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Nasdaq 100: A New All-Time HighNasdaq 100: A New All-Time High As shown on the Nasdaq 100 chart (US Tech 100 mini on FXOpen), the value of the technology stock index has risen above its February peak, setting a new historical high. Bullish sentiment may be supported by: → Easing concerns over potential US involvement in a Middle East war, as the ceasefire between Israel and Iran remains in effect. → Media reports suggesting that Donald Trump is considering replacing Federal Reserve Chair Jerome Powell by September or October, in an effort to influence a rate cut that could accelerate economic growth (though this also raises the risk of a new inflationary wave). Technical Analysis of the Nasdaq 100 Chart Price fluctuations in May and June have formed an ascending channel (highlighted in blue), with the following observations: → The decline (marked by red lines) appears to be an interim correction forming a bullish flag pattern; → The 22K level, which acted as resistance mid-month, was breached by a strong bullish impulse (indicated by the arrow) from the week's low. This leaves the market vulnerable to a potential correction, which seems possible given: → Proximity to the upper boundary of the ascending channel; → Overbought conditions indicated by the RSI. If the market corrects, a retest of the 22K level may happen. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
FXOPEN:NDQM
by FXOpen
CRUDE OIL poised to go UP AGAIN? Usually my posts on crude oil are short. but here’s a longer one for a change. Back in December, I predicted that crude oil would hit the highlighted zone around $57. That’s exactly what happened, hit the target and bounced. Over the past two weeks, we’ve seen wild swings in crude oil prices as tensions between Iran and Israel escalated. But now, following the ceasefire announcement brokered by President Trump, and considering Iran’s response over the past couple of days, crude oil has dropped below its pre-conflict price levels. While I truly hope for a peaceful world where no innocent lives are harmed, my personal view is that this ceasefire feels fragile and may not last long. So, what’s next for crude oil? Up or down? If the ceasefire holds and we don’t see further conflict in the Middle East, I think crude oil could hover in the $65–$75 range. There’s even a slim chance we dip as low as $45. However, based on my technical analysis model, and my doubts about the durability of the ceasefire, I expect oil prices to rise in the next 6 to 9 months. My targets? $78 and $85. Of course, I might be wrong this time. :) Cheers!
NYMEX:CL1!Long
by SamanFx0
Will Middle East Flames Ignite Winter Gas Prices?The global natural gas market is currently navigating a period of profound volatility, with prices surging and defying typical seasonal trends. This significant upward movement is primarily driven by escalating geopolitical tensions in the Middle East, specifically the intensifying conflict between Iran and Israel, coupled with the looming potential for direct US military intervention. This complex interplay of factors is fundamentally reshaping perceptions of global energy supply and influencing investor sentiment, pushing natural gas prices towards critical psychological and technical thresholds. Direct military strikes on Iran's energy infrastructure, including the world's largest gas field, the South Pars, have introduced a tangible threat to supply at the source. This is compounded by the strategic vulnerability of the Strait of Hormuz, a vital maritime chokepoint through which a significant portion of the world's liquefied natural gas (LNG) transits. Despite Iran possessing the world's second-largest natural gas reserves and being the third-largest producer, international sanctions and high domestic consumption severely limit its export capabilities, making its existing, albeit modest, export volumes disproportionately sensitive to disruption. Europe, having strategically pivoted to LNG imports following the reduction of Russian pipeline gas, finds its energy security increasingly tied to the stability of Middle Eastern supply routes. A prolonged conflict, especially one extending into the crucial winter months, would necessitate substantial LNG volumes to meet storage targets, intensifying competition and potentially driving European gas prices higher. This environment of heightened risk and volatility also attracts speculative trading, which can amplify price movements beyond fundamental supply-demand dynamics, embedding a significant geopolitical risk premium into current market valuations. This confluence of direct infrastructure threats, critical chokepoint risks, and Europe's structural reliance on global LNG flows creates a highly sensitive market. The trajectory of natural gas prices remains inextricably linked to geopolitical developments, with potential for further substantial increases in an escalation scenario, or sharp reversals should de-escalation occur. Navigating this landscape requires a keen understanding of both energy fundamentals and the intricate, often unpredictable, currents of international relations.
NYMEX:NG1!Long
by UDIS_View
Safe-Haven Demand Boosts Gold as Middle East Tensions EscalateHey Traders, In today’s trading session, we are monitoring XAUUSD for a buying opportunity around the 3,380 zone. Gold is currently trading in an uptrend and is experiencing a correction phase as it pulls back toward this key support and resistance area. On the fundamental side, reports indicate that Israel struck Iran overnight — fueling a classic geopolitical risk-off sentiment. This escalation is driving strength in safe-haven assets while putting pressure on riskier markets. Gold typically benefits from this kind of uncertainty, adding further weight to the technical setup we’re seeing today. Trade safe, Joe
OANDA:XAUUSDLong
by JoeChampion
5
Chasing Oil Spikes? How Geopolitics Can Wreck SetupsOil prices surged over 12% in Asia on Middle East headlines, sparking a surge of volatility across safe-haven currencies and stock market futures during thin trade. It felt like a good time to provide food for thought to newer traders looking to chase these moves, highlight the mockery geopolitics can make of technical analysis with recent examples, and provide a filter for when the waters may be safer to reenter. Matt Simpson, Market Analyst at City Index and Forex.com
NYMEX:CL1!
by CityIndex
Crude Oil Eyes 65.40 Support Amid Middle East Uncertainty!!Hey Traders, In today’s trading session, we’re closely monitoring USOIL for a potential buying opportunity around the 65.40 zone. The commodity remains in an overall uptrend, and is currently undergoing a corrective phase, approaching a key support/resistance area near 65.40. This level aligns well with the broader trend structure and may offer a favorable risk-to-reward setup. On the fundamental side, geopolitical tensions are on the rise. Reports indicate that U.S. embassy personnel are being evacuated from parts of the Middle East amid growing regional instability. Allegedly, Israel is preparing for potential military action against Iran should nuclear deal talks collapse. If these tensions escalate further into military conflict, oil prices could spike in response to the heightened risk to regional supply chains. Trade safe, Joe
TVC:USOILLong
by JoeChampion
2
Follow Iran news to take advantage of USDCAD:Dear Traders, follow Iran news! Really do that! Again, Trump negotiations could change everything! How? It's all about oil! any war in the Middle east could rise the oil prices and Loonie will pump! So, any bad news about the US-Iran negotiations, I'll take long trades with cautions. and I'll be ready to take short from any possible Zones. If everything goes normal, I'm ready to take Long/Short after confirmation from the Green and the Blue zones. Expectations: (Just for normal situations, A war in middle east I'll short the pair) The Green zone is not suitable for short trades. The White zone is not suitable for any trades. After all, 71Billion $ for Canda economy is considerable. Persian Gulf is one of the most important energy hubs of the world.
Long
by AliSignals
2
Will Middle East Tensions Ignite a Global Oil Crisis?The global oil market faces significant turbulence amidst reports of potential Israeli military action against Iran's nuclear facilities. This looming threat has triggered a notable surge in oil prices, reflecting deep market anxieties. The primary concern stems from the potential for severe disruption to Iran's oil output, a critical component of global supply. More critically, an escalation risks Iranian retaliation, including a possible blockade of the Strait of Hormuz, a vital maritime chokepoint through which a substantial portion of the world's oil transits. Such an event would precipitate an unprecedented supply shock, echoing historical price spikes seen during past Middle Eastern crises. Iran currently produces around 3.2 million barrels per day and holds strategic importance beyond its direct volume. Its oil exports, primarily to China, serve as an economic lifeline, making any disruption profoundly impactful. A full-scale conflict would unleash a cascade of economic consequences: extreme oil price surges would fuel global inflation, potentially pushing economies into recession. While some spare capacity exists, a prolonged disruption or a Hormuz blockade would render it insufficient. Oil-importing nations, particularly vulnerable developing economies, would face severe economic strain, while major oil exporters, including Saudi Arabia, the US, and Russia, would see substantial financial gains. Beyond economics, a conflict would fundamentally destabilize the geopolitical landscape of the Middle East, unraveling diplomatic efforts and exacerbating regional tensions. Geostrategically, the focus would intensify on safeguarding critical maritime routes, highlighting the inherent vulnerabilities of global energy supply chains. Macroeconomically, central banks would confront the difficult task of managing inflation without stifling growth, leading to a surge in safe-haven assets. The current climate underscores the profound fragility of global energy markets, where geopolitical developments in a volatile region can have immediate and far-reaching global repercussions.
FX_IDC:USDWTILong
by UDIS_View
Will Iran's Nuclear Ambitions Redefine Global Energy Markets?In a world where geopolitical tensions and energy markets dance an intricate waltz, the latest developments surrounding Iran's nuclear program have emerged as a pivotal factor in global oil dynamics. The Biden administration's deliberation of military options against Iranian atomic facilities has introduced a new variable into the complex equation of international energy markets, forcing investors and analysts to reassess their traditional market models. The strategic significance of the Middle East's oil infrastructure, particularly the Strait of Hormuz, hangs in delicate balance as diplomatic chess moves unfold. With approximately one-fifth of the world's oil supply flowing through this crucial chokepoint, the stakes extend far beyond regional politics, touching every corner of the global economy. Market participants have begun incorporating these heightened risks into their pricing models, reflecting a new reality where geopolitical considerations carry as much weight as traditional supply and demand metrics. The energy sector stands at a crossroads where strategic petroleum reserves, investment strategies, and risk management protocols face unprecedented challenges. Portfolio managers and energy traders must navigate this complex landscape while balancing short-term volatility against long-term strategic positioning. As the situation continues to evolve, the global oil market serves as a mirror reflecting the broader implications of international security dynamics, challenging conventional wisdom about energy market fundamentals and forcing a reevaluation of traditional risk assessment models.
FX_IDC:USDWTILong
by UDIS_View
USDCAD: One of the Most Geopolitical-Based Currency PairsHello Traders, The Trump presidency may bring three significant changes to the financial world: We might see an end to the Russia-Ukraine war. We might see more support for Israel against Iran. We might see increased tariffs on US imports. All three changes could affect the pair in both directions, making them a double-edged sword for USDCAD. Trump previously had good relations with Putin and is known for his anti-interventionism under his America First policy. Aid to Ukraine may decrease, which I am not in favor of, as Ukraine represents the frontline of democracy in the war against Putin. Abandoning Ukraine could encourage other dictators, like China, to attack other countries. Recently, Zelensky accepted the idea of temporarily giving up some territories to Russia if Russia allows NATO's presence in Ukraine, a negotiation he previously refused before Trump won the election. A peace agreement or long-term ceasefire between Putin and Ukraine may strengthen the USD, as the world would feel safer, attracting more capital to the growing US economy. However, the strength of the USD against the EUR, the 2nd most powerful currency in the forex market, could also attract more capital to Euro. The Abraham Accords were one of Trump's most successful initiatives. The proxy war between Israel and Iran escalated after the October 7 massacre, with Iran losing most of its proxies. Iran's missile capabilities have been tested and are now recognized as a weak, not-dangerous ability. Previously, Iran had three cards to play against Israel and the West: proxies, missiles, and nuclear capabilities. Now, it only has nuclear activities. Many are waiting for Israel to strike Iran's suspicious nuclear facilities. Such an attack could significantly impact the markets, particularly the CAD. There are two possible scenarios: if Iran does not retaliate due to its inability to do so, the USD would strengthen as more capital flows in. Conversely, if Iran manages to close the Strait of Hormuz for a few days, oil prices would rise significantly, prompting U.S. and Western intervention, leading to a prolonged conflict that would drive oil prices higher. Since Canada depends on oil and energy, any increase in prices would boost the CAD. Regarding tariffs, imposing them may weaken the CAD, but as Trudeau stated, Americans “are beginning to wake up to the reality that tariffs on everything from Canada would make life a lot more expensive.” Canada would retaliate, and if the eurozone follows suit, the U.S. economy could be negatively affected. As forex traders, we know how powerful and important the U.S. is, but we also recognize that other economies have their strengths, and the world is not solely defined by the U.S. For instance, an official in Ontario's government mentioned that they would restrict electricity exports to Michigan, New York, and Minnesota if President-elect Trump imposes sweeping tariffs on all Canadian products. So, consider all three factors if you plan to invest long-term in either currency. For the shorter term, we should also keep these developments in mind, as they could happen at any moment. Any night, Israeli bombers could fly over Syria and Iran to target Iran's nuclear facilities, which could lead to a substantial gain in CAD value. Right now, from a technical perspective: any retracement to the green box at 1.4190 could present an opportunity to increase the price of the pair. Conversely, a break below the channel and 1.41610 would signal a chance for more bearish moves. Sources for US Tariffs on Canada: apnews.com apnews.com
Long
by AliSignals
TradeCityPro | WTI Analysis Fundamental and Technical Insights👋 Welcome to TradeCityPro Channel! Let’s step away from the crypto space and analyze West Texas Intermediate (WTI) from both technical and fundamental perspectives. 🌍 Fundamental Overview Supply Dynamics: U.S. shale oil production and OPEC+ decisions are key drivers. Escalating tensions in the Middle East, such as the Israel-Gaza conflict or Iran-related sanctions, pose significant risks to global oil supply. Demand Trends : Economic growth and seasonal fluctuations influence demand, but the rise of renewables signals a gradual reduction in reliance on crude oil. Geopolitical Factors : The Middle East, a hub for major oil producers, heavily impacts markets. Regional conflicts often lead to price spikes due to supply concerns. Macroeconomic Trends : A stronger U.S. dollar and rising interest rates suppress oil demand, while inflationary pressures support higher prices. Recent instability in the Middle East has heightened market volatility, underlining WTI's sensitivity to geopolitical events. 🕒 4-Hour Time Frame In the 4-hour timeframe, WTI has been trending downward, nearing a key daily support level at 66.938, which has held multiple times and may attract buyers, shifting momentum. 📈 Long Position Trigger wait for the 4-hour trendline breakout and trigger confirmations, such as RSI exceeding 73.48. The current 4-hour candle breaking the trendline could signal entry. 📉 Short Position Trigger if the candle is rejected and turns red with strong bearish momentum or breaks below 66.938, it could trigger a sell opportunity in the market. 📝 Final Thoughts This analysis reflects our opinions and is not financial advice. Share your thoughts in the comments, and don’t forget to share this analysis with your friends! ❤️
BLACKBULL:WTILong
by tradecitypro
6
My TOP10 project list - pick number 1/10 (new set up)Hello my friends, This was my first top 10 crypto pick back in November 1st 2023 ! I personally entered this trade on 25th September 2022 (at 0.015 cents) but felt sufficiently confident to publish it only 1 year later. It had a great run in April this year, it even touched 10 cents. However the best is yet to come. TODAY it has reached the same price level as 9 months ago (white circle) !! God or bad ? Now it is a great time to buy with a better risk reward level. From the 10 cents level, it has crashed all the way back to 0.023 cents. However the breakdown was recently confirmed as F A L S E breakdown (blue circle), similarly as it did in March 2024 before the run up. This is an extreemely bullish price action ! I personally think that we could see the 0.3186 level this year (which would be a 10 x from here). Not financial advice. It is just my personal view on the current set up.
WLong
by Dangermousebanana
4
Crude Oil (CL1!): Why We’re Still Expecting Lower LowsAt the end of last week, we fine-tuned our Crude Oil outlook, and we are still expecting lower lows to take out the sell-side liquidity below. Our limit order at $63.23 remains valid, even after last week’s pump, which was driven primarily by rising tensions and the ongoing war in the Middle East. Oil gained 13% over five sessions following Iran’s attack, as traders feared Israel’s response might target Iran’s oil infrastructure, potentially cutting into the country’s 1.7 million barrels per day of exports. There are also concerns that a broader war in the oil-rich Persian Gulf could threaten nearly a third of global oil output. However, the geopolitical risk premium may be fading due to Israel’s delayed response. The geopolitical risk premium has an unclear and unpredictable expiration. When that moment comes and is not supported by real, fundamental factors—such as a substantial supply shortage due to the conflict—the upward movement in oil prices will not be sustainable. The longer this takes, the more the price increase will slow and potentially reverse, which is exactly what we are starting to see in the chart. While Crude Oil respected the 61.8% Fibonacci level almost perfectly, it found stronger resistance at the POC just above that level. Given the bearish RSI divergence, we continue to expect Oil to move lower, provided the conflict in the Middle East does not escalate further.
NYMEX:CL1!Long
by freeguy_by_wmc
Will geopolitical tension support oil prices? Kazakhstan planned to cut its oil output, while Russia reported lower production in Sep, restricting the supply. Meanwhile, the heightened geopolitical tension in the Middle East increases concerns over oil production and transport. At the same time, market participants remain optimistic about the US economy, which could support oil demand. Today's NFP release may provide insights regarding the US job markets. USOIL has significantly recovered from its low last month. The price retested its support at 67.50 USD per barrel before closing above its psychological support at 70.00 USD per barrel. If USOIL sustains its upward momentum, the price may retest the following resistance at 75.00 USD per barrel. On the contrary, USOIL may return to 70.00 USD per barrel if the price retraces before its continuation.
FX_IDC:USDWTILong
by DynamicCapital-FX
Is Global Oil Demand the Key to Energy Market Stability?In the intricate landscape of global energy markets, the question of oil demand remains a central enigma. Driven by a confluence of geopolitical tensions, OPEC+ production strategies, and economic dynamics, global oil demand is a complex tapestry that shapes the future of energy markets. Geopolitical events, particularly in the Middle East, have historically been a significant driver of oil price volatility. The recent escalation of tensions has once again underscored the delicate balance between geopolitical stability and global oil supply. As geopolitical risks rise, so too does the price of oil, impacting investors in oil-related securities like the United States Oil Fund (USO). However, geopolitical factors are just one piece of the puzzle. The Organization of the Petroleum Exporting Countries (OPEC) and its allies, OPEC+, play a crucial role in regulating global oil supply. Their production decisions, often influenced by economic considerations and geopolitical pressures, can significantly impact oil prices and, consequently, global oil demand. Beyond geopolitical tensions and OPEC+ dynamics, economic factors also play a vital role in shaping global oil demand. The global economy, with its cyclical nature, influences energy consumption. During periods of economic growth, oil demand tends to increase, while economic downturns can lead to reduced consumption. The interplay between geopolitical risks, OPEC+ strategies, and economic factors creates a complex and dynamic environment for the global oil market. Understanding these intricate relationships is essential for investors seeking to navigate the challenges and opportunities presented by the oil sector.
AMEX:USOLong
by MorMedia
XAUUSD | Trade ideaDuring morning trading, the XAU/USD pair is holding around 2500.00. At the end of last week, gold demonstrated a confident upward trend. It was partly supported by expectations of the US Fed’s imminent transition to a “dovish” monetary policy cycle. Analysts have revised their estimates of a possible interest rate cut of 50 basis points, and now, its probability is no more than 28.0%. At the same time, the American regulator may adjust the value by –25 basis points at each of the three meetings scheduled this year, leading to a sharp reduction in the borrowing cost from the current 5.50%. Traders will discuss the possible steps of the financial authorities all week since the annual symposium in Jackson Hole will be held on Thursday, August 22. The representatives of the world’s central banks will speak, giving assessments of the current economic situation, as well as the timing of changes in monetary parameters. A day earlier, the US Fed will publish the minutes of the July meeting, which ended with the interest rate maintained at the current level. In addition, investors will pay attention to business activity data. The service PMI may fall from 55.0 points to 54.2 points, and the manufacturing PMI from 49.6 points to 49.4 points. Another factor supporting gold prices is the continuing risks of military conflicts in the Middle East and Eastern Europe. Despite conflicting reports in the media about the Iranian authorities’ imminent response to the death of Hamas political bureau chief Ismail Haniyeh, no active measures have been taken against official Israel so far, which, on the one hand, only increases uncertainty, preventing market participants from counting on the parties concluding a peace agreement.
OANDA:XAUUSDLong
by DynamicCapital-FX
1
Title: Geopolitical Tempest Navigating the EUR/ILS Currency PairThe EUR/ILS exchange rate is a crucial indicator of Israel's economic and geopolitical stability in relation to the Eurozone. Recently, it has been under substantial pressure due to escalating tensions between Israel and Iran. This dynamic interplay of geopolitical risks and economic factors creates a complex environment for the Israeli shekel (ILS) against the Euro (EUR). Key Points 1. Geopolitical Background: The conflict between Israel and Iran, fueled by nuclear ambitions, proxy wars, and direct military engagements, has deep historical, religious, and political roots. 2. Economic Implications: Investor confidence, economic sanctions, and increased military expenditures are critical factors influencing the ILS. Geopolitical instability can reduce investor confidence, cause capital flight, and strain Israel's fiscal budget. 3. Impact on EUR/ILS Exchange Rate: Geopolitical risks lead to a flight to safety, with investors seeking stable currencies like the Euro. Inflationary pressures from supply chain disruptions and military spending can erode the ILS, while the Bank of Israel's interventions may be limited by persistent tensions. Conclusion The Israel-Iran conflict casts a long shadow over the Israeli economy and the strength of the ILS. As geopolitical tensions persist, the EUR/ILS exchange rate is likely to experience significant volatility. Investors and policymakers must remain vigilant, monitoring developments closely to mitigate risks and capitalize on opportunities in this uncertain environment.
Long
by MorMedia
Gold trade with Israel-Iran in Focus Gold temporarily surged past $2,474 per ounce on Friday, marking a new record high, as a weak U.S. jobs report bolstered expectations of a dovish shift by the Federal Reserve. The U.S. economy added 114,000 jobs in July, significantly below the anticipated 175,000 increase. Gold prices have since pulled back slightly but are still trading just above the 100-hour moving average. Analysts foresee potential for another upward trend toward $2,490, though the MACD indicator, with its signal line crossing the MACD level, may suggest otherwise. Meanwhile, heightened tensions in the Middle East have continued to drive demand for safe-haven assets. The conflict between Israel and Iran escalated with a strike on the Israeli-occupied Golan Heights, resulting in the deaths of 12 children and teenagers. Subsequently, the Israeli military reported killing a senior Hezbollah commander in Lebanon, prompting several countries to advise their citizens to leave Lebanon amid fears of a broader regional conflict. In a further development, Hamas chief Ismail Haniyeh was assassinated in Iran while attending the inauguration of Iran’s new president. Iran's Supreme Leader, Ayatollah Ali Khamenei, vowed a “harsh punishment” for Israel in response. Israeli Prime Minister Benjamin Netanyahu described the situation as a “multi-front war” with Iran and its proxies. The recent assassinations have likely undermined efforts to reach a ceasefire and a hostage release agreement between Israel and Hamas in Gaza.
BLACKBULL:XAUUSD
by BlackBull_Markets
Options Trading is Not about the GreeksCME: E-Mini S&P 500 Options ( CME_MINI:ES1! ) On March 24th, I published a trade idea, “Buckle Your Seatbelt for a Market Correction”, where I suggested that the US stock market was due for a major correction. Buying a Put contract on CME E-Mini S&P 500 Futures would be a trade to express this market view. How is this trade panning out? • On March 24th, the June S&P futures contract (ESM4) was settled at 5,289.75. The out-of-the-money (OTM) put strike 5,100 was quoted at 63. • To purchase a Put, a trader would pay an upfront premium of $3,150 (= 63 x 50). • On April 18th, the S&P has been down for five straight days, and ESM4 was settled at 5,49, losing about 4.6% since we first placed the trade on. Meanwhile, the 5100 put is now trading at 150.75. • Our put position is valued at $7,537.50 (= 150.75 x 50). If we were to close the trade now, we would realize a hypothetical return of +139.3% (= 150.75/63 -1) in less than a month, excluding transaction cost. While the underlying stock index is lowered for less than 5%, and the put strike is barely in-the-money (5049 is 51 points below 5100), the value of the put contract has been more than doubled. This trade showcases the attractiveness of an options strategy. Firstly, there is time value on the put contract. We have two more months to trade until the options expire on June 21st, the 3rd Friday of the contract month. The probability that the S&P could go significantly lower than 5100 makes the put options very valuable. Secondly, there is a multiplier of 50 built into the options contract. Each index point that the S&P moves in-the-money, the Put position will gain $50 per contract. Thirdly, the volatility of the S&P 500 index has increased 50% in the past month, from 12-12.50 to 18-19.50. Higher volatility makes options contracts more valuable. Options Greeks are Lagging Indicators My trade idea did not price in volatility increase. In fact, it did not even mention any of the options Greeks – Delta, Gamma, Theta, Vega, and Rho. In my opinion, the Greeks are concurrent indicators or lagging indicators. Take the VIX index as an example. It captures historical volatility about the S&P 500. However, options are priced by the implied volatility. It is the market consensus, or collective sentiments from all the buyers and sellers, about what volatility would be in the future. In this case, historical volatility is not very useful in gauging future volatility. All sophisticated options pricing models eventually bog down to a subjective estimate of the implied volatility. The Greeks are precise about what the market has been, but they are not useful in assessing how market sentiment will be a month from now. We could illustrate this with CME Group’s FedWatch Tool, which shows real-time market sentiments in Fed rate cut probability. • On March 24th, it indicated the probability of a 25-bp cut in June at 75.5%. There was a 77% chance that Fed Funds move to 4.50%-4.75% by year end, indicating a total of three rate cuts in 2024. Four total rate cuts, which would be a full percentage point lower, was priced at 43% probability. • On April 18th, the probability of a 25-bp cut in June is now down to just 15.3%. The probability for total rate cuts in 2024 are: 2 cuts (32.4%), 1 cut (36%) and no cut (15%). We may recall that only four months ago the market consensus was 6-7 rate cuts. (Link: www.cmegroup.com) If you measured the market last month based on the Greeks, you would have expected the S&P to go higher. Instead, market sentiment turned upside down as March CPI and Nonfarm payroll data completely destroyed the hope of near-term Fed rate cuts. Trading with E-Mini S&P Options In my opinion, the market correction is not over yet. There is a good likelihood that the S&P to move down 10%-15% from its peak of 5,265, to the range of 4,475-4739. Here are the key drivers: • US stock market had a spectacular run in the past two years on the back on AI revolution. While the seven Big Tech companies gained over 50%, the remaining 493 stocks registered low single-digit returns. We are now at the breaking point where the Magnificent Seven could no longer carry the heavy burden of the mediocre performance of the rest. • The lowered expectation of Fed rate cuts results in higher-than-expected future interest rates. This puts downward pressure on company valuation. I had several writings explaining how the discounted cash flow (DCF) valuation works. • Escalated geopolitical tension triggers a flight to safe-haven securities. Gold would gain in value while the stock market would decline. CME Group E-Mini S&P 500 Options provide leverage and capital efficiency. Options are based on futures contracts. The contract notional is $50 x S&P 500 Index. On April 19th, the June S&P futures contract (ESM4) is now quoted at 5,031.75. The 4,850-strike put is quoted at 64.75. To purchase a Put, a trader would pay an upfront premium for $3,237.50 (= 64.75 x 50). Hypothetically, if the S&P lowered 10% from its peak to 4,739, the put position would be 111 points in-the-money (= 4850-4739). The trader could exercise the options to capture the price difference or sell the put at a higher price. If the S&P ends up with a smaller correction, the trader could lose money, up to the full amount of the upfront premium. Options traders could find CME’s Options Calculator an easy-to-use tool in structuring their options strategies. The best part, it is free. www.cmegroup.com Happy Trading. Disclaimers *Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services. CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
CME_MINI:MES1!Short
by JimHuangChicago
5
Gold & oil volatility grows amid Middle East escalationFinancial markets are bracing for the uncertainty surrounding Iran's recent strike on Israel and the potential for retaliatory measures. Mohamed A. El-Erian, Chief Economic Adviser at Allianz, remarked that the current situation may lead to elevated gold and oil prices, alongside lower US Treasury yields and stocks compared to what would have been expected otherwise. In the previous week, investors flocked to gold, driving it to reach new record highs. Will we see more records hit this week? Early trading this Monday Asian session has shown a gap upwards. Since April 1st, the energy market has been on edge regarding a potential Iran-Israel conflict, hinting at the likelihood of highly volatile oil trading in the upcoming week. Additionally, concerns arise over signs of Iran's inclination towards a soft blockade of the Strait of Hormuz, which could result in supply chain disruptions and increased oil prices. The escalating tensions may also further prompt the Federal Reserve to exercise caution in interest rate cuts, as higher oil prices could steer inflation away from the Fed's target. On Friday, the U.S. dollar index surged to its highest level since November, while the euro dipped to a five-month low against the dollar following indications from the European Central Bank of potential interest rate cuts. This broad strengthening of the dollar also drove the yen to a fresh 34-year low as investors monitored for potential intervention by Japanese monetary authorities to stabilize the currency.
BLACKBULL:XAUUSD
by BlackBull_Markets