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NFLX Price Soars 12% after Strong ReportYesterday's closing price was 345.83, but this morning, NFLX's price rose above USD 390 per share in premarket trading. The reason is a strong report: → earnings per share = USD 3.73, expected = USD 3.49; → revenue = USD 8.54 billion, a year ago = USD 7.9 billion. → the main surprise is that the number of subscribers grew by an impressive 8.76 million in the third quarter (about 6 million were expected). The number of subscribers worldwide is approaching 250 million. Given the increase in demand for its service, Netflix has decided to raise the price of its basic plan in the US to USD 11.99 per month from USD 9.99, and raise the price of its premium subscription to USD 22.99 per month from USD 19.99. This could attract more earnings per share in the future, which is what has helped NFLX's price soar. From the technical analysis point of view: → NFLX price returns to the ascending channel that was in effect in 2023 and seems to be becoming relevant again. The false breakout pattern could become a support zone in the future. → NFLX price exceeded USD 370 per share. Since early September, NFLX has been a laggard in the NASDAQ index, but after the report it may become one of the leaders. "While we have much work to do to build out this business, we're making good progress and laying the foundation for what we believe should be a multibillion-dollar revenue stream over time," Netflix executives wrote in a letter to shareholders. Resistance to a powerful bullish impulse may come from: → psychological level of USD 400; → level at USD 412 – during the summer, the level provided support. But it was broken on September 13-14, and with a bearish gap, which could slow down the rally if the price of NFLX reaches this level. Also note that here is the Fibo resistance level of 50% of the decline A→B. According to TipRanks, analysts have a target price of USD 454 for NFLX, but given its recent performance, the forecast could be raised. 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.
NASDAQ:NFLX
by FXOpen
12
The Life of Bitcoin: The definitive Historical Count Pt.3This is Part 3 of my epic series breaking down every major, relevant Segment in Bitcoins' price history, and explaining how they fit into the 'Historical Elliot Wave Count.' In short, what this Count implies is nothing less than astonishing: Essentially Bitcoin has just completed a decade long, (Running Triple Three) Wave 2 Correction and is now in an extremely powerful Wave 3 that should take the price to over 10 Million $ per coin, with the bulk of this appreciation (if not all) occurring within the next 5-10 years. See my published chart (which preceded the series) to view what the massive, Wave 2 Correction looks like when zoomed out, as well as a bit of the rationale that supports this Count: Snapshot Published Chart Also, for more context as to what this series is all about, have a look at parts 1 and 2: The Life of Bitcoin: The definitive Historical Count Pt.1 The Life of Bitcoin: The definitive Historical Count Pt.2 To date, the historical chart can be seperated into six Segments, I will be continuing to dedicate a post (a part of the series) to each of them. The term Segment should be taken loosely to mean a Section of the market data eligible for Classification as a Wave to be included in a larger Count. In this post, Segment 3 will be the focus. Again, I will continue to build upon the theme of speaking from a Direct perspective (analyzing one piece of the puzzle under a microscope), yet also gradually bridge the gap with an InDirect perspective (how the pieces of the puzzle all fit together, and how such necessarily informs the conclusions about any given piece). With the above in mind, consider that the start of every Segment or Wave is the end of another, thus why I thought it would be valuable to include a brief revisiting of Segment 2. Before jumping into Segment 3, I will again include a small taste of the flavor of the times. Title for this Segment: "Venture Capital continues to flood into Bitcoin, Wall Street takes note" In Post 2, we spoke about the fall of Mt. Gox, and whispers of the 'Tech guys' dipping their toes in the water amidst Bitcoins first ever prolonged bear market (before the 2013 rise it was a highly illiquid market). Throughout this bear market, government-confiscated Silk Road coins were continually auctioned off, serving to dampen all attempts at a trend-changing rally. It was amidst this backdrop that Bitcoin found its' first 'buyer of last resort' in Tim Draper, in this sense, he was basically the Michael Saylor of the times. Without batting an eye, Draper, again and again, packed the trunk with three digit coins, instilling a confidence in the space the new, immature market had never seen. Not only did this buying have a very real effect on the supply-demand dynamic of an asset that aims to be the future of money, but it also influenced others in the shadows to begin to publicly speak out not just about their own positions but more importantly, their intentions to support the space with the Capital it would need to grow into the powerhouse it has now become. Draper (in addition to Andreesan, Hickey, Pantera, and a few others), was the first domino to fall: Segment 3 was characterized by all the rest following suit, piling into the space continuing to build out the Wallet, Exchange, and Merchant-Proccessing infrastructure. Similarly, Barry Silbert continued to bet big on Bitcoin offering the first 'legitimate' investment vehicle, a work-around of sorts that allowed money to flow in (which otherwise could not have using 'shady' overseas exchanges), forcing Wall Street to at least acknowledge the nascent asset. Ultimately, the CME would mark the top of the rise offering the first ever Bitcoin Futures market. There were also another two topics dominating the 'flavor of the times' that bares mentioning: The Bitcoin Fork Wars Ethereum Mania. In the beginning of Segment 3, all attention was on what would be the culmination of a raging debate amongst the Bitcoin community: The block size debate. As the price began to rise from the ongoing influx of money mentioned earlier, uncertainty around how the block size debate would be resolved (or rather which approach, or combination of approaches, would win out, and how) loomed and served as the cold water to be poured on every potential acceleration of the new bull market. In the essence of staying on track with this post, I will condense the sequence of events to this brief summary: The decision by Bitmain to hard fork the Bitcoin Protocol resulting in a distinct coin Bitcoin Cash, the failure of an 'industry led' attempt to force a block size increase into the adoption of Segregated Witness ('SegWit2X'), and the adoption of Segregated Witness by Litecoin (as well as the threat of a 'User Activated Soft Fork') all contributed to any uncertainty the market migh have had about this ongoing debate being removed, thus leading to the 2017 blow off top. Alongside all of this, Ethereum had become a household name, enabling and encouraging huge speculation to enter the market. Most of this speculation came from retail investors, who were intoxicated by the marketing of a more exotic Bitcoin, but this version had a 'boy genius' figurehead, providing a founder they could worship like the Tech Companies they were familiar with investing in. Prompted by the sound financial advice of CNBC and others (sarcasm), the crowd followed into Ethereum, ICOs, Ripple, and others setting the stage for the eventual popping of the bubble. Of course, there was much more happening at the time, but hopefully the above should suffice in giving at least a feel for what occurred during this Segment. Now, let's get to the meat and potatos and dig into some charts. Segments 1 and 2 required many snapshots to cover, alternatively, going forward my analysis will likely be more consice as the stage has, for the most part, been set. I was able to condense both the Time and Wave Type analysis of Segment 3 into one main Chart Snapshot (which should also be the image in the published chart), this represents the complete picture of Segment 3 analyzed *from a Direct perspective*, it is the last snapshot. The first few snapshots help provide some preliminary techniques that help inform how both Segments 2 and 3 were counted, and how they each fit together and fit within the larger Historical Count. Chart Snapshots (see below for a short description and/or any relevant notes): -'Where' to begin Segment 3. The ability to discern 'where' a Segment begins and ends is one of the most overlooked requisite skills needed to master the Elliot Wave Principle. Similar to determing 'Where to begin your Count' in Part 1, getting this right is crucial, it establishes what will help serve as the foundation for your analysis. -Where the price data connects 'Cleanly' (incorrect approach to determining the beginning of Segment 3). -'Exposed Points' Duration, Degree, Structure, and Type in and of the Segments. -Snapshot of the Published Chart.
BITSTAMP:BTCUSD
by ltc-joe
98
🔜 20+ Year Treasury Bond Market. Perhaps This Is The End US stocks surprised much of Wall Street this year with a strong run that defied decades-high interest rates and recession calls. The rally was fueled by slower inflation and hype over artificial intelligence. But more recently, the Federal Reserve's unwavering higher-for-longer rate stance and a deepening bond-market rout have had a sobering effect on equities sentiment, with the S&P 500 index halving its year-to-date gains. Indeed stock valuations are looking increasingly stretched, raising the risk of a correction. One such indicator in particular is flashing RED - the relative valuation of stocks versus the debt market. SPX / ICE BofA Corporate Total Return Index In August this year, the S&P 500 CBOE:SPX climbed to levels last seen during the peak of dot-com boom, relative to an index that tracks the US corporate bond market. The gauge is still holding near those highs, despite the recent pullback in equities. The metric last surged this high in the spring of 2000 — and that was followed by a multi-year meltdown in stocks that saw the S&P 500 crash 50% between March 2000 and October 2002. SPX 50% Decline During 2000-2002 Another indicator that shows the richness of stocks relative to debt is the so-called equity risk premium — or the extra return on shares over government debt, which is considered a safer form of investment. The metric has plunged this year lows unseen in decades, indicating elevated stock valuations. "Equity risk premium is near its worst ever level going back to 1927. In the 6 instances this has occurred, the markets saw a major correction & recession/depression - 1929, 1969, 99/00, 07, 18/19, present," research firm MacroEdge said in a recent post on X (ex-Twitter). The so-called equity risk premium (earnings yield minus bond yield) recently fell to a new cycle low and remains well below historical averages. In other words, the stock market has become more expensive relative to the bond market despite the recent pullback. Meanwhile the main graph (quarterly Div-adjusted chart for NASDAQ:TLT 20+ Year Treasury Bond ETF) illustrates perhaps right there could the end for U.S. Govt Bond Market decline, with Double top as a further projected/ targeted upside price action. Will all of that bring U.S. stock market to 50% decline like in early 2000s!? Time will show!
NASDAQ:TLT
by PandorraResearch
40
Harnessing Gains from Yield Curve NormalisationNot too long ago, watching interest rates was as boring as looking at wet paint dry. Not anymore. Interest rates and currencies are as interesting as they get. The US dollar has been clocking moves more akin to an EM currency. The greenback has been on a rollercoaster ride over the past three months in line with market expectations of Fed’s interest rate policy path. This paper is set in three parts. First, the background to rising rates and spiking yields leads to a brutal bond sell off. Then, the paper evaluates the case for further Fed rate hikes. In the third and final part, it dwells into factors that support a rate pause. It is not just the rates but also the term structure of rates that’s gone off-the-chart. This paper posits a hypothetical spread trade inspired by the divergence in 30Y and 10Y treasuries with an entry at 13 bps and a target at 40 bps hedged by a stop at 5 bps delivering a reward-to-risk of 1.5x. RISING RATES AND SPIKING YIELDS Fed’s commitment to taming inflation with a higher-for-longer stance leads to a surging dollar. Spiking bond yields help reign in inflation through tightening monetary conditions. The US 10Y Treasury Bond Yields surged to their highest level since 2007, by 20% or 0.8 percentage points since July 17th. Chart 1: US 10Y and US 2Y Treasury Yields Yield and Bond prices are inversely related. Surging yields have hammered bond prices lower resulting in a staggering record sell-off. Leveraged funds hold a record net short positioning in US 2-year and 10-year Treasury Futures. Chart 2: Record Net Short Positioning by Leverage Funds This brutal selloff has pushed yields to their highest levels in more than 15 years. Among others, portfolio managers and traders can position themselves one of the two ways: Risk Hedged Yield Harvesting: Harvest risk hedged treasury yield using cash treasury positions and Treasury futures to generate income over a long horizon, or, Gain from Yield Curve Normalisation: Deploy CME Micro Treasury Futures to engineer a spread trade to realise gains from a normalising yield curve. In a previous paper , Mint Finance illustrated the first. Distinctly, this paper covers spread trade using CME Micro Treasury Futures. THE CASE FOR HIKING The September FOMC meeting re-affirmed a higher-for-longer rate regime. Though there was no rate hike, the updated Fed’s dot plot signalled very different expectations for the rates ahead. The dot plot was updated to show a final rate hike in 2023 and fewer rate cuts in 2024. Chart 3: Contrasting US Fed’s Dot Plot between 14/June versus 20/September ( Federal Reserve ) The Fed has adequate grounds to crank up rates even more as highlighted in a previous paper . These include (a) American exceptionalism where the US Economy has been remarkably resilient, (b) Expensive Oil due to geopolitics & receding base level effects, and (c) Brutal Lessons from past on the folly of premature easing. THE CASE FOR PAUSE Factors described above have led markets to price another rate hike at Fed meetings later this year. Those views have started to tilt further towards a pause since the start of October as per CME FedWatch tool. Chart 4: Target Rate Probabilities For 13/Dec Fed Meeting ( CME FedWatch Tool ) Bond yields have surged, helping the Fed with their fight against inflation. Yields on US Treasuries surged to their highest since 2007. As yields are inversely proportional to bond prices, this is the equivalent of a major selloff in the bond market. Three reasons behind the selloff: 1. Steepening Yield Curve: Yields are finally catching up to market rates, especially for long-term treasuries; yield curve is steepening Chart 5: Yield Curve is Steepening 2. Rising Sovereign Risk Premia: The US national debt passed USD 33 trillion and is set to reach USD 52 trillion within the next 10 years. Investors are demanding higher risk premia as compensation for default risk by a heavy borrower. Chart 6: US Debt to GDP Ratio 3. Higher Yield to Compensate for Scorching Inflation: Investors are demanding higher real rates amid a high-inflation environment. Chart 7: Real Yields are marginally above zero Bond yields seem to be peaking. Solita Marcelli of UBS Global Wealth Management opines that the recent upward momentum in yields has been spurred largely by technical factors and is likely to be reversed given the overhang of uncertainty over underlying forces guiding the Treasury market. Higher bond yields support a case for a Fed pause. This is because rising treasury yields do part of the Fed’s job. Higher treasury yields tighten financial conditions in addition to being a drag on the economy. The Fed officials shared similar sentiments over the past week: San Francisco Fed President Daly noted the moves in markets “could be equivalent to another rate hike”. The Atlanta Fed chief opined that he doesn’t see the need for any more rate hikes. The Dallas Fed President remarked that such a surge in bond markets may mean less need for additional rate increases. The Fed has made it amply clear many times that it is data dependent. The data about the economy is positive. And that is concerning. Jobs data last week, and a sticky CPI print raise concerns that the Fed’s hand might be forced to hike despite US inflation being low among G7. Chart 8: US Inflation is among the lowest within G7s HYPOTHETICAL TRADE SETUP Are we witnessing peak rates? In anticipation of the peak, investors can use CME Micro Treasury Futures to harness gains in a margin efficient manner. Micro Treasury Futures are intuitive as they are quoted in yields and are fully cash settled. They are settled daily to BrokerTec US Treasury benchmarks for price integrity and consistency. As highlighted in a previous paper , each basis point change in yield represents a USD 10 change in notional value across all tenors, making spread trading seamless. Setting up a position on yield inversion between 2Y and 10Y Treasuries is exposed to significant downside risks from near-term rate uncertainty. Instead, a prudent alternative is for investors to establish a spread with a short position in 10Y rates and a long position in 30Y rates. The 30Y treasury rates demand a higher term premium due to their longer maturity. Presently, this premium is just 0.15%. In the past, this premium has reached as high as 1% during periods of monetary policy shifts with yield curve steepening. Chart 9: US Treasury Inverted Spreads Furthermore, downside on this spread is limited as the 30Y-10Y premium scarcely falls below 0% unlike the 10Y-2Y premium which has been in deep inversion for the past year. A long position in 30Y Treasury and a short position in 10Y Treasury with: Entry: 0.130 (13 basis points) Target: 0.4 (40 basis points) Stop Loss: -0.05 (5 basis points) Profit at Target: USD 270 (27 basis points x USD 10) Loss at Stop: USD 180 (18 basis points x USD 10) Reward to Risk: 1.5x Chart 10: Hypothetical Spread (Long 30Y & Short 10Y) Trade Set Up MARKET DATA CME Real-time Market Data helps identify trading set-ups and express market views better. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs tradingview.sweetlogin.com DISCLAIMER This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services. Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
TVC:US30YLong
by mintdotfinance
11
Understanding the Role of HFTs and Dark Pools for Day TradingNASDAQ:TSLA reports on Wednesday of this week, October 18th. Last quarter, it had a gap down on its earnings news based on Year over Year comparisons which triggered High Frequency Trading (HFTs) to gap the stock down. Quarter over Quarter, however, NASDAQ:TSLA has shown consistent growth this year. The problem with determining if the HFT gaps are likely to gap down or up on the next earnings report is the very low Percentage of Shares Held by Giant Buy-Side Institutions (PSHI). TSLA’s CEO has lost the necessary confidence of the largest Buy-Side Institutions in the world. So it's institutional interest is extremely low for such an important US company. The Buy-Side Institutions want the Board of Directors to replace Musk with someone who is more focused on TSLA to help it grow. The PSHI is likely to remain low until a new CEO is chosen. The highest the PSHI has ever been was in July 2020 when it reached a high of 71%. It dropped to a low of 43% in November of 2021 and the stock has been sideways with very low PSHI ever since. It is very rare to see such low PSHI in a young new technology company with such high growth potential. With less support from largest most influential institutions, the HFTs, which use retail news as one of their 6 primary algorithm triggers for automated orders as Maker/Takers, often gap a stock down on earnings news that was actually not negative. Smaller Fund Managers, who have a special SEC classification with lower reporting requirements, often have VWAP automated orders trigger on high volume surges. This is often mistaken by smaller funds and retail investors or traders as “Dark Pool high volume activity,” when it is not. High PSHI creates a natural liquidity draw and thus more momentum and speculative price action. This is missing much of the time for NASDAQ:TSLA stock price movement. The current sideways trend has existed since 2021, best seen on a Weekly Chart. The dimensions of the sideways trend and the irregularity of the price range determines whether the sideways trend is a Long Term Wide Trading Range, a Short Term Trading Range, a Wide Sideways Trend, or a Platform-Building Sideways Trend. This is a Long Term Trading Range due to the inconsistent highs and lows. This is common in a stock that has PSHI below 60%. On a Daily Chart, the fundamentals currently are within the rectangular shape outlined below. This area of price can be problematic for retail day traders as there are always portfolio adjustments going on by the Buy-Side Institutions who have ETFs and Index funds with TSLA as a component. When the stock drops below that Buy Zone range, it quickly reverses and runs up into the lows of that fundamental range. This becomes a price range where there is conflict between retail day traders trying to trade on news and the Buy-Side Institutions accumulating inventory shares of TSLA for the Indexes or ETF Trust accounts that must maintain a value close to the ETF or index value upon which that ETF is based. What happens intraday is a very choppy and indecisive price action up and down that causes whipsaw losses for day trading. In order to successfully day-trade TSLA, these factors must be understood to use to one's advantage. This requires an understanding of how to identify a Dark Pool Sell Zone or a Dark Pool Buy Zone within the daily charts. It also requires an understanding of how HFTs trigger and how VWAP orders often cause whipsaw action as well. Remember that Dark Pool data is not available during the trading day. That data is on Over-the-Counter Alternative Transaction Systems. Those orders are filled off the exchanges and are not transmitted to the National Clearing Houses until after the market closes. Hence, ALL retail day traders are trading against an invisible entity whose orders they can’t see even on Level 2 screens. The art of day trading in harmony with Dark Pool activity requires what I call "Relational Technical Analysis."
NASDAQ:TSLA
by MarthaStokesCMT-TechniTrader
10
False Bitcoin rumors revealing real market sentimentFake news sent Bitcoin up about 10% on Monday, surging from $27,900 to over $30,000 after Crypto news site Cointelegraph posted on X that the Securities and Exchange Commission had approved BlackRock’s spot bitcoin ETF application. In response to the rumor, BlackRock had to clarify that no decision had been made regarding their ETF application. Even though the rumor has now been debunked, Bitcoin is still up more than 5%, at $28,600, with some movement suggesting that buyers are still willing to prob for more gains. The 10% upside move has perhaps provided us with a preview of what might happen when/ if the SEC eventually approves or rejects BlackRock's Bitcoin ETF application. It could also be argued that we are also getting a glimpse into what could happen if the SEC rejects the application, with targets set at the pre-rumor price of $27,900 the first port of call.
BLACKBULL:BTCUSD
by BlackBull_Markets
12
A Traders' Weekly Playbook - energy markets to direct sentimentWe look at the scheduled economic data and US earnings this week and question if given the fluid news flow from the Middle East, these events move the dial or if geopolitics consumes the full attention and direct sentiment. We saw a rush to hedge portfolios on Friday ahead of a darkening picture emerging in the Middle East. The situation is dynamic and it's too early to say if the hedges placed on Friday are unwarranted, but there have been pockets of positive news flow – for example, US Secretary of State Blinken saying aid will get to Gaza via the Egyptian border, and Israel opening water supply to Southern Gaza, with over 600k Gazans moving south. A call between US National Security Advisor Jake Sullivan and Iranian officials is a development, with the US warning not to increase aggression. As Israel's ground offensive pushes into Gaza, risk and energy markets will look for headlines and actions from Iranian officials who have stated they have a duty to come to the aid of the Palestinians. Watching crude and Nat Gas The energy markets are the first derivative to drive broad market sentiment this week, with crude and Nat Gas leading investors to trade volatility (options), as well as classic hedges such as gold and Treasuries. Amid a backdrop of ‘higher for longer’, and the US CPI inflation gaining 0.4% in September, higher energy prices could deliver a one-way punch to sentiment. Given market participants are generally poor at pricing risk around geopolitical developments, it's no wonder most have looked to mitigate drawdown - but at this stage, while there is a growing wall of worry to potentially climb, the probability is traders will use strength in risky assets to reduce exposures. The probability of supply disruptions is one of the key aspects here – last week we saw the closure of Chevron’s Tamar gas field in Israel – the focus has been rerouting that gas from the Leviathan gas fields in the North of Israel – if the market feels this gas field could be impacted then could see a spike in EU NG. Many energy experts see the risk of a supply event here as fairly low, but should developments escalate on various fronts, then the market will increase the possibility of a disruption. The bear case for risk, given the potential for a significant rally in EU NG and crude, would be where the market increases the probability of Iran curtailing the movement of LNG through the Straits of Hormuz, where notably Qatar LNG supply (20% of the global LNG market) would be impacted. Again, this seems a low probability at this stage, but that will depend on Iran’s ongoing involvement and any new sanctions placed on them. Downside risk to the EUR If EU NG spikes higher in the near term, then talk of a renewed energy crisis in Europe will resurface and the EURUSD could be headed to parity. As said, this probability is a lower risk right now, but when considering the risks, this is the market concern that will be monitored. While sentiment will move around on each headline, we revisit the hedging flows seen on Friday, as traders de-risked ahead of potential gapping risk – It’s too hard to make a call on whether these hedges are partly unwound in Asia. Where did we see the hedging flows? • Gold rallied 3.4% on Friday - a 3-sigma move and the second biggest day since 2020. A massive 299k gold futures contracts traded, the highest since May. XAUUSD 1-month implied volatility has pushed to 15% and 1-week call volatility has increased to a 1.75 vol premium to puts – the most since March. • The XAUUSD price closed at a 2.8% premium to the 5-day moving average, which shows the sheer pace of the intraday rally, with limited intraday mean reversion – sellers just stood aside. • Brent crude closed 5% higher with our Brent price closing over $91 and eyeing a move back to the recent highs of $96 – WTI Crude futures saw the curve lift and go further into backwardation – this typically means the market sees a higher probability of a supply shock. • In equities, the VIX traded to a high of 20.78%, settling at 19.3% (+2.6 vols on the day) – a VIX index at 19.3% implies daily % changes in the S&P500 of 1.2% and 2.7% on the week. • S&P 1-month put implied vol now trades at a 5.46 vol premium to 1-month calls – This volatility ‘Skew’ is now the most bearish since May – traders are ramping up the demand for downside puts to protect in case of drawdown. • Market breadth was ok with 46% of S&P500 stocks closed higher – there was no blanket selling, but a rotation from tech and consumer names into energy and defensive sectors - staples, utilities, and healthcare. • While we saw some buying in petrocurrencies (NOK & CAD) but traders played defense buying into the CHF & JPY – short NZDCHF was the play of the day (-1.4%), with GBPCHF breaking the long-run range lows. • US Treasuries rallied with 10’s closing -8bp and 30’s -10bp. Marquee event risks for the week ahead: • NZ Q3 CPI (17 Oct 08:45 AEDT) – the market consensus is for 1.9% QoQ / 5.9% YoY (from 6%) – NZDCHF was the biggest percentage mover on Friday following the risk aversion flows – will the sellers follow through? • UK jobless claims/wage data (17 Oct 17:00 AEDT) – the consensus for wages sits at 7.8% (unchanged) – UK swaps place a 29% chance of a hike from the BoE at the 2 Nov BoE meeting, will the wage data influence that pricing? GBPCHF trades the weakest levels since Oct 2022 and looks likely to be sold on rallies • US retail sales (17 Oct 23:30 AEDT) – the advanced read is expected at 0.3% mom and the ‘control group’ element at -0.1%. The retail numbers could influence market sentiment, especially if we see a big miss to expectations, with USDJPY and USDCHF the pairs most sensitive to a weaker outcome. Gold could find further buyers on a downside surprise. • Canada CPI (23:30 AEDT) – headline CPI is expected at 4% yoy, with core CPI eyed at 4% yoy • Fed chair Jay Powell speaks at the Economic Club of NY (20 Oct 03:00 AEDT) – the highlight of the week. Expect Powell to focus on the view that moves in the bond market are mitigating the need for the Fed to hike further. • China Q3 GDP (18 Oct 13:00 AEDT) – consensus is 4.5% yoy (from 6.3%) – likely a trough in China’s GDP, with better levels ahead. • China Industrial production, fixed asset investment, retail sales (18 Oct 13:00 AEDT) • UK Sept CPI (18 Oct 17:00 AEDT) – the consensus for headline CPI is 6.6% yoy (from 6.7%) / core CPI at 6% yoy (6.2%) – a risk to manage for traders holding GBP exposures • EU CPI (18 Oct 20:00 AEDT) – no change expected in the revision, with headline CPI eyed at 4.3% /core CPI at 4.5%. Should be a non-event for the EUR and EU equities. • Australia employment report (19 Oct 11:30 AEDT) – the consensus estimate is for 20k jobs to have been created in September and the U/E rate unchanged at 3.7% - expect the impact from Aussie jobs to be short-lived – preference to work sell limits in AUDUSD on the day and sell into strength. • China new homes prices (19 Oct 12:30 AEDT) • China 1 & 5-year Prime Rate (20 Oct 12:15 AEDT) – the consensus is no change with the 1yr rate to stay at 5.2% & the 5yr rate at 3.45% US Earnings (with the implied move on earnings) – Goldman Sachs (3.7%), Bank of America (4.6%), Tesla (5.2%), Netflix (7.5%) Central bank speeches: BoE – Huw Pill, Sam Woods, Swati Dhingra ECB – Villeroy, Knot, Centeno, Guindos, Holzmann Fed – see schedule below
NYMEX:TTF1!Long
by Pepperstone
5
How to Trade the Gap & GoWelcome to the final instalment of our 7-part Power Patterns series where we aim to give you the skills to trade powerful price patterns which occur on any timeframe in every market. Last but by no means least is the Gap & Go pattern. Price gaps epitomise power and the Gap & Go is must for any active trading looking to take advantage in a spike in volatility. We’ll teach you: How to identify the best Gap & Go patterns Why the catalyst behind the pattern is crucial A simple technique for managing a Gap & Go trade I. Understanding the Gap & Go: The Gap and Go pattern revolves around a simple concept: market shocks take time to fully price in. A price gap occurs when a stock "gaps" higher or lower from its previous closing price when the market opens. The price gap represents a shock and in certain circumstances traders can anticipate a continuation of price movement in the direction of the price gap. Here are the key components of the Gap & Go trade setup: Identify the gap: The first step is to identify stocks that exhibit a noticeable price gap between the previous day's closing price and the current day's opening price. This gap can be either bullish (a gap up) or bearish (a gap down). Breaking structure: The price gap should break above or below a level of resistance (or support). Gaps that break key structural levels are likely to draw in a higher level of participation. High volume: The price gap should occur on higher-than-average volume. Higher volume indicates increased participation and suggests that a significant number of market participants are actively reacting to the news or event that caused the gap. Bullish Gap & Go: Bearish Gap & Go: II. Know the catalyst behind the gap: Stock prices can gap higher or lower for a multitude of reasons and some of the reasons make better trading catalysts than others. As a general rule, you want the gap to form on a piece of stock-specific newsflow that has recalibrated market expectations. Remember, central to the pattern working is that the shock which caused the gap must take time to price in – hence mechanical events such as dividends and corporate actions are of no use, so too are confirmed bids. The best catalysts for Gap & Go trades will be earnings surprises (good or bad), and a change in outlook (good or bad). In general, trading updates tend to lead to more surprises that Interim and Annual Reports, as they occur within reporting periods. Good catalysts: Trading update Interim results (change of outlook) Annual results (change of outlook) Bid rumour Broker upgrade / downgrade Bad catalysts: Ex dividend Corporate actions Global news event Confirmed bid Top Tip: For the stocks you like to trade, make sure you add a calendar alert for when the company releases Trading Updates and Interim/Annual Reports. This may help you to anticipate price gaps. III. How to Trade the Gap & Go: Whilst the Gap & Go pattern can be traded in many different ways and on many different timeframes. We favour getting to grips with this pattern on the hourly candle chart first. On this timeframe gaps will be clear, levels of risk can be kept relatively small, and trades can play out across one or two trading days. Here’s how to start trading the Gap & Go on the hourly candle chart: Entry : Wait for prices to stabilise following the opening rotations. The gap should be maintained after the first hour of trading and there should be no signs of exhaustion. Enter during the second hour of trading. Stop-loss placement : Traders can either place a stop above (or below) the 9 period exponential moving average (EMA) or use a multiple of the Average True Range (ATR) above (or below) the entry price. Price targets : The expectation for the Gap & Go trade setup is to catch a clean swing of price movement in the direction of the gap. For this reason, the 9EMA is a useful tool as a dynamic profit target – traders should close their position on a close back above (or below) the 9EMA. This method does not cap upside in fast moving markets but ensure discipline and allows traders to attempt to capture the ‘meat of the move’. Bullish Gap & Go Trade Setup: Bearish Gap & Go Trade Setup: IV. Managing risks and pitfalls: Be wary of opening reversals: It is important that prices stabilise and maintain the gap before entering a Gap & Go trade. On occasions, prices will gap lower only to reverse sharply during the first hour of trading. The stronger your understanding of the subtle nuances of trading around the open, the better you will be at trading the Gap & Go pattern. Risk management: The Gap & Go pattern by definition is trading during an expansion in volatility. Therefore, it is essential that traders implement proper risk management techniques, such as position sizing and diversifying your trading portfolio. Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance.
NASDAQ:AAPL
by Capitalcom
6
Markets embrace the Higher-for-Longer themeIt has been a big week of central bank policy announcements. While central banks in the US, UK, Switzerland, and Japan left key policy rates unchanged, the trajectory ahead remains vastly different. These central bank announcements were accompanied by a significant upward breakout in bond yields. Interestingly most of the increase in yields has been driven by higher real yields rather than breakeven inflation signifying a tightening of conditions. The bond markets appear to be acknowledging that until recession hits, yields are likely to keep rising. Connecting the dots The current stance of monetary policy continues to remain restrictive. The Fed’s dot plot, which the US central bank uses to signal its outlook for the path of interest rates, shows the median year-end projection for the federal funds rate at 5.6%. The dot plot of rate projections shows policymakers (12 of the 19 policymakers) still foresee one more rate hike this year. Furthermore, the 2024 and 2025 rate projections notched up by 50Bps, a signal the Fed expects rates to stay higher for longer. The key surprise was the upgrade in growth and unemployment projections beyond 2023, suggesting a more optimistic outlook on the economy. The Fed’s caution is justified amidst the prevailing headwinds – higher oil prices, the resumption of student loan payments, the United Auto Workers strike, and a potential government shutdown. Quantitative tightening continues on autopilot, with the Fed continuing to shrink its balance sheet by $95 billion per month. Risk assets such as equities, credit struggled this week as US yields continued to grind higher. The correction in risk assets remains supportive for the US dollar. A hawkish pause by the Bank of England In sharp contrast to the US, economic data has weakened across the board in the UK, with the exception of wage growth. The weakness in labour markets is likely to feed through into lower wages as discussed here. After 14 straights rate hikes, the weaker economic backdrop in the UK coupled with falling inflation influenced the Bank of England’s (BOE) decision to keep rates on hold at 5.25%. The Monetary Policy Committee (MPC) was keen to stress that interest rates are likely to stay at current levels for an extended period and only if there was evidence of persistent inflation pressures would further tightening in policy be required. By the next meeting in November, we expect economic conditions to move in the MPC’s favour and wage growth to have eased materially. As inflation declines, the rise in real interest rates is likely to drag the economy lower without the MPC having to raise interest rates further. That said, the MPC is unlikely to start cutting rates until this time next year and even then, we only expect to see a gradual decline in rates. Bank of Japan maintains a dovish stance Having just tweaked Yield Curve Control (YCC) at its prior Monetary Policy Meeting (MPM) on 28 July, the Bank of Japan decided to keep its ultra easy monetary settings unchanged. The BOJ expects inflation to decelerate and said core inflation has been around 3% owing to pass-through price increases. Governor Ueda confirmed that only if inflation accompanied by the wages goal was in sight would the BOJ consider an end to YCC and a rate shift. With its loose monetary policy, the BOJ has been an outlier among major central banks like the Fed, ECB and BOE which have all been hiking interest rates. That policy divergence has been a key driver of the yen’s weakness. While headline inflation in Japan has been declining, core inflation has remained persistently higher. The BOJ meeting confirmed that there is still some time before the BOJ exits from negative interest rate policy which is likely to keep the Yen under pressure. The developments in US Monetary Policy feeding into a stronger US dollar are also likely to exert further downside pressure on the Yen. This year global investors have taken note that Japanese stocks are benefitting from the weaker Yen, relatively cheaper valuations and a long-waited return of inflation. Japanese companies are also becoming more receptive to corporate reform and shareholder engagement. Adopting a hedged Japanese exposure Taking a hedged exposure to dividend paying Japanese equities would be a prudent approach amidst the weaker yen. This goes to a point we often make - currency changes do not need to impact your foreign return, and you can target that local market return by hedging your currency risk. A hedged Japanese dividend paying equity exposure could enable an investor to hedge their exposure to the Yen. This material is prepared by WisdomTree and its affiliates and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of the date of production and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and non-proprietary sources. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by WisdomTree, nor any affiliate, nor any of their officers, employees or agents. Reliance upon information in this material is at the sole discretion of the reader. Past performance is not a reliable indicator of future performance.
TVC:US10Y
by aneekaguptaWTE
1
Gasoline futures portend pleasure at the pumpAmong my favorite charts this time of year is that of RBOB gasoline futures. Often as Halloween approaches, wholesale gasoline costs start coming down significantly from highs in the summer. Call it a nice treat for commuters and families around the country. As it stands, the prompt-month of RBOB is now under $2.20 - that's a fresh 10-month low should we close here. RBOB at $2.18 means that retail pump prices should continue their recent trend lower, eventually finding the $3.20 mark if the historical premium of about $0.95 holds. It's key to remember that the price difference between the futures and the retail cost of a gallon of regular unleaded depends on a host of factors - taxes, transport costs, refiner margins, and refinery outages being among them. I see a bit more downside ahead on the chart. Consider that, according to seasonal data from Equity Clock, RBOB tends to move lower from mid-October through early December. That could mean gas prices under $3 in terms of a national retail average by, say, Christmas. Keep your eye on the low from last December - $2.05. Another layer of possible dip-buyers could come into play near $1.95. On the upside, I see resistance near $2.45 - the range lows from this past May and June.
NYMEX:RB1!Short
by mikezaccardi
5
The US Super Bubble Theory Credit for this perspective goes to u/RS3175. They shared their log Elliot waves with me and I found it so interesting I had to chart it up for myself. They've done better labelling of the wave than I have. I'll post their pic at the bottom of the page. Firstly, what are we looking at? A logarithmic chart covering all of the SPX trading history with the entire thing fitting inside the context of the Elliott Wave Theory. Unless you really like Elliot, I'm sure you're beyond sceptical but let me tell you a few things of note about Elliot. Elliot lost his job in the depression and started to study markets trying to work out why. This was how he devised his theory. The rally up to the high and the depression crash is a literal textbook example of the Elliot Wave. Even if you don't think Elliot Waves work - Elliot based his wave theory on this move. This IS the original Elliot Wave. What Elliot noticed was that this shape occurred over and over again on small timeframes and built up to a huge version on a bigger timeframe. Like Russian Dolls, but in reverse. Elliot published his theory in the 40s and died soon after. Elliot would be dead before the the depression high was broken. In his 1940s book Elliot referred to the depression as a typically ABC correction. Implicate to this statement is a forecast of a new bull market and that bull market developing in five main waves before then entering into a bigger correction. And that was a very good forecast of what would happen over the next 25 years. So Elliot deserves some credit. There would not have been many people who made forecasts of new highs and trending through them in 1940. Elliot deserves a lot of credit, to be honest. Because here was the next moves. Paul Tudor Jones famously shorted this 1987 crash and there are documentaries from 1985-1986 in which Jones and his team are using a mixture of Elliot Wave theory and matching up moves of last decade relative to the 1920s. They were running a computer program tracking correlation, finding it incredible high and betting on it. Jones was long the rally and short the drop - And it's documented a year before the crash trade that he was using Elliot for his forecast of it. If you look up Jones forecasts at the time he was actually completely wrong. He thought it was heading into a depression. There'd be the first break and then there'd be the 1930s style downtrend. They thought this because the correlation of price moves in their time relative to 1987 were so high (I can't remember specifically but I think it was over 80%). I think this lends a lot of credibility to Elliot's work. Not only would his 1940's book forecast these types of 5 leg bubble moves and then sharp corrections but it was also famously used in real time to trade the rally and crash of the 1980s. If you do not think Elliot Wave works, is has! On a big scale, it has worked so far. Elliot's implied forecasts happened. When DJI was $100 Elliot was hardly going to call DJI to $33,000 but if he'd taken the perspective that the Depression was wave 2 - what he would have forecast would be an extremely accurate forecast of what went on to happen in markets for decade after decade to come. One would have to think if Elliot was with us today, he might well be a bear. Here's @RS3175's chart: tradingview.sweetlogin.com The implied swings of this would match up with my Elliot bear waves forecast of 2021 (Even though we've took very different routes there).
SP:SPXShort
by holeyprofit
149
Would the Middle East Conflict Push Gold and Oil Prices Higher?NYMEX: WTI Crude Oil ( NYMEX:CL1! ), COMEX: Micro Gold Futures ( COMEX_MINI:MGC1! ) Over the weekend, military conflict in Gaza between Israel and Palestine shocked the world. I condemn violence against civilians and pray for the victims and their families. In the following paragraphs, I will discuss how the prices of strategically important commodities, namely gold and crude oil, might respond to the eruption of a global crisis. Firstly, let’s look back into the recent past for those crises arising to a global scale. In the last five years, the world has witnessed three major crises of very different natures: • US-China Trade Conflict: from January 2018 to January 2020, the world’s two largest economies imposed import duties to each other in a series of escalating actions and retaliations. A major event occurred on September 18, 2018, where President Trump added 10% tariff on nearly all Chinese-made products. The US-China trade conflict forever altered the global supply chain, with its impact being felt till today. • Covid-19, the most severe pandemic in a century, from its outbreak in January 2020 to 2021. A big event that sparked market fear occurred on February 2, 2020, where the US imposed travel restrictions on incoming air passengers. • Russia-Ukraine Conflict: the first military conflict in Europe since World War II, from February 14, 2022, till now. Secondly, let’s measure how gold and WTI crude oil responded to these crises. For my analysis, I denote the day before Event Day as T0, where we may find last market prices before the impact hit. Event Day will be T+1, and then 1-week after (T+7), 1-month after (1M), 3-month after (3M), all the way through 1-year after (1Y). Here are what I found: US-China Trade Conflict • Gold spot price (T0) = $1,201.90 per Troy Ounce • Price changes by time: -0.1% (T+1), +0.1% (T+7), +2.3% (1M), +3.3% (3M), +8.6% (6M), +11.6% (9M), +25.0% (1Y) • Comment: Trade tension between US and China could push the global economy into a recession. Gold, a safe-haven asset, saw its market value growing 25% in a year. • WTI crude oil spot price (T0) = $69.86 per barrel • Price changes by time: +1.2% (T+1), +6.3% (T+7), +4.3% (1M), -27.7% (3M), -14.2% (6M), -24.6% (9M), -8.4% (1Y) • Comment: High tariff raised the price consumers had to pay, hence reducing demand. Crude was down 28% three months after the all-in tariff was imposed. Covid Pandemic • Gold spot price (T0) = $1,574.75 per Troy Ounce • Price changes by time: -1.0% (T+1), -0.1% (T+7), +2.6% (1M), +8.5% (3M), +24.4% (6M), +21.2% (9M), +16.6% (1Y) • Comment: We saw the biggest stock market selloff in March 2020. Gold price was down initially as stock traders needed to raise money and meet margin calls. However, a flight to safety eventually took place, and gold was up 24% in six months. • WTI crude oil spot price (T0) = $53.09 per barrel • Price changes by time: -5.0% (T+1), -11.9% (T+7), -77.1% (1M), -61.4% (3M), -23.1% (6M), -31.1% (9M), +0.9% (1Y) • Comment: Rapid Covid outbreaks stroke fear. Lockdowns put global activities to a pause. The pandemic wiped out oil demand, with WTI falling 80% in a month. April 20, 2020 made history as oil price of the expiring contract went below zero. As storage cost more than selling price, traders were willing to pay others to take away the crude for free. Russia-Ukraine Conflict • Gold spot price (T0) = $1,854.60 per Troy Ounce • Price changes by time: -2.5% (T+1), -2.5% (T+7), +6.5% (1M), -1.8% (3M), -2.8% (6M), -5.0% (9M), +5.0% (1Y) • WTI crude oil spot price (T0) = $91.25 per barrel • Price changes by time: +4.7% (T+1), +5.3% (T+7), +30.7% (1M), +12.90 (3M), +1.1% (6M), +0.6% (9M), -17.2% (1Y) • Comment: A major military conflict in Europe significantly raised the global risk level. Gold, the safe-haven asset, and crude oil, an energy commodity critically important in wartime, both went up in the first month, by 6.5% and 30.7%, respectively. • However, the impact was short-lived. On March 16, 2022, the Fed begin hiking interest rates, which has become the driving force in global market. Impact from Russia-Ukraine became a secondary factor and sat in the back burner. To sum up the above examples, I observe that gold prices usually go up in the aftermath of a global crisis. Crude oil has a mixed bag of reactions. If a crisis results in economic recession and a consequential reduction in oil demand, oil prices would go down. However, in the case of a major war, oil price would go up due to its strategic importance. Review: Event-driven Strategy focusing on Global Crises In June 2022, I introduced a three-factor pricing model for commodities futures: Commodities Futures Price = Intrinsic Value + Market Sentiment + Crisis Premium Intrinsic Value is the baseline cash price of the underlying commodities, determined by available supply, demand, inventory, shipping costs, and factors affecting these variables. Market Sentiment indicates if investors are bullish or bearish. Whether speculative investors place more money on the long side or the short side affects the price of a futures contract. Market sentiment could be either positive or negative, resulting in a price premium or a discount of the intrinsic value. The new Crisis Premium factor captures “Event Shock” during a global geopolitical crisis. Previous trade example: Russia and Ukraine together accounted for 28% of global wheat export. Wheat price shot up by 75% following the start of the conflict. I designed a Long Strangle options strategy on CBOT Wheat futures, and simultaneously bought out-of-the-money (OTM) call and put options. A “risk-on” outcome could push wheat price higher, making the calls more valuable, where a “risk-off” outcome would pull wheat price back down, making the puts in-the-money (ITM). Trading Opportunities with Micro Gold Since the September FOMC meeting, gold prices suffered a 6.3% drawdown, sending the futures price from $1,969 to $1,845. Friday settlement price was nearly 9% below the yearly high. On the one hand, high-interest money market funds beat out non-interest-yielding gold investment; on the other hand, strong dollar raised the cost of gold purchase by foreign investors. As a result, gold prices have been under pressure. However, my analysis illustrates that gold prices could rise in response to geopolitical conflicts. Since its founding, Israel had five major wars with its Arab neighbors. We do not know whether this time it would be contained as a regional conflict or spark a chain reaction of a global war. By the intensity of how it started, it doesn’t seem like a short one. To express a view of rising gold prices, we could consider a long position in COMEX Micro Gold Futures ( AMEX:MGC ). The December contract (MGCZ3) was settled at $1,845. Each contract has a notional value of 10 troy ounces, or $18,450 at market price. CME Group requires an initial margin of $780 per contract. Hypothetically, if gold futures go back up to $2020, its yearly high, the $175 ($2020-$1845) price increase would translate into $1,750 for a long futures position. If gold price goes down instead, each dollar of decline would result in a loss of $10 per contract. Alternatively, we could consider the newly launched Micro Gold Options. A Long Strangle Options Strategy, where simultaneously buying OTM calls or puts, could be deployed if we expect a big move in gold price, but not certain of its direction. Trading Opportunities with WTI Crude Oil Since June, WTI crude oil first staged a nearly 40% rise, from $67 going to $93. However, it has seen a 9% drawdown since the Fed meeting on September 20th. A major military conflict in the Middle East, the world’s most important oil producing region, threatens to interrupt oil supply and push up oil price. If the conflict is escalated to involve major oil exporting nations, the situation could be dire. To express a view of rising crude price, we could consider a long position in NYMEX WTI Futures ( NYSE:CL ). The December contract (CLZ3) was settled at $83.18. Each contract has a notional value of 1,000 barrels, or $83,180 at market price. CME Group requires an initial margin of $6,186 per contract. Hypothetically, if WTI futures go up above $100, which we saw from February to July 2022 in the first months of the Russia-Ukraine conflict, the $17 price increase would translate into $17,000 for a long futures position. If crude oil price goes down instead, each dollar of decline would result in a loss of $1000 per contract. Similarly, the newly launched Micro WTI Options could express a view that a big move in oil price is expected, without knowing its direction. 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 tradingview.sweetlogin.com
NYMEX:CL1!Long
by JimHuangChicago
35
Storms are Brewing: Is your Portfolio Weatherproof? Risk strikes when least expected. Optimism peaks before a downturn strikes. Chart below shows remarkable spike in articles mentioning soft-landing before recession hits. Human brain is engineered to think linearly. Anything non-linear tricks the mind. Recession is non-linear which muddles up investor estimates of recession, its timing and impact. Count of Soft-landing Articles & US Recession (Source: Bloomberg ) The US Federal Reserve in its fight against inflation has lifted rates by an unprecedented 525 basis points since the start of 2022. Yet the American economy, US corporations, and the US consumer are remarkably resilient. Non-Farm Payrolls last week came strong. When the Fed is tightening its levers to slow the economy, nothing seems to stop its rise. What explains this anomaly? Three words. Monetary Policy Transmission. Monetary policy transmission takes time, lulling many to believe that consumers and corporates are resilient. When in fact, they are yet to face the consequence of constrained credit markets which will manifest itself in myriad ways from reduced availability of financing, high cost of funding, and rising bankruptcies, just to name a few. This paper is set in two parts. First part describes monetary policy transmission. Part two dives into storms forming in the horizon. The paper concludes with a hypothetical trade set-up using CME Micro S&P 500 Options to defend portfolios from deepening polycrisis. Despite the risk narratives, a soft landing may still be possible. However, the combined impact of Fed’s hawkish stance, rising geopolitical tensions, continuing auto workers strike, tightening of financial conditions, and elevated oil prices & yields renders the likelihood of a soft landing, super slim. Narratives around the soft-landing aside, CTAs have dumped nearly USD 40 billion worth of S&P 500 futures positions marking the fastest unwind on record over the last two weeks as reported by Goldman Sachs. PART 1: MONETARY POLICY TRANSMISSION Monetary policy operates with long and unpredictable lags. Monetary Policy Transmission is the process through which a Central Bank’s decisions impact the economy and the price levels. The flow chart below schematically describes the downstream impact of quantitative tightening. Monetary Policy Transmission Takes Time (Source: ECB ) Changes made to official interest rates affect markets in diverse ways and at distinct stages. Central bank's interest rate decisions impact the markets in the following seven ways: 1. Banks and Money Markets: Rate changes directly affect money-market rates and, indirectly, lending and deposit rates. 2. Expectations: Expectations of future rate changes influence medium and long-term interest rates. Monetary policy guides expectations of future inflation. 3. Asset Prices: Financing conditions and market expectations triggered by monetary policy cause adjustments in asset prices and the FX rates. 4. Savings & investment decisions : Rate changes affect saving and investment decisions of households and firms. 5. Credit Supply: Higher rates increase the risk of borrower default. Banks scale back on lending to households and firms. This may also reduce consumption and investment. 6. Aggregate demand & prices: Changes in consumption and investment will change the level of domestic demand for goods and services relative to domestic supply. 7. Supply of bank loans: Changes in policy rates affect banks’ marginal cost for obtaining external finance differently, depending on the level of a bank’s own resources/capital. The mechanism is characterized by long, variable, and indefinite time lags. As a result, it is difficult to predict the precise timing of monetary policy actions on economy and inflation. For some sectors, monetary policy transmission can take as long as 18 to 24 months. In other words, the full force of the Fed’s 525 basis points spike since 2022 will not be felt until early 2024. Added to that, the Fed may not be done hiking yet. Probabilities of Rate Anticipation in Prospective Fed Meetings (Source: CME FedWatch Tool ) PART 2: STORMS ARE FORMING Not one but three major storms are brewing in parallel, namely (1) Worsening Geo-politics, (2) US Sovereign Risk Fears, and (3) Tightening Financial Conditions. One or more of them could unleash havoc, sending financial markets into a tailspin. 1. WORSENING GEO-POLITICS Adding to the geopolitical conflict between Russia and Ukraine, Hamas attack on Israel over the weekend has elevated geo-political tensions. If counter strikes escalate to a wider region impacting Strait of Hormuz, then oil prices could spiral up sharply, sending shocks across financial markets. Oil prices lost steam last week. That doesn’t guarantee lower prices. Eerily, this month marks 50-year anniversary of oil emergency in 1973 which led to oil prices spiking 3x back then. The US Strategic Petroleum Reserves are at a 40-year low. The reserves are at 17-days of consumption compared to an average of 34-days consumption observed over the last thirty years. 2. US SOVEREIGN RISK FEARS: The US government is facing multiple challenges of its own. The government narrowly avoided a shutdown and has kicked the problem can down the road only by six weeks. Long before investors take relief, the shutdown fear will resurface again. Add to that is the rising US debt levels. With a debt burden of USD 33 trillion, the government debt is forecasted to reach USD 52 trillion by 2033. With rates remaining elevated, a substantial chunk of US Government debt will be directed towards interest payments. Is there a risk of US debt default? To compensate for that risk, bond yields are climbing. The 10-Year treasury yields rose to 16-year high of 4.6%. With jobs market remaining solid, the data-driven Fed might have to keep the rates higher for longer. The futures market implies a probability of 42% for a rate hike during the Fed’s December meeting. Any further hikes can tip the recovering housing market back into crisis due to exorbitant mortgage rates. High yields also cost it dearly for firms to borrow. 3. TIGHTENING FINANCIAL CONDITIONS: Dwindling liquid assets, resumption of student loan repayments, stringent lending practices atop heavy debt burden on US Corporates are collectively weighing down on investor sentiments. Student Loan Repayments: After 3.5 years of loan servicing holidays, millions of students will resume student loan repayments. Bloomberg estimates that these repayments can shave 0.2% to 0.3% off US GDP. Depleted Savings: Strength of the US Consumers will be put to stress tests. Extra savings from pandemic stimulus checks have been depleted to below pre-pandemic levels for low-income categories. Consumer strength could turn into weakness in the coming weeks. Inflation Adjusted Liquid Asset Holdings by Income Group (Source: US Fed and Bloomberg Calculations ) Stringent Lending Standards: The Fed’s Senior Loan Officer Opinion Survey (SLOOS) on Bank Lending Practices points to 50% of the banks imposing stringent criteria for commercial & industrial loans. Lending conditions are at levels last seen during 2008 global financial crisis. Impact of this will be felt in Q4 when business will be stifled from access to funds. Tightening Standards of Commercial & Industrial Loans (Source: July 2023 SLOOS Survey ) Corporate Debt Burden: Years of extremely low cost of funding have tempted US corporates into a debt binge. With rates rising, the debt burden is getting heavier on corporate balance sheets, cash flows, and profitability as reported by Bloomberg. Leverage ratios are rising. Interest coverage ratios are falling. Average Free Cash Flow to Debt ratios are plunging. Debt burden amid rising rate environment is hurting US Blue Chips (Source: Bloomberg Intelligence ) HYPOTHETICAL TRADE SETUP Against the backdrop of these risks, this paper posits a hypothetical back spread with puts to gain from sharp index moves. Unlike a long straddle, this option strategy delivers (a) outsized gains when markets plunge, and (b) limited downside risk if market remains flat or rises despite the risks. This strategy involves selling one unit of at-the-money puts to finance purchase of two units of out-of-the-money puts. This strategy can be executed either for net positive premium or net negative premium depending on the choice of strikes. Specifically, the hypothetical trade illustration is built around CME Micro Monthly S&P 500 Options expiring on 29th December 2023 (EXZ3). The strategy involves (a) selling 1 lot of EXZ3 at a strike of 4400 collecting a premium of USD 655 (131.16 index points x 1 lot x USD 5/index point), and (b) buying 2 lots of EXZ3 at a strike of 4300 paying a premium of USD 950 (95.041 index points x 2 lots x USD 5/index point). The hypothetical trade involves a net debit of USD 295 (58.922 index points * USD 5/index point). This trade breaks even when S&P 500 (a) falls below 4141, or (b) rises above 4400. Pay-off from Back Spread with Puts Trade Strategy (Source: CME QuikStrike ) Summary pay-off from this trading strategy is illustrated in the table below. MARKET DATA CME Real-time Market Data helps identify trading set-ups and express market views better. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs tradingview.sweetlogin.com DISCLAIMER This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services. Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
CME_MINI:MES1!Short
by mintdotfinance
18
Is Stock Market Recovery Possible? Trading Idea for 05/10/2023A unique situation has arisen in the market where the reward for the risk associated with stock investments is nearly equivalent to the yield on 10-year US government bonds. The prices of debt securities are steadily declining, and only a substantial collapse in the stock market can restore demand for them. Barclays' analysts share a similar viewpoint. However, there are currently conditions for a stock market recovery, especially if the unemployment rate in the US exceeds analysts' expectations. Therefore, our focus today is on the SPY ETF, which invests in companies comprising the S&P 500 index. On the D1 timeframe, resistance has formed at 430.30, with support at 420.12. If quotes consolidate above 425.01, this will likely trigger the beginning of an upward trend. Additionally, the price has moved closer to the 200-day Moving Average, which typically results in a rebound. On the H1 timeframe, the short-term target for the price increase is around 435.80, while in the medium term, it could reach 445.75. — Ideas and other content presented on this page should not be considered as guidance for trading or an investment advice. RoboMarkets bears no responsibility for trading results based on trading opinions described in these analytical reviews. The material presented and the information contained herein is for information purposes only and in no way should be considered as the provision of investment advice for the purposes of Investment Firms Law L. 87(I)/2017 of the Republic of Cyprus or any other form of personal advice or recommendation, which relates to certain types of transactions with certain types of financial instruments. Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 67.85% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
AMEX:SPY
by RoboMarkets
10
ES1! & SPY: Happy October!Hopefully you all love Halloween and fall. Because I am obsessed and I went as extra as extra will allow. And you can expect this to continue until next month :p. Let's hope for a straight forward week this week. This would be for SPY to come up and reject 431. Remember, we have been rejecting that 431 repeatedly (which is our bearish condition on the 6 month) and have had 4 successful closes below it: If we break over it, its fine really. Because, as promised, we have 6 month levels on ES1! now and we can take a look at those here: Bearish condition on ES1! on the month is at 4486. So we can go back up there, we just need to reject there. Let's just hope it keeps it to the point with a rejection of 431. Its going to be bullish on Monday, probs agree and with the news catalyst of a government deal, its probably going to be excitable. But yeah, we need to just see rejection at 431 to see some continuation to the downside. It really should be swift, the move to the 6 month low targets, and then we see bounce and chop. It's usually how it plays out. But it could, technically and realistically, just chop its way down there. The velocity in tanking is not the same degree we had in 2022 where it was straight down, most of the time. There is a bit more bouncing here. Another thing of note, we missed the 99 on ES1! last week, which generally means the sentiment is overwhelming in one direction or another. In this case, that would be bearish. The last time ES1! missed a bullish 99, it tanked dramatically the next week, so of course be cautious here. I don't necessarily think that will happen this week, but it is a possibility. ES1!'s price targets for the week are listed in the chart above, for SPY, here they are: 99 this week is at the bullish condition on the week. So let's see what we get. That's it for now, I am bearish but obviously its contingent on us rejecting or staying below 431 on SPY. So let's see what happens with that, then we go from there. For Monday, I am bullish provided we open below 431. Will update as we see more!
CME_MINI:ES1!
by Steversteves
115
Yen Drops Below 150 Per Dollar - Exercise Caution in TradingThe Japanese yen has recently dropped below the critical threshold of 150 per dollar, primarily due to mounting concerns regarding intervention measures. In light of this situation, I strongly urge you to exercise caution and consider pausing yen trading until further clarification is obtained. The sudden decline in the yen's value has raised concerns among market participants, as it suggests the possibility of intervention by the Japanese government or central bank. Intervention refers to deliberate actions taken by authorities to influence their currency's exchange rate, typically through buying or selling large amounts of their own currency in the foreign exchange market. Such interventions can have a profound impact on the currency's value and create significant volatility in the market. Given the uncertainty surrounding the current situation, it is prudent to reassess our trading strategies and ensure that we are not unnecessarily exposed to potential risks. Therefore, I strongly recommend that you temporarily halt yen trading until we receive further guidance or clarification from reliable sources regarding any potential intervention measures. In the meantime, I encourage you to closely monitor the latest news and market developments related to the yen. Stay informed about any official statements or actions from the Japanese government or central bank, as these can provide valuable insights into the future direction of the currency. Additionally, consider diversifying your portfolio to reduce reliance on yen-based assets until the situation stabilizes. Please remember that our primary objective is to protect our investments and mitigate risk. By exercising caution and temporarily pausing yen trading, we can better position ourselves to navigate the current market uncertainties and make informed decisions when clarity emerges. If you have any questions or require further guidance, please do not hesitate to reach out to me or our dedicated support team. We are here to assist you and ensure that you have the necessary information to make well-informed trading decisions.
by bryandowningqln
11
BTCUSD: Long Position with a Target Price of 29221In the dynamic landscape of cryptocurrency trading, the BTCUSD pair has emerged as a focal point for investors seeking opportunities for growth and capital preservation. This analysis delves into the factors shaping the current trajectory of Bitcoin (BTC) and the US Dollar (USD) pairing, with an optimistic outlook projecting a rise to a target price of 29221. Underlying Catalysts: A Comprehensive Approach Growing Demand: The surge in demand for BTC is propelled by increased adoption and the growing interest of institutional investors. This heightened interest not only signifies a changing perception of cryptocurrencies but also establishes BTC as a sought-after asset. Inflation of the US Dollar: The recent injection of trillions into the US economy has triggered concerns about inflation. As investors seek refuge from potential devaluation, BTC emerges as a compelling alternative, acting as a store of value amid uncertainties. Technical Analysis: Technical indicators reveal a bullish trend, with the second re-test of the 4H diagonal resistance line solidifying the upward trajectory. Technical analysis, a pivotal aspect of market dynamics, augurs well for those eyeing a favorable position in the market. Market Sentiment: Positive market sentiment, buoyed by the US government's avoidance of a shutdown, has cast a favorable light on cryptocurrencies. As sentiment influences investor behavior, this positive outlook could be a driving force behind the upward momentum of BTC. Conclusion: Considering the combined impact of growing demand, concerns about US dollar inflation, positive market sentiment, there is a compelling case for a long position on BTCUSD. Technical analysis further supports the bullish outlook. Trade Parameters: Entry Price: After Bullish Reversal Confirmation around 27447-27062. Stop-Loss: Set below recent support levels to manage risk. Take Profit: Target price of 29221. Risk-Reward Ratio: Ensure a favorable risk-reward ratio by adjusting position size accordingly. Risk Factors: Market Trends: Monitor broader market trends for potential shifts. Economic Indicators: Keep an eye on key economic indicators, especially those related to inflation and the US dollar. Geopolitical Events: Any unexpected geopolitical events can influence market sentiment. It's crucial to conduct ongoing analysis and adapt the trade strategy based on changing market conditions. Always be aware of potential risks and use risk management tools effectively.
BITSTAMP:BTCUSDLong
by fardycurry
72
Navigating Rocky Oct After a Crushing Sept in US EquitiesSeasonality is pervasive in financial markets. Some are benign while others are not. The “September Effect” refers to a month when equity returns gets crushed. Typically, this is followed by a volatile October. Other well-established pattern in equity markets is the "Santa Claus Rally" which is known to occur during December. Equities go bullish with increased optimism, holiday spending, and portfolio rebalancing before the end of the year. Then, there is also the "January Effect" where small-caps tend to outperform large-caps in the early part of the year. Essential to remember that historical trends do not guarantee future performance. This paper delves into the September Effect followed by the volatility which tends to be witnessed during the month of October. Portfolio managers can prudently position their portfolios to gain from rising volatility and sharp price moves in October and the rest of the final quarter. WHAT EXPLAINS POOR EQUITY RETURNS IN SEPTEMBER? There is no exact rationale explaining why September is historically the worst month of the year for equities. Over the last 94 years, September is the only individual month that has declined at least 50% of the time. Scott Bauer, CEO of Prosper Trading Academy surmises in an opinion note that three drivers plausibly explains this: 1. Post Summer Vacation: In the lead up to summer in Europe, average trading volumes grind lower resulting in lower volatility from June to August. When portfolio managers and investors return in September, their collective rebalancing of portfolios cause panicked exits as they create space for new holdings. This mass-exodus of selling shares pushes prices lower making September the worst month for stocks. 2. Year-end for Mutual Funds: Many mutual funds close their fiscal year in September. These funds purge their portfolios during this ill-fated month. 3. New Bond Issuances: Like equity trading activity, bond issuances ease during summer and return with vengeance and spikes in September. New issuances channel existing money into bonds forcing investors to rotate out of equities and into bonds. SEPTEMBER US EQUITY MARKET PERFORMANCE IN THIS MILLENNIUM Does the September effect prevail in the current millennium? Since start of 2000, September indeed is the worst month for S&P 500 stocks with average returns of -1.8%. Surprisingly, the months with the highest occurrence of negative returns is not September but January. Over the last 23 years, January had 13 months of negative returns. June along with September rank second with 12 occurrences of negative returns during the same period. The chart below summarises average monthly returns of S&P 500 index. Clearly, on average, September stands out as a poor performer while April is the best . Interestingly, the S&P 500 shares tend to deliver positive returns with average upside performance of 3.22% in the fourth and final quarter of the year. Likewise for Nasdaq 100, the September Effect is even more pronounced with index plunging 2.61% on average. Unlike S&P 500, February (14 of 23) has the highest number of months with occurrence of negative returns. The month with the second highest occurrences of negative returns are September, June, and December with 12 of 23 years marking a negative return. The chart below summarises average monthly returns on the Nasdaq 100 index. While September crushes Nasdaq stocks, October is the best month thus far this millennium. October and November deliver positive returns with a pullback in December. On average, Nasdaq 100 upside performance stands at +2.44% in the fourth quarter. A CRUSHING SEPTEMBER IS FOLLOWED BY A ROCKY OCTOBER While September is the king of worst month for stock returns, October claims the crown for being the most volatile. Over the last 23 years, the S&P 500 equity returns show the largest exaggeration in October. Range as used below is defined as the high minus the low of the month and then expressed as a percentage as month’s opening level. Analysis shows that equity returns move by 9.1% in October compared to 6.9% on average for the rest of the months in the year. Similarly, observations in Nasdaq-100 also point to exaggerated range of returns during the month of October. Range in Nasdaq monthly returns stand at 11% in October compared to 9.2% on average for the rest of the months in the year. Based on expected returns and volatility, investors in S&P 500 can expect large swings in returns in October as evident from the chart below. Likewise, Nasdaq 100 investors can expect large swings in October returns based on observations over the last 23 years. OUTLOOK FOR FINAL QUARTER OF 2023 Twenty-three years of historical observations point to a positive upward bias in equity returns for the last three months of the year. This time however, the outlook going into the final quarter is beset with head winds. Not one but five of them approaching in parallel. Risk lurks in many places. Strong dollar. Oil skirting near $100/barrel. Resumption of student loan repayments. Record high mortgage rates driven by higher for longer policy stance. Automotive workers striking at multiple plants potentially leading to higher labour costs and automotive inflation. Dollar is trading at 10-month highs. The US 30-year mortgage rates at record high levels unseen in 23-years. The 10-year US yield are at levels last observed during 2007. Gathering of these dark clouds are starting to show up in the University of Michigan’s US Consumer Confidence index. Since June, American exceptionalism boosted the index to 71.73 clocking a 52-week high. However, with a raft of concerns weighing on the consumers, the index has started to drop the last two months. HARVESTING VOLATILITY EXPANSION USING CME MICRO OPTIONS ON S&P 500 AND NASDAQ 100 INDEX In times of uncertainty, where seasonality leans towards a bullish rally but fundamentals signal a bearish grind, portfolio managers can position to gain from volatility expansion and sharp index moves in either direction. Options can be used to engineer a convex portfolio. Convexity in finance refers to portfolio strategies which enjoy outsized and solid gains while limiting downside risks. Convex strategies deliver non-linear returns with substantially higher gain for every unit of pain. LONG STRADDLE USING OPTIONS ON CME MICRO E-MINI S&P 500 FUTURES Long straddles involve holding a simultaneous long call and long put position at the same strike price for the same expiration period. Let’s look at a hypothetic long straddle using Micro E-Mini S&P 500 Options expiring on 29th December 2023 at a strike price of 4400. The straddle pay-off is visualised in the chart below. This trade will generate positive returns when (a) index rises above 4655, or (b) index falls below 4145, or (c) volatility expands . The premium required for this trade (as of 2nd October 2023): (Premium for Call Option + Premium for Put Option) = (USD 631.7 + USD 636.65) = USD 1268.35. If index rises 10% to 4840: Call option would pay out ~USD 1568 = ((4840 – 4400) x 5 – Premium for Call Option) = (440 x 5 – 126.34) while the put option would expire worthless, so, net profit would be: (Net PnL from Call leg – Net PnL from Put Leg) = (1568 – 636.65) = ~USD 932 By the same measure, the long straddle will suffer losses if the index remains flat or its moves are muted. It also loses money if volatility remains flat or contracts. If index remains at 4400: Both options would expire worthless, so, the position would lead to a net loss of the premium paid = Loss of USD 1268.35. LONG STRADDLE USING OPTIONS ON MICRO E-MINI NASDAQ 100 FUTURES Let’s look at another hypothetic long straddle using Micro E-Mini Nasdaq 100 options expiring on 29th December 2023 at a strike price of 15250. The straddle pay-off is visualised in the chart below. This trade will generate positive returns when (a) index rises above 16416, or (b) index falls below 14084, or (c) volatility expands. The long straddle will endure losses if the index remains flat or its moves within a narrow range. It will also lose if volatility remains flat or shrinks. MARKET DATA CME Real-time Market Data helps identify trading set-ups and express market views better. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs tradingview.sweetlogin.com DISCLAIMER This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services. Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
CME_MINI:MES1!
by mintdotfinance
12
Watch TLT Support at Multi-Decade LowsPrimary Chart : Monthly Chart of TLT Showing Multi-Decade Support Levels. A fair amount of charts have been published lately on the importance of interest rates, and conversely, long-term bonds, government or high-yield bonds. One well-known TradingView publisher @scheplick went so far as to describe the chart of the US 10-year yield as the most important chart for understanding financial markets in this season. His post was entitled, " The Most Important Chart in the World : TLT is an iShares ETF that tracks the performance, generally speaking of long-term US Treasury bonds. Specifically, iShares describes TLT as an ETF that "seeks to track the investment results of an index composed of U.S. Treasury bonds with remaining maturities greater than twenty years." TLT has been in a severe downtrend since March 2020. Bonds yields move inversely to price, and TLT represents, in a rough sense, the price of an index or basket of long-term US government bonds with maturities greater than 20 years. So if long-term bonds remain in a downtrend, then this corresponds to the uptrend in long-term yields that has continued to break higher than anyone expects. The Primary Chart shows TLT having reached long-term, major support at 2009-2010 lows. But a careful examination of TLT's recent lows reveals that it broke slightly below those lows, which isn't a good look for bond bulls in the long term. Supplementary Chart A shows 2009-2010 lows on a monthly chart (similar to the Primary Chart above). Supplementary Chart A However, TLT's reaching such a major support level, with a lower wick forming (at least initially), could imply a move higher in bonds and a concomitant move lower in yields in the near term. But remember that fighting a predominant trend (mean reversion) when it becomes extended can be one of the trades having the lowest success rate. But it can also have a higher reward rate if risk is managed well. SquishTrade does not recommend being long bonds here but rather commenting on how traders may react to major support levels in TLT's downtrend. They may be right or wrong—recall that no one likely expected long bonds to fall as far as they have, and many have been positioned long bonds since TLT was in the upper $90s! The next few supplementary charts emphasize the nature and severity of the downtrend in long-term bonds, as represented here by TLT. The first shows TLT's 200-day simple moving average (SMA). Price is about –12.11% below the 200-day SMA as of mid-session on Friday, September 29/ Supplementary Chart B Next, the VWAP anchored to TLT's long-term cycle high is shown in black. This confirms a long-term, and extreme downtrend in long duration US Treasury bonds. Long-term VWAPs do not always have such a noticeable downward slope. Even a bounce to $125 could present just a mean reversion (retracement) within this downtrend despite creating an uptrend on the daily or even weekly chart, which would be necessary to reach that distant level. Supplementary Chart C A Fibonacci channel below has been applied to a weekly TLT chart. Notice how the channel shows support right where the weekly lower wick formed—the 1.618 level of the channel. To be sure, this does not necessitate a long-term trend reversal (though anything is possible, and this could be the spot). But it does suggest the potential for a near term bounce in the shorter cycles. Supplementary Chart D Anyone wondering whether a long-term uptrend is still in place from the start of TLT's price history should consider the following chart. This shows decisive breaks of several long-term (and progressively accelerating) uptrends. Supplementary Chart E Year-end flows can be supportive of equities, though not always—note the late 2019 exception for CBOE:SPX and $NASDAQ:NDX. If some relief materializes in long-term to intermediate-term bonds, then this could coincide with some support in broader equity markets into year end, though this is by no means guaranteed. Consider the following posts and charts on yield curve inversions posted by @SPY_Master and this author on TradingView: These charts of yield-curve inversions should give one serious concerns about the near-term (3 months to 2 years) health of the stock market. This post is in no way advocating any particular investing or trading strategy. Short-term trading and long-term investing can both be either devastating or profitable (or somewhere in between those extremes) to the person engaging in it. And thanks for reading this and for your encouragement and support. ________________________________________ Author's Comment: Thank you for reviewing this post and considering its charts and analysis. The author welcomes comments, discussion and debate (respectfully presented) in the comment section. Shared charts are especially helpful to support any opposing or alternative view. This article is intended to present an unbiased, technical view of the security or tradable risk asset discussed. Please note further that this technical-analysis viewpoint is short-term in nature. This is not a trade recommendation but a technical-analysis overview and commentary with levels to watch for the near term. This technical-analysis viewpoint could change at a moment's notice should price move beyond a level of invalidation. Further, proper risk-management techniques are vital to trading success. And countertrend or mean-reversion trading, e.g., trading a rally in a bear market, is lower probability and is tricky and challenging even for the most experienced traders. DISCLAIMER: This post contains commentary published solely for educational and informational purposes. This post's content (and any content available through links in this post) and its views do not constitute financial advice or an investment or trading recommendation, and they do not account for readers' personal financial circumstances, or their investing or trading objectives, time frame, and risk tolerance. Readers should perform their own due diligence, and consult a qualified financial adviser or other investment / financial professional before entering any trade, investment or other transaction.
NASDAQ:TLT
by SquishTrade
46