2022/07/11 (047) Technical Analysis

The Future Of The US Economy Has Never Looked Worse!
We may Have Had A Psychological Knock Out Of The Bears In June`22?
And That`s Why This Long Trading Capability In The DOW FUTURE Aims For…

Wall Street Starts Week In The Red

The main US stock indices declined on Monday, with investors treading carefully as fresh economic data and corporate earnings reports to be released this week will shed light on current recession risks. The Dow Jones lost over 160 points, while the S&P 500 and the Nasdaq fell 1.1% and 2.2%, respectively. Sentiment remained clouded by bets that the Federal Reserve will continue to hike interest rates aggressively, recently supported by stronger than expected payroll data released last week and expectations that this week’s CPI figure will point to an acceleration in consumer prices. On the corporate front, Twitter shares slumped over 11% after Tesla CEO Elon Musk said he canceled his takeover deal because the social media company violated several merger agreement provisions. The rest of the tech sector followed, with Alphabet and Amazon both losing 3%.

10-Year Treasury Note Eases Below 3%

The yield on the 10-year US Treasury note, which sets the tone for corporate and household borrowing costs worldwide, eased to below the 3% mark as investors continued to assess recession risks against the outlook of interest rate hikes by the Federal Reserve. A batch of economic data, including June consumer prices, will give further information on the Fed’s aggressiveness in its subsequent decision. Several policymakers, including Chair Jerome Powell, already backed a 75bps rate hike in the central bank’s next meeting while saying that monetary policy needs to be more restrictive to tame inflation, even if it hampers growth. Meanwhile, the yield for the 2-year instrument was at nearly 3.1%, remaining above its 10-year counterpart and reflecting a higher perceived risk for the short-term.

Dollar Index Hits 108

The dollar index topped the 108 mark for the first time since October 2002 as investors have dramatically upped their bets that the Federal Reserve will move even more aggressively to tame inflation. Several policymakers, including Chair Jerome Powell, already backed a 75bps rate hike in the central bank’s next meeting while reiterating that the Fed will use its monetary policy tools to return inflation to the 2% target, even if it hampers growth. Such a narrative was exacerbated by a stronger-than-expected jobs report last week. While market participants are increasingly concerned about the economy’s prospects, businesses remain optimistic about their progress, with an unwavering appetite to hire. This dollar’s strength has been seen across the board, but some of the most pronounced buying activity was against commodity-linked currencies such as the Australian and New Zealand dollars.

The Liquidity Of The USD Serves As A Safe Haven

Since the all-time high, by 36.832 points, the CBOT_MINI E-mini Dow Jones ($5) Future has fallen. On the other hand, both the USD and/or the USD yield curve increased in price. It is important to take this into account – and keep it in the back of your mind. Because it manifests the US financial market as a safe haven. Safe haven, in the context that the US financial market is not only the largest but also much more the safest. And that nowadaysalmost everyone who is interested, with liquidity, can get in and out every second during opening hours. Therefore, due to the high US inflation, as well as in our so-called West, due the energy supply problems here in Europe, especially here, in my home country, Germany, and last but not least, due to Russia’s war of aggression, in eastern Ukraine, it goes without saying that the US stock markets, especially the CBOT_MINI E-mini Dow Jones ($5) Future developed as it did.

The Most Important Higher-Level Prizes

36832 01/05/2022 (a) previous all-time high
35752 02/22/2022 (b) 1st interim high after all-time high
35413 04/21/2022 1st interim new high above 200SMA after 3rd low above
35281 03/29/2022 (c) 2nd interim high after all-time high
33928 12/01/2021 (1) last low under 200SMA before all-time high
33434 05/31/2022 false break-out after reversal before lowest price
33031 01/24/2022 (2) 1st interim low after all-time high
32167 02/24/2022 (3) 2nd interim high after all-time high
31867 06/28/2022 1st interim new high after lowest price
31490 07/08/2022 2nd interim high after lowest price
31148 05/12/2022 1st another interim new low after (abc) (123) reversal

31140 07/14/2022 today`s close (last trading price)

30585 05/20/2022 2nd another interim new low after (abc) (123) reversal
29639 06/17/2022 lowest price so far after all-time high