2022/12/29 (137) Technical Analysis – XETR-PUM & CBOT

This Week Is Set To Be One Of The Least Exciting Weeks Of The Year,
That`s Why We`re Dealing Woth Our Basic Excepations For 2023 In The Dow!

When It Comes To The Dow Future, Even CBOT_MINI-YM1!, Let`s Point It Out,
And Get Always Shortly Illuminate About The Fundamental Framework Conditions
– Today With Using The Margin Debt Model And/Or The S&P 500 Mean Reversion Model

Margin debt is money investors borrow to invest in stocks. High margin indicates bullish investors, and tends to lead stock market corrections, particularly after margin rates begin falling from a peak. This model looks at changes in margin as a percent of total stock market value. As of November 30, 2022, total US margin debt was $644B, a decrease of $340B year-over-year. This represents a yearly decrease of 0.82% of the value of the total US stock market. This is about 1.2 standard deviations below the historical trend, indicating the market is Undervalued. The last changed from Under Valued to Fairly Valued in September 2022.

An extremely straightforward model stipulating that at some point, eventually, the S&P500 will tend to return towards its historic trend line. The S&P500 is at $3,845, or approximately 27% above its exponential historic trend line. We consider this Fairly Valued. The last changed from Fairly Valued to Overvalued was in December 2022.

33242 Points Up To 35228 Points To Defend In January 2023
– This Is The Minor Short-Term Technical Picture In The Dow Future, Even CBOT_MINI-YM1!

35228 points was the last high in the Dow futures on Tuesday 12/13/2022. On this trading day the latest US inflation data for the previous month were released. The annual inflation rate in the US slowed for a fifth straight month to 7.1% in November of 2022, the lowest since December last year, and below forecasts of 7.3%. To my surprise, the market, i.e. the majority of traders and/or investors, took the pleasing numbers as an opportunity to sell the Dow Futures since then. Which I admittedly didn’t expect. A lower than expected inflation yes. But as has already been emphasized several times in the last issues, not just a sale. On the other hand, I didn’t expect prices to overshoot. But at least new highs. And that has to be tackled again in January 2023. Because the market, namely the majority of market participants, sold the Dow Future on the following Thursday, 12/15/2022, again by almost 1000 points in a single trading day, after both theSNB and ECB and or also SNB , as expected, hawkish, in public, at their regular meetings. After they each raised their interest rate. And since I hadn’t expected this sell-off, as I’ve repeated several times, I formulated a somewhat more cautious long 4XSetUp again. In order not to run into the open knife again. An that`s why through January 2023 this long 4XSetUp in the CBOT_MINI-YM1! with an entry price at 33053 points, a stop price at 32686 points, and/or target price at least at 35413 points for the first time. Don`t ignore the stop proce! The stop price must be observed. Because I don`t want to and can`t rule out a fall to new old lows of around 30,000 points in the run-up to the upcoming central bank meetings, in the first week of February 2023. So we might well see a volatile price action to the downside as well. But to stay honest I don’t have the courage for a short 4XSetUp. That’s why I will only observe the Dow Jones Future in January below 32686 points, from today’s perspective.

Dollar Enjoys Robust 2022

The dollar index enjoyed one of its strongest years ever, up almost 9% year-to-date, as the Federal Reserve was the first central bank among developed economies to rein on stubbornly high inflation with an aggressive tightening. The US central bank hiked its federal-funds rate by a cumulative 4.25% this year, the most since 1980, bringing borrowing costs to the highest level in 15 years while pledging that rates would need to go even higher in 2023. This dollar’s strength was seen across the board, with some of the most pronounced buying activity against the yen, given the widened gap in interest rates. The DXY hit a yearly peak of 114.8 on September 28, a level not seen since May 2002, before bottoming around 104 in December as concerns mount that the US economy will be dragged into a recession next year with the Fed already slowing the pace of rate hikes.

Dollar Steadies Amid Market Caution As Continuing Claims Highest in 10 Months

The dollar index steadied above 104 on Thursday, underpinned by market caution amid growing fears that China’s reopening would add inflationary pressures to the global economy and lead to a surge in infections worldwide. The greenback also remains supported by a hawkish Federal Reserve outlook, with the central bank expected to tighten policy further despite the economic risks. Earlier in December, the Fed raised interest rates by a more moderate 50 basis points but indicated that the terminal rate could reach 5.1% next year, higher than markets anticipated. Meanwhile, latest data showed that US core PCE prices, the centr bank’s preferred inflation gauge, fell to a four-month low of 4.7% YoY in November, in line with market forecasts. The dollar index has lost nearly 10% after reaching a 20-year high of almost 115 in September, but remains up about 9% so far this year as the Fed’s historic tightening campaign to combat inflation lifted the currency.

Continuing jobless claims in the United States increased to 1710 thousand in the week ending December 17th from 1669 thousand in the previous week. It is the highest level since February of 2022, above market forecasts of 1686 thousand suggesting it has been more difficult for the unemployed to find new jobs.

Use The 50SMA, The 100SMA And/Or The 200SMA In The Dow Jones Industrial Average, Also Today Once Again
– To Det Daily Technical Analysis Confirmation As To Whether Our Short-Term Bullish Expectations Are Also Confirmed In The Medium Term

Closing price from today’s Thursday are 33220.81 points. The 50SMA is currently trading at 33111.34 points. The 200 SMA is currently at 32448.24 points. And/Or the 100SMA at the same time at 32205.40 points. As long as the DJI (Dow Jones Industrial Average Index) is trading above all 3 SMAs in a full candlestick on each trading day closed data, I would still like to technically argue with a short-term technical recovery, which will hopefully turn into a confirmed medium-term technical recovery. And then just as long as the DJI is only traded above all 3 SMA`s (Simple Moving Averages)! Because that’s what our new old long 4XSetUp in the corresponding CBOT_MINI-YM1! is aiming for. And that regardless of the current monetary policy and/or economic data, which I, as usual, in the Central bank 4XSetUps, and/or also Economics 4XSetUps, will also continue to address and/or comment also in the future, in every D2D Edition – like today…