BOUGHT SILVER (TRADE UPDATE FROM VIP)
Entry: 22.25 (20.35 on $SLV ETF)
Stop: 24.38 (22.28 $SLV ETF) - Trailed in profit
Target: N/A
ANALYSIS
Trailing my stop further into profit after breaking through key resistance, actually outpacing gold!I've mentioned in my videos recently that I believe silver needs to lead gold in order for the metals market as a whole to rally.Historically, this has been key to a sustained rally. Silver led the rally in 2009, 2020, etc.This is my best risk/reward trade this year. Even though it was a small position, it's still doing some work!
- Nick
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March's inflation report for the month of February came in higher by 0.10% suggesting that there is still stubborn CPI levels in the US. Higher inflation is usually good for a currency if the economy is showing growth. However, with GDP declining and a less robust labor market, the US economy may be experiencing what could be the start of a weaker dollar. Although rate hikes have brought down inflation by a considerable amount since March 2023, it is stalling around the 3% range. With this data at least, the Fed might not be so inclined to cut rates this year.
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Gold is now selling off for the first time in 9 days of upside. The higher inflation news in the US has caused gold to retrace back near the previous all time highs of $2,148. This may push the Fed to keep rates higher for longer, however, at the expense of dollar strength. This is because if GDP continues to slow and inflation rises, high interest rates are not strengthening USD at that point.
-Frank
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GBP/USD
GU sells off harder today after higher than expected inflation rates in the US. Core stayed where it was and CPI y/y and m/m came in hotter. This initial reaction could be due to the fact the Fed is in a tough position now. Cutting rates would only push inflation higher but may cause GDP to rise again. Keeping rates high for longer will take a toll on the GDP and may not even help decrease inflation.
-Frank
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This rally has been insane...
Is gold getting tired? I will stay in my longs unless we break 4H support.
- Nick
Retail is still bearish the indices but recruited a few more players to the short side. EURUSD, GBPUSD are now short by the crowd. USOil is still long and a few other USD pairs are still mixed. -Frank
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The NAS100 is still hanging on to the uptrend although the index is down today. Tech stocks have been outperforming the rest of the market with help from strength in the semiconductor sector. Because stocks have been very resilient over the last couple months, it's hard to say when/if a pullback will happen.
Tomorrow's number is going to be very important in determining direction for the stock market. Unlike gold, investors want to see a softer inflation number which would help alleviate pressure from the Fed who may think they will be forced into a rate cut should inflation continue to rise. -Frank
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Very important news in the US comes out this week which is CPI. Any signs of higher inflation could be detrimental to the indices, dollar and oil.
Читать полностью…Wages have also dropped today which could be indicating a potential decline in inflation. Although wages have mostly remained steady, it's still a good sign to see wages fall since it could be due to declining inflation. Tuesday's CPI report is going to be important for investors' outlook on an interest rate cut.
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NFP came in hotter than expected, however, unemployment rate did too and wage growth declined to 0.1%. Another thing to note is that jobs numbers beat expectations but broke the 3 month streak of steady growth. Last month's report was 353K, today's was 275K. Last month's NFP was revised to only 229K in today's report as well. The indices' markets initial reaction is negative in premarket. Gold is mixed, dollar is down on the day, oil is also down.
What we can take from this is probably a weaker jobs market considering that UE rates rose and CPI levels were stubborn. Although premature, stagflation concerns may take hold in the market as we see declining growth and higher CPI. We just need to watch for the next inflation report now. -Frank
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The assets with an arguably bullish stance are the ones being sold by the crowd. Meanwhile, AUDUSD, GBPUSD and EURUSD are mixed. Oil is one of the top short positions from the crowd as well.
- Frank
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BOUGHT GOLD (TRADE UPDATE FROM VIP)
Entry: 2026.87 (187.79 on $GLD ETF)
Stop: 2150.00 (199.03 $GLD ETF) - Trailed in profit
Target: N/A
ANALYSIS
Trailing stops slightly tighter - below the swing low of yesterday.My added long position from yesterday is looking like it may have been a good call. Support seems to be holding for now.If we proceed to break through the highs, I will look to trail further!What a runner... This is my most profitable trade of the year so far, but silver has this one beat in terms of risk/reward
- Nick
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Читать полностью…Employment change dropped this morning in the UK and actually showed a negative change this month. This means that jobs were lost in today's report which is indicating weakness in the UK labor market and pound. The overall labor score for GBPUSD is a -2 as unemployment rate has also ticked up in the most recent report.
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NAS100 tech index is up after higher inflation in the US. This reaction is a little strange as the Fed may need to keep rates higher for longer. Unfazed by the alarming rise in CPI, stocks may see more upside towards the $18,300s where price has topped before. NAS is still on a rising trend line as well that has yet to break.
-Frank
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Although a positive change in US inflation will cause the EF score to change to a -1 on the pair, it still may be bullish this time around as fears of stagflation in the US are still prevalent. Either way, the Fed is likely going to cut rates. It is just a matter of whether they are forced to or not.
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Retail is still bearish the indices but recruited a few more players to the short side. EURUSD, GBPUSD are now short by the crowd. USOil is still long and a few other USD pairs are still mixed.
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GU is still a strong bullish reading on the EdgeFinder although the score fell by -1 since Friday. The trend reading is now weaker than before after price came up to test a strong resistance level on the 1D timeframe.
Tomorrow's CPI is equally as important for this pair as the pound is trading directly against the dollar. CPI values will determine whether GU is on support or resistance in the next few days. There could be a bullish argument for both higher or lower CPI. This is because both directions could still indicate a rate cut. Either way, it's bearish for the dollar. -Frank
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Last week, we talked a lot about a potential stagflation issue going on in the US. It comes down to tomorrow's CPI number and how investors interpret the data. Gold most likely wants to see a higher level of inflation to indicate falling growth and labor with rising CPI.
The metal's score has changed by -1 to take price down from +7 to +6. COT still shows heavy interest in gold and bitcoin which could be serving as a hedge to stagflation. Instead of beating expectations, it will be important to watch which CPIs come in higher than the previous month, Core especially. -Frank
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NAS100 continues to chug higher after a stronger than expected rise in job numbers. However, after revisions, last month’s NFP showed a stark 124K difference in the real number of jobs added (actual: 353K, revised: 229K). This month was 275K, but can we believe that number will hold up in next month’s NFP report with revisions? Unemployment rates rose as wages declined. This news is on top of an already slowing economy and stubborn inflation levels. At some point, it seems that the indices may reach their peak, but the question is when. Investors need to stay cautious during this period as rate cuts may come as a necessity rather than a luxury.
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Forecasts are now projecting Europe's interest rate to stay the same while USD's is lower in the coming quarters. Because of this, the dollar is likely going to be weaker than other currencies for some time. ECB remained unchanged once again at their policy rate meeting. They believe that inflation will continue to cool with through 2025 to hit slightly lower than 2% by the end of next year.
- Frank
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We can watch retail sentiment deteriorate over time as gold continues pushing higher towards $2,160s. Smart money is not short, but they are slowly moving some funds out of the metal and potentially taking profit.
- Frank
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GBPUSD is now in the bullish range after gaining another point this morning. The trend is reading stronger as the dollar index continues to drop by another 0.4% today. Whether or not the Fed cuts rates due to stagflation or an expansionary environment, it still does not look very bullish for USD.
This is because investors are expecting rate cuts at some point in the near future. Whether it be for a healthy or poor economy, it's not a good look for the dollar. The stagflation scenario, however, is more bearish for USD.
-Frank
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