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By this time, most people are also starting to believe in the V-shape recovery, and the Nasdaq has already fully recovered from the crisis, surpassing its highs before the Covid crash.

Will the tech stocks be able to lift the rest of the market to new highs, or will the general market drag down the tech giants as the reality of the economy kicks in?

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Market Overview

Last month, the USD was very strong, while the AUD was one of the weakest, however this month we have started to see a twist of events, where the AUDCAD is in a strong bull, while the USD/CHF is in a strong bear.

Gold has declined slightly, putting it in weak bear territory.

Nasdaq (NASUSD) remains the strongest stock market, whereas Hang Seng (H33HKD) remains the weakest.

Major Events

The biggest news of the week is probably the awesome jobs data from the US, although there was some classification error.

 

Stock Markets

The stock markets continued to rise, and as I posted in the case study below, since the tech stocks have gone up so much relative to the rest of the market, I was expecting the rest of the market to play catch up, and on Friday we saw the Dow Jones & S&P 500 outperforming the Nasdaq as anticipated.

 

Weekly Trade Highlights

Here are some highlights and case studies of trades done on forex, commodities and CFD products, also taken from our private forum.

See more case studies: https://synapsetrading.com/trading-guides/case-studies/

 

The first is a trade we did on the USD/CAD, as it broke down from a descending triangle.

 

Next, we also had a good run on Crude Oil, riding on the surge in prices as economies reopened.

 

Trading Insights

 

 

Join our Last & Final Skillsfuture Workshop!

2 weekends ago, we conducted another full-house Skillsfuture workshop, with 40 pax of new traders & investors, as well as some of my past students who sat in to help out.

So far, every intake has been a full house, which is why we expanded to 3 workshops instead of 1 originally planned, because of the overflow. But our license expires on 18 June, so this is the last and final workshop which we can hold.

This fully subsidised Skillsfuture workshop will give you the skills and roadmap to build a second source of income to plan for early financial freedom, by building an all-weather portfolio that can perform well in any market conditions, and also market timing skills to create additional cashflow from short/medium-term trades.

Date: 13 & 14 June 2020 (6pm to 10pm)

Click here to check availability:
🔥 https://wp.me/P1riws-8OX

💰 First-come, first-serve!
🍻 See you soon! 😄

After seeing negative prices in Crude Oil futures, will oil prices stay depressed, or will they recover any time soon?

With stock markets unclear, and the US dollar fluctuating wildly, is Gold a good long-term investment now?

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Market Overview

Looking at the “Daily Trend Analysis” on our Telegram channel, we can see that the most bullish counters are Gold (XAUUSD) and the US Dollar Index (USDIDX), whereas the most bearish counters are Brent (BCOUSD) and Crude Oil (WTIUSD).

The stock markets are pretty mixed, with most indices either being in a weak bear trend, or ranging.

 

Can Gold Hit $3000?

According to analysts from the Bank of America, they now have an 18-month target of $3000 for Gold, which seems pretty bullish, considering we have not even cleared $2000 yet.

Normally, it is quite rare for the USD and Gold to trend strongly in the same direction, but we are seeing it now.

In the short/medium-term, since USD is a reserve currency, it is in demand when liquidity dries up, whoever with the aggressive money printing, it might decline in the long run.

As proposed by Ray Dalio, we are nearing the end of a 75-year debt cycle, which could see massive deleveraging and devaluation of the US Dollar. If that happens, then it will definitely be bullish for Gold.

This is the reason I have been actively adding Gold to my long-term portfolio.

 

Normally, commodities tend to lag Gold, and eventually “catch up” once inflation kicks in, however this time demand is at an all-time low.

 

We have had great success buying the dips on Gold, and our most recent trading positions are already in the money. 💰😎🔥

Will continue to hold for more upside.

 

How Long Will Oil Stay Cheap?

After seeing the May Crude Oil futures hit negative, traders are getting spooked for the June contracts, because they are afraid the same thing will happen if the lockdown is still in force, and demand remains low.

Looking at the virus numbers, the possibility is high.

 

Even if the lockdown does end, there is too much pent-up supply, and a lack of storage.

Hence prices could remain low or continue falling.

 

We have taken full profit on our crude oil shorts, and will not be taking any new positions for the time being, since many brokers do not allow new positions to be initiated due to the liquidity.

This has turned out to be one of the most profitable trades of the year. 💰😎🔥


< h2>Ranging Stock Markets

Lastly, for the stock market, I would say I am 65% bearish, and 35% bullish.

Since there are no clear signs, I will testing the waters with small positions, but will not be taking any large positions yet.

Stay tuned in our Telegram channel to continue monitoring the stock market for the right time.

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See you on the inside! 🍻

If you have been keeping up with the news, you will know that oil futures (May) have hit negative territory for the first time in history, and that has spooked the stock market as well.

Going forward, will this be the catalyst that causes another leg down in the stock market, or will we see the lockdowns ending soon, and the economy returning to normal?

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Did You Catch This Epic Oil Crash?

If you are wondering why oil prices managed to go negative, the reason is quite simple:

Oil costs money to store.

Due to the economic collapse, oil isn’t being used much.

So all the storage facilities are filled up. So nobody who can store it will buy it from you.

If you want to get rid of oil, you have to pay someone.

When oil was trading at $20, we were already short with a target of $10.

To be honest, I did not really think it could go that low, and was prepared to take profits along the way.

But sometimes if you get the direction right, you might get lucky and enjoy a windfall profit.

 

It is worth noting that only the May contract dropped drastically, while the June and July contracts remained much higher.

This means that traders are expecting some economic recovery (and an increase in demand?) in the coming weeks or months.

 

Something interesting to note is the divergence between stocks and oil, shared by one of community members.

How Will This Affect the Stock Market?

Comparing across different asset classes, we can see that crude oil and the 10-year treasury are bearish, while the long-term treasury bonds and Gold are bullish.

The S&P 500 is somewhat sideways, and has not decided which way it would follow.

 

Most fund managers seem to think that the recovery will be U-shaped, meaning we can expected a prolonged sideways movement in the stock market while the real economy takes its time to recover.

The second most popular option is the W-shape recovery, meaning they expect another leg down to test the prior lows. This one has my vote as well.

And lastly only 15% think a V-shape recovery is likely.

 

Based on what I posted last week, there are 2 potential areas which I feel offer a high probability short trade, and if prices manage to clear the 3000 level, then I will rethink the W-shape hypothesis.

Updates Regarding the Covid Situation

 

Although the number of cases seem to have peaked in most major economies, and the US might want to relax its lockdown and resume the economy, there is a high risk of a second wave of infections, which might actually drive the second leg down of the stock market.

Also, the number of cases in developing countries seem unusually low, which is likely a case of not doing much tests. Hence there is a real risk that we might see an explosion of cases once the testing scales up.

Now that things have started to stabilise, many countries are starting to point fingers at China for their slow disclosure of the virus, thus allowing it to spread globally and wrecking havoc worldwide.

This could lead to more global tension and conflicts going forward.

As you can see, there are always many exciting trading opportunities in the markets, and I think that another big move is coming really soon, so now would be a really great time if you plan to start learning about trading & investing.

Start Your Trading Journey Today!

If you want to learn, you might as well learn from the best. 😄

Here is some feedback from our students:

“I am more confident to trade better with the setups I have learnt. I confident to meet my goals if I take action.” – Joseph Benjamin

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“The course is well-planned and thought-out. As an experienced trader, I feel it definitely helps me to have an edge over the markets in various ways.” – Shi Min

“A comprehensive and insightful course that is useful for those looking to understand technical analysis better.” – Daniel Tan

“Would recommend this course to others. I think, more focus on each type/setup will be good.” – Junnaidy

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If you are interested to start your journey with our community, click on the link below: https://synapsetrading.com/the-synapse-program/

See you on the inside! 🍻

For the past few weeks, we have seen a strong rebound in stocks, but at the same time, we have also seen a plunge in Oil, crazy volatility in the USD, and a surge in Gold.

How can we make sense of this crazy market, when it seems like everything is moving in different directions? Does it mean it is risk-on for now, and is the market bottom already in?

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Due to popular request, I will be doing a 1-hour Facebook Live session which is open to the public, where you will get the chance to ask me any questions you have about trading or investing, or the current market situation.

👉🏻 https://t.me/synapsetrading/1818

Is the Stock Market Bottom In?

To be honest, no one really knows at this point.

After reading all the different articles, news, opinions and data, it seems the consensus is pretty split on this.

I also did a poll on Telegram, which seems to favour more downside.

 

So is it possible that we are actually here?

 

Let’s take a look at the arguments for each side.

Bullish case:

  • Slowing number of cases and hospitalisations after lockdown measures
  • Possible that lockdown will end soon and economy returns to normal
  • Unprecedented fiscal and monetary policies to boost economy
  • Only certain industries are hit pretty bad, the rest of the economy is still ok
  • It is a matter of time before a vaccine is found
  • China is already “back to normal” after lifting their lockdown

Bearish case:

  • Permanent damage to the economy – lost jobs, businesses shut down, loan defaults, etc
  • Less future spending – change of habits, less discretionary spending
  • Lockdown (full or partial) may last a really long time
  • 2nd wave of infections after lockdown is lifted
  • Domino effect of economy failure has yet to really kick in
  • Fiscal & monetary policy is insufficient to save the economy

 

How to Swing Trade the Stock Market?

If I had to put a number on it, I would say I am 60% bearish, and 40% bullish.

Based on this opinion (and of course studying the price action), my general strategy is to do short/medium-term bullish swing trades, while at the same time looking for an opportunity to take a long-term bearish trade.

This will allow me to profit from the short/medium-term price rebound, based on the price action, but also not miss out from the potentially bigger long-term move down, should it happen.


From the chart, the strongest level of resistance is the gap around the 2900-3000 level, so if prices manage to close and stay above that, then I will reconsider my bearish hypothesis.

Tesla – Very Strong Price Rebound

After the sharp plunge when the stock price was almost hitting $1000, Tesla fell sharply to the $380 to $400 buying zone, which was the area I was planning to accumulate the stock.

It had an amazing rally after that, and as of today’s closing it is up almost 90% from my initial entry price. Congrats to those who took the trade with us!

 

Crude Oil – Double Whammy Selldown

Crude oil was very unfortunately to suffer a confluence of bad news, including price wars, and a huge decline in demand due to restriction of travel.

As price continues to drift down, we have seen the main exporters try to put together some deals and supply cuts, but the problem is that demand is too low, and even with a decrease in supply, there is still an increasing supply glut.

So unless we see lockdowns being lifted, and the economy going back to normal, we can expect crude oil to continue falling. This will get worse the longer the lockdown lasts.

 

Gold – The Hedge for USD

After seeing how the Fed (and almost every huge economy) is printing billions and trillions of dollars to save the economy, it is highly possible that we might see a devaluation of the US Dollar in the long-run.

For many traders and investors, they see Gold as a good way to hedge against the decline in value of the USD, which could explain the huge surge in Gold prices.

Thankfully, we managed to start buying in near the lows, and slowly accumulated on the way up.

As I mentioned in the post, I think this is a good medium/long-term trade, so for investors, you might want to add some of this in your investment portfolio as well.

Want to Start Your Trading Journey?

Here are some very practical trading tips which will be very useful, especially during such market conditions.

 

In trading, it is important to find the right mentor and the right community, because having the right support is very important if you want to succeed as a trader.

 

If you are interested to start your journey with our community, click on the link below: https://synapsetrading.com/the-synapse-program/

See you on the inside! 🍻

Last week, we had an epic week, with stock indices swinging up and down on alternate days, giving swing traders one of the best opportunities to trade.

Yields plunged (which meant bonds spiked), Gold was up, and oil was also bearish.

In this post, I will be giving an update on 2 of my largest positions:

  • Short position on Crude Oil
  • Short position on S&P 500

 

Short position on Crude Oil

For those of you following my last blog post or my Telegram channel, you will know that I have been stacking my short positions in oil for quite a while, and recently with the price war OPEC, Russia and the US are having, prices are on a downward spiral.

Just today, prices plunged 25-30% in one day!

I have taken the chance to cover my positions, and recently initiated a long position at $30, as I feel that it is a bit oversold, and prices are very near the lows back in 2003 and 2016, so maybe negotiations might start again to push prices back up.

 

Short position on S&P 500

For those who have been following closely, you will also know that I have been short on the stock market, using the S&P 500 as a benchmark.

At the first sign of decline, I posted this predictive roadmap, which has turned out be be uncannily accurate.

 

Simply by following this, my students and I have managed to stay one step ahead in the market, and we have been profiting handsomely both from long and short positions.

As I mentioned in my last trading video, you need a solid trading plan if you want to be able to make money from the markets, instead of chasing price movements blindly.

 


This is where we are the moment in the roadmap, and I am still holding my short positions.

Is this a good time to start buying?

In the long run, I am still bullish on stocks, so I will keep looking for good buying opportunities.

The challenge, however, is avoiding large drawdowns.

So I will want to wait for the dust to settle before buying, and not attempt to catch a falling knife.

If you look at the chart below, since the 1970s, there have only been 3 times when the market corrected to 50% or more, so such super crashes are actually pretty rare.

So maybe a 20-25% correction this time might be more likely, I will see when we get there, since I am still short at the moment.

 

 

Overall, the last 2 months have been pretty fantastic, with 39.81% portfolio gains in February, and 25.8% returns so far in March.

These gains large larger than normal, due to market conditions, but it would allow me to chill for the rest of the year. 😄

Remember, it’s not how many shots you make, but how many shot actually hit the target. One good shot is all is needed to make the kill.

 

Going forward, this week the market is looking bearish now, and the level of fear is increasing. This will present us with excellent trading opportunities.

If you would like to avoid missing out on any of such awesome trades (which we deliver on a daily basis), then you should definitely check out our training program & trading signals bundle:
https://synapsetrading.com/the-synapse-program/

See you on the inside!