Market Analysis – Page 40 – Synapse Trading

Weekly Market Wrap: Rate Hikes, Big Tech Earnings, Crypto Surge!

In last week’s NFP (non-farm payroll) report, the US added 517,000 jobs in January, higher than expected and pushing the unemployment rate down to 3.4%, its lowest since 1969.

Job growth was revised higher for November and December, adding an additional 71,000 jobs.

The strong job growth may not be welcomed by the Federal Reserve, which is looking to slow job gains and wage growth to reduce inflation and pause its interest rate hike campaign.

The Federal Reserve raised its interest rate target by 0.25% last week, and plans to continue raising rates with the aim of bringing inflation down to 2%.

However, investors believe the Fed may cut rates back to current levels by the end of next year.

The recent surge in crypto saw a rebound in Bitcoin and Ether by 51% and 47% respectively.

The shift in trading patterns shows a pullback from retail investors and a rise in the influence of institutions such as hedge funds.

The Big Tech Earnings Season saw a decline in revenue growth compared to 2021 with combined growth of only 7% for Apple, Amazon, Alphabet, Microsoft, and Facebook, compared to 28% in 2021.

The companies are engaged in significant headcount reductions, costing more than 50,000 jobs.

The time for a correction or pullback may be as soon as next week.

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

[Photo: Bukhara, Uzbekistan – 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?

Weekly Market Outlook Video

Weekly Market Outlook (29 January 2023)

📌 Wednesday: FOMC
📌 Friday: NFP

Portfolio Highlights

Weekly Portfolio Updates (29 January 2023)

Not much changes, since the market has not moved much.

Forex & Commodities Market Highlights

AUDCAD – rebounding off strong resistance, good for a short trade with SL above the prior swing high.

AUDCHF – Also another short trade after running into strong resistance.

Stock & Bond Market Highlights

Stock sector comparisons for 2022

The Federal Reserve raised rates. Chair Powell says it’s ‘premature’ to declare victory against inflation.

In 2007. the Fed and major banks were predicting a soft landing. We all know how that turned out. Will this time be different?

Wow quite a large deviation from expectations!

Wonder if this will lead to a more aggressive stance on rate hikes.

Traders have never been this bearish on Treasuries.

Crypto Market Highlights

ETHUSD Crossing 1694.81
Break swing high

(Charts posted in Telegram channel)

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!

Spencer Li

After trading for 18 years, reading 1500+ books, and mentoring 1000+ traders, I specialise in helping people improve their trading results, by using tested trading strategies, and making better decisions via decision science.

0 Comments/by Spencer Li

Fed Hikes Rates by 0.25%: What’s Next for the Markets?

Market Analysis

The Federal Reserve recently raised its interest rates by a quarter point, signaling that more rate increases are on the horizon.

Despite this stance, investors are betting on only one more quarter-point increase, with some suggesting that the Fed may even cut its target range back to its current level by the end of next year.

This disconnect between the Fed’s message and what investors believe it will do poses a problem, as a drop in long-term interest rates and a stock market rally could hamper the Fed’s efforts to control inflation.

The Fed’s past behavior is partly to blame for this disconnect, as in previous cycles, it has tended to start cutting rates shortly after it finished raising them.

However, the Fed’s actions will depend on inflation and employment in the coming months.

There is a risk that investors may see the central bank’s hawkish talk as mere jawboning and that the Fed itself doesn’t believe its own message.

Despite the Fed’s recent rate hike, the S&P 500 and Nasdaq Composite closed 1.1% and 2% higher, respectively.

The stock market has been rallying since October 2022, with the S&P 500 up 17% since then and 8% since the start of the year.

There are conflicting opinions among experts on what this means for the future of the market.

Michael Burry predicts a second round of inflation spike when the Fed cuts interest rates again, while Nassim Taleb believes that the next 15 years will be harder than the previous 15 due to higher interest rates.

On the other hand, Mark Spitznagel predicts a major market crash as bad as the Great Depression.

A deeper market crash may be possible, but it is not visible at this point in time.

Historically, US midterms have resulted in positive S&P 500 performance, with a 7.3% increase after three months, a 15.1% increase after six months, and a 16.3% increase after 12 months.

Additionally, a recession is not correlated with S&P 500 performance and stock market performance after a recession is usually bullish.

The Fed has hiked rates by 450 basis points in just 10 months, far more than what was initially expected.

Ongoing rate increases will be necessary to get inflation back to the 2% target over time, with at least two more rate hikes projected in the future.

If the economy performs as expected, there will be no rate cuts this year.

The Chairman of the Fed, Powell, emphasized that there is still more work to be done with respect to inflation control and monetary policy.

The risk of doing too little is difficult to manage, while over-tightening can be addressed with available tools.

The labor market remains extremely tight, and reducing inflation is likely to require a period of below-trend growth and softening of labor market conditions.

Financial conditions have been loosening since mid-October after tightening earlier in the year, and the Fed is cautious about declaring victory in controlling inflation, viewing the job as ongoing.

Spencer Li

After trading for 18 years, reading 1500+ books, and mentoring 1000+ traders, I specialise in helping people improve their trading results, by using tested trading strategies, and making better decisions via decision science.

0 Comments/by Spencer Li

Weekly Market Wrap: Is this Finally a New Bull Market?

Market Analysis

Investors’ views on inflation, recession risk, and monetary policy were fickle throughout much of 2022.

Recently, a positive bias has emerged, reflected in the downward shift in interest rate expectations and upward move in securities prices since mid-October.

Investors appear to be interpreting economic data as evidence that a dovish pivot (Fed stopping interest rate hikes and possibly cutting them) is imminent.

Bad news (slowing job growth, dismal economic survey data, falling property values, negative real wage growth) is seen as good news when viewed through the lens of inflation and monetary policy.

But what is missing in this discussion is the real economy and what may have to happen to it for this market narrative to play out.

The dovish pivot narrative is driven by the expectation that U.S. inflation will continue to decline at a fairly rapid rate.

However, it’s also noteworthy that the Fed’s success in slowing inflation thus far has occurred while China, the world’s second-largest economy, has been hampered by pandemic-related restrictions.

The Fed is typically prone to keeping policy either too tight or too loose for too long.

Fed officials only have to look back at “the great inflation” of 1965 to 1982 to see what can happen when policy is loosened too quickly.

The market’s optimism could make it more likely that the Fed keeps tightening policy.

So, all things considered, the risk of over-tightening seems to be higher than the likelihood of a premature pivot.

What would cause the Fed to make a significant shift in policy?

Most likely a meaningful recession or market crisis – risks that aren’t being reflected in today’s earnings expectations or credit spreads.

Investors are focusing far more on what negative economic data means for interest rates than the potential implications for the real economy.

Join our “Daily Trading Signals” for real-time trading opportunities!

[Photo: Lake Aydarkul, Uzbekistan – 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?

Weekly Market Outlook Video

Weekly Market Outlook (22 January 2023)

CNY week will see slow markets
Watch out for tech layoffs and earnings

Portfolio Highlights

Weekly Portfolio Updates (22 January 2023)

Not much changes, since the market has not moved much.

Forex & Commodities Market Highlights

AUDCHF – Excellent short entry, and trade is now in the money. Can consider trailing SL to breakeven to reduce risk.

EURAUD – Great entry near the support level, and the trade is now in the money. Can continue to hold for more profits since the trend is still bullish.

EURCHF – Excellent entry near support, after pulling back from an ascending triangle breakout.

USDJPY (H4 chart) – Congrats to those who managed catch this short!

Gold (XAUUSD) – Still going strong, after some small profit-taking. I have circled the previous buying/consolidation points.

Probably heading up to test the previous swing highs.

The Periodic Table of Commodities Returns 2022

Stock & Bond Market Highlights

S&P 500 (US500) – The major trendline is back in play, after the recent rally failed to break past it.

If it takes out the previous swing low (~3750), then the bears will start stepping in full force and we will probably see new lows.

Now that we are more or less certain that inflation is coming down, the next major concern is slowing growth and worse company earnings.

S&P 500 Calendar Year Returns: 1928-2022

200,000+ laid off in tech since the beginning of 2022. And for no reason other than “everyone else is doing it”.

Tech workers need a union.

Crypto Market Highlights

Bitcoin (BTCUSD) – After an impressive rally the last few weeks, prices are now consolidating.

If prices can break out of the small bull flag, this could spark more buyers coming in and start an uptrend.

However, if volumes falter, then traders could end up taking the chance to dump their holdings on this rally.

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!

Spencer Li

After trading for 18 years, reading 1500+ books, and mentoring 1000+ traders, I specialise in helping people improve their trading results, by using tested trading strategies, and making better decisions via decision science.

0 Comments/by Spencer Li

Weekly Market Wrap: Slowing Growth & Earnings in the US?

Market Analysis

US nominal growth is experiencing a significant deceleration, as evidenced by declining services PMI and lower momentum of Non-Farm Payrolls, with a negative rate of change for real growth and moderating wage growth indicating negative inflationary pressures.

Inflation in the US is currently affecting services the most, which is where nearly two-thirds of consumer spending goes.

Services include housing, insurance, healthcare, education, travel and hotel bookings, subscriptions, streaming, telecommunication, haircuts and more.

Inflation in the Eurozone is increasing due to excessive printing of real-economy money and a relatively inelastic basket of goods and services.

European core inflation may lag US core inflation by 6 months but it is expected to continue to increase over the next 3-6 months, which will force the ECB to be hawkish.

The Chinese economy is experiencing a significant reopening, which is expected to boost growth and force Emerging Markets fund managers to reallocate to China and other countries.

This push from the Chinese reopening is offset by the pull of a deteriorating global growth and inflation picture.

In light of these mixed news, has the stock market bottomed, or was the recent rally a bull trap?

Stayed tuned in our “Daily Trading Signals” private Telegram channel!

[Photo: Cappadocia, Turkey – 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?

Weekly Market Outlook Video

Weekly Market Outlook (15 January 2023)

1. Bearishness of USD – might be oversold
2. No clear direction of US stock market
3. Bullishness of China stock market
4. Watch for TLT as early indicator
5. Crypto market reversing?
6. CNY market slowdown
7. Soft landing or recession?

Portfolio Highlights

Weekly Portfolio Updates (15 January 2023)

Not much changes, but this week I could be doing some rebalancing, which I will update when it happens.

Stay tuned!

Forex & Commodities Market Highlights

USDJPY – Congrats to those who followed the trade, prices have hit the first TP!

Gold (XAUUSD) – This trade has also hit the TP, congrats to all those who followed!

USDSGD – As predicted, prices have fallen to the major support level. Congrats!

Since prices are quite oversold and the support is strong, this will be a good level to have a price rebound.

USDSGD is near the 5 year low, and is at the bottom of a wide trading range. Weekly RSI is in the oversold region.

Good chance of a rebound from these levels, which means if you are looking to buy US dollars, now is a good time to get it cheaper.

And if you are planning to fund your trading accounts in USD, you can also take advantage of the good conversion rates now.

AUDJPY – Continuation of the downtrend

Stock & Bond Market Highlights

What if don’t get a recession this year?
What happens if we get a soft landing?

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!

Spencer Li

After trading for 18 years, reading 1500+ books, and mentoring 1000+ traders, I specialise in helping people improve their trading results, by using tested trading strategies, and making better decisions via decision science.

0 Comments/by Spencer Li

Weekly Market Wrap: When Will the Fed start Cutting Rates?

Market Analysis

Currently, there is a potential clash between investors’ hopes for the Federal Reserve (Fed) to cut interest rates and the Fed’s current stance that it is too early to consider such action.

This has caused uncertainty in financial markets for 2023.

Many investors believe that inflation has peaked and that price pressures will fall quickly, leading the Fed to cut rates by the end of the year, as they did in 2019.

However, Fed officials have stated that the current inflation rate is higher than in previous years and therefore, this time will be different.

Despite the slower pace of inflation in December, evidence of inflation pulling back has fueled bets that the Fed will cut rates as early as the second half of the year.

Traders in interest-rate derivatives markets see a high chance of the Fed raising rates twice more this year and then cutting at least once by December.

However, Fed officials have projected that interest rates will continue rising through the spring and have not planned for cuts this year.

The Fed is concerned that a strong labor market could sustain wage growth and keep inflation above their 2% target.

Investors are at risk of being incorrect if they believe interest rates will fall.

The S&P 500 and government bonds have risen but there are concerns that Fed policy could be tougher than expected, leading to a potential decline in the economy and market.

The disconnect between the Fed and investors is caused by differing views on the rate of inflation decline.

For real-time trading signals and daily updates, join our “Daily Trading signals” Telegram channel!

[Photo: Brokenheart Mountain, Kyrgyzstan – 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?

Weekly Market Outlook Video

Weekly Market Outlook (08 January 2023)

1. Bearishness of USD
2. No clear direction of US stock market
3. Bullishness of China stock market
4. Watch for TLT as early indicator

Portfolio Highlights

Weekly Portfolio Updates (08 January 2023)

Not much changes.

📌 In 2017 and 2018, emerging markets were the best-performing and worst-performing asset class, respectively.

📌 Cash was the worst-performing asset class in 2016 and 2017, the top performer in 2018, and at the bottom of the heap in 2019.

📌 REITs were in the dumps in 2020 and shot to the top of the charts in 2021, before returning to last place in 2022.

📌 In 2022, commodities and cash were the only two asset classes that experienced gains.

📌 8 out of the 10 tracked asset classes had ….

Check out this free video breakdown of the various asset classes:

Forex & Commodities Market Highlights

USDCNY – Congrats on hitting the profit target! 💰🔥💪🏻

Momentum is still strong, so can consider taking half profits and trailing the rest.

AUDUSD – Breakout after consolidating near the 200-EMA!

NZDUSD – Prices have successfully stayed above the 200-EMA, and formed a bull flag.

USDJPY – Prices are now in a downtrend channel

CHFJPY – Excellent shorting opportunity!

Stock & Bond Market Highlights

Global REITs (REET) – Could this be the start of a major bullish reversal?

If you buy and hold stocks after a bad year, the average returns for the next 3 years is 32.5%.

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!

Spencer Li

After trading for 18 years, reading 1500+ books, and mentoring 1000+ traders, I specialise in helping people improve their trading results, by using tested trading strategies, and making better decisions via decision science.

0 Comments/by Spencer Li

Weekly Market Wrap: Rate Hikes, Big Tech Earnings, Crypto Surge!

Weekly Market Outlook Video

Portfolio Highlights

Forex & Commodities Market Highlights

Stock & Bond Market Highlights

Crypto Market Highlights

Fed Hikes Rates by 0.25%: What’s Next for the Markets?

Weekly Market Wrap: Is this Finally a New Bull Market?

Weekly Market Outlook Video

Portfolio Highlights

Forex & Commodities Market Highlights

Stock & Bond Market Highlights

Crypto Market Highlights

Weekly Market Wrap: Slowing Growth & Earnings in the US?

Weekly Market Outlook Video

Portfolio Highlights

Forex & Commodities Market Highlights

Stock & Bond Market Highlights

Weekly Market Wrap: When Will the Fed start Cutting Rates?

Weekly Market Outlook Video

Portfolio Highlights

Forex & Commodities Market Highlights

Stock & Bond Market Highlights

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