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Trump Bounce Potentially Coming This Week in Equity Indices

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

Trump Bounce Potentially Coming This Week in Equity Indices

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S&P 500 Three Month Chart as of 19th January 2025

Trump: U.S equity markets will be closed Monday for MLK Day. Upwards momentum developing this week as Trump White House takes power would not be surprising.

Retail traders need to know that U.S equity markets will be shuttered on the 20th of January because of the Martin Luther King Jr. holiday. Importantly tomorrow is also the United States Presidential Inauguration. Donald Trump will retake power of the Executive Branch of the U.S government at noon in Washington D.C as he is sworn in as the 47th President. U.S stock markets have produced choppy results the past few months but still remain in sight of highs. It would not be a shock to see optimistic momentum develop on Tuesday in the U.S stock markets near-term.

Yes, financial institutions have known Trump will be taking the White House for two and a half months and have had plenty of time to already react regarding their outlooks. However, from a behavioral sentiment standpoint it is easy to deduce that Trump’s coming inauguration speech tomorrow will deliver a confirmation of his economic policy intentions. Financial institutions near-term may produce optimistic upwards trajectory and they may have psychological targets which take into account late November and early December 2024 highs in the S&P 500.

The coming week will also be light on U.S economic data, except for the weekly Unemployment Claims on Thursday, Flash Manufacturing PMI and Existing Home Sales on Friday. Meaning the week will be driven largely on sentiment generated via President’s Trump’s actions in the coming days. Trump is expected to deliver a series of Executive Orders which will affect outlooks and likely be reflective of his campaign rhetoric spoken the past year.

Retail traders should not bet blindly on upside via CFDs for the S&P 500, Nasdaq and Dow 30. Near-term prices are not guaranteed to move higher, but there is reason to suspect buying might prove positive. An interesting barometer for price action will certainly be seen via future contracts early on Tuesday morning as financial institutions return to full volume and get set to return after a long holiday weekend. Risk taking tactics should include price targets that are realistic and not be leveraged wildly.

Forex conditions may prove volatile this week, and traders need to remain cautious about betting against the strength of the USD which has been ferocious the past three months. U.S Federal Reserve outlook remains murky and cautious, and nervousness regarding Trump’s intended foreign policy changes including trade negotiations still have to be fully demonstrated. USD centric risk bullishness likely still has ammunition which will be displayed in the coming days.

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Forex: The Art of Not Making Sense and Accepting Price Values

by with No Comment AssetsBehavioral SentimentFeatured Highlights

Forex: The Art of Not Making Sense and Accepting Price Values

Retail traders are likely learning the hard way that attempting to trade in Forex for the moment is more than dangerous, it is expensive. The U.S Consumer Price Index numbers yesterday met expectations, which essentially allows the Federal Reserve to remain in a cautious dovish stance. However, after an initial show of USD weakness upon the data in many FX pairs, USD centric strength quickly returned.

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USD Cash Index Six Month Chart as of 14 November 2024

Short and near-term trading for speculators who do not have deep pockets and are suffering from whipsaw movements are creating the need to take a step back. As many major currencies have suffered losses against the USD since late September, the tendency is to likely think a reversal is going to develop sooner rather than later. However, until financial institutions become comfortable with the notion President-elect Trump’s policies aren’t going to harm economic prospects in a variety of nations regarding tougher trade agreements, risk adverse trading is going to remain a key in Forex.

Yes, at some point the USD will start to give back some value, but timing the moment this is going to start and become sustained for day traders is simply betting. Financial institutions are feeling anxious about their commercial forward positions in Forex too, which will continue to create volatility for all trying to predict where the USD will be mid-term. Federal Reserve policy may actually be able to deliver a 0.50 basis point total cut over the next few months, but this notion has had almost no impact on USD strength short-term. Perhaps financial institutions do not feel the Fed will be that dovish through February, but if inflation remains tame the Federal Funds Rate still has room to decrease.

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Gold Three Month Chart as of 14 November 2024

Today’s Producer Price Index inflation reports will be watched, but like yesterday the results are unlikely to be a key which will suddenly ignite strong reversals in Forex. In the meantime traders need to practice solid risk taking tactics and patience. Retail Sales figures will come from the U.S on Friday, but again day traders should expect financial institutions to remain risk adverse until there is an event which changes their cautious mindsets.

Gold is noteworthy because it has struggled since early November. There is the possibility the precious metal has turned lower because investors feel more sure about their long-term bets in the U.S equity markets for a moment, but that is likely wrong. It could also be argued speculators are cashing out winnings they have made the past handful of months. The point being that explanations for price movements are tenuous. False narratives abound. Fundamentals like behavioral sentiment are shifting because new economic policies from the U.S are going to develop and market participants want greater clarity.

Like the major currencies suffering significant declines versus the USD, the value of gold can be argued, but the market is telling us what participants are willing to pay for assets whether we agree or not. Let there be no doubt that the highs being produced in U.S Treasury yields which are near early summer values, the USD Cash Index reversing towards technical levels seen in early July, gold recently losing value, and U.S equity indices being near all-time highs makes it particularly difficult for predictions regarding what is next. Except to say the Trump victory in many ways has sparked a buy American parade for the moment. If you want to bet against the trends you are free to do so, but behavioral sentiment is proving once again the king of the hill.

While the broad markets may not feel like they are making much sense to some, as traders we need to be able to put our bias to the side and accept the markets as they are, not what we think they should be. There is a significant difference between near-term and long-term targets. Day traders need to understand they are wagering in markets that will remain dangerous for a while. Nothing is guaranteed, but the idea that U.S equities may continue to rally into the New Year is being wagered upon by larger players and they might be proven correct.

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Caution as GDP and Reactive Sentiment the Key for the Week

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

Caution as GDP and Reactive Sentiment the Key for the Week

Forex markets have seen plenty of sideways action with the USD Cash Index lingering within the weaker parts of one and three month ranges. Yes, financial institutions appear to be leaning towards a belief the Federal Reserve will have to become more dovish over the mid-term, but last week’s price action before the onset of the long holiday weekend which has just passed did start to produce headwinds.

Risk appetite although high has climbed down from its peaks for the moment. Yet, financial institutions, investors and day traders likely still are aiming for more optimistic results. Speculative inclinations may believe more weakness is about to come from the USD, and major currencies are within sight of important technical barometers which could fuel more bets on a weaker USD to develop.

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USD Cash Index One Month Chart on the 28th of May 2024

A taste for speculative buying in the equity indices while running out of some power last week remains within sight of highs. The Dow 30 and S&P 500 might have come off their records along with the Nasdaq, but the slight declines may be viewed as a buying opportunity by day traders.

However, before retail speculators dip their toes in the water they should understand that the Gross Domestic Product numbers this week will factor into existing behavioral sentiment. Again, taking a position for a short-term wager is different than buying an equity index as a long haul investment vehicle. The two are not the same and the daily fluctuations, even the weekly movements of the equity indices, do not bother investors who are gearing their outlooks for the long-term, while short-term moves can wipe out a person using too much leverage if they are pursing a casino like belief in direction without solid risk management.

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Dow 30 Index One Month Chart on the 28th of May 2024

Yesterday’s holidays in the U.S and U.K have likely given financial institutions a chance to reflect on events and outlooks which will be unfolding and affecting sentiment. The announcement on Wednesday of last week that Britain will have a national election on the 4th of July will certainly start to create concerns for the GBP/USD.

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USD/ZAR Six Month Chart on the 28th of May 2024

Tomorrow the South Africa election will be held. While not an event which will get the attention of all investors, the implications of the vote in South Africa and the potential for a coalition should be watched. If the African National Congress is forced to form a coalition, investment managers will be hoping that the political maneuvering doesn’t bring about a ‘hard-left’ ruling government. Again while the investment stakes may not be felt by everyone around the globe concerning the results in the South Africa election, its impact on geopolitics long-term could be substantial.

International mining companies with large amounts of infrastructure and investment in the nation will certainly be keeping their eyes on events. There is a high level of suspicion within South Africa that load-shedding (rolling electrical blackouts) which has largely disappeared the past few months could reappear after the election, which highlights some of the distrust citizens have regarding the current leadership. The ANC has been in power for 30 years and tomorrow’s election marks one of the first times their leadership may prove vulnerable.

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Gold Six Month Chart on the 28th of May 2024

As a clue for speculators and the level of complexity being seen in the financial markets near-term is that the price of gold remains elevated. Although not at its apex values, the price is certainly within sight of highs. What is interesting is that the record levels have taken place as USD centric attitudes have turned weaker the past month, showing that their is likely a large speculative presence within the gold market.

Certainly governments via central banks and other investors could be buying gold. The apex values in gold coupled with weaker USD sentiment which has developed the past month shows that nervousness still lingers. Again, long-term players in gold have much less to fear than short-term day traders who are betting on intraday price changes. Gold is a remarkably strong inflation hedge historically, but retail wagers on the price of the precious metal is a constant battleground. If the USD stays weaker over the mid-term it will prove very interesting to see where gold starts to display a durable support level – if in fact it is tested. There are gold bugs who certainly believe the price of the commodity should be much higher in relation to the unreliability of paper money in many spheres.

For traders who are looking ahead to the economic data risk events, the price of WTI Crude Oil needs to be given attention too. The price of the energy source remains under 80.00 USD per barrel which is important. If the costs of WTI Crude Oil remains stable this may cool some inflation fears. It should be noted that OPEC will begin conducting a conference to discuss Crude Oil production on the 2nd of June.

Tuesday, 28th of May, U.S Consumer Confidence via the Conference Board – the University of Michigan Consumer Sentiment numbers came in slightly better than expected last week. However, today’s reading is expected to be slightly lower than the previous result. Weaker than anticipated data could actually help the USD remain within its bearish technical range in Forex.

Wednesday, 29th of May, Germany Preliminary Consumer Price Index – this CPI result will impact the EUR/USD. The expectation is for a weaker result of 0.2% compared to previous outcome of 0.5%. If this number matches the expectation, this could put the European Central Bank into a collision course with financial institutions who want the ECB to take on a proactive dovish policy and begin cutting interest rates.

Thursday, 30th of May, U.S Preliminary Gross Domestic Product – the growth and Price Index numbers via the GDP reports will be significant and cause a large impact in the financial markets. Forex, commodities and equity indices (and Treasuries) will all be affected. The growth number is expected to be weaker than last month’s. Having produced lower results last month, if this GDP statistic is below the anticipated level of 1.3% it could set off fireworks. The GDP Price Index will have many eyes upon it too, and it carries a expected gain of 3.1%. Inflation remains a chief catalyst for the Fed and in Forex. The combination of the growth and price numbers is certain to cause volatility.

Friday, 31st of May, China Manufacturing PMI – economic data from China has been mixed recently, but foreign investment is still weak and the nation is looking for positive outcomes. Traders should keep their eyes on these numbers and also remember that economic results from China are not exactly the most transparent. Consumer numbers via retail spending domestically in China are still struggling. China is hoping to attain better trade relationships in Europe, but its intentions are running into a more competitive export landscape and political complications which are making the chances for a quick fix for its economy elusive.

Friday, 31st of May, U.S Core PCE Price Index – this report should be watched by Forex traders because it is highly regarded by the Federal Reserve as an inflation gauge. An outcome of 0.2% is the expectation for this report and if met, the USD could turn weaker going into the weekend.

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AMT Top Ten Miscellaneous Raindrops for 16th of February

by with No Comment AMT MarketsArtificial IntelligenceFeatured Highlights

AMT Top Ten Miscellaneous Raindrops for 16th of February

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10. Bitcoin is trading within sight of 52,000.00 USD, the digital asset was trading near 38,700.00 on the 23rd of January, which is over 34% in less than a month. That’s a lot of air in the balloon folks.

9. Gold: The precious metal has climbed above 2000.00 USD, this after a drop to 1985.00 USD on the 14th of February. Sentiment is uneasy.

8. Not April Fool’s Day: Iran has announced ‘plans’ to build a naval base on Antarctica, after declaring ‘property rights’.

7. WTI Crude Oil: The price of the commodity continues to battle the 77.00 USD level. Higher energy costs will not be looked on favorably by inflation hawks.

6. U.S Treasuries: Yields should be watched today after having provided anxious results this week, U.S equity indices will continue to react to the ‘bonds’ market.

5. Nvidia: After delivering superlative results in 2023, the company has announced the release of Chat with RTX, which allows independent AI chatbot capabilities to interface with your own documents, videos, etc., providing insights from personal queries.

4. Chinese Property: Investments dropped by over 9% in 2023. China’s government faces a clash between socialistic ideology in order to help the market versus practical supply and demand realities.

3. U.K: Gross Domestic Product numbers came in with negative results yesterday for Britain, the combination of recessionary GDP and stubborn inflation is stagflation. Bank of England faces a difficult decision. Will the BoE get proactive and cut interest rates before the Federal Reserve? GBP/USD is below 1.25800 this morning.

2. Data: Stronger than expected U.S CPI statistics caused bedlam on Tuesday, but yesterday’s Retail Sales came in weaker. The ‘disappointing’ consumer spending numbers were likely welcomed by the Federal Reserve and financial institutions. Producer Price Index statistics will be published today, surprise inflation results could jostle financial markets.

1. Forex: Day traders witnessed whipsaw results early this week and should remain cautious going into this weekend. Patience will be needed as USD centric outlooks adjust to nervous shifts in behavioral sentiment.

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To Risk or Not to Risk that is the Speculative Question

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

To Risk or Not to Risk that is the Speculative Question

Last week U.S equity indices demonstrated a rise in value. The highs achieved in the Dow Jones Industrial Average, the NASDAQ Composite and the S&P 500 by the end of last week only touched values seen in the middle of October. And while their ratios remain below the highs of early August and falling values seen in September, the move upwards was certainly welcome by financial institutions and day traders who hold optimistic viewpoints.

U.S Treasury yields declined last week. While incremental decreases were made through Thursday, the U.S Non-Farm Employment Change and Average Hourly Earnings reports both coming in below expectations on Friday, created a stronger dose of lower yields. The 5, 7, 10 and 30 year U.S Treasuries are now trading near mid-September values. The 2 and 3 year notes are moving around early September numbers.

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Gold One Year Chart as of the 5th November 2023

The USD grew weaker in slight movements against many major currencies last week, but upon the weaker jobs numbers found increased selling price velocity. Gold however remains suspiciously strong, which brings up the notion that risk adverse ‘insurance’ is still being held closely by investors who remain nervous.

The Middle East crisis is ongoing in Israel against Hamas and to a limited extent Hezbullah, but financial institutions have seemingly been able to digest the news and remain tranquil and vigilant. Another sign of calm coming into the global financial markets is the price of WTI Crude Oil which finished the week under 81.00 USD per barrel.

Economic data will be relatively light this coming week, and behavioral sentiment appears to be the potential larger factor until Friday regarding impetus for day traders and financial houses. Certainly loud global developing news could suddenly erupt and cause nervous investors to falter, but last week’s trading results showed signs of improving risk appetite.

The U.S Federal Reserve met expectations last Wednesday and didn’t raise the cost of borrowing. The mid-term seems to indicate interest rates will remain high, but that the U.S central bank will not raise the Federal Funds Rate anytime soon. The lower than expected inflation report via the Average Hourly Earnings before going into the weekend helped highlight this thinking, although it remains a consideration that is still speculative.

Officials from the major central banks including the BoJ, BoE and Fed will be speaking this week and could cause turbulence with their rhetoric. However, no major surprises will likely come from their mouths. Although the Bank of Japan may rattle the prospects of intervention to keep USD/JPY traders on their toes.

Monday, the 6th of November, Germany Factory Orders – the result is expected to be negative and highlight the nation remains within recessionary conditions. The Sentix Investor Confidence reading will also be released slightly afterwards for the European Union and a worse number than last month’s outcome is anticipated. But the EUR/USD is likely to remain mostly USD centric, even though these reports could cause momentary fluctuations.

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AUD/USD Six Month Chart as of the 5th November 2023

Tuesday, the 7th of November, Australia Cash Rate – the Reserve Bank of Australia is expected to raise its interest rate by 0.25% to 4.35%. Will the RBA take a gamble and not raise the interest rate due to other major central banks holding their rates in place, or will the increase go ahead to fight stubborn inflation while trying inspire some confidence in the AUD? A hike seems to be the direction the RBA will decide upon, having said that, the Australian central bank have surprised financial institutions before.

Wednesday, the 8th of November, U.S 10-year Bond Auction – the results from this sale and the yields that develop within U.S Treasuries will have an affect on Forex. Lower yields than anticipated could signal a weaker USD. However, risk adverse elements will need to be calm for the bond auction to produce tranquil results.

Thursday, the 9th of November, China CPI and PPI – the data from these inflation reports will be watched closely. Chinese economic numbers has shown some signs of stabilization the past few weeks, both of these publications are expected to have negative outcomes. Concerns about the financial pressures domestic consumers are facing regarding housing market values in China and the way in which they spend due to lackluster prospects are concerning. The USD/CNY will be affected in the wake of these statistics, and the USD/SGD could see momentary volatility too if the results prove to be a surprise.

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GBP/USD One Month Chart as of the 5th of November 2023

Friday, the 10th of November, U.K Gross Domestic Product – last month’s number came in with an unexpected positive gain of 0.2%, this GDP report is anticipated to show no change. The GBP/USD jumped in value on Friday and financial institutions will be geared towards behavioral sentiment most of this week, but the British GDP data could cause a reaction before going into the weekend.

Friday, the 10th of November, U.S Preliminary Consumer Sentiment via the University of Michigan – the reading is expected to be slightly below last month’s outcome. U.S consumers remain a strong point of light for the U.S Federal Reserve. American consumers have remained spenders, although they have seemingly curtailed purchases of large ticket items such as cars and big appliances. If this data comes in weaker than expected it could propel more selling of the USD. A stronger number than anticipated could spook financial institutions and cause a slight surge in buying of the USD.