2023/02/02 (162) Column

The suffering with the shelf life
of my 4XSetUps


A colleague whom I was not able to win over for the stock exchange during my last job, in a supermarket, asked me door to door at the time why I write market analyzes and/or forecasts every day? And sometimes later, exactly the opposite! Last month you wrote to sell US stocks, especially the nasdaq – and now we should buy some, shares of the dow jones!? Something is wrong with you?!

The young colleague and my former superior, who could have been my son, did not even know the latest monetary policy, the leading central banks, the most traded currencies on this planet at that moment. Let alone the latest economic data, and/or on which the central banks base their monetary policy? And from the fundamental problem of the market, i.e. the other financial market participants, i.e. all of us – who deal more or less (in)directly with the price action – who once again confirm the problem he formulated, I don’t want to philosophize about it at this point: What good is central bank information? What is the impact of economic data? What is the connection between the individual market price actions? Which scenario is currently being traded on US WallStreet? And what does technical analysis bring? I ask myself these questions and more every day! Don’t you, too?

Right at the beginning of 2023, increasing confidence prevailed that the “major upward correction” would continue in most economic data. Too high inflation is depressing growth – so that even in a recession we will all have to find ourselves in 2023? Recently, for example, the internationally researching sentiment analyzes by Sentix came with a different tone, before some days: “We are measuring a surprisingly clear slump in sentiment on the stock markets. Sentiment values are already falling close to the buy zones again. That means we can expect further price gains over a period of more than two weeks.”

Oops, now it’s getting complicated:
the basic strategic trust, on the other hand, still leaves a lot to be desired! am i the only cop here? Is it good! Or am I an excellent counter-indicator? And/Or on WallStreet it was said: “On the other hand, the basic strategic trust is still not really convincing. Although we are also measuring an improvement here, the balance is still slightly negative. Statistically, not much can be expected here over a period of several weeks.” That’s it! I see it that way too! I also perceived it that way! And here the rabbit is usually buried in the pepper, my dear lovely readers! And that usually always in the case of any other information – independent of the esteemed Sentiment Research colleagues at Sentix, let alone my information, from every DEVISE 2 DAY Affiliate Financial Market Online Newspaper Edition. Because based on every single piece of information, every investor and/or trader always has 3 options for action: buy, sell, or do nothing!Therefore, at this point,
in today’s column, my basic insight, dear readers:
Follow the daily ongoing releases of indicators and forecasts (as well as the analyzes of the analyses), because they are primarily of exclusive use to the short to medium-term trader. And paint your own jigsaw puzzle (about the future) the following day after sleeping on it for at least a night. So that you can incorporate this short-term, medium-term new information into your overall, long-term picture of the future! Because that’s the only way – that’s the only way – you too will, one day, become a winner, who correctly analyzed the price action in retrospect, and in the present, understands better and better how to correctly anticipate future price action! And then also because you werr wrong for days, because you were wrong for weeks, because you were wrong fir months, because you were wrong for quarters, because you were wrong years long, with your analysis! And in the present you`ve come to a new realization about the past – even the future also.

Nothing more exciting than the everyday suffering
of a US Wall Street Veteran, now almost 45 years old!
Still childless – but already felt like grandpa, because of everything already experienced (as far as the price action is concerned)…
DEVISE 2 DAY 48h
– My Last Thoughts Abot Market Price Actions

It will be a very busy week with central banks meetings in US, UK, and Euro Area and/or US non-farm payrolls report taking central stage. Also, investors will follow inflation and GDP growth rates for major European economies including Germany, France, and Italy. Finally, it will be worth following fresh PMI readings for the US, China, Canada, India, Australia, and South Korea.

In addition, there is also the strongest week in terms of quarterly reports, on the US Wall Street. It will be and is one of the most groundbreaking weeks of this year 2023! And that already in the fifth calendar week of 2023.

However, DOW Future long (as a conservative base investment), DAX Future long (as a German patriot, without overpriced technology companies from Silicon Valley), incl. EURUSD long (after the FED had already done most of its homework in 2022 – in contrast to the ECB, which still has to do it in 2023). And/Or also long TESLA shares – as an highly speculative admixture. If you go long, please only with a maximum of 5% of your portfolio with these four 4XSetUps. And that only from today’s perspective. It should be worth, more or less, until the end of 2023! Don`t you think so? More every day – today also.
DEVISE 2 DAY Another 48h
– Some Last News About Market Price Actions

The offshore yuan appreciated toward 6.7 per dollar, heading back to its strongest levels in nearly seven months as the US Federal Reserve reduced its rate hike size and confirmed the progress in its inflation fight, igniting hopes that this tightening cycle might be nearing its end. Meanwhile, a private survey showed Chinese manufacturing activity remained contractionary in January, at odds with the official data indicating the unexpected return to growth. Robust holiday spending and tourism data during the week-long Lunar New Year celebrations also raised hopes of continued economic recovery in China. At the same time, Beijing vowed to promote consumption as a major economic driver and to boost imports. On the monetary policy front, the People’s Bank of China kept its key lending rates unchanged for the fifth straight month at its January meeting.

Asian equity markets mostly rose on Thursday, tracking gains on Wall Street overnight as the US Federal Reserve reduced the size of its rate hike and said it has made progress in the fight against inflation. The US central bank also signaled more rate increases ahead, but hopes that this tightening cycle may be nearing its end is growing. Investors also assessed data showing annual inflation in South Korea rose to a three-month high in January despite forecasts for further easing, while building permits in Australia rebounded sharply in December. Shares in Australia, Japan, South Korea and Hong Kong advanced, while mainland China stocks declined.

China Stocks Mixed on Thursday
Hong Kong Stocks Hold Above 22,000 Mark

China Stocks Mixed On Thursday
The Shanghai Composite inched up 0.02% to close at 3,286, while the Shenzhen Component lost 0.222% to 12,131 in mixed trade on Thursday. Mainland stocks struggled for direction despite upbeat global sentiment lifted by the US Federal Reserve’s decision to reduce the size of the rate hike and its confirmation of progress in the fight against inflation. On Wednesday, a private survey showed that Chinese manufacturing activity remained contractionary in January, at odds with the official data released on Tuesday, which indicated the return to growth. Among single shares, losses came from heavyweight firms such as East Money Information (-2.7%), Contemporary Amperex (-2.2%), and Citic Securities (-2.9%), while gains were seen from Naura Technology (7.5%), Wuliangye Yibin (1.3%) and Jiangsu Hengrui (1.3%).

Hong Kong Stocks Hold Above 22,000 Mark
The Hang Seng rose 48 points or 0.23% to 22,120 on Thursday morning deals, continuing its recent upward trend while staying above the 22,000 mark, helped by an upbeat session on Wall Street overnight after the US Fed raised its interest rate by the expected 25bps and acknowledged that inflation in the economy was starting to ease. Locally, the HKMA lifted the base by a similar size as the Fed did, taking borrowing costs to the highest level since January 2008 of 5.0%. Meantime, city’s leader John Lee said recently he hoped all pandemic measures would be dropped this year, including the mask mandate. In China, President Xi Jinping planned to spur consumption and reaffirm his commitment to accelerate technological independence in the country. The healthcare sector drove the gains, amid notable rises from Xino Biopharmaceutical (4.6%), CSPC Pharmaceutical (3.3%), and Wuxi Biologics (3.2%). Other early performers were Baidu Inc. (6.3%), Sunny Optical Tech. (4.3%), and Xiaomi Corp. (3%).European Stocks Rise To Over 9-Month High

European bourses enjoyed some respite on Thursday, with the benchmark DAX 40 adding more than 1% to an almost one-year high of around 15,400 points, driven by gains in the real estate sector. The European Central Bank raised interest rates by a widely expected 50 bps to 3% while hinting at a similar hike at its next monetary policy meeting in March. Despite the ECB not providing a more dovish tone like its US and UK counterpart, risk appetite remained supported by speculation that the tightening cycle is about to end. Yesterday, policymakers in the US reduced the size of rate hikes as expected while acknowledging that the central bank had made progress in the fight against inflation. Still, it hinted at more increases in future meetings. In corporate news, Deutsche Bank reported its tenth consecutive quarter of profit. However, shares came under pressure as investors honed in on an uncertain outlook and weakness in the investment bank.

The euro steadied near $1.09 on Thursday, remaining close to levels not seen since April last year, as investors react to central banks meetings in US, UK, and Euro Area. The Federal Reserve raised rates by 25 bps while both the BoE and the ECB hiked rates by a bigger 50 bps. Looking ahead, ECB officials hinted at another 50 bps rate hike at the March meeting and said the subsequent pace will be data-dependent. In the US and the UK, policymakers were optimistic that inflation had peaked.

European equity markets enjoyed some respite on Thursday, with the benchmark Stooxx 600 rising 1.4% to nearly 460, the highest since April last year, buoyed by gains across technology and auto stocks. Domestically, the German DAX added 2.2% to a 1-year high of 15,509. Among single stocks, Deutsche Bank retreated more than 6% as investors honed in on an uncertain outlook and weakness in the investment bank even after it reported its tenth consecutive quarter of profit. On the monetary policy front, the ECB raised interest rates by a widely expected 50 bps to 3% while hinting at a similar hike at its next monetary policy meeting in March. Despite the ECB not providing a more dovish tone like its US and UK counterpart, risk appetite remained supported by speculation that the tightening cycle is about to end. Yesterday, policymakers in the US reduced the size of rate hikes as expected while acknowledging that the central bank had made progress in the fight against inflation.

FTSE MIB Rises to Near 1-Year High
CAC 40 Rises to 1-Year High
Madrid Stocks Conquer 9200 MarkFTSE MIB Rises to Near 1-Year High
The FTSE MIB index closed 1.5% higher at 27,100 on Thursday, extending gains for a third session to its highest in one year as investors digested a batch of monetary policy decisions and corporate results. The ECB raised its key rates by 50bps, as widely expected, and signaled another 50bps rate hike in March to rein in excess demand. In the meantime, the Fed hiked its rate by a slower 25bps, while the BoE added 50bps to its Bank Rate. Bets that the Fed will cut rates this year supported Milan’s tech sector to jump by nearly 4%. Among single shares, Telecom Italia soared 9.5% after US private equity firm KKR & Co. made a bid for the telecom’s fixed-line network. In the meantime, Ferrari surged 7.3% after beating estimates for fourth-quarter profit and raising its guidance.

CAC 40 Rises to 1-Year High
The CAC 40 index closed 1.3% higher at 7,167 on Thursday, rebounding from last session’s drawback to reach its highest in over one year as investors assessed the outlook for monetary policy for major central banks. The ECB hiked its key rates by 50bps and signaled another similar rate increase in March, despite underscoring concerns about low growth. Meanwhile, markets rallied as investors digested a slower 25bps rate increase by the Federal Reserve, prompting rate-sensitive sectors in Paris to book sharp gains. Heavy-weight luxury brands booked strong gains, led by a 5% jump for Kering and a 2.3% advance for Hermes. Tech shares also moved higher, carried by a 12.4% surge for Dassault Systemes following the release of strong corporate results.

Madrid Stocks Conquer 9200 Mark
The Ibex 35 rose by 1.45% to 9,229 on Thursday, advancing for the second session and reaching levels last seen in June 2021, as investors welcomed the softer rate hike by the Fed and strong earnings reports. Thanks to the companies’ presence in the US, Fluidra and GRIFOLS jumped by respective 8.18% and 9.27% after the Fed announced its 25bps rate increase and confirmed the progress in reigning in inflation. Shares of Banco Santander also surged by 5.73% since the lender reported its record profit of 9,605 million euros in 2022, 18% larger than last year’s, thanks to the strong growth of commercial activity, good asset quality, and cost control. Meanwhile, Banco Sabadell (-3.99%) and Repsol (-2.94%) were the biggest laggards.

UK Shares Hold Gains After BoE Decision While Russian Shares Rise For 5th Session

Equities in London snapped two sessions of losses on Thursday, with the FTSE 100 bouncing back above 7,800 points, driven by gains in real estate and consumer discretionary stocks. The Bank of England raised interest rates by a widely expected 50 bps to 4%, but like its US counterpart, sounded more dovish, saying inflation had probably peaked. The BOE also softened its recession forecasts for this year but warned that the economy will not recover to pre-pandemic output levels until at least 2026. The announcement comes a day after the Federal Reserve slowed the pace of its rate hikes by delivering a modest 25 bps hike. On the corporate side, JD Sports Fashion jumped more than 10% to lead the FTSE 100 after the retailer outlined its strategic focus for the next five years, including plans for 250 to 350 new stores every year. In other corporate news, Shell posted a record annual profit for 2022 due to soaring oil prices and robust demand since Russia invaded Ukraine.

The ruble-based MOEX Russia index closed 0.6% higher at 2,243 on Thursday, gaining for the fifth session with support from miners and metal producers, while energy companies continued to underperform. Gold miners led the gains, with Seligdar shares soaring nearly 7%. At the same time, Polymetal jumped 5% with continued support from strong quarterly results published last week and the possibility that the gold miner could move to list itself in the Astana International Exchange to escape Western sanctions. Further, steel giant Severstal closed 2.2% higher after posting Q4 results, while expectations of higher import demand in China also boosted the sector. On the other hand, oil and gas producers underperformed and closed mixed as investors await the G7’s price cap on services linked to Russian diesel and fuel exports to be set tomorrow.

European Bond Yields Retreat After ECB

The yield on the 10-year German Bund fell past 2.1%, retreating from the one-month high of 2.31% touched on January 30th as investors assessed the policy outlook for the European Central Bank following its February meeting. The ECB raised its key rates by 50bps, as widely expected, and signaled another similar hike in March to extend its efforts against soaring inflation in the bloc. Still, policymakers stated the bloc’s economy could contract both this quarter and the next, easing the extent of hawkish bets for the medium term. Additionally, the central bank confirmed that it will reduce its bond portfolio by EUR 15 billion per month during Q2 but refrained from making pledges for the year’s second half. In the meantime, European bondyields felt downward pressure after the Federal Reserve raised its funds rate by a softer 25bps, while Chairman Powell omitted a sharp warning against easing financial conditions and further fed bets of a dovish pivot this year.

The yield on the Italian 10-year BTP sank below the 4% mark in early February, tracking other neighboring bond yields after the European Central Bank delivered a 50bps hike in its main interest rates. The central bank also signaled a similar rate increase in its March meeting to extend its effort against soaring inflation in the currency bloc, while money markets bet on a final 25bps hike in May before a pause in the tightening campaign. Still, policymakers stated the bloc’s economy could contract both this quarter and the next, easing the extent of hawkish bets for the medium term. The central bank also confirmed its pledge to reduce its EUR 5 trillion bond portfolio by EUR 15 per month during Q2, but refrained from signaling a higher pace for quantitative tightening in the second half as loosely expected. The closely watched spread between the 10-year BTP and German counterpart narrowed to 170bps, the lowest since April, to signal lower credit risk relating to Italy’s high debt.

The yield on the French 10-year OAT fell to 2.5%, tracking the sharp decline of European bond yields and approaching the five-week low of 2.45% touched on January 18th as investors digested a batch of monetary policy decisions by major central banks. As widely expected, the ECB raised its key rates by 50bps and signaled another 50bps increase in its March meeting to battle the stubbornly high inflation. Still, bond prices received support as the central bank underscored concerns of slowing growth this year and refrained from announcing a faster pace of quantitative tightening at the start of Q3. In the meantime, Euro bond yields also felt downward pressure after the Fed raised its funds rate by a softer 25bps.DEVISE 2 DAY 48h
– Where I Was Wrong, Where I Was Right

We are heading into one of the most important weeks of the quarter, of this year 2023, with a flurry of important economic data including big ecomony data from the united states – even the us jobs data, on friday. The FED meeting on Wednesday will be followed by decisions at the Bank of England and the ECB over the course of the week. At the same time, a wave of earnings news is sweeping Wall Street, with the focus on the tech sector. AMD reports Tuesday night, followed by Meta on Wednesday night and Apple, Amazon and Google on Thursday night. Caterpillar, Eli Lilly, Exxon, Ford, GM, McDonald’s, Pfizer and Starbucks are also reporting results throughout the week. It’s hardly surprising that we’re seeing some profit-taking after the massive rally. The Nasdaq is up 11% year to date with the Russell 2000 up over 8%.

However,
the first experiences in 2023 are far too short to make presumably reliable predictions, and/or the periods of professional forecasts are also too different – like at every start of any year. Nevertheless, I have now dared to do it – at the end of January 2023 and/or at the beginning of February 2023:

DOW Future long
(as a conservative base investment)

DAX Future long
(as a German patriot, without overpriced
technology companies from Silicon Valley)

incl. EURUSD long
(after the FED had already done most of its
homework in 2022 – in contrast to the ECB,
which still has to do it in 2023).

and/or long TESLA shares
– as a highly speculative admixture.

If you go long a maximum of 5% of your portfolio withthese four 4XSetUps, it sgould be wirth (from today’s perspective), more or less, until the end of 2023! Don`t you think so, also?

Of course I don’t know how the future, let alone how the price action will develop in this year 2023 either. Nevertheless, it is not important, as most market guys always assume, to anticipate the future correctly, but rather to position oneself accordingly for certain upcoming scenarios – and/or much more in doing so all imaginable (mathematically and or but also semantically to include justifiable) scenarios. And that’s what I’ve just done with our four long 4XSetUps trading capavilities. Because the inflation, the war, let alone the energy crisis, of 2022 has been a disastrous year for the economy, markets and consumers. Let’s not fool ourselves, please. And in 2023 a recession is may be to come. However, it is unclear whether it will be a hard landing or just a mild downturn. Therefore always operate with stop-lost marks to secure losses. And/Or also target price marks – even if there may be other possible profits.

All experts agree that 2022 was one thing in particular: unprecedented. For the first time in more than half a century, both stocks and bonds brought losses to investors, while consumers in Europe and Germany suffered from double-digit inflation rates in some cases. Will 2023 bring improvement? Or is the great economic collapse coming? What I do not know! But I will, also this year, every trading day, to the best of my knowledge and belief, inform you so competently that you can hardly wait to read my, our, your, next DEVISE 2 DAY Affiliate Financial Market Online Newspaper again tomorrow.

Due to the numerous regular meetings of the central banks, and or at the same time the natural reporting of the quarterly figures on Wall Street, don’t forget to include the commodity price action also in your considerations, my dear, loyal readers.

Because I’ve been playing with the idea of formulating a new 4XSetUps trading capability in the UKOIL for days. Where we had already realized three profitable 4XSetUps and/or three lossy 4XsetIps last year 2022. But I currently lack the courage, and or the conviction! However, anyone who is courageous and/or has a conviction regarding the oil price action should contact me this week via email Devise2Day@gmail.com…