TradersClass

Superior Trading Skills through Education

 
Who da thought it Print
Written by Site admin   

31/10/2020

WhoDaThoughtIt!

It's Trump, no Biden's
got it, or has he?
 
Dear Trader and Clickevents reader
The four yearly madness is upon us, only it's more insane than ever this time. I guess we will know outcome, win/lose/draw or a gladiatorial fight through the courts.
Remember the 'hanging chads' that decided the Bush presidency? That was a side show compared to how this one could turn out.
Does it matter to traders?
Probably not. Volatility has been rising in the markets and is bound to continue and that's all traders want, place your bets and the smartest win. So is this now a gamblers' market, or will cool calm analysis win the game?
There are those who feel that Trump is good for domestic industry.In 2016 he was going to make 'America Great Again' and bring back all those jobs off-shored over the last three plus decades or so.
He was also going to bring the troops home and that implies reduced defence spending. Perhaps he could accelerate all that if he gets a landslide victory, or perhaps not.
And Biden/Harris, are they committed to the globalist cause that off-shored those jobs and will they re-ignite tensions and wars of aggression against those countries still not within the US orbit? Perhaps they are ready for the big one, direct action against Russia or China, or why not both?
All this is wild speculation and both could turn out to be exactly the opposite of what the acres of newsprint have led us to believe.
And then there is Covid.
I'm sure we all have own beliefs about its outcome and also the economic impact of job losses, endless debt and stimulus. All the above fits neatly into project fear. Fear has been a running epidemic since, well, forever. It just gets ramped up from time to time to suit certain agendas.
And the stock market? perhaps it's time to consider that old adage 'Equities climb a wall of fear'. Plenty are fearful of a collapse in the Dow. Contrarians would argue they are totally wrong.
So what of the US Dollar.It's been zig-zagging up down and back to where it was when Trump first came to the White House.
Perhaps the charts have an opinion....
Last month gave us a technical signal. A key reversal month, that most bullish of candle signals, a Bullish Engulfing. These can result in some of the most powerful reversals.
They are not always the instant reversal that some would have us believe of course. Earlier this month we saw one on the AUDUSD.This is what happened:
It failed. For three days the signal was ignored. Then three days ago, on Wednesday, we had the signal again. This time might be different.
For a candle pattern to work, price action must follow through. It didn't at the start of October. This latest one has started to and now needs to break decisively below the blue box.through.
The overall pattern is a Triangle with a flat, or almost horizontal, lower side. When these break price action often runs through as many points as the depth of the triangle.
Forex moves
Forex had lost some volatility during October then it came back strongly this past week. The market had decided the time was right to start buying the US Dollar.
If it continues after the election, expect much higher levels for USDCAD, USDCHF, USDJPY and the opposite for the Euro, British Pound and AUDUSD.
These moves are discussed and shown in the regular twice weekly videos for Traders Class members, let me know if you would like to view the most recent one.
Also, if If you missed the previous, newsletter which explained why we were expecting a reversal in the Australian Dollar, just send a request by replying to this email.
Best regards.
 

From the blog

Gold Silver Ratio

Today is the Day & The Case for the Gold Silver Ratio

 

Will Christmas come early for the Donald? Will he get his demand of lower interest rates from Father Christmas Powell? Today is the day that could see a major reversal, or just the same old, same old.

A quick re-cap. The fed have made a couple of 0.25%, or 25 basis point, increases to the Fed funds interest rate this year. Signalled by the Fed, the market is fully expecting Wednesday the 19th December will bring the rate to 2.5%.

But. At his last announcement Fed chair Jerome Powell talked about rates which were just below the Neutral rate. Markets seem to have taken this to mean that today's rate increase, if it happens, will bring it to neutral, so no more rate increase will be signalled into 2019. Add in the Donald's insistence that any rate hike now is insane, we wait to see if it actually happens.

Either way, US dollar traders are in for some excitement and that just might include the precious metals and stock markets.

The case for Gold

This time last year all eyes were on BitCoin and the other 1400 or so Crypto's. These were the new Gold the hype merchants told us. Yes, the similarities were there all right. Gold has rocketed higher several times in a buyers frenzy to get in on the act. What makes it move?

Read more...

Check these links

  • JoomlaWorks Simple Image Rotator