Pair this current environment with the regulatory pressure coming into the space, I remain unsold on the idea that the Bitcoin correction is over. Though I believe a some upward movement is possible due to a major event such as an ETF approval, I believe any hype will remain temporary until global macros improve. So until then, I will leave these levels to react upon. In summary: Long-Term Bullish on Bitcoin: My long-term bullish stance on Bitcoin remains consistent with my assessment from 2022. I maintain the view that the crypto market is still undergoing a prolonged correctional phase. Changing Market Dynamics: Since my initial analysis, we have witnessed a significant shift in market dynamics. Notably, interest rates have surged, and mid/low cap equities continue to face challenges. These factors have contributed to a sentiment that the crypto market has yet to embark on its next major bull cycle. Volatility and Liquidity Concerns: Diving deeper into the market's current state, we encounter concerns surrounding volatility and liquidity. The market's price action often mirrors the patterns seen during the 2018 'bart market.' This can be largely attributed to a lack of liquidity and reduced market participation. Furthermore, the regulatory pressures looming over the crypto space further cast a shadow of uncertainty. Temporary Potential with ETF Approval: While I acknowledge the possibility of a short-term price surge due to a major event such as an ETF approval, it is important to exercise caution. Any resulting hype may prove to be ephemeral, contingent upon broader improvements in global macro conditions. A Waiting Game: In light of these factors, I remain patient and observant. Until we witness a more substantial shift in market dynamics and improved global macros, any long term trade will be exercised with caution.
by oh92
1
Macro Economics- BRICS Oil Nations, GDPHi Traders, Investors and Speculators of Charts 📈💰 The 15th BRICS summit was held in South Africa from August 22-24, 2023. There have been some important updates that concluded from this summit and if you're an active trader / speculator in the Forex, stocks or commodities market, you NEED to know about this. The BRICS countries (Brazil, Russia, India, China, and South Africa) now control 30% of the entire global economy. This is up from 17% in 2000 and 23% in 2010 . The BRICS countries are also home to 42% of the world's population. Incase you missed the previous article, find it here: BRICS Total GDP With New Members: B razil: $2.08 trillion R ussia: $2.06 trillion I ndia: $3.74 trillion C hina: $19.37 trillion S outh Africa: $399 billion Saudi Arabia: $1.06 trillion Argentina: $641 billion UAE: $499 billion Egypt: $387 billion Iran: $367 billion Ethiopia: $156 billion BRICS will now control 30% of the global economy. If you're invested in any BRICS related stocks or Forex markets, this concerns you! The summit outcomes are expected to lead to a weaker US dollar in the near term. This means that currencies against the dollar will strengthen. This is because the BRICS countries are collectively a major source of demand for commodities, such as oil and gold. The outcomes of this summit lead to proposed increased investment in the BRICS economies. This could lead to higher demand for commodities, which would put upward pressure on commodity prices and the value of currencies of commodity-exporting countries, such as the Brazilian real and the Russian ruble. This would make the US dollar less attractive to investors, which could lead to a weaker dollar. _______________________ 📢 Show us some LOVE 🧡 Follow for daily updates and trade ideas on Crypto , Stocks , Forex and Commodities 💎 We thank you for your support ! CryptoCheck
Short
by CryptoCheck-
19
Recession Timeframe Horizon Macro Monday (2) Potential Recession Time Horizon Below you will find a breakdown of how many months pass before a confirmed Economic Recession (shaded grey areas) after the yield curves first definitive turn back up towards the 0% level: 1) 13 Months (Dec 1978 – Jan 1980) 2) 9 Months (Nov 1980 – July 1981) 3) 16 Months (Mar 1989 – Jul 1990) 4) 12 Months (Mar 2000 – Mar 2001) 5) 22 Months (Feb 2006 – Dec 2007) 6) 6 Months (Aug 2019 – Mar 2020) 7) 4 Months so far (Mar 2023 - ????) Average Time frame: 13 months (reasonable time horizon would be 6 – 18 months). I consider the first definitive turn up towards the 0% level as no. 7 on the chart (March 2023). Since this date we have rolled over below the -1% level (see additional chart in comments). March 2023 appears similar to the bounce in Dec 1978 (No. 1 in the chart), it also rolled over to the lower sub -1% level. If we assumed a similar 13 month timeframe to recession commencement as in Dec 1978 of 13 months, which also aligns with our 13 month average above, we would be looking at April 2024 for a recession to commence. Interestingly 1978 - 1980 was a similar peak inflationary period known as the Great Inflation, a defining macroeconomic period of high inflation. You might be wondering, has a recession ever occurred in the month of April before? I personally thought this was a strange month but it has occurred in the past. In April 1960 a recession commenced and lasted 10 months to February 1961. The 1960 recession was mainly a result of an over-tight monetary policy whereby the Federal Reserve raised interest rates from 1.75% in mid-1958 to 4% by the end of 1959 and maintained them at that level until June 1960. The Federal Reserves motive for raising interest rates and maintaining them was fear of high inflation (as in early 1951 inflation soared to +9.5%). Is it just me or is this all starting to sound a little too familiar? If we wanted to cater for all time scenarios in the chart and noted above (no. 1 - 6) we could argue that the start of a recession is possible at the earliest within 6 months (Sept 2023) and at the latest 22 months (Jan 2025). Also, the month of April 2024 has some eerie similarities to two prior recessions, the 1978 and 1960 Recessions. Lucky 13 Since World War 2 bear markets have on average taken about 13 months to reach their bottom and a further 26 months to recover their losses. Our average time before a recession would start is 13 months. It’s worth remembering that it could take an additional 13 months before a bottom is established and then 2 years or 26 months (2 x 13) of price action below the pre-recession price highs. Over 3 years is a long time to wait to recover losses. It would be pertinent to start deleveraging or increasing your hedge from the 6 month mark (Sept 2023 in this case) as subsequently the likelihood of a 3 year period below the Sept 2023 price levels increase as each month passes. For reference the S&P 500 index has fallen an average of 33% during bear markets over the avg. timeframe of 13 months to the bottom. I actually find it very hard to accept that a recession is possible in the near term (within 6 - 12 months) and I would in fact argue against it, however I cannot explain away the data in the chart which speaks for itself and warrants at least some consideration & caution. Nothing is a guarantee and maybe this time it will be different, especially factoring in the amount of unprecedented liquidity added to the market in recent years, sticky inflation and financial supports provided to systemically important banks. All the chart really indicates is a probable window for a recession to start some time between Sept 2023 – Jan 2025 and no guarantees. The rule of 13 is worth remembering, simply from a timing perspective (before and during a recession) as it may help your timing. Based on two similar periods in history, the 1978 and 1960 recessions suggest the month of April 2024 may be a key date. Again, no guarantees. It is also worth noting that for the last six recessions, on average, the announcement of when a recession started was up to 8 months after the fact…meaning we will have no direct indication when a recession starts, however the un-inversion of the yield curve (back above the 0% level) and a rise in unemployment will be the early tells, so these are worth paying attention too. We will keep you posted on any sudden changes in these metrics. I hope the chart is helpful, provides one perspective of which there are many, and can help time and frame the situation we currently find ourselves in. NO GAURANTEES, just probable timeframes that may be worth paying attention too. PUKA List of Recessions: 1. COVID-19 Recession (February - April 2020) 2. The Great Recession of 2008 (December 2007 - June 2009) 3. The September 11 Recession (March - November 2001) 4. The Gulf War Recession (July 1990 - March 1991) 5. The Iran/Energy Crisis Recession (July 1981 - November 1982) 6. The Energy Crisis Recession (January - July 1980) 7. The Nixon Recession (December 1969 - November 1970) 8. The “Rolling Adjustment” Recession (April 1960 - February 1961) 9. The Eisenhower Recession (August 1957 - April 1958) 10. The Post-Korean War Recession (July 1953 - May 1954)
FRED:T10Y2Y
by PukaCharts
5
$XAU - NATH's Ahead ? LONG opportunities incoming for Gold *W (tf) (wave 5) Wave 4 completed ? Long Confirmation is anticipated with the red trendline resistance breakout and CHoCH's on smaller time frames. Current support trendline support on green and 20EMA on *W TA speaking, Gold is sitting at a very sweet spot until the uptrend is invalidated - Looking ahead for New All Time Highs for Gold in the midst of this troubleshooting frenzy Economic Enviroment US's Debt Ceiling Crisis and governments not trusting any longer The US Dollar in their balance sheets. Did you know that through-out 2022 and the on-going of 2023 amongst many countries, Russia and China, two Global Superpowers, have been stacking Gold up as their State Reserves in heavy amounts ! Do they know something we don't !? TRADE SAFE ! *** Note that this is not Financial Advice ! Please do your own research and consult your own Financial Advisor before partaking on any trading activity based alone in this idea
OANDA:XAUUSD
by Mr_J__fx
Is the Worst OVER? This is the differential of 10yr vs 1yr US bond which represents long term against short term yield on sovereign debt, and those you don't know, short term bonds are used by central banks to control interest rates(amazing uh? the FED does not actually print money) therefore they do use bonds as a tool to control interest rates which then controls the S&D of capital. As you can see, we are back at a differential which is extremely low, back to energy crisis levels. However, we seem to be already at very low levels, does that mean THE WORST HAS COME? What is going to happen to the stock market? A very quick and personal thought to sum everything up as I do not consider myself an expert macroeconomist: the market is efficient, meaning that the current price on every single security is traded at all the current public information that is available and if something keeps going up, it means that expectation are in favor of it moving higher. Hope that explains what I wanted to say, Feel free to ask question, be safe!
TVC:US10Y
by EWFAlessio
EUR/USD - Resistances to Observe- With Europe entering in to Recession as a cause of two consecutive negative quarters, a positive Price Action is a merely a relief rally that will be short lived.. Golden Zone is most definetely reachable taking into consideration the negative Macro-Economics events for Europe . Patience is a virtue . TRADE SAFE *** NOTE that this is not Financial Advice ! Please do your own research and consult your Financial Advisor before partaking in any trading activity based solely on this idea
by Mr_J__fx
$DXY -Ballads of Dollar $- Monitoring The Dollar Index TVC:DXY and constantly keeping an eye on its Price Action packed with Stories to Tell , is very important in your Trading Journey. TVC:DXY its ; The best Strategy, the best Signal the best Indicator Why ? Because it's a Dollar Story ! As the phrase goes : 'Paper Rules the World' And so it does, to the average man working 9-5 having no aspiration to know the dark valleys of this World. And so it does, regarding us that are involved in Trading Financial Markets. While the most valuable of fiat currencies out there is The Mighty Dirty Dollar to whom the whole Economic System is based upon, it's a must to be diligent and vigilant over The Dollar Index's TVC:DXY price action stories. TRADE SAFE *** This is not Financial Advice ! Please do your own research and consult your Financial Advisor before partaking in any trading activity based solely on this idea
TVC:DXY
by Mr_J__fx
$DXY -Debt Ceiling Scenarios *2W All Eyez on TVC:DXY ! The Fate of other Financial Markets is to be decided on X Date of Debt Ceiling Important Candlesticks prints on *2W and *W Dollar Index seems to been having stuck between the range of 100.8 - 105.9 so far speaking of 2023's Price Action However, with the incoming decision of Debt Ceiling this range can very well be violated on it's borders ; wether to the downside or upside that has yet to be seen : - Bearish case'C' wave on ABC Correction) - Bullish Case Impulsive Wave1 from 1-2-3-4-5 Elliot Waves) Moreover, With the breakout of Red Trendine Resistance, wave one is about to come in to fruiton while yet needing to clear the last Lower High of the downtrend to create a Change of Character of the Donwtrend. Breaking above last LH and holding support (Wave B) also confulences with the Golden Zone of Fibb taken from 114.7 High to Lows of 100.8 (Wave A) TRADE SAFE *** Note that this is not Financial Advice ! Please do your own research and consult your Financial Advisor before partaking any trading related activities based soly on this idea.
TVC:DXY
by Mr_J__fx
XAU/USD - Brics ThroryThe BRICS theory refers to an economic concept that emerged in the early 2000s, highlighting the growing influence and potential of five major emerging economies: Brazil, Russia, India, China, and South Africa. While the BRICS theory primarily focuses on these countries' collective impact on the global economy, it can also have implications for currency pairs like XAU/USD (Gold against US Dollar). BRICS and Gold Demand: The BRICS countries, particularly China and India, have been significant drivers of global gold demand. These nations have traditionally had a cultural affinity for gold as a store of value and a symbol of wealth. Increased economic growth, rising middle-class populations, and expanding disposable incomes in the BRICS nations can contribute to a sustained demand for gold, potentially impacting the XAU/USD pair. BRICS and US Dollar Dependency: The BRICS nations have been exploring avenues to reduce their dependency on the US dollar for international trade and investments. This includes bilateral trade agreements, currency swaps, and initiatives like the BRICS New Development Bank. If the BRICS countries succeed in reducing their reliance on the US dollar, it could lead to a decline in the US dollar's global dominance, potentially affecting the value of XAU/USD. BRICS Economic Performance: The economic performance and stability of the BRICS nations, individually and collectively, can influence investor sentiment and capital flows. Positive developments, such as robust economic growth, structural reforms, and political stability, may increase investor confidence in the BRICS economies and impact the XAU/USD pair. Geopolitical Factors: Geopolitical dynamics within the BRICS nations can also affect the XAU/USD pair. Political tensions, trade disputes, or changes in government policies may create volatility and impact gold prices and the value of the US dollar. Diversification of Reserves: The BRICS nations have been actively diversifying their foreign exchange reserves away from the US dollar. This diversification often involves increasing their holdings of gold, which can influence gold prices and, consequently, the XAU/USD pair. It is important to note that while the BRICS theory provides a framework to understand the collective impact of these economies, each country has its unique economic, political, and monetary policies that can independently influence the XAU/USD pair. Therefore, conducting thorough analysis of individual country-specific factors is crucial when considering the BRICS theory's potential impact on XAU/USD trading.
FXOPEN:XAUUSDShort
by maxdoherty75
1
Pound Weakness After U.K. InflationAs a young trader (21 years old), I see my trading style as more of an art than a science. I don't understand patterns, and I don't use technical analysis. I am a macro trader. I take information from various sources (WSJ, Twitter, Investing.com, Trading Economics, ect.), and my instincts kick in. I understand where assets should be moving on data releases. The U.K. pound has been on a monster rally in the past month and change. Expectations for the U.S. Federal Reserve to pause rates, with some saying cuts later into the year, has simmered the red hot U.S. dollar. The Bank of England on the other hand, is expected to continue hiking rates in the midst of the highest inflation in recent memory. When yields rise on the U.K. Gilt, that makes their debt more attractive to foreign investors, making their currency appreciate against the greenback. This past Wednesday morning, at 1:00AM (CST), U.K. inflation came in hotter than consensus estimates (8.7% actual versus 8.2% consensus), as did core inflation (6.8% actual versus 6.2% consensus). I would have expected the pound to appreciate against other currencies as their currency becomes more valuable as Gilt yields rise. The opposite happened, FXB has now fallen two consecutive days. I was building up my short position against the pound, but we must remember U.S. data sets can affect currencies across the globe. I exited my FXB position before the open today with the intention of hopping back in after said release. Tomorrow (5/26), before the bell, we have U.K. retail sales MoM, U.S. durable goods orders MoM, core PCE prices MoM, personal spending MoM, and personal income MoM. There's no telling where any of this data will land us, especially the U.S. data, and that is why I closed out of my position today. As far as I can see, we have no upcoming U.K data that would affect the pound. That is why I'm confident in this trade. The market will have time to digest what has transpired, and my hope is that it will come to the same conclusion that I have. I have full intentions of getting back into my trade after this data is priced back into the stock. The most important lesson I've learned in my very young trading career is protecting your capital and letting the trades come to you, don't look for them, they will find you ;) fyi - this is my first writing and any feedback is appreciated! Thanks
Short
by UnknownUnicorn22408063
FXB downside after U.K. inflationAs a young trader (21 years old), I see my trading style as more of an art than a science. I don't understand patterns, and I don't use technical analysis. I am a macro trader. I take information from various sources (WSJ, Twitter, Investing.com, Trading Economics, ect.), and my instincts kick in. I understand where assets should be moving on data releases. The U.K. pound has been on a monster rally in the past month and change. Expectations for the U.S. Federal Reserve to pause rates, with some saying cuts later into the year, has simmered the red hot U.S. dollar. The Bank of England on the other hand, is expected to continue hiking rates in the midst of the highest inflation in recent memory. When yields rise on the U.K. Gilt, that makes their debt more attractive to foreign investors, making their currency appreciate against the greenback. This past Wednesday morning, at 1:00AM (CST), U.K. inflation came in hotter than consensus estimates (8.7% actual versus 8.2% consensus), as did core inflation (6.8% actual versus 6.2% consensus). I would have expected the pound to appreciate against other currencies as their currency becomes more valuable as Gilt yields rise. The opposite happened, FXB has now fallen two consecutive days. I was building up my short position against the pound, but we must remember U.S. data sets can affect currencies across the globe. I exited my FXB position before the open today with the intention of hopping back in after said release. Tomorrow (5/26), before the bell, we have U.K. retail sales MoM, U.S. durable goods orders MoM, core PCE prices MoM, personal spending MoM, and personal income MoM. There's no telling where any of this data will land us, especially the U.S. data, and that is why I closed out of my position today. As far as I can see, we have no upcoming U.K data that would affect the pound. That is why I'm confident in this trade. The market will have time to digest what has transpired, and my hope is that it will come to the same conclusion that I have. I have full intentions of getting back into my trade after this data is priced back into the stock. The most important lesson I've learned in my very young trading career is protecting your capital and letting the trades come to you, don't look for them, they will find you ;) fyi - this is my first writing and any feedback is appreciated! Thanks
AMEX:FXBShort
by UnknownUnicorn22408063
1