2023/03/26 (198.061) Technical Analysis

The Chart Is Looking Better Than The Sentiment – And Should It Turn,
We Want To Be Also Long! Or? That`s Why Long In The DOW Future Back Again…

Basic Infos For This Week – About The Currently Financial Market Proce Action – And/Or Our New (Old) 4XSetUps

“Things have been getting out of hand since the financial crisis at the latest, and now we are getting the acknowledgment: first interest rates were abolished and the Fed in particular printed massive amounts of money to combat the alleged deflation, then Corona and the Ukraine war showed the problems in the system up with the sharp increase in inflation. The Fed and Co reacted to this much too late, but then violently with a rapid rise in interest rates. This in turn is also not without consequences: the bonds in the banks’ custody accounts are losing value, at the same time the rise in interest rates with the money market created strong competition for banks, which triggered the banking crisis in the USA through outflows of funds. Now criticism of the Fed is growing in the USA – above all, we now have a Fed crisis! What to do?”, Markus Fugmann (co-founder of the information website finanzmarktwelt.de) asked himself last Friday, March 24, 2023 in one of his two german-language Video analyses, which he presents daily. I enjoy listening to his analyzes – and not just because we usually come to the same conclusion more often than we would like when we look in the rear-view mirror. But looking ahead – so what to do? – that’s where we differ, like most financial market participants, of course. Nevertheless, regardless of his future prospects, I would like to go back again this week in terms of the number of 4XSetUps – and draw from the full! Because I don’t think we will experience a financial market crisis in 2023 like we did in 2008! Also not like during the Corona virus outbreak! But I fear we will be dealing with stagflation in our west for longer than we would like! And an interest rate cut in the USA for this year 2023 is out of the question. Which is what FED Chair Man Powel sees, if I haven’t misremembered his statements. Even though many in Chicago are already speculating that the FED will cut interest rates again in 2023! I personally don’t think so! I would like to make that very clear at this point, this week! Possibly another rate hike in May 2023!? And then that was probably it?! That`s why I pay more attention to the current daily US Yield Curve than the US CME FedWatch Tool.

However, I think the FED did its job!
And 14 to 15 years after the fall of the Lehman Brothers Bank in 2008, it was publicly formulated in such a way that everyone involved now knows it!
Even US Treasury Secretary Janet Yellen once again expressed her calm about the banking situation. In her fourth speech this week, she assured on Thursday that the banking system is sound. The US bank regulator and the Treasury Department are ready to take on comprehensive deposit insurance for other banks, as they did with the failed Silicon Valley Bank and Signature Bank. “These are tools that we could reintroduce to an institution of any size if we concluded that its failure would pose a risk of contagion,” she said at a hearing of the U.S. House Budget Subcommittee.

Meanwhile, the difference between current US inflation and the current US interest rate is the lowest it has been since US stagflation broke out in July 2021, and/or since Biden is in the White House. Because I`m too of the opinion that the FED is not the problem but rather the solution! Rather, it is the disastrous left-wing green policy of the Christian Democrat Joe Biden, who counteracts the economic policy of his predecessor Trump almost with biblical Cainic wrath! And what does Trump do? He still doesn’t want to and/or can’t admit his defeat from 2020 in public – and argues, with the help of his followers (to which I still count myself up to a certain point) ad absurdum! However, the upcoming US presidential election will be even more politically exciting and the price action even more volatile than we can imagine today?! Nevertheless, regardless of that, I assume, as I have already written to many columns, that we will experience US growth of -1% to +1%. and that for better or worse in 2023 and 2024. I feel like Nourinel Roubini, who wrote on October 3, 2020: “For a year now I have been arguing that the rise in inflation will be permanent, that its causes include not only misguided policies but also supply-side shocks and that central bank attempts to fight inflation will provoke an economic hard landing. When the recession comes, I warned, it will be severe, protracted, and marked by widespread financial distress and debt crises. Despite their hawkish pronouncements, the in Central bankers caught in a debt trap would still “pinch” and accept above-target inflation. Any portfolio composed of risky stocks and less-risky fixed income would lose money on the bonds due to higher inflation and increased inflation expectations.” And that´s why I decided this 13th calendar week of `23 even these 4XSetUps, as I have decided! Why? Read further this and/or all next Technical Analysis 4XSetUps…

All New (Old) 4XSetUps This Week Are Based On The Assumption
That The USD Index (DXY) Will Get Cheaper In Line With The US Yield Curve,
So That US Stocks (In Contrast To 2022) Could Be More Attractive Back Again.
And That´s Why We Should Get An Brief Overview Of DXY, Yields And/Or WallStreet

DXY Tops 103 As US 10-Year Treasury Yield Falls To 6-Month Low, While Wall Street Books Weekly Gain, Despite Banks Concerns

The dollar index strenghtened past 103 on Friday, moving further away from a 7-week low of 102 hit in the preivous session, as investors took shelter in the US currency amid instability in the banking sector. The Deutsche Bank said it would redeem $1.5 billion in a set of tier 2 notes due in 2028 and as its credit default swaps surged to the highest since they were introduced in 2019. At the same time, Bloomberg reported that UBS and Credit Suisse are under scrutiny in a US Justice Department probe into whether financial professionals helped Russian oligarchs evade sanctions. On Thursday, Treasury Secretary Yellen said authorities are prepared for further steps to protect deposits if needed. Earlier this week, the Fed delivered a widely expected 25 basis point rate hike and hinted at only one more rate increase. Still, Powell said that officials don’t see rate cuts this year and are prepared to prolong their tightening cycle if needed.

The yield on the US 10-year Treasury note fell by 11bps to 3.29% on Friday, the lowest since September of 2022, amid a flight to safety as the banking sector turmoil continued. Deutsche Bank shares were under heavy pressure after the bank announced the redemption of $1.5 billion in a set of tier 2 notes due in 2028, and its credit default swaps surged to the highest level since their first introduction in 2019. News of a U.S. probe on Credit Suisse and UBS and a big drop in Deutsche Bank shares also weighed on traders’ confidence. Meanwhile, the two-year yield dropped over 20bps to 3.59%. Bonds were already rising since Wednesday after the Federal Reserve delivered dovish rhetoric along with the loosely-expected 25bps hike in the fund’s rate, indicating that it was on the verge of pausing its tightening campaign to address recent risks to financial stability.

The Dow Jones closed more than 130 points higher on Friday, while the S&P 500 and the Nasdaq added nearly 0.6% and 0.3%, respectively. The upward movement came in while the concerns about the stability of banks still persist. Deutsche Bank’s US-listed shares were down only 3.1% rebounding from a 14% decline earlier in the session. In the morning, DB said it would redeem $1.5 billion in a set of tier 2 notes due in 2028 creating a market panic and pushing banking stocks in Europe sharply lower. ECB President Christine Lagarde tried to ease concerns by telling EU leaders the euro area banking sector was resilient and that the central bank toolkit was equipped to provide liquidity to the financial system if needed. For the week, the three major averages are set to book gains. For the week, the Dow edged up by 0.1%, while the S&P 500 and the Nasdaq gained 1% and 2.1%, respectively.

Let Me Give You Some Basic Background Information About My 4XSetUps At This Point

George Soros is considered one of the most successful stock market speculators of all time. He is one of my literary role models, my super-egos, my egos, if you will – because I love to put myself in his shoes of thinking about his own written theory of reflection – and then, based on this, to draw my own mathematical and/or semantic conclusions. Next to Andre Kostolany, he shaped me the most in terms of my perception of the financial market. One of my two grandfathers, if you will – with a wink, of course. Because George Soros quotes do not deal with small-small, because Soros is a critical thinker who thinks in terms of global economic policy and aligns all his investments with it. The following three quotes can serve as evidence for this way of thinking.

“Before sunrise comes darkness.”
“China is reluctant to take responsibility for the world, Germany is reluctant to take responsibility for Europe.”
“Because of its history, Germany fears inflation more than recession. In the rest of the world it is exactly the opposite.”

George Soros’ quotes are perhaps partly to blame for the fact that he is dividing opinions in both Hungary and the USA like hardly any other major investor. For the nationalists, he is considered a socialist traitor to the fatherland. And/Or also for the socialists as cunning capitalists. Which is why, as his grandson in spirit (if you will), I keep defending him as an international Federal Republican – even if I don’t always agree with him on many different detail political points. And as a Federal Republican, he feels surely like me real good about the fact that he is repeatedly attacked mainly by politically left-wing socialists and/or right-wing nationalists. Just a testament to the fact that he is basically an enlightened international Hungarian American Jewish Federal Republican; just like my humble self, even an enlightened international German Croatian Catholic Federal Republican.

Let Me Detail Ot Clearly And/Or Break It Down To The Point

The lows around 31738 appear to be holding, in the DOW Futire. And are groundbreaking for this week. If the bulls fail to defend this level, a fresh sell-off can smack the DOW futures as low as 30585. So that we would then more or less find ourselves back where we were in October 2022. That`s why we bulls need to recapture the 33031 price action area. Because at this point the DOW Future falls at 1st 2022, after the attacking-war of Russia vs. The Ukraine.

The fact that the gap between the US interest rate and US inflation has never been so low since the outbreak of US stagflation in July 2021, and/or since Joe Biden took office at the end of January 2021, gives me confidence. And proves to me that the Fed has mostly done its job. Even if I don’t expect interest rate cuts for this year 2023 today – like many traders yet (in the Futures). So it doesn’t currently look pro-cyclically bullish for US stocks in New York. But bearish on the DXY and the US Yield Cruve. That’s why I chose the 4XSetUps of this wich just like I chose you.