This setup with high retail optimism and lower COT bullishness suggests the potential bearishness we may start to see in currencies trading against the dollar. This chart shows that smart money is increasingly short NZDUSD while retail is heavily long after yesterday's FOMC conference.
Data from the A1 EdgeFinder
📈 Trial the EdgeFinder
🚨 10% OFF w/ Code TGVIP
Right now the US indices are neutral for the most part. The market doesn't know where to go with the data we have now. Mixed sentiment is usually a bad place for traders unless they are taking quick intraday moves like what we have seen the past couple weeks.
The Russell is very interest rate sensitive as it consists of smaller companies that need yields lower for a smoother business operation. If you take a look at the US indices, you might have noticed that despite the 2-3% moves that happened during the day ended up closing back to where they opened.
Data from the A1 EdgeFinder
📈 Trial the EdgeFinder
🚨 10% OFF w/ Code TGVIP
NZDUSD is flashing bearish signals on the EdgeFinder. The score is now -12 and has remained lower than -10 for the most part for the last month. This is likely due to the monetary shift in Fed sentiment who had originally forecasted three rate cuts by the end of this year.
However, we are not seeing any of these plans come to fruition as we approach the middle of the year. Now the question remains when, if any, the cuts will come. As forecasts keep getting pushed back deeper into the year, it raises fears that they won't come until next year.
Data from the A1 EdgeFinder
📈 Trial the EdgeFinder
🚨 10% OFF w/ Code TGVIP
We Are Live With The Trading Battle!
Don't miss out as two traders go head to head for charity! First challenge is coming up!📈
WATCH HERE
40% OFF SALE ENDING!
Use code TGVIP here:
https://a1trading.com/edgefinder/
Questions? CHAT US HERE NOW:
https://tawk.to/chat/62e5d26254f06e12d88c1ec2/1g98rrk80
Point 2: Jobs data is strong. People are employed, consumer still spending, earnings still healthy for companies. This could lead to a persistent period of demand induced inflation!
Читать полностью…It is unlikely, but don't rule out the possibility of Powell mentioning rate hikes potentially being appropriate tomorrow.
This could lead to continued USD strength, and a continued selloff in the stock market.
- Nick
EURUSD Daily Chart:
Big picture, the dollar continues to look strong relative to European peers.
Like this message if you want me to expand more details... for those of you fundamental nerds like me!
- Nick
Let’s buy some stocks!📈
Our portfolio has been performing well so far during earning season! Remember, we’re buying partial shares of whatever YOU vote for!🔥
In the US and need a broker? Sign up with Webull!
Unemployment claims came in lower than expected but matched last month's number of 212K claims. Lesser claims than expected is a good sign that unemployment is slowing down and the job market is still in line with Fed policy.
Data from the A1 EdgeFinder
📈 Trial the EdgeFinder
🔓 Use Code TGVIP for 40% Off
Retail is betting heavily on crypto right now. The majority of the crowd is bearish dollar despite the continued rise in yields. The US indices are now mixed after being in retail's short positions. This could be a sign that traders are getting more bullish on stocks.
Data from the A1 EdgeFinder
📈 Trial the EdgeFinder
🔓 Use Code TGVIP for 40% Off
Small cap stocks are taking the biggest beating right now due to their highly sensitive nature to interest yields and borrowing costs. Geopolitical tensions are also not going to help this index perform well if sentiment turns to risk off.
Despite strong economic data, it is actually hurting optimism in the short term due to the fears of higher interest rates for longer. The market is trying to pare some of the losses from the last few days, although the S&P and NASDAQ have broken under significant levels on the 1D timeframe.
Data from the A1 EdgeFinder
📈 Trial the EdgeFinder
🔓 Use Code TGVIP for 40% Off
The yield curve has been a very accurate predictor of a stock market correction. You can see when the chart crosses below the inversion level, a correction has happened in the years following. 2000, 2008, 2020 have all been major market crashes. But right now, we are sitting at over 600 days on being inverted with no signs of a market crash.
Data from the A1 EdgeFinder
📈 Trial the EdgeFinder
🚨 10% OFF w/ Code TGVIP
Retail is now decisively short the dollar as GU and AU sit in the top sell positions while metals, oil, crypto, and indices mostly remain in their top buys.
Data from the A1 EdgeFinder
📈 Trial the EdgeFinder
🚨 10% OFF w/ Code TGVIP
The NAS100 seems relatively unbothered by the fact there might not be any rate cuts this year. Price is only 5% off the highs it made earlier in the year as the lack of volatility this week is keeping stocks within a range of support and resistance.
What we can likely expect is choppiness from positive growth in earnings yet stubborn inflation. Tomorrow's NFP is going to be another big news day, and we'll see if that is enough to give the markets a decisive move. It seems that a lower jobs number will be bearish for the indices given the fact we would have a slower jobs market and higher than expected inflation.
-Frank
The pirates took over the stream 😂😂
Nick and Frank are talking about their strategy for trading FOMC. Don't miss it!
WATCH HERE
USDCAD remains strong as yields stay elevated above 5% and oil prices fall. As we get ready for FOMC today, stocks dip at the bell and wait for Powell’s speech on monetary policy and interest rate decision. The most probable outcome is for rates to stay where they are at 5.5% with a mention from Powell that they may remain elevated until they see further confidence in inflation returning to their 2% target.
- Frank
Update on my IWM / Russell position:
I've moved my stop slightly in profit. While I believe the Powell may sound more hawkish today due to sticky inflation, these events can be volatile and if a surprise dovish note causes markets to pop, I will take profits. - Nick
Check this table out. Here's a quick rundown!
- COT data: shows bullish preference for USD over EURO
- Retail positioning: Retail is long this pair, which is a contrarian signal
- Seasonality: April historically bearish
- Trend: bearish!
- GDP: favors Euro
- PMI data favors USD
- Retail sales: strong in the US, weakening in Europe
- Inflation: sticky in the US, which could mean monetary policy remains restrictive in the US when compared to the ECB
- Jobs data: strong USD
"The EdgeFinder made me profitable"
Start trading like the pros with fundamental data on your side! 🏆
🚨Today is the LAST DAY to take advantage of our 40% off sale! Our prices will not be this low again all year long!
Use code TGVIP for 40% off the EdgeFinder here!
Gold
Metals grow weaker as a result of the shift in risk sentiment. Yields are an important factor in gold’s health so the higher it goes, the weaker gold may get. Price could test a broken trend line on the 1D timeframe should price move lower. If the Fed wants to remain restrictive, this could hurt gold as well.
-Frank
GBPUSD shifted from appearing more bullish to mixed as COT has flatlined the number of positions added to the long side on this pair. Meanwhile, retail is getting increasingly long indicating that the pair could dip further.
Data from the A1 EdgeFinder
📈 Trial the EdgeFinder
🔓 Use Code TGVIP for 40% Off
Gold is still very strong on the 1D timeframe. Price clearly does not want to break under the support zone around $2300 despite rising yields. This is a concerning indication to investors that we could be in a heavy risk-off environment suddenly.
Rate cut forecasts keep getting pushed back further into the year, and at this rate, may get pushed into next year. The shift we saw in October through March was an optimistic one, but now it seems like we are back to the strict monetary policy we thought was over. -Frank
Russell 2000, 4H chart: I am short! Let's see how it goes. I've written up my reasoning below.
- Interest rates look like they may remain higher for longer. This bodes poorly for the russell 2000, which is an index comprised of smaller cap stocks that are more interest rate sensitive. This is due to their larger need for borrowing, as well as having less cash on hand when compared to large cap companies (S&P500)
- Retesting resistance, downtrenc, 20 period moving average retest. Stops above structure
- EdgeFinder bearish reading on the indices data scanner page
- Nick