2022/09/22 (075) Column

„The Agony Of Choice
And/Or
The Choice Of Agony“


Various individual currencies rise/fall, more or less, in numerous exchange rates because the yield curve of the various currencies will (not) become more expensive sooner or later. Most of the national indices on the international financial market (not) participate in these bullish/bearish movements. So that what has been emerging for months is now becoming increasingly clear: financial market prices are decoupling from their fundamental valuations. And not only on the foreign exchange market and in relation to the respective yield curve. But rather also entire stock markets, as well as individual stocks and individual commodities. Even within countries, themes and/or industries, investors are making more differentiation based on current fundamentals and business development forecasts. Which does not rule out a temporary parallel direction of price trends (= high correlation).

Nevertheless, active wealth management is becoming more and more and more important. That´s why don’t just buy America, much more specifically look for quality stocks on US Wall Street with a concrete profitable conservative fantasy. That is the goal of every Technical Analysis 4XSetUp. For example: China’s economic prospects are uncertain, Japan’s economy grows solid, Sweden is threatened with a recession. And at us, in my home country Germany? “The assessments for the financial sector are improving due to the expected firmer monetary policy,” comments ZEW researcher Michael Schröder. Don`t understand me wrong. It can also be interpreted differently. Frankfurt bankers wrote spontaneously in a report: According to the ZEW Index, the mood among German financial market experts regarding the coming six months has “worsened again”. That’s no surprise, because our German economy is currently confronted with a multitude of problems: poorly functioning supply chains, record inflation and/or the uncertainty surrounding the Ukraine war and/or the associated energy crisis. Added to this are drought and low water on the rivers that are important for the economy. Concerns are therefore growing and it is becoming increasingly likely that our German economy will slide into a recessionary phase in the coming quarters.

So, as written: the agony of choice and/or the choice of agony will stay with us marke guys for the rest of this year 2022. And that´s why active portfolio management is becoming more and more important – not simply buying America, but specifically quality stocks on US Wall Street with a concrete profitable conservative fantasy oitlook. That`s the goal of every Technical Analysis 4XSetUp. And not just in the case of individual US stocks; individual USD exchange rates. Because US stock market futures are and remain at times also (not) interesting. Let alone anything else outside of US Wall Street; even worldwode – may be like here in Germany.

DEVISE 2 DAY – Some Last Market Price Action News

US Stocks Finish Volatile Session Sharply Down
The Dow lost over 500 points in a volatile session on Wednesday, and the S&P 500 and the tech-heavy Nasdaq tumbled roughly 1.8% each as investors digested the Federal Reserve’s rate decision and Powell’s gloomy outlook for the economy. The Fed delivered a 75 bps rate hike for a third consecutive meeting while signaling further increases in the next few months. The terminal rate, the peak spot where the federal funds rate is, is now seen at 4.6%, with policymakers anticipating cutting interest rates in 2024 and extending that into 2025. Officials also significantly cut their outlook for 2022 economic growth, expecting just a 0.2% gain in GDP, down from 1.7% in June. On the corporate side, shares of General Mills advanced over 5% to hit a record peak on solid quarterly profit results and upbeat forward guidance.

Euro Depreciates Further
The euro tumbled more than 1% to below $0.99, hovering around its weakest level since 2002, after the US Federal Reserve delivered a 75 bps rate hike for a third straight time, widening the interest rate gap with theEuro Area. The ECB raised interest rates by an unprecedented 75 bps in September, and is expected to deliver between a 50- and a 75-bps rate hike in October despite recessionary risks. The bloc has been grappling with an unprecedented energy crisis and a recession looks almost inevitable to analysts, although the central bank steered clear of suggesting that a contraction may take place. The region is under even more pressure after Russian President Vladimir Putin announced a partial military mobilization in Russia, a move that is seen as an escalation by the West.

DXY Hits New 20-Year High
The dollar index surged to as high as 111.5 on Wednesday, a new high since June 2002, after the US Federal Reserve raised benchmark interest rates by another three-quarter of a percentage point and indicated it will keep hiking well above the current level. The federal funds rate is now at its highest since early 2008, and new projections show it reaching 4.4% by the end of 2022 before topping out at 4.6% in 2023. Meanwhile, GDP growth forecasts were revised lower while inflation and unemployment rates were revised higher. The currency today received an extra boost from safe-haven flows after President Putin announced a partial military mobilization in Russia, in a significant escalation of the conflict in Ukraine.

MOEX Sinks Further On War Escalation
The MOEX Russia Index closed nearly 4% lower at 2,130 on Wednesday, being down as much as 10% on the session and extending last yesterday’s 9% plunge as President Putin ordered the country’s first mobilization since World War II. Russia will conscript 300,000 soldiers and emphasized its readiness to use nuclear weapons, escalating the war further. The index tanked yesterday as the Kremlin confirmed that is moving to annex Ukrainian territory, setting up referendums to join Russia in the breakaway Luhansk and Donetsk Republics and Kherson. The annexation is seen by many as serious means of escalation, giving grounds for the Kremlin to consider Ukraine’s recent counterattack an aggression on Russian soil with Western weapons. Russian markets were also pressured by the announcement Russia would tax exports to raise RUB 3 trillion to cover its looming budget deficit.DEVISE 2 DAY Another 48 Hours – Where I Was Wrong, Whre I Was Right

On Monday we closed our 5 open 4XSetUps with a lost. Like our MSFT long trading capability (from 03/07/2022) with a lost of 41.26 $ (last price 244.74 $ as we went long at 285 $) at once. Our GBPJPY long trading capability (from last monday 09/12/2022) with a lost of 2.04 GBPJPY (last price 163.21 GBPJPY as we went long at 165.25 GBPJPY). Our VOW3 long trading capability (from last tuesday 09/13/2022) with a lost of 6.54 € (last price 145.46 € as we went long at 152.00 €). Like our LVMH long trading capability (from last wednesday 09/14/2022) with a lost of 12.4 € (last price 637.5 € as we went long at 649.9 €). And/Or last but not least also our GS long trading capability (from last thursday 09/15/2022) with a lost of 1.05 $ (last price 326.21 $ as we went long at 327.26 $). So we`re only long in the YM1!, in the DXY and/or short in the UKOIL this week. But in these two open trading capabilities at least with still an existing booking profit currently.

However, this week’s focus is on the Fed meeting. And or that of the BOE after it was moved due to the death of Queen Elizabeth. Therefore, I focus daily on the YM1! in the Technical Analysis 4XSetUps. Also in DXY and/or UKOIL if something extraordinary happens. But the fight about 30.000 in YM1! has top top priority…