2022/10/09 (084) Column

„My Most Important 4XSetUp For You Is:
Don’t be afraid of CFD`s!“


My compatriots, in my home country Germany, tend to be seen as (too) anxious types.
In contrast to my compatriots, in my homeland Croatia, who are considered to be (too) adventurous types.
I love stereotypes like that; and I can amuse myself immensely about it – without not including myself in the process. Whether Scandinavians in need of security and/or omnipotent black Africans; I’m really proud of all my readers. After all, we all want the same thing on us wallStreet, on the financial market, especially with derivatives (especially CFD`s). And/or in normal life! Namely making even more money out of money. And that as safely as possible! Even in normal life; outside of profits, economics and/or money. And have a good time at the same time!Isn`t it? And not because we originally come from white Scandinavia or black Africa. But rather because we are like-minded, life-affirming, realistically optimistic people. That’s why we (un)consciously deal with us wallstreet, with the financial market, especially with derivatives trading (with the help of CFD`s).

It`s therefore worthwhile, especially in times when there are particularly many and/or more than truly serious dangers like now, to self-critically examine whether you are “risk-averse” or “risk-loving”, as many of my colleagues like to put it again and again and again. For CFD trading, a fundamental aversion to risk is more of an hindrance. Because make sure that you, yes you, never waste a thought on opening a new CFD trading account in the amount of a partial amount of your current total deposit. On the other hand, the constructive, realistically optimistic willingness to take risks is advantageous. To which I, and hopefully you too, count me.

Irrespective of this, it is noticeable that the function of market guys, who pursue another main occupation every trading day in order to secure their livelihood, is currently viewed critically even by well-known asset managers and other money experts. Stock market indices are the focus of most brokers when it comes to CFD derivatives trading. Although many still perceive an individual stock, let alone individual exchange rate pairs, as a risky asset. “A market guy’s worst enemy is often the market guy himself,” summarized a portfolio manager at a public event more than a decade ago. When I philosophized with him about the psychology of us market guys. For whom CFD`s were not risky papers even then – and for me, in 2022, they are still not…

DEVISE 2 DAY 48h
– My Last Thoughts About Market Price Actions

This week, the Fed’s FOMC Minutes are overshadowed by the Bank of England, which is to be expected from central banks. Because the British central bank has to clean up politics. The new British Prime Minister is causing chaos on the financial markets with her budgetary policy. Which is jazzed up by most colleagues, in the newspapers (all around the world). Because Biden has been pursuing such a policy with his Democrats for 2 years. But the focus is on her, in London. However, that`s why the Fed is forced to raise interest rates due to high US inflation. But without publicly, openly criticizing US fiscal policy, let alone misguided economic policy – FED Boss Powell is far too polite for that.

Next to the Bank of England this week, all attention this week should be on Thursday’s US inflation numbers. A better-than-expected figure for the Sep`22 should then possibly counteract the bears’ pressure on the stock market. In addition, us producer prices on wednesday as well as us retail sales on friday should not be ignored either. So that we can get a better picture of the us economy over the weekend. UK unemployment rate on Tuesday is equally important. As well as inflation rate and trade balance from China, on Friday.

In OIL_BRENT, CBOT_MINI-YM1! & DXY we currently have open 4XSetUps. And EURUSD, GBPUSD, US10Y, XLF & MSFT we should watch mainly this week to get a feel for the financial market price action mainly. And/Or US Dollar, Euro, British Pound, US Basis Yield – even 10Y, US Bank Stocks, and/or US Techs.
DEVISE 2 DAY 48h
– Some Last News About Market Price Actions

US Stocks Fell Sharply As NFP Strengthens Hawkish Fed
US stocks traded deeply in the red on Friday, with the Dow Jones falling nearly 600 points, while the S&P 500 fell more than 2.5% and the Nasdaq dropped almost 3.5% after fresh labour market figures dashed any hopes of a slower pace of tightening by the Fed. The jobs report continued to point to a tight labour market, with the US economy adding 263K jobs last month, above forecasts of 250K, while the unemployment rate unexpectedly fell to 3.5%. On the corporate front, shares of Advanced Micro Devices slumped nearly 7%after the company reported weaker-than-expected preliminary revenue for Q3. On the week, however, the three major averages are up nearly 3%.

UK Stocks Flat On Friday, Up 1.5% On The Week
The FTSE 100 closed little changed on Friday, as gains in heavyweight energy shares offset overall negative sentiment. The benchmark Brent crude topped $97 per barrel, the highest in five weeks and was heading for its biggest weekly gain since early March on OPEC’s production cuts. Meanwhile, data from the US showed the unemployment rate declined unexpectedly to 3.5% in September, while the economy added 263 thousand jobs. The stronger-than-expected employment report means the Federal Reserve will stick to sharp interest rate hikes in the coming months to cool inflation. In other economic news, UK house prices dropped for a third straight month in September, as rising borrowing costs are likely to exert “more significant downward pressure” soon, according to the report. The second-quarter labor productivity in the United Kingdom was revised higher. The FTSE 100 advanced 1.5% on the week, its biggest weekly percentage gain since late July.

European Equities Fall For 3rd Session
European equity markets dropped for a third consecutive session on Friday, with both the benchmark Stoxx 600 and the German Dax down more than 1% on expectations major central banks will continue aggressive tightening. The US jobs report showed labor market conditions remained tight in September as the unemployment rate fell below forecasts and as the economy added more new jobs than expected with payrolls rising by 263 thousand. The data suggested the US Federal Reserve will continue to raise interest rates at quick pace to combat inflation, despite expected pain in the medium term. Elsewhere, tech stocks were among the worst performers after both Samsung and AMD flagged a downturn in chip demand. On the corporate front, Credit Suisse said on Friday it had made an offer to repurchase up to CHF 3 billion of senior debt securities, aiming to soothe investors’ concerns ahead of its strategic review later this month. For the week, the Stoxx 600 advanced almost 1% and the DAX gained 1.5%.

Gold Extends Retreat After NFP
Gold prices fell to $1,700 an ounce on Friday, extending losses for a third session as investors digested better than expected labor market data. The nonfarm payrolls report showed that the US economy added 263,000 jobs in September, above expectations of 250,000 and adding room for the Federal Reserve to maintain the aggressive hiking momentum that it pledged. The metal has been whipsawed throughout the week by shifting views on US monetary policy, with weak US PMI data initially driving bullion higher on expectations that the Fed could ease its tightening pace, before facing pressure toward the end of the week as hawkish remarks from US policymakers retracted pivot hopes. Despite the late-week retreat, gold pricesre set to end the week 3% higher, marking the biggest weekly gain since March.

Brent Crude Tops $98
Brent crude futures jumped 4% to nearly 5-week highs above $98 per barrel on Friday and were set to gain more than 15% this week, the most since early March as OPEC+ agreed to cut production by 2 million barrels per day or about 2% of global supply from November. That would be the biggest output cut since the start of the pandemic, though Saudi Arabia’s oil minister said the actual cut will likely be around 1-1.1 million barrels as some members are already pumping below targets. US President Joe Biden showed dismay over OPEC+’s decision on Thursday and said the US was looking for ways to keep prices from rising. Goldman Sachs significantly raised its oil price forecast after the OPEC+ move, projecting Brent prices to reach $104 per barrel this year and $110 per barrel in 2023. Adding to supply concerns, Russia warned again this week that it won’t sell oil to countries that support the US-led plan to impose a price cap on Russian oil.

Hong Kong Shares Jump 3% Weekly
The Hang Seng plunged 272 points or 1.51% to finish at 17,740.05 on Friday, extending losses from the prior session and tracking US stocks that ended in the red for the second straight day, as Fed officials showed no intention of backing down from the most rapid rate hike in decades. Meanwhile, the monthly US jobs report later today will give a fresh hint of inflation pressures in the country. Turning to fresh data, China’s forex reserves fell to their lowest in 5-1/2 years in September, amid strong US dollar. Sharp losses were pronounced for JD.Com (-3.4%), China Overseas Land (-2.6%), Tencent Holdings (-2.2%), and Meituan (-1.8%). Still, the index gained 3% for the week, on growing speculation that major central banks might shift to less-aggressive rate hikes to avoid a global recession and reports that spending on local tourism rose during China’s Golden Week even as clusters of lockdowns continue across the mainland.
DEVISE 2 DAY 48h
– Where I Was Wrong, Where I Was Whright

The USD more or less (still) on the upside. Oil prices up nearly 20% last week. And the stock market with an historically high volatility, in which 1.000 points in the Dow Jones Industrial Average Index is no longer a headache price action. When was it even more exciting? When was it even more volatile? However, I could have been writing this for weeks!

For a year now, Nourinel Roubini has argued yet, that the increase in inflation would be persistent, and that its causes include not only bad policies but also negative supply shocks, and that central banks’ attempt to fight it would cause a hard economic landing. „When the recession comes“, he warned, „it will be severe and protracted, with widespread financial distress and debt crises. Notwithstanding their hawkish talk, central bankers, caught in a debt trap, may still wimp out and settle for above-target inflation. Any portfolio of risky equities and less risky fixed-income bonds will lose money on the bonds, owing to higher inflation and inflation expectations.“ In fact, we have had stagflation in the USA since the middle of last year 2021. Because since July 2021, inflation has been higher than GDP in the same month. According to the formula: Inflation Rate (since July 2021) – GDP Annual Growth Rate (of the same Quarter, even since 3Q2021) = Stagflation. And that`s why the US yield curve in Chicago has become more expensive since then, since the FED cannot and does not want to sit idly by and look at it. And that’s just as well. But that’s why it’s also bad for stock markets in New York. Whether it will be a “long, ugly recession and a correction in equities, by around 40%“, as Roubini feared, remains to be seen at this point. Which is why we should keep this fact in the back of our mind. Because it obviosusly hides a positive future economic perspective! No doubt…

Anyway!
The price of oil had not reckoned with such a strong recovery last week. So there is a real danger this week not only of losing our booking profits again, but possibly also closing our short 4XSetUp in the oil price. And/Or wait and see again. With respect to the USD, we pull the ripcord at 110 points on our 4Xsetup. And let’s go long above back again if it’s just a brief pullback. Because we have experienced a huge movement so far. That`s why aour new stop price at 110 points in the DXY, this week. Because as more I think about it, I get cold feet. I don’t know if this is my personal, individual, subjective fear of my own courage!? And/Or may be also veteran experience to take profits in time?!