Date: October 2nd 2023
Welcome to our weekly dive into the world of trading, where we follow the intriguing trail of money and decipher the global financial puzzle. This is no ordinary market overview; it’s a journey through price action and historical correlations between assets that unveil where the wealth has flowed in the past week(s). By following the money, we get a vivid glimpse of the broader economic canvas.
The Mighty Dollar’s Dominance
The dollar has been on a relentless uptrend since June 23, showcasing remarkable strength yet again this past week. Rumours abound of nation-states parting with their assets, with China and the United Arab Emirates making headlines. Meanwhile, the Eurozone seems to be gearing up for winter by ramping up its oil purchases, all contributing to the enigmatic ‘Dollar Milkshake’ theory. While the dollar’s ascent is remarkable, a pullback is certainly on the horizon.
US10Y Yield’s Unstoppable Surge
US10Y yield is in a league of its own, spiralling upwards in a seemingly uncontrollable fashion. Each passing week, it surges higher, and its macroeconomic impact cannot be overstated. The persistent sell-off of US debt is sending warning signals throughout the market, and it’s a situation that urgently requires containment.
SPX500: Breaking Technical Barriers
The SPX500, like most indices continued its sell-off, shattering technical support levels and refusing to show any signs of relenting.
Precious Metals Under Pressure
Gold faced a substantial sell-off, mirroring the indices’ performance. The rising dollar’s impact on gold and commodities, in general, is undeniable. Silver faced an even harsher blow towards the end of the week.
Oil’s Rollercoaster Ride
Oil embarked on a rollercoaster journey, surging at the week’s outset but enduring a significant sell-off in the latter part. A pullback had been anticipated.
Bitcoin’s Surprising Surge
In an unexpected turn of events, Bitcoin saw a substantial upward move this week, culminating in a triumphant Sunday that shattered recent highs and a significant trendline. It stands out as a unique outlier, inversely correlated with gold and traditional indices. Keep a close eye on Bitcoin in the coming week.
What This Means for Use Traders
For us traders, the key takeaway is the importance of tracking the flow of money. While we are constantly buying and selling, understanding the direction of these financial currents can be a boon for spotting continuation plays and engaging in intraday trading, if that aligns with your trading style. At this stage, it seems that risk is off, with money flowing into the dollar, potentially fuelling the Dollar Milkshake theory’s continuation. However, Bitcoin remains a captivating anomaly and a market to watch closely in the week ahead.
As we embark on another week of trading, remember that the financial world is in a constant state of flux. Staying informed and agile in your trading strategies is paramount. Until next week, may your trades be fruitful, and your insights be astute.”
Navigating the Seas of Risk – A Vital Trading Skill
In the world of trading, understanding and managing risk is as essential as deciphering market trends. As we follow the ebb and flow of money, it’s imperative to remember that trading is not just about making the right calls but also about safeguarding your capital.
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