In today’s live webinar, I went through the news, why I’m looking to short the dollar in the short term, and the Earth and Sky pairs.
Marc then joined for the last 20 minutes to talk about what is happening in the crypto world and what he plans to do with stocks and commodities.
$ weakness could be temporary
In the short term, we could see some $ weakness after the huge bearish candle on the DXY last week. However, like I said I need the 105 region to be broken for extra confirmation. Like Marc showed it as well has stopped right at the 200 MA too so if it gets past that the odds look good.
I also mentioned in my weekly analysis why I think the dollar is dropping currently.
“The markets were volatile on Thursday when the CPI news came out as we expected. CPI figures came out worse than expected or rather signs to show that inflation is slowing down. What this could mean is the FED might not raise rates aggressively going forward. Which is probably what the market is pricing in.”
Then Yesterday one of the FED members Brainard basically gave us clues on exactly what I mentioned above 🙂
🏦🇺🇸FED’S BRAINARD: LATEST CPI FIGURES SIGN TO A REDUCTION IN THE CORE PCE
FED’S BRAINARD: CORE INFLATION REMAINS STRONG
FED’S BRAINARD: STARTED TO SEE WAGE MEASURES SETTING DOWN
FED’S BRAINARD: APPROPRIATE TO MOVE TO A SLOWER PACE OF INCREASES
— Cable FX Macro (@cablefxmacro) November 14, 2022
Also one of the Ex Bond traders Alf I follow said the same thing. He extracted the Feds policy minutes into simpler words. He writes very good articles and I would advise you to read them. He has a lot of knowledge of the markets and he knows what he is talking about.
He mentioned in the article that Powell was trying to be very hawkish in the sense that he will be looking to increase rates further but at a slower pace. He is a big fan of Paul Walker who previously raised interest rates to a staggering 20% to bring inflation under control back in the 1970s when the US was in a crisis. Alf does say that the FED is looking to be more aggressive in the short term so they can control inflation now rather than leaving it too late before it gets worse. But he does mention the risk this comes with because the FED cant keep the rates high for too long. This will slow the economy down, increase unemployment, Crash the housing market as people won’t be able to afford to buy or pay their mortgage, and basically cause a recession.
At the end of the article, he did say to Long the DXY and short the risky assets (basically just get out as they will get hammered.
Link to his recent article
Which does bring me to my point where Marc stepped into the webinar, but before that..
Alf provides these articles for free on his website and you can view them using the below link:
You can follow Alf on Twitter
You can also follow him on his websites where he posts his articles for free.
You can also follow Marc on Twitter https://twitter.com/marcwalton
Marc mentioned the recent bust-up of the third largest cryptocurrency exchange FTX which lost billions last week. At least $1 billion of client funds went missing at the crypto firm. The whereabouts of the missing funds is unknown. At its peak, FTX was valued at $32 billion. The company filed for bankruptcy on Nov. 11 after competing offshore crypto exchange, Binance, backed out of a deal to acquire it and users withdrew around $6 billion in funds.
This has rocked the crypto market bringing the price of Bitcoin down to 15,000 where it found some support. Other crypto coin values were also bought down due to this move as investors looked to cash out of the market.
The FTX collapse has wiped out around $180 billion from the crypto market. Ouch!
So add to that if the Dollar gets stronger this will cause more pain in the crypto world and bring the markets down even further. Some dark times ahead.
Here are a few articles to read:
At least $1 billion of client funds missing
FTX’s Sam Bankman losses billions
$180 billion wiped out after FTX crash
What’s happening with GOLD
As I mentioned in my weekly analysis GOLD demand is increasing every month. Here in India gold demand has increased as it is a commodity that is bought heavily in our community. People buy a lot of GOLD during the wedding season. It could be the last time we could see GOLD at its current price before it starts breaking all-time highs in the coming months.
Marc mentioned how the BRIC countries are heavily buying GOLD at the moment. They are accumulating as much as they can as they already looking to make their own currency which will be backed by GOLD. They are looking to compete with the $ and eventually become the new safe haven currency. It does not look good for the Dollar in the future but this currency is already in the making.
China is also buying GOLD heavily but is not revealing how much GOLD reserves they have. So it could be a lot more than what they have on paper.
Here is an interesting article Marc shared during the webinar talking about which countries are heavily buying GOLD right now.
Why central banks are buying GOLD
As always, remember correlation!
We are NOT a “tipping service” our aim is to teach you how to trade for yourself.
You can view the webinar below: