2022/05/15 (046) Column
Let`s Wait And See In The NASDAQ 100 Until End Of June `22
After Bad US Economic Data Last Week, This Should Hardly Follow Better,
So That US Stock Markets & US Yield Curve Should Stay More As Volatile
However 4 Long 4XSetUps (USDX, FB, MSFT & UKOIL) Are Still In Play
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Foreign Exchange Market Analyst Marc Chandler
Has Determined Which Factors Will Shape The Coming Weeks
As Mark Chandler, chief market strategist at Bannockburn Global Forex, writes in an op-ed for „The Market“, there are three main fundamental forces that are shaping the climate of the global economy and financial markets and will continue to do so in the coming weeks will. On the one hand, there is the Ukraine war and the associated sanctions against Russia, which would further intensify inflation and slow down growth. On the other hand, he also mentioned the zero-COVID strategy continued to be pursued by China in the omicron wave, which threatens Chinese domestic growth and is a burden on global supply chains. As a third factor, Chandler also listed the “hawkish” turn by the US Federal Reserve.
This recently initiated the turnaround in interest rates and in May raised the key interest rate for the second time since the beginning of the corona pandemic – this time by 50 basis points. The Fed also announced that it would start winding down its balance sheet on June 1, which Chandler says will amount to another rate hike. “The futures exchanges expect the key interest rate in the USA to rise to 2.85 percent by the end of the year,” said Chandler. This anticipated tightening reduced investors’ willingness to take risks. “It also keeps the dollar a broadly higher trend in forex trading and weighs on US economic growth prospects“, the strategist said.Expect A 50 bps Linear Hike In US Interest Rates Until The End Of This Year 2022 Meanwhile
And that although I once instinctively and emotionally expressed my support for an interest rate hike of 100bps, even 200bps.
And not because i want to be right – not that we misunderstand each other. Rather, to make it clear to all gamblers and speculators, and WallStreet, “not with me (my gamblers), my WallStreet. I don’t want to pit WallStreet against MainStreat. And in doing so, sacrifice the middle class by unspoken inflation. Approvingly, in the truest sense of the word, because of the sprawling fiscal policy of the US Democrats, under Joe Biden’s watch”.
However, but as more I think about it, “How high and how fast should interest rates go (my personal opinion)?“, „will they go (expectations of what Powell and his men and women will actually do)?” I also admit to myself, I hereby expressly write to you, that it is probably better, and/or much more diplomatic, in the best sense, for the USA now to raise interest rates linearly, by 50bps at a time. After I was somehow still hoping for”only an accumulation of 25bps, per session, until the end of the year” until the interest rate decision earlier in this month May`22. But US inflation is just too high! And that primarily because of the fiscal policy and/or the left-wing green economic policy of the US Democrats! Not that we misunderstand each other as far as the cause is concerned! Even if many of my esteemed colleagues argue otherwise. But I won’t be able to convince myself about this…At Weekend The Traders In Chicago Excepted With 92.5% A 50bps Hike To 125-150bsp On 06/15/2022
And with 86.7% a 50bps hike again to 175-200bps, on 07/27/2022
But only with 54.5% interest rates to 200-225bps, and/or with 38.9% to 225-250bsp, on 09/21/2022
Like with 53.8% interest rates to 225-250bps, and/or a with 39.1% to 250-275bsp, on 11/02/2022
Like with 52.4% interest rates to 250-275bsp, and/or a with 39.1% to 275-300bps, on 12/14/2022
So that interest rates will be more or less between 250-300bps at the end of this year 2022
If we assume a linear interest rate hike by the FED of 50bps, then interest rates should even be 325-350bps at the end of 2022.
The traders in Chicago, however, currently assume that they are most likely to end up at 250-275bps with a probability of 52.4%. So, at least for the fall of 2022, there is still plenty of scope for further fears of an interest rate hike that is too fast and too tight. For the summer of 2022, however, it seems clear that interest rates will be raised by 50bps in June and July 2022. And that`s why I closed our NASDAQ short trading capability last week. Since Jerome Powell a rate hike of more than 50bps, not literally but analogously, if you trust the words of his colleagues, don`t put on the table. What I do…
Tuesday, Wednesday And Thursday New Numbers From The US Economy Will Give Us The Direction Of The Markets For This Week
After consumer confidence, which read almost depressed on Friday, after inflation, as well as producer prices and foreign trade prices, continued to stagnate at historic highs, the NASDAQ 100 recovered surprisingly well until the weekend. It remains to be seen how financial market participants will react to retail sales and industrial production on Tuesday, Wednesday to the Housing Starts and Building Permits, as well as on Thursday to the Existing Home Sales. Do the bears continue to sell US stocks at these current prices? Or will the bulls buy, since the fear of an excessively rapid and steep wave of interest rate hikes is gone, at least temporarily? So that US stock markets could recover next days, next weeks – may be this summer!?
DEVISE 2 DAY Another 48h – Where I Was Wrong, Where I Was Right
On Wednesday our open long trading capability (from 02/13/2022) in APPL (entry 169 USD, stop 150 USD & target 230 USD) was stopped out. Which is one of the reasons why I also dissolved our TSLA short trading capability (from 02/21/2022 with an entry by 855 USD, stop by 1200 & target by 430 USD). But in this 4XsetUpat least with a realized gain of 121 USD (Wednesday closed by 734 USD). As well as our NDX short trading capability, on Thursday too (from 02/16/2022 with an entry by 14.500 & target by 12.000). So overall, when we compare all of our 4XSetUps, the bottom line is that we still have a profit to show for it. And that without paying attention to our first successfully completed UKOIL long trading capability (from 02/15/2022). When UKOIL traded faster as originally expected at USD 130 (04/06/2022) due to the outbreak of war in eastern Ukraine.
However, today i wrote an another NDX technical analysis for the next days, for the next weeks – until end of June `22. But without an entry/exit 4XSetUp. Because i have something other things to get real about it. So bear with me. Because i want to release from July our D2D better than before! And that regardless of whether I will come to a new and or better agreement with a new broker, and/or even a publisher!? Or not?! Until then, find out more from other media that you also trust. And note the other 4 open long trading capabilities: USDX, FB, MSFT and/or UKOIL.
good morning, good day, and/or good night
at whatever time, wherever you are !
right here right now :