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FOMC

🔥 Bitcoin Losing The Short-Term Uptrend? BAD Reaction To FOMCWith the FOMC practically concluded, the market is reacting with a strong sell-off in both crypto and stocks. The FED has announced to keep their interest rate stable for the 4th time in a row, as it wants to see a stronger reduction in inflation before cutting rates. Higher rates for longer, the market doesn't like that. As seen on the chart, BTC is trading in a decent uptrend for the last week. However, there's a risk that the FOMC will mark a top and that the bears will take over from here. Keep in mind, bears are still waiting patiently after the post-ETF sell-off. If BTC breaks through the bottom support, we could quickly fall back towards 41k or even lower.
INDEX:BTCUSDShort
by FieryTrading
4
THE KOG REPORT - FOMCThe KOG REPORT – FOMC This is our view for FOMC, please do your own research and analysis to make an informed decision on the markets. It is not recommended you try to trade the event if you have less than 6 months trading experience and have a trusted risk strategy in place. The markets are extremely volatile, and these events can cause aggressive swings in price. On Sundays report we said we had 3 levels in mind for the week ahead. 2010-12, 2030-35 and extension level 2045-50. It’s this level here we were expecting a move into for a potential tap and bounce, however, on Monday we activated long and took our trades from the 2018 completing another Excalibur target today around 2043. We’re still within the plan on the KOG Report, but FOMC is likely to throw us some curve balls, so we’ll have to play the cards we’re dealt for the rest of the week! So, for todays move we’re still looking at extreme levels, not only due to FOMC, which may already be priced in, but also for NFP. We’re going to highlight the above resistance level as 2060-5 as a potential target level from support regions below, that’s if the price level is not touched during the rest of the week. This now turns 2030-35 into support on the flip which could be a level they dip into on the move, to then continue the move to the upside, before we then see a reaction in price. Pre-event plan, we’re going to stick with one scenario, if we get it we’re in, if not, we’re happy to sit and wait for the right set up. If you’ve taken enough from the market already, please also do the same. We’ll be looking for price to push up into the 2060-65 region and hold, this level we feel holds an opportunity to short the market back down into the 2050-45 price point, and then below that 2030-35. Price will need to break below the 2030 level to complete the move to the downside, as we initially wanted in the KOG report on Sunday targeting the break of 2000! Price breaks above 2060-65, we’ll sit and wait for tomorrow and let Excalibur activate. KOG’s bias for the event: Bullish above 2030 with targets above 2060 and above that 2065 Bearish on break of 2030 with target below 2010 Please use this as a guide, FOMC is most likely priced in. It’s the press conference 30mins into the hour where the market will be looking for clues to future economic news. We may see some late sessions movement across the markets, so please make sure you have a strict risk model in place, if you’re going to try and trade it. Otherwise, sit it out, wait for them to move the market to where they want to, then look for the right set up at the right time. Please do support us by hitting the like button, leaving a comment, and giving us a follow. We’ve been doing this for a long time now providing traders with in-depth free analysis on Gold, so your likes and comments are very much appreciated. As always, trade safe. KOG
FX:XAUUSD
by KnightsofGold
higher prices on Crude oil (update) If prices continue to struggle going bullish after inventory or week come in red. I expect prices to drop into mitigation and if that happens you will see an explosive move on oil. Otherwise, they should take buy side liquidity @70.77 and come back into internal range (mitigation/volume imbalance) Mind you, if the fed also cuts rates today that will weaken the USD and strengthen foreign currencies creating more demand for oil and short inventory reports will surge prices higher.
NYMEX:MCL1!
by jewlstagara
1
Discussion of Levels before the FOMC January 31st DXY: (Fed Decision) Stay below 103.80 could trade down to 102.70 support. NZDUSD: Buy 0.6150 SL 15 TP 40 (DXY weakness) AUDUSD: Sell 0.6585 SL 15 TP 60 (DXY strength) USDJPY: Sell 147.10 SL 30 TP 200 (Hesitation at 146.45) GBPUSD: Buy 1.2715 SL 20 TP 60 (DXY weakness) EURUSD: Sell 1.0790 SL 15 TP 45 (2nd setup) Sell 1.0730 SL 20 TP 70 USDCHF: Consolidation, possible straddle Buy 0.8655 SL 20 TP 55 Sell 0.8600 SL 15 TP 40 USDCAD: Sell 1.3400 SL 20 TP 50 Gold: Break above 2040 trade up to 2055 (Conflict escalation & DXY weakness)
TVC:DXY
by JinDao_Tai
Bitcoin will sell into discount amid interest rate hikes CPI headline inflation come in higher than previous so expect another rate hike. When the institutions step in with their ETF money expect them to gab all the liquidity from prior month lows to bring price into discount because that it there angle. prices should come down into these discounted Arrays for buys in line with bitcoin halving this summer or whenever it gets there ( it will eventually) and don't find it a coincidence that it happened after approval amid interest rate hikes.
BITSTAMP:BTCUSDLong
by jewlstagara
EURUSD Breakout and Potential retrace with today's CPIIn today's trading session, our attention is focused on EURUSD, with a keen eye on a potential selling opportunity around the 1.09700 zone. After breaking out of its uptrend, the pair is currently in a correction phase, edging closer to the retrace area at the 1.09700 support and resistance zone. Adding a fundamental layer to our analysis, the recent Consumer Price Index (CPI) data could play a pivotal role. The US dollar's strength, influenced by economic indicators such as CPI, may impact the overall direction of EURUSD. Traders should keep a close watch on the evolving market dynamics, especially considering the potential implications of USD strength on this currency pair. As always, trade safe. Joe
Short
by JoeChampion
1
Gold Setup H1 Time Frame | CPI Data NewsGold Setup H1 Time Frame | CPI Data News Hey Traders ❗️ Welcome back hope you're doing well This is our 5 analysis on Gold Setup These idea not based on sell or buy Its based on #Levels and prediction On this Setup we catched more then 700 #pips As you guys seem #Gold currnet point at 2033.65 We draw the two circles at 2040 and draw the line at 2047.00 #CPI fundamental high news impact might be tried to break these resistance at 2040-2047 🔵 Overall we are on #Bearish Although gold overall view is at 2020-2019 then 2005 ❗️ So enjoy the Gold H1 setup with us 🙌 Cheers....
OANDA:XAUUSDLong
by professionaltradersfx
USOIL| Level 74$ will be decisive!Analyzing the oil market, we see that WTI (West Texas Intermediate) is priced around $72.55 per barrel, while Brent is at $77.71 per barrel. Several key factors are influencing the current oil market scenario. Saudi Price Reduction: Saudi Arabia's decision to lower the prices of its oil exports to Asia has contributed to a bounce back in prices from the Monday low of $70. This move might increase the competitiveness of Saudi oil in the Asian market, thus impacting the global market. Decline in Inflation and Oil Demand: The fall in oil prices is welcomed by analysts and fund managers as it could lead to a further decrease in inflation. Stock Market Dynamics and DXY Index: The steady state of the US Dollar Index (DXY) around 102.00, despite some selling pressures, and the strengthening of US and Japanese stock markets, indicate investor confidence, which could positively affect the oil market. Geopolitical Tensions: Despite geopolitical tensions, such as the recent elections in Taiwan and ongoing tensions in the Middle East, markets seem to be overlooking these risks, which could keep the oil market stable in the short term. Russian Compliance with OPEC+ Cuts: Russia is adhering to the production cuts agreed upon in the last OPEC+ meeting, helping to balance the market supply. Speculations and Realpolitik: Rumors that shipping companies paid fees to Houthi rebels for safe passage in the Red Sea, though denied, demonstrate the market's sensitivity to such news. US Secretary of State Blinken's visit to Israel could have implications for the security of maritime passages and, consequently, the oil market. US CPI Expectations: With the upcoming release of the US Consumer Price Index (CPI), a further decrease in oil prices could be expected, potentially stimulating demand. Technical Analysis: The $74 level is pivotal for WTI; we might see a bullish breakout towards $80 or a pullback towards $71. Happy trading to everyone.
TVC:USOILLong
by Forex48_TradingAcademy
Gold Puzzles: ISM Downturn, NFP Beats, and Thurday's CPI.In today's trading session, our attention is directed towards XAUUSD, where we're eyeing a buying opportunity around the 2008 zone. Gold, emblematic of a broader uptrend, currently finds itself in a correction phase, steadily approaching the key trend at the 2008 support and resistance area. This technical perspective serves as our initial guide. Diving into the specifics, the recent ISM figures revealed a notable downturn, falling from the forecasted 52.5 to the actual 50.6, signaling a slower expansion in the manufacturing sector than anticipated. This unexpected contraction has cast a shadow on the US economic outlook. Coupled with the recently released NFP data, where the actual job gains surpassed both the forecast (184k) and the previous (150k), a nuanced economic landscape is emerging. This intricate scenario, where manufacturing lags while employment gains outpace expectations, introduces a level of uncertainty. The mixed signals within the labor market further underline the potential for a dovish Fed. Adding to this equation, the CPI data becomes a pivotal factor. In this intricate dance of numbers, the potential for a softer CPI reading aligns with the narrative of a cautious Federal Reserve. Now, weaving these numbers into the fabric of our analysis, the combination of weak ISM figures, strong NFP job gains, and the prospect of a softer CPI contributes to the argument for USD shorts. As we traverse the complex economic landscape, gold emerges as a candidate for potential upside movements amid the increasing likelihood of USD weakness. Stay vigilant, Joe, and trade safe.
OANDA:XAUUSDLong
by JoeChampion
4
USOIL: Route map 71.50-79 awaiting the FED!Observing the price of West Texas Intermediate (WTI), I notice an upward trend, with the price having retested the bullish trendline after breaking through the $74 level. Now, I expect a slight pullback towards $71.50 before a significant rebound towards $79 per barrel. However, from a macroeconomic perspective, I've also detected growing concerns about the stability of demand due to an increase in U.S. gasoline and distillate inventories, leading to a decrease in prices. I am particularly mindful of the impact of Middle East tensions on energy markets. These conflicts directly influence logistics and shipping, so much so that I've observed companies diverting their ships from the Suez Canal route to avoid waters infested with Houthi rebels, significantly changing commercial routes between Europe and Asia. The arrival of an Iranian warship further complicates the situation. Additionally, I am monitoring the ongoing conflict between Israel and Hamas, aware of the risk that it might involve neighboring countries. I've noticed that Iran has suspended crude shipments to China to secure higher prices. This move is particularly interesting as it follows China's advance purchase of a significant portion of its annual oil demand, enjoying a discount on imports from sanction-hit Iran. In conclusion, my personal analysis describes a complex WTI oil market influenced by a variety of geopolitical and technical factors. I am closely monitoring how Middle East tensions, Iran's strategies, and technical indicators affect the direction of WTI prices. Best regards and have a great weekend, from Nicola.
TVC:USOILLong
by Forex48_TradingAcademy
AUDUSD Chronicles: Linking CPI, FOMC, and DXY TrendsGreetings Traders, In today's trading session, our attention is focused on AUDUSD, where we are actively monitoring for a potential buying opportunity around the 0.66200 zone. As AUDUSD navigates an uptrend, the ongoing correction phase positions it in proximity to the trend at the 0.66200 support and resistance area. This in-depth analysis will explore the fundamental landscape, drawing insights from the Consumer Price Index (CPI) and Federal Open Market Committee (FOMC) data, and connecting this idea to the previously discussed DXY analysis. Starting with the FOMC decisions, the most recent meeting held on December 13, 2023, maintained the interest rate at 2.00%. The dovish stance articulated by the Federal Reserve underscores their commitment to accommodating economic growth while navigating inflationary pressures. This has broader implications for AUDUSD, as a weaker USD often contributes to the strength of commodity currencies like the Australian Dollar. Analyzing the CPI data for AUDUSD, the inflation rate in Australia has shown resilience. The most recent figures for Q4 2023 indicate a 2.0% year-over-year increase. This steady inflation, coupled with the dovish stance of the Federal Reserve, can contribute to a positive environment for AUDUSD, potentially supporting its upward trajectory. Linking this idea to the previously discussed DXY analysis is crucial. DXY, representing the strength of the US Dollar against a basket of major currencies, exhibits an inverse relationship with AUDUSD. As DXY weakens, AUDUSD tends to strengthen, creating a favorable environment for a buying opportunity. Traders should monitor DXY movements for additional insights into the potential direction of AUDUSD. Examining interest rate differentials between the Reserve Bank of Australia (RBA) and the Federal Reserve adds another layer to this analysis. As of the latest available data, the RBA's cash rate is at 0.10%, significantly lower than the Federal Reserve's 2.00%. This interest rate gap can further contribute to the attractiveness of AUDUSD for investors seeking higher yields. Considering the overall economic backdrop, Australia's strong ties to commodity exports, particularly in metals and minerals, can enhance the appeal of the Australian Dollar. As global economic conditions improve, the demand for commodities may rise, positively impacting AUDUSD. In conclusion, as we explore a buying opportunity in AUDUSD around the 0.66200 zone, the interplay of FOMC decisions, CPI data, and the inverse relationship with DXY provides a comprehensive understanding. Traders should remain vigilant, considering the broader market context, and keep an eye on DXY movements for nuanced insights into the potential direction of AUDUSD. Best of luck in your trades, Joe
Long
by JoeChampion
2
EUR/USD stabilizes after slide, FOMC minutes loomThe euro has steadied on Wednesday after sustaining sharp losses a day earlier. In the European session, EUR/USD is trading at 1.0932, down 0.08% and its lowest level since December 21. The US dollar has been struggling in recent weeks but came flying out of the gates on Tuesday, the first trading day of the New Year. The euro fell 0.88% against the dollar, its worst one-day showing since October. The dollar's spike could be due to profit-taking as the data calendar was light on Tuesday and the dollar gained ground against all of the major currencies. It's a busy day for US releases after a lull during the week of Christmas. The ISM Manufacturing PMI is expected to rise to 47.1 for December, compared to 46.7 in November. The manufacturing sector has been in a miserable slump and hasn't shown expansion since October 2022. Manufacturers have been squeezed by weak demand abroad and high borrowing costs. With the Fed expected to start cutting rates in March, we could see manufacturing respond with increased business activity. The Federal Reserve releases the FOMC meeting of the December meeting later today. The meeting was highly significant as the Fed surprised the markets by failing to push back against rate-cut fever. The Fed signalled that it expected to trim rates three times in 2024, a major pivot from the well-worn script of 'higher for longer'. Investors will be looking for details about the shift in Fed policy which has boosted the equity markets and weighed on the US dollar. Germany and the eurozone will post the December inflation reports on Thursday. Last week, Spain posted lower-than-expected inflation numbers. Inflation has eased to 3.2% in Germany and 2.4% in the eurozone, as the ECB's target of 2% is getting closer. Will the December numbers show inflation continues to fall? If so, the European Central Bank will be under pressure to lower rates. ECB President Lagarde has so far dismissed talk of rate cuts, but she may need to shift her hawkish stance if inflation continues to fall, as the eurozone economy is struggling and could use some relief in the form of rate cuts. There is resistance at 1.1069 and 1.1102 1.0958 and 1.0887 are the next support lines
by OANDA
Interest Rates and Inflation: Shaping GBPUSD's TrajectoryGreetings Traders, As we delve into the intricacies of GBPUSD for potential trading opportunities, the convergence of fundamental factors takes center stage. This analysis encapsulates the interplay between interest rates, Consumer Price Index (CPI) data, and central bank decisions for both the Bank of England (BoE) and the Federal Reserve. Examining the BoE's CPI data provides insights into the inflationary pressures faced by the UK. The most recent CPI figures on December 20, 2023, indicate a year-over-year inflation rate of 3.9%, slightly below the forecasted 4.3% and notably lower than the previous 4.6%. The gradual decrease in inflation suggests a potential easing of price pressures. However, it's crucial to note that even with this decline, inflation remains elevated. In tandem with the CPI, the BoE's interest rate decisions are instrumental in understanding the monetary policy landscape. As of December 14, 2023, the BoE has maintained a benchmark interest rate of 5.25%. This consistent stance signals the central bank's commitment to addressing inflation while providing stability to the economy. The interest rate differential between the BoE and the Federal Reserve plays a pivotal role in shaping GBPUSD dynamics. Contrasting this with the Federal Reserve's interest rate decisions, the FOMC has maintained a steady interest rate of 2.00% as of December 13, 2023. The relatively lower interest rate in the United States compared to the UK creates an environment where traders need to carefully navigate the potential impact on GBPUSD. Analyzing the broader context, the comparative interest rates and inflation trends suggest a nuanced landscape for GBPUSD. While the BoE grapples with elevated inflation, its commitment to a higher interest rate provides a counterbalance. On the other hand, the Federal Reserve's dovish stance, despite rising inflation, signals a cautious approach. This divergence in monetary policy contributes to the potential for GBPUSD upsides. In conclusion, traders eyeing GBPUSD for a buying opportunity around the 1.25900 zone should consider the complex interplay of interest rates, inflation, and central bank decisions. The nuanced analysis presented here aims to equip traders with a comprehensive understanding of the macroeconomic factors shaping GBPUSD's prospects, pointing towards potential upsides in the current market environment. Wishing you successful trades, Joe.
Long
by JoeChampion
3
USDJPY Outlook (1st Qtr 2024)Is it going to be the same story again for the USDJPY? In 2022, the USDJPY climbed to reach just below 152 before turning down to the 128 support level. The similar price movement played out in 2023 as the USDJPY rose from the 128 support level to retest the 152 resistance level. The USDJPY has reversed down to the 140 price area (50% Fibonacci retracement level), primarily due to the weakness of the DXY as markets began to price in rate cut scenarios from the US Federal Reserve. This move lower was also due to rumors that the BoJ could end its ultra-loose monetary policy at the December 2023 meeting. However, the BoJ has so far maintained its current policy stance as it continues the fight to bring inflation down to its 2% target level. The longer the BoJ persists with its negative rates regime in 2024, this could continue to bring weakness to the Yen. Combined with some retracement on the DXY, the USDJPY could retest the 143-144 price area (38.2% Fibonacci retracement) in the short term. Look for the BoJ to signal a plan for policy normalization in 2024, to lead to further downside. However, it'll be crucial for the USDJPY to break below the 138-round number support and 61.8% Fibonacci retracement level before we can see a significant downside to the 128-support level again.
Short
by JinDao_Tai
Macro Monday 25~The Feds Inflation Barometer – Core PCE Macro Monday 25 The Feds Favorite Inflation Barometer – Core PCE The US Core Personal Consumption Expenditures (PCE) are released this Friday 22nd December 2023. Currently Core PCE is the most important component to the Federal Reserve in making their interest rate decisions and thus it will provide a great insight into what lies ahead in terms of interest rate policy for Q1 2024. Known as the Federal Reserve’s favorite gauge for inflation, Core PCE is a crucial economic indicator that provides insights into the general trend in consumer spending (it excludes the more volatile energy & food costs). Jerome Powell “I will focus on core PCE inflation, which omits the food and energy components.” 25th Aug 2023 The Bureau of Economic Analysis (BEA) compiles and publishes the Core PCE report which is considered a more comprehensive measure of general trends in consumer spending than some other indicators, such as the Consumer Price Index (CPI). We will briefly cover the differences between CPI and PCE which will eventually lead us to why specifically the Core PCE is the preferred barometer for inflation (over headline and core CPI and over headline PCE). Stick with me here and lets have a look at CPI vs PCE first… CPI Vs PCE - Main differences? Consumer Price Index: CPI is a metric that follows a fixed basket of goods. This fixed basket of items is measured month to month providing a consistent “basket of goods” cost for the common urban consumer. This allows for the basket of items to remain relatively unchanged thus providing an indication of how costs may be increasing or decreasing for the common consumer using the said basket (the basket is updated but not a frequently as the PCE basket). Personal Consumption Expenditures: PCE includes a broader range of goods and services, and it is based on more frequent updates to the basket of goods and services that represent consumer spending, thus PCE captures more of the trend or trend changes in consumer spending. PCE includes expenditures on durable goods (e.g., cars and appliances), nondurable goods (e.g., food and clothing), and services (e.g., healthcare and education). This breakdown provides insights into which sectors of the economy are experiencing changes in consumer spending. We covered Durable Goods in a prior Macro Monday (I will link same under the published version on my TradingView). The bottom line on PCE is that it is more broader and more consumer led report thus arguably providing a more accurate indication of the wider spending habits of the consumer Headline Vs Core (for both CPI and PCE) In general Headline CPI and Headline PCE have an all-encompassing basket of goods and services included whilst Core CPI and Core PCE focus on a subset by excluding the volatile components of food and energy. Analysts and policymakers often consider both Headline and Core to gain a comprehensive understanding of inflation trends, however Core PCE in particular provides the deepest and broadest insights into consumer led spending habits and provides the true underlying inflation by removing volatile commodities (Food & Energy). Lets look at CORE PCE a more closely What is the benefit of excluding food and energy from inflation figures for Core PCE and why is this so beneficial? 1. Reduced Volatility: Energy and food prices are known to be more volatile and subject to temporary fluctuations due to factors such as weather conditions, geopolitical events, and supply chain disruptions. By excluding these components, Core PCE aims to provide a more stable measure of inflation. 2. General Inflation Trend Focus: As noted above, the short-term volatility in energy and food prices can mask the underlying aggregate trend in other goods and services, so the PCE eliminates some of this short term noise from food and energy inflation figures. 3. Captures Persistent Underlying Inflation Forces: Core PCE filters out the impact of temporary shocks to energy and food prices. This can be valuable for assessing whether inflationary pressures are becoming ingrained in the economy in the general sense. 4. Long Term Planning for the Consumer and the Fed: Understanding the underlying inflation trend is crucial to knowing the base level of the cost trend. Core PCE can provide a more reliable gauge for long-term economic planning by smoothing out short-term fluctuations.This provides investors, consumers and the Fed with a sort of long term general expenditure based moving average (the Core PCE) for the underlying inflation burden that is trending in an economy. All three participants can make the necessary adjustments to cater to this long term trajectory and thus the metric is a powerful tool for all involved. Now that we know why the PCE is such a useful metric we can have a look at the long term PCE chart and see how things have been trending. For the record CPI already came out for the month of November as CPI is typically released mid-month whilst PCE is released towards the end of the month. Remember we will have an update this Friday from the BLS on the November readings for Core and Headline PCE, so we can see how we are looking then. The Core and Headline CPI Chart This CPI chart illustrates the following: ▫️ You can clearly see how Core CPI is less volatile than Headline CPI. As discussed above, Core CPI removes the volatile food and energy expenditures to provide a more general view of underlying inflation (based on a fixed basket of goods) ▫️ It is clear that we are not at the Federal Reserves target of 2% which is also outlined on the chart (purple line). It is critical to understand that we are still not at or below the target 2% level regardless of the FOMC’s determination of a likely hold on interest rates and reductions to interest rates in 2024. Lets see can the target be met first. ▫️ You can see that since 2002 Core CPI has fluctuated one standard deviation above and below the 2% inflation level between 1% and 3%. It is clear that we are not back into this standardized zone between 1 – 3%. The Core and Headline PCE Chart (SUBJECT CHART AT TOP PROVIDED TODAY) (will be updated this with newly released figures this Friday 22nd Dec) This CPI chart illustrates many of the same findings from the CPI chart above: ▫️ Core PCE provides the deepest and broadest insights into consumer led spending habits versus a more fixed and stringent basket of goods for CPI, making Core PCE the Feds favorite inflation barometer to watch. ▫️ You can clearly see how Core PCE is less volatile than Headline PCE. As discussed above, Core PCE removes the volatile food and energy expenditures to provide a more general view of underlying inflation (based on a fixed basket of goods). ▫️ It is clear that we are not at the Federal Reserve’s target of 2% which is also outlined on the chart (purple line). The Federal Reserve have advised that Core PCE is expected to decline to 2.2% by 2025 & finally reach its 2% target in 2026. Anything that happens to interfere with this between now and then will need to be addressed by the fed. ▫️ You can see that since 1991 Core PCE has fluctuated one standard deviation above and below the 2% inflation level between 1% and 3%. It is clear that we are not back into this standardized zone between 1 – 3%. Summary You can visualize on the charts why the Core CPI and Core PCE is more important to Chair Powell, both Core metrics on the charts are almost like a slower moving average providing an indication of the longer term inflation trend. Right now Headline metrics are diving down past the Core metrics and the Federal Reserve cannot just take that volatile headline figure to make long term decisions. The Core PCE/CPI provides the long term trend trajectory whilst the Headline can offer early/lead signals of the direction of inflation, however core must be observed to determine the resilience of the long term trend. Furthermore, Core PCE is perceived by the FED as having more value as it has its finger on the pulse of the consumers spending habits by covering a broader range of expenditures whilst also accounting for consumer led spending trends. The CPI basket of goods in more fixed/restricted in terms of the goods it accounts for. This is why the FED values Core PCE so highly as a versatile and all encompassing gauge of inflation. Hopefully you’ve come away today with a greater understanding of why the Core CPI and PCE data is preferred by the Fed ahead of headline inflation and also why the Core PCE comes out ahead as the chosen long term inflation gauge. Any questions or observations, please throw them into the comments and I will be onto them as quickly as possible, Thanks for reading, PUKA
ECONOMICS:USCPCEPIAC
by PukaCharts
Decoding "THE GREAT DEPRESSION" !!! - #DJIThe great depression VS today's market structure! - trying to find synergies between both timeline's The Stock Market Boom and Crash of 1926-1933: An Applied Time Series Investigation I found this interesting how it aligns with today's market sentiment.. chgate.net/publication/314247517_The_Stock_Market_Boom_and_Crash_of_1926-1933_An_Applied_Time_Series_Investigation]https://www.researchgate.net/publication/314247517_The_Stock_Market_Boom_and_Crash_of_1926-1933_An_Applied_Time_Series_Investigation Companys are in the mist of adopting innovative technology, from blockchain technology to artificial intelligence. Hyper inflation begun in 1924 lasting until 1929 until eventually the DJI collapsed 89%. The catalyst to inflation - Hyper inflation. over expanding the currency supply. here's an article of the Dawes plan which would of contributed to hyper inflation. www.bbc.co.uk Todays market structure and sentiment.. DJI This show's the DJI coming to a similar % rally we saw during the great depression... Also signalling a top target for maximum Fibonacci levels, combined with bull flag TP target price.. Pretty scary chart to say the least!!.. But highlighting potential scenario's.. Still a good chance we see a shorter correction before continuing into a hyper inflation period. *Fiat currency - has lost a significant amount of value, from - covid stimulus/aid too Russia/Ukraine now Israel/Hamas. Central banks over expanding the currency supply. The chart's and timeline's match... but The great depression happened in much shorter succession. history often rhymes! - my thesis the great depression is delayed - hyper inflation is yet to come... with that risk on asset's will rise! WHY? The debt ceiling was raised to 35 Trillion dollars until 2025 which insinuates reserve liquidity to recover failing market's - banks and possible real estate with downward pressure on individual companies and business's. countries can't withstand high interest rate's due their current Debt .. currently economy's are expected to retract. Sentiment The US changed the definition of a recession so many are still un- aware that were currently in a recession. talks of just missing one! - which I find pretty amusing! Central banks are back tracking on high interest rates for longer, M2 money supply is contracting to the lowest level since 1960. Now expected 6 rate cuts during 2024! were currently in a speculation rally based off liquidity returning and the fast adoption of technology which is currently propping up the DJI. Likely we see a 30-50% correction for the DJI, But for the reason's above we could see a shorter correction. which would align with the great depression! Let me know your thought's in the comments below.
TVC:DJI
by dibz1996
FOMC - is this the top of the rate cycle? Be cautious buying this uptrend, and be especially cautious trying to catch the bottom of a mediocre company in a downtrend. I don't view the current environment to be fully risk off or fully risk on, but showing signs of the last leg of the business cycle. My preference is to target 20-30% cash and focus on companies with a high sharpe ratio, and lower dependence on debt. The market has had a nice uptrend, but there is a consistent pattern of trend reversals after FOMC updates. The fed delivers a message and the market reacts. Then the market begins to shift the narrative in between meetings, only to be caught off guard by the fed remaining on course for inflation. I personally expect the fed to separate price stability from banking stability and remain on the tightening path with a 25bps increase. However, a pause in rates will likely mark the top of the rate cycle. In this chart we see the following business cycle trends: • Local bottoms in global net liquidity signal local bottoms in risk assets (Oct 2022) • The last leg of the cycle starts when the market for 2yr bonds rolls over fed funds and remains there (remains there being the key). This makes the current rate decision meaningful. • The market can continue 20-40% upward movement for 15-30 months until experiencing a credit crisis • Market bottoms are confirmed once maximum unemployment is reached • Maximum unemployment is observed to be 24-36 months from the double top of core inflation (Mar 2022) While every business cycle is unique, monetary and fiscal policy tend to adjust to conditions with similar tactics and in similar time frames. I will continue to move my assumptions outward if rate increases continue. SP:SPX FRED:FEDFUNDS
SP:SPX
by Ben_1148x2
46