Get started

Community ideas

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
Gold Tracks Purchasing PowerYES, gold does track your purchasing power over LONG PERIODS of time. It tracks the inflation ADJUSTED US Dollar more accurately than it does either the US Dollar OR Inflation. It is a better way to understand macro tides which move the price of gold. While there are periods of lower/diminishing correlation... you should really keep your eye on what has been happening now! Gold has been in a period of INCREASING, statistically significative correlation with Purchasing Power. WHAT DOES THIS MEAN? Well, when gold sniffs out the end of the current rally for US Dollar versus Inflation, then it will tell us on its price chart. You might want to reshare this post and maybe pin it. I will. ======== Below is why I did this post. What makes gold move? I see soo many focus too much on either inflation or the US Dollar. They are often wrong for 2 reasons: 1- Gold tracks neither per say, but inflation adjusted US Dollar (purchasing power). 2- Gold has a tendency to move 3 to 6 months ahead of the next move in purchasing power. Use charts for unbiased, objective evidence gathering. Forget headline news, stories, and narratives. #gold #usdollar #dxy #purchasingpower #inflation
INDEX:DXYShort
by Badcharts
37
How to Altseason Cycle || Cheat Sheet || Bitcoin DominanceMonitoring Bitcoin dominance (BTC-DOM) is a valuable tool for crypto traders. It provides insights into the relationship between Bitcoin (BTC-USD) and altcoins (ALT-USD), helping you make bette decisions about your altcoins and tokens. Spotting Altcoin Seasons: Altcoin seasons are periods of heightened interest in different cryptocurrencies and tokens, often causing their total market cap to surpass that of Bitcoin. Understanding BTC-DOM's movements can help you anticipate how the market might react: 1. BTC-DOM Goes UP: When BTC-DOM rises and BTC-USD also climbs, it often indicates a bullish phase for Bitcoin. During this time, ALT-USD may stay relative stable and face sideways. If BTC-USD experiences a decline while BTC-DOM is on the upswing, ALT-USD might witness a significant dump. When BTC-USD moves sideways and BTC-DOM follows suit, ALT-USD tends to maintain a stable course. 2. BTC-DOM Goes SIDEWAYS: If BTC-DOM remains relatively stable and BTC-USD sees an uptrend, ALT-USD often mirrors this upward movement. Conversely, if BTC-USD takes a dip while BTC-DOM remains flat, ALT-USD tends to follow suit with a decline. When both BTC-USD and BTC-DOM exhibit sideways patterns, ALT-USD typically remains in a state of relative stability. 3. BTC-DOM Goes DOWN: A decrease in BTC-DOM coupled with a rising BTC-USD often leads to a pumps for ALT-USD. When BTC-USD experiences a decrease while BTC-DOM falls, ALT-USD may stabilize or enter a sideways phase. If BTC-USD moves sideways while BTC-DOM declines, ALT-USD often witnesses an upward movement. Remember that while these trends offer valuable insights, the crypto market is highly volatile. Low cap altcoins can behave unexpectedly even when Bitcoin dominance suggests a particular trend. Therefore, use Bitcoin dominance as one of many tools in your investment strategy, and always conduct thorough research before making decisions.
by Vestinda
14
NIKE | JUST BUY ITNike topped Wall Street estimates for first quarter profit on Thursday as higher prices of its sneakers and apparel helped offset a hit from waning demand and persistent cost pressures, sending its shares up about 8% in extended trading. Nike (NKE) is the largest apparel company in the world, with leading positions across different categories and regions. The company is currently facing challenges such as elevated inventory levels, inflationary pressure, and slow growth in China. Such issues have resulted in the stock dropping by 19% YTD. Although these headwinds are serious, I believe the company's durable brand, leading position, and high-quality products should allow it to come out stronger on the other end. 'Nike is a brand that is of China and for China' -John Donahoe Like every other apparel and retail company, Nike thought post-pandemic demand would continue, so it increased production, which led to inventory levels hitting an all-time high in Q1-FY22, but as we know, that wasn't the case. Although NKE's inventory level is down from all-time highs, investors are still concerned, especially when inflation is eating into people's pockets and growth in China is slowing. Inflation in North America has come down to 3.7% from its peak in June at 9.1%, but it is still a concern in Europe (6.1% in the EU union). As you can see from the graph below, sales in China have been decreasing for the past two years. There are multiple ways one can explain this: COVID related lockdowns resulted in the shuttering of some stores. Plus, Nike and other apparel companies started facing a backlash in China in 2021 due to the alleged use of forced labor in cotton production. However, if the company is successful at expanding into China, then we can expect a lot of room for growth. Now that I have addressed the problems that are facing Nike, let me explain why I believe the company will overcome them. Nike sponsors the most well-known athletes such as Cristiano Ronaldo (+600 million Instagram followers), LeBron James, Michael Jordan, the late Kobe Bryant, Rafael Nadal, Tiger Woods, and more. This has helped the company build a loyal customer base and further boost its brand equity. With a loyal customer base comes pricing power, and as Warrant Buffet said: Nike's pricing power is no joke. Its shoes have reached a level where they are considered luxury, with some selling for more than the $10,000 mark. In 2017, Nike's median price for a shoe regardless of gender was $80, which is $10 more than its biggest competitor, Adidas. I know 2017 was a long time ago, but shoe prices have increased since then, and I believe Nike is still in the lead given their dominant market position. Plus, Nike targets mostly the age demographic of 25 and 34. These are people who have not settled in yet. They just graduated college with extra income to spend on things such as expensive shoes. I believe this pricing power will continue as the company continues to sponsor talented upcoming athletes to build trust with customers. Another way to measure Nike's brand power is by comparing its marketing spending against its peers. Nike's marketing budget in FY 23 was $4 billion, or 7.9% of revenue. On the other hand, Adidas spent 38% and Under Armour 11%. These companies have been allocating more of their revenue towards marketing but have experienced nowhere near the growth Nike has. NKE's association with well-known athletes in the U.S. has allowed them to have a 96% awareness rate, 53% usage rate, and 43% loyalty rate. Going forward, I expect the company's brand will remain high-quality due to sponsorships, high-quality products, and market-leading technology. Founded by Bill Bowerman and Phil Knight in 1994, Nike has come a long way from its first store in Portland, Oregon. As of May 31, 2023, the company had 369 stores within the U.S. and 663 internationally, operating in more than 190 countries. Stores include franchised stores and third-party retailers. The firm owns multiple brands such as Jordan, Converse, and Nike. The company derives sales from four main segments and across four regions. I excluded Converse (4.74% of revenue) from the graphs below because I wanted to focus on the Nike brand. The company's app, NikePlus, has more than 160 million users. On a trailing free cash flow basis, the stock yields over 3.3% relative to its enterprise value. My ~$104 May 24 PT implies a 28.00x P/E and 20.00x EV/EBITDA. Both multiples are below the ten-year NTM average and in line with the median. I project revenue to compound at a rate of 6.47% over the next three years, driven by market growth and new products, while shares decrease at a rate of 2.67%, driven by stock buybacks. The company is forecast to spend $12.1 billion on share repurchases over the same period. Additionally, I believe the company still has room for margin improvement driven by price increases and DTC mix (direct-to-consumer). In FY 2019, DTC sales constituted 31% of revenue, and that figure stood at 44% in FY 2023. Although NKE is trading at a premium compared to peers, I believe it is reasonable considering its scale, high-quality products, and strong brand. The first risk that I would associate with NKE is competition. The company competes with conglomerates such as Addidas, Puma, New Balance, Under Armour, and more. Additionally, e-commerce has made it very easy for anyone to start their own footwear brand. Other key risks to my rating include supply chain distributions, a recessionary environment, and slow growth in China. Finally, we can point out that NKE appears technically oversold heading into the Q1 earnings report. From the chart , there has been relentless selling pressure over the last four months since NKE was trading at $130 per share. The potential that NKE delivers a "good" earnings report with encouraging guidance, brushing aside fears the company is facing a deeper deterioration in its operating environment could be enough for shares to reprice higher. Simply put, our take is that NKE bears have gone too far, opening the door for bulls to take control. The bottom line is that Nike is currently experiencing headwinds such as elevated inventory levels, inflationary pressure, and slow growth in China. Every business goes through similar challenges at one time or another, but I believe Nike is well-positioned to overcome these issues due to its durable brand, high-quality products, and leading position. I expect the company to keep endorsing high-quality athletes to elevate its brand equity and further strengthen its pricing power. My valuation implies a price target of ~$104 for May 31, 2024. If you into NIKE brand you can watch Air film and read Shoe Dog book as well
NYSE:NKELong
by moonypto
20
EUR/CAD Long and EUR/USD LongEUR/CAD Long • If price corrects and a tight flag forms, then I'll be looking to get long with either a reduced risk entry on the break of the flag or a risk entry within it. • If my entry requirements are not met then I will simply wait until another setup which meets my plan materialises. • If there's any ambiguity then I will not place a trade on this pair. EUR/USD Long • If price corrects and a tight flag forms, then I'll be looking to get long with either a reduced risk entry on the break of the flag or a risk entry within it. • If my entry requirements are not met then I will simply wait until another setup which meets my plan materialises. • If there's any ambiguity then I will not place a trade on this pair.
Long
by StewySongs
9
Is the Finnish Bank OmaSp about to collapse?The charts are suggesting caution. On the above 10-day chart: 1) Double top in price. 2) Regular bearish divergence. The higher the timeframe you look the more ugly this divergence is. Laterally I’m wondering if the small banking crisis that hit the US is now venturing to other parts of the world. OmaSp does not appear to be in isolation. There were some tell-tell signs before the collapses of Silicon Valley and Signature Banks. (No one in Europe heard of those banks!) They were: 1) Strong bond market exposure. AND 2) Same TA as above. “OmaSp has been active in the bond market since 2013” says their website. Very true.. Until recently you could get the information on their Bond market exposure.. You click on the WebPage today and you get: www.omasp.fi “Unfortunately the webpage you were looking for can not be found” Oh dear… Ww Type: Trade, short Risk: <=3% Timeframe: Candles closing at 19 and under. 10-day Silicon Valley Bank before after 10-day Signature Bank before after
OMXHEX:OMASP
by without_worries
47
Crude Oil is Unchanged since 1985Adjusted for inflation as measured by FRED:CPIAUCSL , the price of crude oil hasn't changed since the price peak in 1985. The back and forth oscillations in supply and demand over the decades has left us right where we started back when I was in college 38 years ago! The price of a first class stamp in 1985 was 13 cents and is now 66 cents. So, the price of a stamp is up 5-fold but the nominal price of crude oil was $31/barrel back in 1985 and is just over $90 now for a 3-fold increase. So when you hear over and over in the general media that "crude oil is up" and devastating the economy, you can rest assured that "we have been here before". Yes, prices aren't as low as they were when we had Covid-Crash prices of $25/barrel but at least we don't have $140+ that we had back in 2008 prior to the deleveraging crash called the GFC.
TVC:USOIL
by timwest
48
Nvidia Hasn’t Done This Since JanuaryNvidia is on pace for its worst month in a year, but some dip buyers may see opportunity in the semiconductor giant. The first pattern on today’s chart is the 100-day simple moving average (SMA). NVDA has been holding that line since Thursday, one session after the Federal Reserve hammered the stock under $410. It was the first test of the SMA since early January, when the shares were under $150. Is the long-term trend still intact? Second, the current price range is near the lows of late June and mid-August. Intermediate-term support may remain in effect. Third, a falling trendline marks the decline that began in early September. But NVDA made a lower low on Monday and a higher high. That kind of bullish outside day may suggest that short-term slide is nearing an end. Finally, stochastics are trying to rebound from an oversold condition. TradeStation has, for decades, advanced the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more. Important Information TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means. This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates. Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: www.tradestation.com .
NASDAQ:NVDA
by TradeStation
11
S&P Double TopHistory and Introduction Everyone in the market today remembers broadly the financial response to C19. It We see it every time that we look at the price chart and we see the spike down and the V recovery. What a lot of people may not remember is the investigation into SoftBank for essentially causing a short squeeze by use of call options and gamma hedging. When that news story came out my long term assumption was we would be returning to the C19 low and that has informed every idea I have put out since then. News story www.investmentwatchblog.com An Explain Like I am 5 From Reddit When you write a call as a seller you essentially take a short position against the stock delta wise When SoftBank bought loads of calls that were out of the money then the writers had large negative delta positions against these tech stocks. One common way to offset a negative delta is you can hedge with owning shares to offset the negative position from the calls you write. As the calls were heavily wrote then shares were added to offset risk which contributed towards momentum. As the stock positions were entered it drove up price of stock which put those out of the money options closer to the money leading to more share purchases while SoftBank continued to purchase more and more calls leading to an increased share price between delta hedging and general market momentum. Someone can correct me if I’m off but that’s my broad description www.reddit.com Essentially when that news story came out I, personally, understood all these gains were unsustainable and were going to be given back. This was in addition to all of the other stimulus spending that was going on. There was still gains to be made or lost speculating in swing trading but my ultimate goal was to not buy the top and not to sell bottoms. Main Chart Analysis The main chart has been left pretty simple. We have the Gaussian Channel on top and we can see that in the 70s there were two points in time investors or traders got to buy below the gaussian channel. Fortunes could be made by buying below the channel and merely selling above the guassian channel. Loading up on dividend stocks would have also been very prudent. We can also see the opportunity came again in the 2000s. We can also see in purple the tops where the ADX has been at 20 or below. The 70s dip had the low ADX but the 2000s did not. It is not a necessary condition that the ADX be low for price to go below the gaussian channel, but it is suggestive that with the current low monthly ADX we have a fair shot of getting there. We also see that similar to the 1970s the ADX has been declining over each high for over the last decade. Not a good set of circumstances to be in. The right side of the chart shows the double top itself without any indicators and on the weekly time frame. As it stands right now it looks like a “lower high” double top but price could rally up 17% from the current level and this idea is still valid. The last top took over 300 days to develop and start to sell off to create the valley low. We can still have a significant amount of sideways as bulls get exhausted. Double Tops Double tops are suppose to have a flat base before the uptrend begins and then return to the flat base per Bulkowski, who is broadly considered to have written one of the modern trading “bibles.” www.thepatternsite.com The chart below shows what I consider the flat base to be. The fib draw on the double top does get us right into that range. Another thing to remember is that we don’t need to see an impulse that looks strait down. It is quite probable that price action takes out the valley low and then rally to test previous support as resistance. Here is an example of a double top on bitcoin from the 2018 bear market. The 4-hour chart provides the detail of a double top that developed over 25 days from the time the began to top to rejection oat previous support. So, not only could price action go sideways for some 300 days as the second half of the double top is created, but once price sells off we could spend considerable time in a suckers rally as price returns to previous support and tests it as resistance. Quarter Chart Long term, we have a chance to buy in the quarterly gaussian channel. This would require significant sidewise-ish or channel-ish price action for a decade. Dow Theory Basic Dow theory on bull markets has three phases, accumulation (smart money), public participation, and excess. From there we enter distribution, public participation, and panic. One tenant of Dow theory is indices must confirm one another. www.investopedia.com My linked idea will show that I thought that NDX would have a bull trap. That idea has been invalidated because rather than forming a classic bull trap NDX is likewise in a double top. But having both NDX and SPX in a topping formation suggests that we are in distribution. Since we are talking about Dow theory lets look at the DJI. T Guess what? he Dow looks like it is in a double top as well. Having all three indices appear to be topping within 5 percent of previous ATH is pretty bad. NASDAQ/S&P Since the Nasdaq is more volatile than the S&P we can look for bearishness in the NDX/SPX pair to see broader bearishness in the market. I am personally staying away from the Nasdaq as an investment as possible until it reaches its own double top target against the S&P. Crypto Assets Since I believe the SPX is a index that could be topping for over 300 days and having several consolidations on the way down I would expect some assts to go crazy as investors rotate and individual assets have blow off tops. I expect some massive rallies with some select cryptos and then a lot of despair. A lot of movement can happen in crypto over the lifespan of this idea. Here is bitcoin. What is the traditional target of a rising wedge? The beginning of the wedge. And there is no guarantee that bitcoin will set a higher high. If it does I am selling and probably never returning. Conclusion As someone who thinks the United States have been off sound money since the creation of the Federal Reserve I see all of this as the consequences of late-stage socialism. Subsidies to support government initiatives, transfer payments, bloated public services, debasement of the money supply all lead to public excess in the stock market. The United States as been more resilient than a lot of other countries in warding off the pernicious influence of socialist actors but once the Federal Reserve was created the ultimate conclusion was clear, it was just a matter of timing. Of course, due to inherent theory and model failure of most socialists they don’t realize it is the socialist policies that got the market here. Just like most don’t realize we are in distribution. The distribution phase can take a long time and I expect to be ignoring a lot of news. It’s a distraction. I am going to make the trades and investments as I see them. The main chart focuses on what happened to the SPX in two bear markets, one in the 70s and another in the 2000s. What happened to sound money (precious metals) in the 70s and 2000? Quite simply they went crazy. What happened to the Gold/SPX ratio? They reached muti-decades lows. If the SPX is topping then I would expect to see a massive upside pattern on gold. And I do. There is a cup and handle or ascending triangle. Based on that the time for me to rotate back into the S&P generally would be when the SPX/Gold ratio hits a double bottom from the low of 2011 Likewise with Silver and the S&P I think it is a decent time to take my kids to the precious metals store.
SP:SPXShort
by This_Guhy
17
HOW-TO evaluate volatility quality?The Volatility Quality Index (VQI) is an indicator used to measure the quality of market volatility. Volatility refers to the extent of price changes in the market. VQI helps traders assess market stability and risk levels by analyzing price volatility. This introduction may be a bit abstract, so let me help you understand it with a comparative metaphor if you're not immersed in various technical indicators. Imagine you are playing a jump rope game, and you notice that sometimes the rope moves fast and other times it moves slowly. This is volatility, which describes the speed of the rope. VQI is like an instrument specifically designed to measure rope speed. It observes the movement of the rope and provides a numerical value indicating how fast or slow it is moving. This value can help you determine both the stability of the rope and your difficulty level in jumping over it. With this information, you know when to start jumping and when to wait while skipping rope. In trading, VQI works similarly. It observes market price volatility and provides a numerical value indicating market stability and risk levels for traders. If VQI has a high value, it means there is significant market volatility with relatively higher risks involved. Conversely, if VQI has a low value, it indicates lower market volatility with relatively lower risks involved as well. The calculation involves dividing the range by values obtained from calculating Average True Range (ATR) multiplied by a factor/multiple. The purpose of VQI is to assist traders in evaluating the quality of market volatility so they can develop better trading strategies accordingly. Therefore, VQI helps traders understand the quality of market volatility for better strategy formulation and risk management—just like adjusting your jumping style based on rope speed during jump-rope games; traders can adjust their trading decisions based on VQI values. The calculation of VQI indicator depends on given period length and multiple factors: Period length is used to calculate Average True Range (ATR), while the multiple factor adjusts the range of volatility. By dividing the range by values and multiplying it with a multiple, VQI numerical value can be obtained. VQI indicator is typically presented in the form of a histogram on price charts. Higher VQI values indicate better quality of market volatility, while lower values suggest poorer quality of volatility. Traders can use VQI values to assess the strength and reliability of market volatility, enabling them to make wiser trading decisions. It should be noted that VQI is just an auxiliary indicator; traders should consider other technical indicators and market conditions comprehensively when making decisions. Additionally, parameter settings for VQI can also be adjusted and optimized based on individual trading preferences and market characteristics.
by blackcat1402
18
British Pound Plunges as Bank of England Holds Interest RatesI bring today is far from uplifting. As you may already be aware, the British Pound (GBP) has taken a significant hit in the wake of the recent decision by the Bank of England (BoE) to hold interest rates steady. This unforeseen turn of events has left many traders like yourself feeling disheartened and uncertain about the future of GBP. The BoE's decision to maintain interest rates has sent shockwaves throughout the financial markets, triggering a substantial decline in the value of the British Pound. This unfortunate turn of events has left the currency vulnerable and exposed to further downside risks. While it is indeed disheartening to witness such a decline, it is crucial for us to adapt and seize opportunities even in the face of adversity. Given the current state of affairs, I would like to encourage you to consider taking advantage of the situation by exploring short positions on GBP. The downward trajectory of the British Pound may present an opportunity for you to potentially profit from this unfortunate turn of events. However, please remember that trading involves risks, and it is essential to conduct thorough analysis and consider your risk tolerance before making any investment decisions. In times like these, it is crucial for traders like yourself to stay informed and adapt to the ever-changing market conditions. Monitoring economic indicators, central bank decisions, and geopolitical developments will be key in navigating the turbulent waters of the foreign exchange market. If you require any further information or assistance regarding shorting GBP or any other trading-related queries, please don't hesitate to comment below. We are here to support you and provide you with the necessary guidance to make informed trading decisions during these challenging times. Remember, even in the face of adversity, the trading world remains full of opportunities. By staying informed, adapting your strategies, and seeking professional advice, you can navigate these uncertain waters and potentially turn this unfortunate situation to your advantage.
TVC:BXYShort
by bryandowningqln
15
Hawkish Fed! Strong Dollar! - What are the markets expecting?he Fed has kept interest rates steady as expected, but Chairman Jerome Powell's statements were much more hawkish than anticipated. In summary, 12 out of 19 Fed members are calling for one more interest rate hike this year. No interest rate cuts are expected this year. Inflation is expected to remain high over the next 12 months. Tightening and balance sheet reduction will continue. An increase in unemployment is expected for 2024. Even if there's no interest rate hike this month, there could be one more increase later in the year. Key takeaways from the monetary policy meeting minutes and Powell's remarks: The year-end interest rate expectation for 2023 has been raised to 5.6%, and the expected rate for 2024, initially at 4.6%, has been increased to 5.1%. Additionally, the expectation for 2025, previously at 3.4%, has been raised to 3.9%. Long-term interest rates will remain high, with the long-term rate expectation at 2.5%. Unemployment expectations: 3.8% for 2023 4.1% for 2024 There is a bias towards an increase in unemployment. Core inflation expectations: 3.7% for 2023 2.6% for 2024 2.3% for 2025 2.0% for 2026 Expectations suggest a gradual decline rather than a rapid one. With the release of the monetary policy minutes, 2-year U.S. Treasury yields have risen to 5.1%, which is particularly negative news for stocks and gold. MARKET EXPECTATIONS: Gold: Initially, gold may continue to rise to the range of 1,960-1,963 as an immediate response. However, the continued high-interest environment will exert downward pressure on gold, and we may see a decline to around 1,880 levels after reaching 1,960. U.S. Stock Indices: Given the high-interest rates and high inflation, we shouldn't expect significant gains in the stock market. Currently, it's prudent to view every increase as a selling opportunity. USD: The strengthening of the dollar is expected to persist, especially against currencies of countries signaling relaxation in their monetary policies. The dollar is likely to maintain its strength for some time. EUR: The European Central Bank (ECB) took a dovish stance in its recent interest rate decision, reducing the possibility of further rate hikes. Although there has been a slight decrease in Eurozone inflation data, we may see a chart indicating USD dominance and a downward trend in the EUR/USD pair. JPY: Japan remains the only country with negative interest rates (-0.10%) and a commitment to a loose monetary policy, suggesting that the depreciation of the yen will continue. GBP: The Bank of England (BoE) decision and statements tomorrow will be crucial for the pound. However, our expectation is that tomorrow's announcements will resemble the Fed's hawkish stance, leading to some strengthening of the GBP. We will publish a new analysis after tomorrow's meeting to provide an update on the pound's situation. Oil: Today's U.S. crude oil inventory data came in below expectations, indicating that OPEC's production cuts are still in effect. We expect oil prices to reach $100 due to ongoing production cuts, which will negatively impact both stock markets and inflation for some time.
by TradeAndMeApp
25
The Power of Support Lines: A Bullish Trend on the Horizon?Introduction: In technical analysis, support lines play a crucial role in identifying potential trends and predicting future market movements. When multiple levels of support converge at higher levels, it can indicate a strong bullish trend. In this article, we will explore such a scenario and discuss how it could impact the overall direction of the market. The Case Study: Let's consider an example where the support lines for the weekly, daily, and hourly charts all intersect at a higher level. This convergence suggests that there may be a strong upward pressure pushing prices towards new highs. However, before jumping into conclusions, let's analyze each chart individually to gain a better understanding of the situation. Weekly Chart ]Analysis: On the weekly chart, the support line has been consistently above the price range, indicating a solid base of support. As long as this level remains intact, the bulls have control over the market. Moreover, the RSI (Relative Strength Index) is hovering around the mid-50s, which indicates a neutral market condition. Daily Chart Analysis: Moving down to the daily chart, we notice that the support line is also above the price range, confirming our initial observation from the weekly chart. Additionally, the MACD (Moving Average Convergence Divergence) indicator is showing a bullish divergence, suggesting that the uptrend may continue. Hourly Chart Analysis: Finally, let's examine the hourly chart. Here, we see that the support line is once again above the price range, reinforcing the idea of a solid base of support. Furthermore, the Stochastic Oscillator is reading near its oversold territory, signaling a potential bottom. Conclusion: While the intersection of these three support lines at higher levels is certainly intriguing, it's essential to remember that no single piece of evidence can guarantee a specific outcome. Other factors like economic indicators, geopolitical events, and investor sentiment must also be taken into account when making trading decisions. However, if we combine the findings from all three charts with other relevant data points, we might infer that the market is poised for a potential bullish move. It's important to monitor the situation closely and adjust our strategies accordingly based on further developments. Ultimately, the key to successful trading lies in staying adaptable and open to changing circumstances.
NSE:STYRENIX
by stocktechbot
7
Unveiling Crypto Market Insights: RSIHello, market enthusiasts! In previous post , we described a group of technical indicators - Oscillators, providing a solid foundation for today's discussion on RSI. The Relative Strength Index (RSI), developed by J. Welles Wilder, is a momentum oscillator that measures the speed and change of price movements. Calculating RSI: RS = Average of x days' up closes / Average of x days' down closes RSI = 100 - (100/(1+RS)) Interpreting RSI: RSI is plotted on a vertical scale of 0 to 100. Movements below 30 are considered oversold, and movements above 70 are considered overbought. In trending markets, it is common to adjust the conditions to 80 and 20, respectively. In the book "Technical Analysis of the Financial Markets," John J. Murphy describes the scenarios where RSI holds the greatest potential. "In my personal experience with the RSI oscillator, its greatest value lies in identifying failure swings or divergences that occur when the RSI is above 70 or below 30. Let's clarify another crucial point regarding the use of oscillators. In any strong trend, either up or down, an extreme oscillator reading typically appears sooner or later. In such cases, claims that a market is overbought or oversold are usually premature and can lead to an early exit from a profitable trend. In strong uptrends, overbought markets can remain overbought for an extended period. Just because the oscillator has moved into the upper region is not a sufficient reason to liquidate a long position (or, even worse, short into a strong uptrend)." Failure Swings: Failure swings can help us identify trading triggers. These occur when the RSI is above 70 or below 30. A top failure swing happens when the RSI (above 70) fails to exceed the previous peak in an uptrend, followed by a downside break of the previous trough. The opposite applies to a bottom failure swing. Now, let's shift our focus to the BTC/USD chart: Today, we are analyzing the price movements of BTC/USD on a 4-hour timeframe. The range marked with the blue lines represents last week's trading range. The current RSI value is approximately 75 (indicating overbought conditions), and the price has just broken the previous week's range high. Given the current price action, we should be vigilant for potential setups: If the price remains above the previous week's high and the RSI remains in the overbought area, we could watch for: a. A robust trend in which both price and RSI continue to ascend. b. The potential setup of a "top failure swing," which would occur if the price rises further, but the RSI fails to surpass the previous peak in an uptrend, followed by a downside break of the previous trough. Signaling to exhaustion of the trend. If the breakout turns out to be a false breakout or a fake-out : c. A retracement to the range low with the RSI in the oversold area. d. A breakout below the range low and a bottom failure swing. e. Sideways price action in the previous week's range. f. other For the purposes of this post, we've highlighted some of the setups we discussed theoretically in today's post. Keep in mind that each of these setups takes time to unfold. Additionally, note that in trending markets, claims that a market is overbought or oversold are typically premature and can result in an early exit from a profitable trend. Please let us know which option you find most likely. Additionally, share which method of using RSI has proven to be the most effective in your trading strategies.
BITSTAMP:BTCUSD
by Bitstamp
7
The predictable Jerome Powell..!Jerome Powell is likely to say the following in the upcoming conference on Wednesday, September 20th: * The Federal Reserve is committed to bringing inflation down to its 2% target. * The Fed is prepared to continue raising interest rates until inflation is under control. * The Fed is aware of the risks of a recession, but it believes that these risks are outweighed by the risks of high inflation. * The Fed is monitoring economic data closely and will adjust its monetary policy as needed. Powell may also discuss the following topics: * The Fed's plans to reduce the size of its balance sheet. * The impact of the war in Ukraine on the global economy. * The Fed's outlook for the US economy. "We expect economic growth to slow down below its average in the coming months, but we are important to avoid a recession." Here are some specific quotes from Powell's previous FOMC press conferences that he may repeat or echo in the upcoming conference: * "Inflation is running far too high, and we are strongly committed to bringing it back down to 2%." * "We will continue to raise interest rates until we are confident that inflation is on a sustainable downward path." * "We understand that high inflation is causing hardship for many Americans, and we are committed to doing everything we can to bring it down." * "We are monitoring economic data closely, and we will adjust our monetary policy as needed." * "We are committed to a smooth transition to a more neutral monetary policy stance." "The US job market remains strong, with low unemployment and high job openings." It is important to note that Powell's remarks at the upcoming FOMC conference will be based on the latest economic data and the FOMC's assessment of the risks and uncertainties facing the US economy. However, e market reaction to a possible FED pause is almost unpredictable!
NASDAQ:NDX
by Moshkelgosha
9
Where is the Euro Headed?Despite unprecedented rate hikes up to 450 basis points over the last 12 months the Euro has lost ground to the US Dollar for the last nine straight weeks. As a result, the Eurozone interest rates are historical highs. Currencies desire nothing more than higher rates. The Euro should have popped but instead it flopped after the ECB’s rate hiking decision last Thursday. That says something about the underlying economy and the expectations for interest rates ahead. This note puts forth data backed arguments that macroeconomic fundamentals in Europe is visibly weak. In sharp contrast, the robust economic fundamentals in the US provide strong tailwinds to the US dollar. Consequently, the Fed has great monetary manoeuvring space which will impose bearish pressure on the Euro. Having cranked up rates to a peak unseen before, the ECB’s hands are tied with little room for further hikes despite its hawkish tone. This paper posits a short position in CME Micro EUR/USD Futures expiring in Dec 2023. To seize opportunity from a weakening Euro, a short position with an entry at 1.071 combined with a target at 1.035 and hedged by a stop at 1.1025 will deliver an expected reward-to-risk ratio of 1.14x. MONETARY POLICY TRANSMISSION TAKES TIME Over the last year, the ECB has increased interest rates, an unprecedented ten times to combat surging inflation. That is a full 450 basis points. Yet inflation remains sticky and persistent. Why? One obvious reason is monetary policy transmission. Monetary policy transmission is the process through which a Central Bank’s monetary decisions impact the economy and the price levels. The mechanism is characterised 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. DATAPOINTS SIGNAL WEAKENING ECONOMY Selected data from the minutes of the Monetary Policy Meeting of ECB Governing Council held in July points to growing weakness in Europe. 1. Yield Curve Inversion Deepening: Together with negative euro area data, the inversion has reignited recession concerns. For now, the Euro area’s equity & credit markets remain resilient, hoping for a soft landing. 2. Sharp Contraction in Euro Area: Euro Area Composite PMI has been declining since April 2023 and in July it has fallen below 50. The dynamics are consistent with a weak GDP performance for the second and third quarters of the year. Housing and business investments are estimated to have declined. 3. Shrinking Demand for Loans: The latest bank lending survey signals further tightening of credit standards and sharp drop in loan demand in Q2 across businesses and households. The reported demand for loans among corporations had fallen to an all-time low since the start of the survey in 2003 and, for the first time, was lower than at the height of the global financial crisis. 4. Growth could stall due to over correction: Growth could slow far more sharply if effects of monetary policy were more forceful than expected, or if the world economy weakens dampening demand for euro area exports. AFTER UNPRECEDENTED RATE HIKES, WHAT’S NEXT? As evident from weakening signals cited above, the ECBs hands are tied. ECB President Lagarde has little option other than maintaining a hawkish tone to manage expectations. When the ECB regroups again in December, the likelihood of rate hike is thin. Hawkish pause? Maybe. As Katie Martin writes in her weekly opinion piece for the Financial Times, “few truly believe the central bank really would raise rates further, especially while the region’s economy feels the strain from the tighter policy enacted so far and from the impact of weaker Chinese demand on German manufacturing.” ECB’s euro area growth forecasts are on the decline. The central bank expects 0.7% growth for this year (down from 0.9% as previously estimated). For 2024, the ECB now forecasts 1% growth (compared to 1.5% growth projected previously). Forecasting the future is hard. It is evident from a survey of economists (see chart below) conducted by Bloomberg earlier this month. The market expectations are for rates to stay flat at 4% for now with rate reductions from Q2 next year. When these expectations become consensus, Euro weakening will accelerate. DOLLAR CONTINUED STRENGTH AGAINST THE EURO The Euro has shed more than 5% against the greenback since mid-July. Shaky fundamentals and an elevated risk of recession have raised questions on ECB’s ability to continue hiking. Contrast this against the conditions in the US. The US economy has been marvellously resilient and set to have one of its best years yet. This backdrop emboldens the US Fed to take on an aggressive monetary posture. TRADE SET UP Interest rates at record elevated levels combined with weakening economy and feeble prospects, collectively pushes recession risks higher in the eurozone. This will corner the ECB into a pause or even cause it to hint at rate cuts during the December meeting. As a result, the Euro will be pressured lower against the US dollar. To ride on the opportunities from a weakening Euro, this paper posits a hypothetical short position in CME Micro EUR/USD Futures expiring in Dec 2023 (M6EZ2023) with an entry at 1.071 combined with a target at 1.035 and hedged by a stop at 1.1025, delivering an expected reward-to-risk ratio of 1.14x. Each lot of CME Micro Euro Futures contract provides exposure to 12,500 Euros. It is quoted in USD per Euro increment. Each pip i.e., 0.0001 per Euro delivers a P&L of USD 1.25. • Entry: 1.071 • Target: 1.035 • Stop: 1.1025 • Profit at Target (hypothetical): USD 450 ( = 0.036; 360 pips; 360 x 1.25 = 450) • Loss at Stop (hypothetical): USD 393.75 ( = -0.0315; -315 pips; -315 x 1.25 = -393.75) • Reward-to-Risk (hypothetical): 1.14x 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 www.tradingview.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:M6E1!Short
by mintdotfinance
8
Crude Oil versus Stock PricesDrops in crude oil have an impact on stocks in a positive way. The important point to remember is that falling crude oil prices have a lagged effect on the overall equity market. How long is that lag? It changes over time but it is approximately 6 months. When oil prices rise, it too has a lagged effect on the market by a variable amount of time. Of course, it depends on many factors, regulatory and global risks constantly change. I am not covering the risk of rising oil price with this chart, only reinforcing the positive impacts of falling oil prices. Oil prices are the most-watched price since we see them on gas station signs everywhere we drive and yet it doesn't have instant impact on the economy. Look at the history of the price of crude oil and the price of stocks. They are related as you can see when I plot the large drops in crude and the price level of stocks when that drop occurred. Tim 9/18/2023 10:19AM EST
FX:SPX500
by timwest
4
Big Citibank Opportunity Citibank Opportunity - NYSE:C Company Market Cap: $82.2 billion Share Price Today: $42.68 Dividend: 0.53c per quarter (Annual Dividend of c.$2.06) Annual Dividend Yield: 4.82% Next Earnings Report: Friday 13th October 2023 Citibank (Citigroup) is the 20th largest bank in the world & a member of Global Systemically Important Financial Institutions (G-SIFIs) meaning it has stricter prudential regulation such as higher capital requirements and extra surcharges and more stringent stress tests. under the scheme deposits can be 100% guaranteed in the event of a crisis, which is not the case for smaller banks that are not considered systemically important. This additional security can add weight to a longer term hold for Citibank combined with a good 4.82% dividend yield. Citibank has recently been in the headlines with negative news for completing a management re-org with substantial lay-offs. Whilst the news is interpreted as negative, the chart appears to reaching a point of exhaustion after 31 months of downward price pressure and a roughly 50% reduction in price from $81 down to $42. We may be forming a 3rd higher price cluster or price launch pad here at $42. Earnings release is in a 4 and half weeks on 13thOctober and after 13 quarters of positive earnings the trend is green. Its worth noting that upon earnings release, the price can capitulate or ascend aggressively (historically this has been the way), this is why it is important to be placing bids or positions well in advance of the release (now) and on the day of the release we should be nimble and on our toes to capitalize or reduce risk with stop losses. Obviously for long term position players this is not all that important, we have our long term target and stop loss on the chart. There is a long term trade opportunity with a stop loss at BASE 2 at $34.37. As you can see the trade has a Risk/Reward of 4:1. People who want to play it even safer could wait for a bounce off BASE 2 but for me a retracement this low could mean lower price momentum and a break of the RSI resistance. This is why I am inclined to take a position now off this base well in advance of the earnings release. This is not my typical style of trade however I could not pass up the chart given the mid-term 31 month 50% reduction and exhaustion in price combined with the higher bases on the longer term trajectory, and to be honest the negative news really got me the contrarian in me rustled. If you look hard enough you can see a potential long term ascending triangle forming out into the 5 year time horizon. As a cherry to the trade, the dividend yield is considerably high at 4.82% for a systemically important institution – to big to fail. In Summary - Citigroup is one of the top 20 banks in the world and is considered systemically important. - Citigroup share price has been declining 31 months with an approx. 50% reduction in price. - Three Price Bases establishing higher lows are reinforced by a rising RSI support line. - To fully take advantage of the earnings release on 13th October 2023 positions need to be placed now as the stock is extremely volatile on the day of release. - If the RSI support line fails to hold this could be a warning signal of a break down into STRONG SUPPORT ZONE (Red). - The dividend yield is considerably high at 4.82% for a systemically important institution offering a little incentive for a longer term hold.
NYSE:CLong
by PukaCharts
21