In today’s session, Ashley and I answered the question what is a recession as well as the ‘usual suspects of supplementary charts (DXY, Gold, Oil, Bitcoin etc.) as well as loads of M2 and Earth and Sky setups. Ashley also explained how he uses support and resistance to stay ‘flexible’ when there aren’t any Earth and Sky setups that fit ALL the rules.
In the first half of the session, Thinus went through his M2 setups and showed the major levels he is focusing on.
He also cautioned traders to try not to get into trades on Wednesday as we have a very important event later in the evening. The FED will announce its rate statement and most people are expecting a 75 bps rate hike.
From past experience, it is always best to wait until Powell finishes his speech which mostly causes volatility in the market. Banks and other institutions analyze this data and then decide whether to sell or buy the dollar.
So what is a recession?
Ashley then went on to share a shocking post from treasury Yellen who claims that she doesn’t see a recession in the US.
According to Investopedia, “A recession is a significant, widespread, and prolonged downturn in economic activity. Because recessions often last six months or more, one popular rule of thumb is that two consecutive quarters of decline in a country’s Gross Domestic Product (GDP) constitute a recession.”
Treasury Secretary Janet Yellen: “A common definition of recession is two negative quarters of GDP growth” “Many economists expect second quarter GDP to be negative. First quarter GDP was negative.”
Yellen: “That’s not the technical definition…we have a very strong labor market. when you are creating almost 400,000 jobs a month, that is not a recession.”
They might be creating 400k jobs a month but how many of those jobs are actually being filled? That’s the question.
Now Bidens economic advisor has come out saying, “Two negative quarters of GDP growth is not the technical definition of recession.”
Most of us knew the definition of recession and probably some of you have been through one. But now the White House has officially changed the definition of a recession. It’s shocking that you can just change the definition of something that has been there for years…. just because of the current situation the US and all other countries are in.
I wouldn’t be surprised if they came out tomorrow and changed the definition again to try and save them selves from the mess they have created. It really is shocking to see all of this happening right now.
Powell will probably have a lot of questions to answer this evening.
Make sure to follow Marc on twitter as he is sharing a lot of insightful news that we don’t normally see on forex factory or other new pages. You can do with the link below.
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