Blog – Page 43 – Synapse Trading

Weekly Market Wrap: Inflation Fears are Back Again?

The global financial markets are experiencing volatility as investors try to gauge the future path of monetary policy. The US Federal Reserve has said it may hike interest rates sooner than expected to combat rising inflation, which could have an impact on stock and bond markets. The Fed has also been discussing the possibility of reducing its bond-buying program.

In Asia, Japan’s central bank has said it will maintain its loose monetary policy, while China is considering measures to boost economic growth.

Gold prices have risen as traders assess the likelihood of interest rate hikes in the US. The precious metal is often seen as a hedge against inflation and is currently on track for its best week since mid-January. Meanwhile, the US dollar has experienced its first weekly loss since January, with traders uncertain about the Fed’s path.

Europe is also experiencing volatility in its financial markets, with concerns over rising inflation in the eurozone. Inflation in the region hit a record high of 7.7% in February, according to Eurostat. The European Central Bank is under pressure to take action to combat inflation, but has so far maintained its stance on monetary policy.

Overall, it is a challenging time for investors as they navigate uncertainty over monetary policy, inflation, and economic growth. The situation is being closely monitored by market participants around the world.

For more market updates and real-time trading opportunities, check out our “Daily Trading Signals” Telegram channel!

[Photo: Dushanbe, Tajikistan – See my full travel photo log!]

For our weekly market wrap, we go through some of the trade calls and analysis from last week, which gives us valuable insights for the week ahead.

We cover 3 main markets with a total of 200+ counters, so we will never run out of trading opportunities:

Forex, CFDs, commodities, bonds
US stocks, ETFs, global stock indices
Cryptocurrencies, crypto indices

By covering a broad range of markets, we can focus our attention (and capital) on whichever market currently gives the best returns.

Click here to receive all these signals in real-time for only $67 a month! You will get several signals a day, and even taking just 1 trade the whole month can easily cover the fee, so what are you waiting for?

Table of Contents

Weekly Market Outlook Video

Weekly Market Outlook (26 February 2023)

Last week was great for our positioning of long USD and short equities, we could see a continue of that this week due to momentum, unless there is any major news to change the flow.

Portfolio Highlights

Weekly Portfolio Updates (26 February 2023)

📌 Our accumulated short positions are doing very well
📌 Added more shorts on pullbacks as the market went down

Forex & Commodities Market Highlights

AUDCAD – Prices are falling as anticipated, congrats to those who took this short trade! 💰🔥💪🏻

AUDNZD – Following up from one of the previous videos, this was a nice short at major resistance, which coincided with the breakdown of a bearish rising wedge.

Congrats to those who shorted, and there might be another shorting opportunity on the next pullback! 💰🔥💪🏻

EURAUD – It took way longer than expected, but prices are finally heading up!

USDSGD – Looking the at the weekly chart, we managed to use the long-term trend to our advantage and go in big on the USD. I accumulated about $500k of USD near the support area.

Let’s see how much higher it can go! 💰🔥💪🏻

Gold (XAUUSD) – This price movement prediction was spot on, except that the rebound happened on a smaller scale.

Congrats to those who shorted! 💰🔥💪🏻

Gold (XAUUSD) – Following up from the video, we mentioned that there is likely to be a rebound this week due to prices being oversold.

Stock & Bond Market Highlights

Based on our latest market poll, there does not seem to be a clear direction, with 39% bullish vs 46% bearish, and 15% neutral.

China tech stocks (3067) – Nearing our profit target for short positions! 💰🔥💪🏻

China tech stocks (3067) – Like I mentioned in the video, this support was a good place to flip to long, and just today we saw a crazy price surge of 6+%! 💰🔥💪🏻

Google (GOOG) – Following up from our video last week, the price has fallen back into the channel as predicted, and looks likely to continue heading down.

Congrats to those who shorted! 💰🔥💪🏻

NASDAQ 100 (US100) – Managed to short near the top, congrats to those who joined in! 💰🔥💪🏻

Let’s see if the downtrend continues next week!

Singapore’s inflation is 6.7% 😕

For the first time in a long time, fixed income is more attractive than stocks. 🤩

Click here to receive all these signals in real-time for only $67 a month! You will get several signals a day, and even taking just 1 trade the whole month can easily cover the fee, so what are you waiting for?

Good luck, and may next week bring more excellent profits!

0 Comments/by Spencer Li

Weekly Market Wrap: Large Profits on USD Longs and Stock Market Shorts!

Market Analysis

Global markets had a mixed week, as concerns over rising interest rates and inflation continued to weigh on investor sentiment.

Gold prices edged up as the dollar weakened due to rate hike worries, capping off a choppy trading week for the precious metal. The price of gold has been volatile in recent weeks as investors weigh the impact of rising interest rates and inflation on its value.

Meanwhile, the US dollar was steady as investors evaluated the Federal Reserve’s outlook for higher-for-longer interest rates. The yen saw increased volatility as traders digested mixed economic data from Japan.

Oil prices gained on Russian supply cut worries, while higher US inventories weighed on prices. Crude prices rebounded after a six-day losing streak as market participants watched geopolitical tensions and supply cuts.

In Asia, equities were mixed, with US rate hike worries still weighing on the markets. Japan’s Nikkei 225 index closed higher, while China’s Shanghai Composite fell.

Overall, markets continue to face uncertainty over the direction of interest rates and inflation, as well as geopolitical risks, which are likely to lead to volatility in the short term.

Thankfully, over the past week, we have been holding large USDSGD long positions and large short positions on the US stock market, which gave us double gains for our portfolio.

For more market updates and real-time trading opportunities, join our private “Daily Trading Signals” Telegram channel!

[Photo: Charyn Canyon, Kazakhstan – See my full travel photo log!]

For our weekly market wrap, we go through some of the trade calls and analysis from last week, which gives us valuable insights for the week ahead.

We cover 3 main markets with a total of 200+ counters, so we will never run out of trading opportunities:

Forex, CFDs, commodities, bonds
US stocks, ETFs, global stock indices
Cryptocurrencies, crypto indices

By covering a broad range of markets, we can focus our attention (and capital) on whichever market currently gives the best returns.

Click here to receive all these signals in real-time for only $67 a month! You will get several signals a day, and even taking just 1 trade the whole month can easily cover the fee, so what are you waiting for?

Table of Contents

Weekly Market Outlook Video

Weekly Market Outlook (19 February 2023)

📌 CPI rose 0.5% in January on a seasonally adjusted basis, after increasing 0.1 percent in December.
📌 Retail sales increase 3.0% in January
📌 Core retail sales rise 1.7%; December data unrevised
📌 Manufacturing production rebounds 1.0%
📌 Current Fed rates are 4.50% to 4.75%, 80% chance of 4.75% to 5.00% in next FOMC meeting
📌 Risk-off mode again?

Portfolio Highlights

Weekly Portfolio Updates (19 February 2023)

📌 Added a bit more T-bills at 5%
📌 Took profit on US tech stocks and REIT shorts
📌 Added a bit more short positions to stocks

Forex & Commodities Market Highlights

USDSGD – Congrats on the 300+ pips profit riding this wave up! 💰🔥💪🏻

Now that it has run into strong resistance, it is a good idea to take half or some profits, and trail the rest.

GBPJPY – As mentioned in the video, this counter is in a long-term uptrend channel, and more recently broke out from an ascending triangle.

Stock & Bond Market Highlights

China tech stocks (3067) – After a strong run-up, we can expect a pullback to support, which may be a good buying opportunity to get onto the long-term trend.

NASDAQ 100 (US100) – Currently consolidating at a crucial point, if it breaks lower bulls will give up and bears will jump in again.

If it breaks higher, then bears will wait at the prior swing high (around 13750) to mount another challenge.

Watching this today to see if it breaks to the downside and triggers the price alert.

NASDAQ 100 (US100) – Looking at the 4 hour chart, it has a nice pullback to the breakout neckline. Good chance to add more short positions.

Investors have been hoping for a “soft landing” for the US economy, but the recent spate of strong economic data has worried some that it might not happen.

The fear is that the US economy will continue to heat up, forcing the Federal Reserve to raise interest rates higher than expected for longer, increasing the chances of a sharp downturn that would hit the markets hard. Investors had been hoping that the Fed would be able to rein in inflation without tipping the economy into recession.

The recent strength of the data has led analysts to increase their forecasts for the peak federal-funds rate to around 5.25%, with some warning that such an increase would increase the likelihood of a recession, which the S&P 500 tends to decline in such scenarios.

Crypto Market Highlights

Ethereum (ETHUSD) – Can consider taking a long position with a tight stop, with a potential upside of 15-20% to test the prior swing high.

After a series of high-profile collapses in 2022, cryptocurrencies faced a tough year. However, things may be looking up in 2023 as Bitcoin, Ethereum and other cryptocurrencies have started to rise, suggesting that the dreaded “crypto winter” could be thawing.

Analysts believe that favourable market conditions and the US Federal Reserve slowing its pace of interest rate hikes could be contributing to this rise. Additionally, the upcoming Bitcoin halving event in 2024 could help lift the prices of Bitcoin out of the doldrums, according to historical data.

Furthermore, the development of central bank digital currencies (CBDCs) could give digital assets more credibility. While cryptocurrencies remain volatile, they could continue to be used as a digital currency for transactions in the digital space.

Click here to receive all these signals in real-time for only $67 a month! You will get several signals a day, and even taking just 1 trade the whole month can easily cover the fee, so what are you waiting for?

0 Comments/by Spencer Li

What is the Best Investment During a Recession?

Economics & News Trading

Are you curious about what a recession is, how it happens, and what its effects are on the financial markets?

A recession is a period of economic decline, and its causes can vary from tight monetary policy to geopolitical events.

However, the impact of a recession can be widespread, including increased poverty rates and reduced access to credit.

But, there are strategies that investors can adopt to minimize the negative effects of a recession.

In this blog post, I will talk about the early warning signs of a recession, and the best asset class to invest in during a recession.

Table of Contents

What is a Recession?

A recession is a period of economic decline characterized by falling Gross Domestic Product (GDP), rising unemployment rates, and contracting consumer and business spending.

It is typically caused by a variety of factors, such as a decline in demand, an increase in supply, or a change in consumer behavior.

Recessions can be triggered by a variety of events, such as an economic shock, a geopolitical event, or a financial crisis.

They can also be caused by external factors, such as changes in global trade patterns or shifts in commodity prices.

To combat a recession, governments and central banks often use a combination of monetary and fiscal policies to stimulate economic growth, such as lowering interest rates, increasing government spending, and providing tax incentives.

Recessions can have significant long-term impacts on both the economy and society, such as increased poverty rates, reduced access to credit, and decreased consumer confidence.

Causes of a Recession

A recession can be caused by various factors, including:

Tight monetary policy: When the central bank raises interest rates to control inflation, it can cause a recession as it reduces borrowing and spending.
Bursting of asset bubbles: If there is a speculative bubble in asset prices, such as in real estate or the stock market, a sudden drop can cause a recession.
External shocks: Major events such as natural disasters, wars, or pandemics can disrupt the economy and lead to a recession.
Fiscal policy: Changes in government spending or taxation can affect the economy and lead to a recession.
Supply shock: A sudden change in supply, such as a major oil price increase, can lead to a recession.
Banking crises: A major banking crisis can cause a recession by reducing lending and investment.
Trade imbalances: Large trade imbalances or protectionist policies can cause a recession by disrupting international trade.

These are just a few of the factors that can contribute to a recession, and often a combination of multiple factors can lead to a recession.

What are the Early Warnings Signs of a Recession?

There are several early warning signs that may indicate a potential recession.

Some of these signs include:

Inverted yield curve: This occurs when short-term bonds have a higher yield than long-term bonds, which is a sign that investors have lost confidence in the economy’s long-term prospects.
High levels of debt: When individuals, corporations, or governments take on excessive debt, it can create a financial burden that can be difficult to sustain in the long run.
Slowdown in job growth: If job growth begins to slow down or unemployment begins to rise, it may be an indication that the economy is weakening.
Decrease in consumer spending: When consumers start to cut back on spending, it can signal a decrease in consumer confidence and a weakening economy.
Decline in the stock market: A significant decline in the stock market can indicate that investors are worried about the economy’s prospects.

It is important to note that no one indicator can predict a recession with certainty, and there are often multiple factors that contribute to an economic downturn.

However, by keeping an eye on these early warning signs, policymakers and investors can take steps to mitigate the impact of a potential recession.

How Does a Recession Affect the Financial Markets?

A recession can have a significant impact on the financial markets.

Here are some historical examples of how recessions have affected the markets:

Stock market decline: During a recession, stock markets tend to decline as investors become pessimistic about the economy. For example, during the 2008 recession in the United States, the S&P 500 fell by around 56% from its peak in October 2007 to its low in March 2009.
Bond market rally: When stock markets decline, investors often move their money into bonds, which are considered safer investments. This can cause bond prices to rise and yields to fall. For example, during the 2008 recession, the yield on the 10-year US Treasury bond fell from around 4% in mid-2007 to below 2% by the end of 2008.
Currency devaluation: In some cases, a recession can cause a country’s currency to lose value. This can happen if investors become concerned about the country’s economic prospects and move their money elsewhere. For example, during the Asian financial crisis in the late 1990s, the Thai baht lost around 50% of its value against the US dollar, while the Indonesian rupiah lost around 80% of its value.
Commodity price decline: During a recession, demand for commodities such as oil, copper, and gold tends to fall, which can cause prices to decline. For example, during the 2008 recession, the price of oil fell from a high of around $145 per barrel in July to a low of around $30 per barrel in December.

It is worth noting that not all recessions have the same impact on the financial markets, and there can be significant variation in how different sectors and asset classes perform during a recession.

What is the Best Asset Class to Invest During a Recession?

During a recession, investors typically look for safe havens that can weather economic downturns.

The best asset classes to invest in during a recession include:

Bonds: Government bonds, such as US Treasuries, are considered one of the safest investments during a recession. During the Great Recession of 2008-2009, the US Treasury bond market gained 12.7% as investors flocked to safety.
Defensive stocks: Defensive stocks are companies that provide essential products and services, such as utilities, healthcare, and consumer staples. During the 2008-2009 recession, the S&P 500 healthcare sector was one of the few sectors that did not decline as much.
Gold: Gold is a traditional safe-haven investment that tends to perform well during times of economic uncertainty. During the 2008-2009 recession, gold prices rose more than 25%, as investors sought protection from the stock market’s decline.
Real estate: Real estate can also be a good investment during a recession, as interest rates tend to be low, and property prices may decline, providing opportunities for long-term investors. During the 2008-2009 recession, housing prices fell sharply, but by 2012, they had rebounded and were rising again.

It’s important to note that no investment is entirely recession-proof, and all come with some degree of risk.

Investors should diversify their portfolios and consult with financial professionals to determine the best investment strategy for their individual needs and risk tolerance.

Concluding Thoughts

In conclusion, understanding the causes, warning signs, and impacts of a recession is critical for policymakers, investors, and the general public.

It’s important to keep a close eye on early warning signs such as an inverted yield curve, high levels of debt, or a slowdown in job growth.

Moreover, investors should take a cautious approach during a recession and seek safe haven assets such as bonds, defensive stocks, gold, or real estate.

Now that I have covered all the strategies for a recession, what can you do to prepare for a potential recession?

Also, how can you ensure that your investment portfolio is diversified and resilient to market downturns?

Let me know in the comments below.

0 Comments/by Spencer Li

Weekly Market Wrap: Inflation Fears are Back!

Market Analysis

Stocks declined after January’s producer price index, which is another inflation gauge, increased by 0.7% in the month, higher than the expected 0.4%.

This follows reports that January’s consumer price index and retail sales were both higher than anticipated, suggesting that the Federal Reserve may need to do more to curb inflation.

In addition, initial jobless claims unexpectedly dropped in the week ending Feb. 11, according to the Labor Department’s report.

The decline in jobless claims indicates a tight labor market, while comments from Federal Reserve Presidents James Bullard and Loretta Mester advocating for an interest rate hike in March also weighed on stocks.

Investors should be aware that inflation may not return to normal levels quickly, which could result in more volatility in the market.

Stay tuned for real-time trading opportunities in our “Daily Trading Signals” Telegram channel!

[Photo: Khujand, Tajikistan – See my full travel photo log!]

For our weekly market wrap, we go through some of the trade calls and analysis from last week, which gives us valuable insights for the week ahead.

We cover 3 main markets with a total of 200+ counters, so we will never run out of trading opportunities:

Forex, CFDs, commodities, bonds
US stocks, ETFs, global stock indices
Cryptocurrencies, crypto indices

By covering a broad range of markets, we can focus our attention (and capital) on whichever market currently gives the best returns.

Click here to receive all these signals in real-time for only $67 a month! You will get several signals a day, and even taking just 1 trade the whole month can easily cover the fee, so what are you waiting for?

Table of Contents

Weekly Market Outlook Video

Weekly Market Outlook (12 February 2023)

After December’s inflation data was adjusted upwards, the market has been extra jittery, so next week’s CPI date release on Tuesday is going to have a very large significance on the stance of the Fed.

Portfolio Highlights

Weekly Portfolio Updates (12 February 2023)

Not much changes in allocation since last week.

Forex & Commodities Market Highlights

ERUCAD – Following up on this trade, congrats to all those who followed and shorted! The profit is currently about 200+ pips. 💰🔥💪🏻

The current price momentum looks very strong, and has a good chance of going further.

EURCHF – After the false breakout, the bears are back in control. This looks like a good shorting opportunity.

NZDCAD – Took longer than expected, but it finally hit the TP for about 300+ pips profit! 💰🔥💪🏻

USDSGD – Formed a small bull flag, which means good chance of another bullish leg.

Congrats to those who took this rebound trade! 💰🔥💪🏻

Gold (XAUUSD) – Following up on Gold, this is how it could play out. Wait for a good pullback to take a low risk short with the tight stop.

Stock & Bond Market Highlights

Wow the 6-month T-bills have hit 5% returns. This means the expected terminal rate of interest rates have gone up.

This was the smallest 12-month increase since the period ending October 2021.

Dow closes 400 points lower as hot inflation report, comments from Fed’s Bullard raise rate hike fears.

Cryptocurrency Highlights

Ethereum (ETHUSD) – How it breaks out of this most recent consolidation will most likely determine its fate for the rest of the year.

Click here to receive all these signals in real-time for only $67 a month! You will get several signals a day, and even taking just 1 trade the whole month can easily cover the fee, so what are you waiting for?

Good luck, and may next week bring more excellent profits!

0 Comments/by Spencer Li

Weekly Market Wrap: Market Rebound is Currently Overbought?

Market Analysis

The United States is considering sanctions on Chinese firms for their involvement in Iran’s surveillance buildup.

Despite international sanctions, Chinese state-owned companies have been shipping navigation equipment and jamming technology to Russian government-owned companies.

The United States and Brazil are joining India’s efforts to increase demand for biofuels.

Elon Musk was found not liable in a trial over his tweets about taking Tesla private, and the Federal Trade Commission is preparing a potential antitrust suit against Amazon.

Disney plans to cut 7,000 jobs and $5.5 billion in costs. Commodity trader Trafigura faces a $577 million loss after uncovering nickel fraud.

Adani plans to repay a $1.1 billion loan, while the United Kingdom’s National Health Service is in crisis due to budget cuts and the impact of Covid-19.

Chinese tech giant Alibaba is working on a rival to OpenAI’s ChatGPT.

Apple is promoting its high-end iPhones and there are signs that a stronger rebound in China will boost oil prices.

Stay tuned for more real-time updates in our “Daily Trading Signals” Telegram channel!

[Photo: Fann Mountains, Tajikistan – See my full travel photo log!]

For our weekly market wrap, we go through some of the trade calls and analysis from last week, which gives us valuable insights for the week ahead.

We cover 3 main markets with a total of 200+ counters, so we will never run out of trading opportunities:

Forex, CFDs, commodities, bonds
US stocks, ETFs, global stock indices
Cryptocurrencies, crypto indices

By covering a broad range of markets, we can focus our attention (and capital) on whichever market currently gives the best returns.

Click here to receive all these signals in real-time for only $67 a month! You will get several signals a day, and even taking just 1 trade the whole month can easily cover the fee, so what are you waiting for?

Table of Contents

Weekly Market Outlook Video

Weekly Market Outlook (05 February 2023)

Explained more about the 4 main data points:
📌 Interest rates (FOMC)
📌 Jobs data (NFP)
📌 Inflation (CPI)
📌 Company earnings

Portfolio Highlights

Weekly Portfolio Updates (05 February 2023)

Added the breakdown for stocks.

Positive numbers are net long and negative numbers are net short. I have a mix of both to provide some hedging.

Forex & Commodities Market Highlights

AUDCAD – Following up, congrats to all those who took this trade, it is now deeply in the money! 💰🔥💪🏻

CADJPY – Watch to see if any setups develop here.

CHFJPY – Watch to see if any setups develop here.

USDSGD (weekly chart) – Rebound off strong support after heading into oversold zone on the weekly chart.

Good reward/risk ratio to go long here.

Gold (XAUUSD) – Strong selldown after the recent NFP jobs report, and the short-term momentum has swung to the bearish side.

Not advisable to go long now, as there might be a second leg of selldown.

Stock & Bond Market Highlights

Apple (AAPL) – After its poor earnings last week, the fundamentals show a decline in revenue for the first time in many years.

Can consider taking a medium/long-term short position and scale in.

NASDAQ 100 (US100) – Currently in the overbought zone based on RSI, so it is not a good time to be buying now.

Will be expecting some correction or pullback next week.

Inflation Forecasts 2023

The chart above shows the TMC’s Market Regime Scrutinizer.

It measures the market-implied odds assigned to a US recession, soft landing or strong growth regime ahead.
It is derived by scrutinizing option markets in fixed income, equity, and currencies and blending the resulting market-implied probabilities in this flagship TMC indicator.

Look for stocks to lose 30% from here, says strategist David Rosenberg. And don’t even think about turning bullish until 2024.

Click here to receive all these signals in real-time for only $67 a month! You will get several signals a day, and even taking just 1 trade the whole month can easily cover the fee, so what are you waiting for?

Good luck, and may next week bring more excellent profits!

0 Comments/by Spencer Li

Weekly Market Wrap: Inflation Fears are Back Again?

Weekly Market Outlook Video

Portfolio Highlights

Forex & Commodities Market Highlights

Stock & Bond Market Highlights

Weekly Market Wrap: Large Profits on USD Longs and Stock Market Shorts!

Weekly Market Outlook Video

Portfolio Highlights

Forex & Commodities Market Highlights

Stock & Bond Market Highlights

Crypto Market Highlights

What is the Best Investment During a Recession?

What is a Recession?

Causes of a Recession

What are the Early Warnings Signs of a Recession?

How Does a Recession Affect the Financial Markets?

What is the Best Asset Class to Invest During a Recession?

Concluding Thoughts

Weekly Market Wrap: Inflation Fears are Back!

Weekly Market Outlook Video

Portfolio Highlights

Forex & Commodities Market Highlights

Stock & Bond Market Highlights

Cryptocurrency Highlights

Weekly Market Wrap: Market Rebound is Currently Overbought?

Weekly Market Outlook Video

Portfolio Highlights

Forex & Commodities Market Highlights

Stock & Bond Market Highlights

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