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Examination Time: Nasdaq 100 and Trump Behavioral Sentiment

Examination Time: Nasdaq 100 and Trump Behavioral Sentiment

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Nasdaq 100 Six Month Chart as of 25th March

Near-term trading in the Nasdaq 100 will face an examination of behavioral sentiment today and the remainder of the week. The stock index finished yesterday’s trading around 20,180.44, essentially traversing near levels directly before the U.S election results were known on the 5th of November. When trading reopened on the 6th following Donald Trump’s victory, the Nasdaq 100 jumped higher and began its trading near the 20,560.00 vicinity.

On the 29th of October 2024, the Nasdaq 100 also tested the 20,560.00 ratio, before reversing lower and finding choppy conditions leading up to the election date. Behavioral sentiment was certainly a factor in the outcome of these results. It cannot be proven, but can be asked and guessed that financial institutions may have started to bet on a Donald Trump victory before the election. Big trading influences may have turned anxious in the immediate days preceding the vote, then after the results were known returned the Nasdaq 100 to highs seen the week before on the 29th of October. By the 7th of November the Nasdaq 100 was trading above 21,100.00 and this was likely a result of optimistic outlooks.

The ability to climb back above the 20,000.00 mark yesterday and sustain the level was important. Yes, if the mark fades and another downturn now occurs it will show financial institutions are still leaning into negative outlooks as they consider the implications of tariffs and potential knock-on effects from the unknown.

However, if financial institutions have decided that they have priced in maximum risk premium and the selloff of the Nasdaq 100 to the level of nearly 19,150.00 seen on the 11th of March, which tested ratios last seen in early September 2024, was extremely oversold. We then have evidence that yesterday’s results back to values seen on election day, set the table for an important examination of behavioral sentiment.

There is plenty of room to traverse from 20,180.44 to 20,560.00. Yet, if financial institutions have decided that they once again want to test optimistic mid and long-term outlooks, the price level of 20,560.00 is where they will likely aim. Day traders should not get overly ambitious and remain cautious while looking for upside momentum if that is their chosen direction.

U.S economic numbers will be light today. Tomorrow the monthly Core Durable Goods Orders data will be published, the results will be of interest because they will show manufacturing sentiment and the statistics are considered a leading indicator. Thursday will also be noteworthy because the Final GDP results will be brought forth, but because this data is based on quarterly factors, the data may not be as important as tomorrow’s opening act – the Core Durable Goods Orders.

While the economic data will be important, President Trump will remain the focus. Behavioral sentiment obviously is being swayed by the winds circulating from the White House. This is not going to change until financial institutions begin to believe the threat of rhetoric can be dismissed without fear. The 2nd of April is now being counted down and in the sights of financial institutions as they consider the implications and outcomes of tariff negotiations. The word ‘agreement’ is sought as a salve by financial institutions. Whether a soothing ointment will be provided remains unknown.

The near-term will provide a test for traders which may be quite a bit like the week before the U.S election from late October and into November 5th when the voting results were still being counted. The Nasdaq 100 has room to traverse upwards and test values from the 29th of October and after Donald Trump was elected President. The 2nd of April is next Wednesday, and trading up until then will reflect on the outlooks financial institutions have regarding tariff negotiations.

It is examination week. It is not a coincidence that the price levels of the Nasdaq 100 are treading water while waiting for impetus. Speculating on the outcome before the 2nd of April needs to be undertaken carefully. An important question each speculator (including financial institutions) taking this test must answer is this: How good is President Trump as a negotiator and will he be able to claim a victory on the 2nd of April?

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Predicting the Federal Reserve and President Trump’s Rhetoric

Predicting the Federal Reserve and President Trump's Rhetoric

Financial institutions have grown accustomed to the rather fierce rhetoric from President Trump in the early days of his second term. Financial institutions have also become quite used to the recent overly cautious statements from the Federal Reserve. This Wednesday the Fed’s FOMC Statement will be delivered and there will be no change to the Federal Funds Rate. The current ‘main’ borrowing rate offered by the Fed is 4.50%.

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US Dollar Index Five Year Chart as of 18th March 2025

This Wednesday Fed Chairman Jerome Powell will speak about the recent CPI and PPI numbers which came in below expectations. This typically would be a good signal regarding weaker inflation. And Powell might also mention that energy prices in the U.S have started to erode. WTI Crude Oil is now trading in a sustained manner below the 70.00 USD threshold, and this will influence the potential of less inflation. It is a good development for the U.S and Federal Reserve.

However, Powell is unlikely to express the unease and anxiousness the Federal Reserve has regarding President Trump, this because the Fed certainly doesn’t want to get into an open confrontation with the White House.

The U.S Treasury is now being run Scott Bessent who was selected by President Trump. Bessent ran the Key Square Group and is well respected in financial circles, which includes vast experience in top financial institutions. Powell though perceived as pragmatic by many analysts, may not be within President Trump’s trusted inner circle like Bessent and Commerce Secretary Howard Lutnick, the former Chairman and CEO of Cantor Fitzgerald. Lutnick is perceived as a workhorse who get things done and is smart.

The Fed’s likely cautious FOMC Statement will not be enough to appease President Trump this week. While some may think Trump’s attention will be elsewhere, those who have come to understand Trump know his capability to react quickly to events should be taken seriously.

What will Bessent and Lutnick think about the Fed’s FOMC Statement and stance? Powell is not a trained economist, do Bessent and Lutnick trust Powell? One thing for certain is that Janet Yellen who served as the Fed Chairwoman before Powell, and the Treasury Secretary before Bessent is not part of the inner circle in the White House.

Powell’s loyalties may be questioned, and eyes should be kept on Trump later this week to see how the President responds to the rather cautious Federal Reserve. The Fed will certainly not want to say aloud it is waiting like everyone else regarding the effects of tariff negotiations and their implications. Powell wants to keep his job. Trump certainly wants lower interest rates. Bessent and Lutnick certainly want lower interest rates too, but like Powell these two may prove pragmatic and know inflation needs to erode further. The Treasury and Commerce secretaries may want to test chicken and egg questions. Will these two gentlemen push Trump to proactively push for lower interest rates in a louder fashion?

Day traders will have to wait to see how financial institutions react to tomorrow’s FOMC Statement – which has already been accepted as being a ‘no interest rate cut event’. And it is probably being discussed in the White House that the Fed may want to wait until early this summer – June? – to consider another interest rate cut. Which means the Fed may not be cutting interest rates mid-term, while the ECB and BoE may have to be more dovish and remain active via interest rate cuts if their economies continue to show recessionary trends.

Meaning that risk premium which was factored into the stronger USD centric buying since the Trump election on the 5th of November until the peaks in mid-January and early February, and have now reversed lower – needs to be watched technically and weighed in combination with behavioral sentiment.

Intriguingly the US Dollar Index is around levels it stood at on the 5th of November (Election Day 2024). It is also near values seen on the 15th of October. (Did financial institutions start to bet on a stronger USD around this time because of a more cautious Fed outlook and the potential Trump was going to win the election?) Raising the question, if financial institutions envision the USD can technically be weaker and attain values seen in late September and early October when the US Dollar Index was testing support levels which have held since April of 2022. The US Cash Index which stands around the 103.070 level now, was trading near 90.00 in the spring of 2021.

Trump wants lower interest rates, the Fed wants to wait on cutting the Federal Funds Rate until they have clarity regarding the results of tariff negotiations. There will be a collision between Jerome Powell and Donald Trump, the only question is when it will happen. The US Dollar Index has been lower historically. Trump, Bessent and Lutnick may not want to say it out loud, but a weaker USD in the global economy would help U.S exporters. A weaker USD may not convey the strong populist rhetoric of MAGA, but it may be economic hardware the Trump administration actually seeks. To sustain a weaker USD, inflation levels will have to erode, and interest rates will have to be lower (and another myriad of complex events have to happen), until then rhetoric and risk premium will factor into USD Forex trading for financial institutions and speculators.

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New Alternatives for Regional Alliances & Global Effects?

New Alternatives for Regional Alliances & Global Effects?

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Opinion: The following article is commentary and its views are solely those of the author. This article was first published the 14th of March, 2025 via The Angry Demagogue.

There is so much going on that it really is difficult to keep up. Israel is at the center of many of the regional developments, as would be expected. But it is not just Israel as Israel, but Israel as an ally of the United States that is interesting. The Syria problem we have written about and it is still not clear what the Trump administration’s policy is there as they look skeptically but hopefully at Al-Julani’s Syria. In our opinion that decision will be made for them, since the chances that Al-Julani has changed his stripes to a Western democrat is small and even if we are wrong there – the armed Jihadist groups that he needs to control seem more interested in ridding Syria of ‘heretics’ than stabilizing the country.

Lebanon has changed enough for the United States and Israel to take chances. While it is too bad that Israel did not do more in ridding the country of Hezbollah, the fact that Syria is no longer part of the Shiite crescent means that they are isolated and not able to get funding and arms from Iran with the same ease. What is important about the current Lebanese government is that Hezbollah is not a part of it. That does not leave them powerless, but it allows the government to act more independently. The Lebanese Shiites, under Hezbollah and the less but still militant Amal, will have to rethink their loyalty to these two organizations. At the least, it should move Amal away from their stronger partner.

Iran now has no land route to Hezbollah and will have a harder time arming the Houthis, too. But it is in Iraq that they are facing problems which could cause as much damage to their projection of power as did the loss of Syria. Due to US pressure, Iraq has stopped buying Iranian electricity although they can still buy gas. It seems that the US is giving Iraq some time to find alternatives to Iranian gas and the Iraqi government is moving away from Iran on other issues too and are trying to get rid of Iran’s Shiite militias.

But the most interesting thing to happen is Israel’s attempt to strengthen America’s relationship with Azerbaijan, a country that Israel is in close contact with regarding Iran. Israel has always been rumored to plan to use Azeri air force bases in a possible attack on Iran. The Azeri official responsible for regional development was in Israel last month and is trying to bridge differences between Israel and Turkey. The Azeri’s next stop after Israel was to Turkey. Steve Witkoff is reported to have stopped in Baku after his visit to Moscow.

An Azeri company has also bought rights to Israel’s Tamar gas field. Israel currently gets oil from Azerbaijan via a pipeline that goes through Turkey so the energy relationship is strong and longstanding between Israel and Azerbaijan. It seems that Turkey’s relationship with Azerbaijan is more important to them than their animosity towards Israel – probably because the Azeris and Armenians are enemies. It seems that sometimes not only friendships have to be ranked but enemies, too.

Trump’s game with Ukraine is not necessarily to my taste but it could be that there is something much bigger going on here and that is connecting Israel, Russia, Central Asia and Turkey to a grand alliance with the United States. I don’t think that Trump will succeed in pulling Russia away from Iran and China and that Erdogan’s Turkey will not give up their dream of destroying Israel. But what if the Iranian regime falls after a combination of harsh sanctions, economic collapse and Israeli military attacks? What if Iran is pulled away from the alliance leaving Russia with just China? What if a Russian base in Syria is dependent upon their moving away from China?

Last year the Axis held a near continuous land bridge from the Pacific to the Mediterranean. China was moving into Russia’s “sphere of influence” in the “Stans” of Central Asia with their economic bear hugs. This was something that the Biden administration ignored, but could be a bigger headache for Putin than a well armed but non-NATO Ukraine with American businessmen instead of soldiers as a tripwire.

Are we giving too much credit to Trump and his foreign policy team and to Israel’s influence in the expanded region that reaches beyond Syria? Is there more going on than we know or less?

On October 7 and the days that followed, the Biden Administration was sure that Israel was in such a panic that it would agree to anything, and they could force the Obama Middle East of a hegemonic Iran and a Palestinian state down Israel’s throats – and overthrow Netanyahu as an extra. None of those things happened.

Only a fool would predict what will be in a year, but what we have discussed above is one scenario no one would have considered even six months ago. The post WWII world looked nothing like the world of 1937, and the post WWIII world (the one we wrote about a year ago and may or may not have happened!) will look nothing like September 2023 – no matter how hard the UN yells and screams.

Could Israel and Azerbaijan be the keys to a realigned world?

It is against my nature to be optimistic, especially since Israel is still not done with Gaza, the hostages are not yet home and the internal politics are reaching levels that border on a soft coup.

However, while we don’t know where the aces are, we know that the Obama-Biden jokers are no longer in the deck.

Disclaimer: the views expressed in this opinion article are solely those of the author, and not necessarily the opinions reflected by angrymetatraders.com or its associated parties.

You can follow Ira Slomowitz via The Angry Demagogue on Substack https://iraslomowitz.substack.com/ 

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Stock Market Narrative and Looking for a Trump Silver Lining

Stock Market Narrative and Looking for a Trump Silver Lining

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S&P 500 One Year Chart as of 14th March 2025

U.S stock markets have been hit on the nose in recent weeks, the major indices have put in rather consistent declines since the 19th of February, and the selling frenzy and particularly noise have grown worse since the start of March. Narrative regarding tariffs and a lack of clarity have certainly had a negative effect. The notion that there is a part of the media that wants to see a downturn in the markets and blame President Trump could also be factoring into concerns and fragile sentiment among indices participants. I am not blaming the media for the downturn, just pointing out that there are some entities which are not unhappy about the recent selling in the stock markets, this because it fits comfortably into their narratives.

While the bearish decline on the S&P 500, Nasdaq 100, and Dow 30 have all been easy to see, defining the dynamics of the downturn, and reactions from day traders and investors are complicated. The stock markets are not guaranteed to always go higher. This may sound naive, but people have gotten so used to the notion that U.S indices always go up that they forget about the potential for downturns. Yes, the stock markets have turned negative, but a one month decline is not uncommon historically. And some of the folks rooting against Donald Trump may want to take that into consideration.

Risk premium has certainly been factored into the markets which has influenced equities, but has created forceful moves in Forex too. Risk adverse tension because of persistent rhetoric about tariffs and their impact on behavioral sentiment cannot be discounted. However, the stock markets are still higher over the past year.

The Trump Effect is certainly being pointed at by many as the cause for the sudden downturn, but it should be remembered that all-time highs occurred after Trump won the election. Yes, the selloff has definitely happened too, and stock markets are now traversing values seen before the election. And support levels are being looked at with caution and more selling could lead to a test of psychological ratios which pressure market confidence further. Yet, it should also be remembered the S&P 500 at this time last year was around the 5,150 ratio compared to its current mark near 5,565.

Day traders have been hard pressed to find momentum with solid wagering opportunities, particularly if they have been in search of a bullish trend in recent weeks. The belief that U.S indices always go up eventually is a solid reference, but in the short-term can cause expensive losses for stubborn betters. Investors certainly have an easier time with stock indices if they practice the long-game and do not worry about the daily and monthly gyrations when their money is parked in indices. The use of leverage when betting on the daily results of stock markets can become ultra expensive for speculators, particularly when upside bias is being counted upon.

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WTI Crude Oil One Year Chart as of 14th March 2015

Data this week from the U.S has actually been positive regarding lower inflation, both the CPI and PPI reports released the past two days has shown a slow down in costs. Yet, these results have little to do with President Trump, since he has only been in power less than two months. However, the lower WTI Crude Oil prices being achieved at this moment will start to factor into weaker inflation and will benefit the U.S economy.

The U.S Federal Reserve will have to be watched, because Fed officials seemingly continue to be among the crowd worried about tariff knock-on repercussions. But it should be remembered during Trump’s first term in office, there were tariff concerns too and inflation was tame. It will take a few months to still see results via inflation under this Trump administration, but if energy prices remain stable and low, this can mitigate circumstances while the tariff winds blow and their effects are waited upon. Interest rates from the Federal Reserve, U.S taxes on the public will continue to come under scrutiny. The likelihood of Trump and the Federal Reserve locking horns regarding interest rates seems to be a certainty in the coming months.

U.S stock markets have proven dangerous for bullish perspectives the past handful of weeks, but the viewpoint that markets have been too discounted will certainly start getting the attention of large players. U.S Treasury yields remain a barometer, but short-term results do not always correlate. Speculators without deep pockets may want to continue to watch from the sidelines.

Traders should also remember there is the ability to short U.S indices, but this brings up the healthy question about when will price support start to become a factor. It is nearly impossible to pick the precise moment financial assets will stage a turnaround for day traders, but history does indicate that bullish sentiment will start to be seen. Betting on a continued downturn could prove more expensive in the end, compared to speculating on upside.

Trading is not easy. It takes a lot of stamina to endure price movements that do not go according to plans. The financial markets are proving difficult for many. We are likely not out of the woods yet because clarity remains problematic, investors who have longer timeframes are likely anxious too. Price velocity needs to be given attention, markets can certainly go lower. However, at some juncture equities will start to look cheap to important long-term players. Behavioral sentiment among investors will likely also start to acclimate to the Trump Effect.

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Bitcoin Lower after White House Crypto Summit Led by Trump

Bitcoin Lower after White House Crypto Summit Led by Trump

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BTC/USD One Month Chart as of 8th March

Yesterday’s Crypto Summit at the White House didn’t meet the hopes of those who desire the U.S to be a proactive Bitcoin buyer. Baby steps accomplished for exchanges perhaps, but not a gamechanger for influencers looking to spark another rally higher.

Bitcoin is lower in early trading this Saturday, after the White House cryptocurrency summit essentially said it would hold onto Bitcoin that has been seized by the government, but did not express other impetus which would have driven the price of BTC/USD upwards.

While President Trump did sign an Executive Order creating a Strategic Bitcoin Reserve, it is important to note the holdings of Bitcoin and other cryptocurrency will consists of digital assets seized by the U.S, it doesn’t guarantee purchases of Bitcoin by the government.

Cryptocurrency backers may be unhappy with the White House’s lack of desire to engage in proactive cryptocurrency buying, including Bitcoin, which may have sparked the downturn being seen for the moment. One important statement in the Executive Order states:

“The Executive Order begins to resolve the current disjointed handling of cryptocurrencies seized through forfeiture by, and scattered across, various Federal agencies.”

A careful reading of the above and other declarations in the Executive Order, makes it clear that the Trump administration wants better oversight of previously seized Bitcoin and cryptocurrencies. The Executive Order while suggesting the government sold some of its Bitcoin in the past and other cryptocurrencies too early, can also be viewed as political statement proclaiming poor management – but this is an assertion which uses hindsight – which is always easier.

If the U.S government is holding substantial Bitcoin now, perhaps this may be the time to cash out considering the BTC/USD market is still rather highly valued. In other words, if the U.S government decides to hold onto Bitcoin too long it could simply prove to be just another speculator.

The Executive Order signed yesterday may create less restrictions and greater freedom for legally established U.S cryptocurrency exchanges that already exists. However, more flexibility for new enterprises trying to enter the sphere need opportunities they can pursue in what is already a competitive landscape. Bitcoin did trade above 91,300 yesterday, but after the Crypto Summit outcome began to see a selloff and as of this writing is hovering near 86,000 USD.

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FX Trends: Brutal Months for Day Traders and Happy Brokers

FX Trends: Brutal Months for Day Traders and Happy Brokers

The past few months for day traders have likely not been pleasant experiences for many. Forex, equity indices and other assets have experienced plenty of volatility and finding a trend has not been easy. While speculators who are wagering on the ups and downs in the marketplace have been getting crushed, their brokers likely have not been getting hurt.

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USD Cash Index Six Month Chart as of 7th of March 2025

Day traders need to understand that CFDs are virtual. Your broker is merely placing a wager for you on chosen direction, in most cases they are acting as ‘the house’ and know the volatility is going to knock you out of your trade. They pocket your losses as their winnings in many cases. The brokers are not only making money from the differentials from the bids and asks (the spread), they might also be charging you a transaction fee.

If a broker feels less confident about their ability to make a profit off your poor results (I am not kidding about this), then they sometimes insure your wager via a liquidity provider who in many cases is literally betting against your broker, because the liquidity providers believe your broker is likely being overly cautious. (A vicious circle). In other words brokers allow your trades to work virtually (not in the real marketplace) on something many risk management rooms in Forex call the B Book. If the broker is not certain if you will lose money, they put your trades into something called an A Book. And, yes, many liquidity providers (the A Book providers) are betting against their clients (who are brokers seeking to mitigate their risks).

Again, the brokers and the liquidity providers do not believe you will make money most of the time. They are allowing you to bet and they are happy to take your wager, because historical evidence shows retail bettors in Forex tend to lose money via their trading accounts at least 85% over long durations. Depending on what source you look at regarding CFD statistics, speculators tend to do a little better against their brokers but still lose money more than 50% of the time. Some statistics claim up to 75% of the CFD outcomes via trading accounts equate into losses for speculators.

And if all of this sounds like sour grapes, it is not, it is a warning to you the bettor. Brokers in many cases are glorified casinos that provide you an opportunity to wager. You need to acknowledge the above before your start trading. Speculating on Forex and CFDs ( via equities, indices and commodities) is like betting on a horse. The racetrack doesn’t lose money, they know most bettors simply enjoy the thrill of gambling and don’t mind losing. Racetracks are happy to pay the occasional winner. If you choose to wager on Forex and CFDs you need to practice risk management.

You probably didn’t come here to be reminded about risk management, you have heard it before – conservative leverage, price targets, timeframe parameters, entry – stop loss – take profit orders are standard warnings. You want to read about trends, you want to know which direction you should take, yet there are no guarantees and that is why speculating is gambling. You are wagering.

If you intend on improving your odds, by following solid risk taking tactics – including trying to understand behavioral sentiment via the financial institutions you are trying to emulate, you might find better results. And still, speculating will be tough.

The U.S will release Non-Farm Employment Change numbers today, but traders should pay attention to the Average Hourly Earnings report which will give insights about inflation too. However, the jobs numbers may prove to be a false narrative, because more importantly, whether you like him or not, there is the Trump Effect to ponder.

Tariff mantras and fears, negotiations regarding the fate of Ukraine, and a myriad of other concerns have financial institutions anxious as they try to seek clarity. Equity indices have been a mess. Yet, the USD Cash Index has given back a lot of its gains since February the 4th – this after the Forex bloodshed caused by nervous reactions to fear of tariffs being implemented. And now, not so coincidently the USD Cash Index is traversing values it saw on the 5th of November 2024, yes, U.S Election Day. Speculators and financial institutions have returned full circle to big unknowns.

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EUR/USD: Volatility is Visiting Again upon the Trump Effect

EUR/USD: Volatility is Visiting Again upon the Trump Effect

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EUR/USD One Month Chart as of 3rd of March 2025

The EUR/USD bounced slightly higher in early trading this morning, this after Friday’s burst lower when nervousness was ignited by the loud outcome (and lack of a resolution) via the Zelensky and Trump meeting. However, after achieving some buying impetus to start today, the EUR/USD is running into nervous headwinds as concerns remain evident.

This Thursday the ECB is expected to cut another 0.25 from its Main Refinancing Rate. The difference between borrowing rates from the ECB and Fed will be significant if the ECB does lower costs. E.U economic data warrants the dovish policy, while concerns about stubborn U.S inflation persists. And President Trump will have something to say about the Federal Reserve’s policy too. Trump wants the Fed to lower the Federal Funds Rate.

The U.S will issue its Non-Farm Employment Change numbers this Friday. And many Fed members will be speaking at various engagements this coming Thursday and Friday which is certain to get attention. Financial institutions will certainly be listening for clues regarding the potential of shifting viewpoints regarding the Fed’s current stance which is cautious from FOMC officials.

Which brings us back to the current value of the EUR/USD and behavioral sentiment which is being generated by a deep sea which is not clear. The EUR/USD into early last week was showing signs of bullishness, this as folks piled into the notion the currency pair was in oversold territory. The ability of the EUR/USD to remain above 1.04000 today should be watched. While there has been upside early this morning, European traders and full market action will begin to kick off in about one hour.

Day traders need to know the potential rate cut cut from the ECB this coming Thursday has been anticipated and factored into the EUR/USD already. Leaving the currency pair ready to be influenced by USD centric perspectives, and Ukraine concerns which are unresolved. The U.S equity indices should be watched too via their less than inspiring results the past week. While many financial institutions believe the EUR/USD should be valued higher, this may be based on instinctive bias instead of fundamental reasons.

Economists are great for insights, but it is skittish sentiment which is driving the markets. Volatility is likely and the price range of the EUR/USD could prove tactically challenging and wide. If cautious attitudes in financial institutions create calm, the EUR/USD could produce durable support levels, which could be used for upside wagers. Speculators will have opportunities in the currency pair this week, but risk management will be essential to protect against sudden gusts caused by swirling Trump rhetoric.