Intraday Market Thoughts Archives

Displaying results for week of Feb 21, 2021

5 Things on Gold & Yields before more Powell

Feb 26, 2021 21:20 | by Ashraf Laidi

Friday's plunge in yields was just as notable as the preceding gains. As Fed chair Powell gears to speak next Thursday about the economy, here are the things im watching: 1) favourite of mine involving an overlay of HUI gold miners, suggesting major developments in XAUUSD (i will share these with the WBG next week); 2) The same applies to the Gold/SPX ratio, showing similar technical positives to the patterns of 2001, until support gave up these past two weeks. 3) Friday's candles in 2 and 10 year yields suggest neutral-negative moves early in the week, but it is the midweek-Thursday that Im concerned about. 4) USDJPY knived through its 200-DMA and its 55-WMA, calling for 107.20 as a short-term target. Our WhatsApp Broadcast Group entered this pair back in 104.60s. 5) Those who trade indices have seen the balant manner in which the jump in yields and oil boosted the DOW30, before their sharp Friday pullback dragged down the index, while supporting NASDAQ. We were active throughout the week with our WhatsApp Broadcast Group (WBG), sharing trades/analysis on DOW30, Nasdaq, XAUUSD, USDJPY, EURUSD and GBPUSD. Tune in for more next week. This is far from over. 

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5 Things on Gold & Yields before more Powell - Whatsapp English Feb 26 2021 (Chart 1)

مقابلتي المفصلة مع جو الهوا

Feb 26, 2021 13:29 | by Ashraf Laidi

تفضلوا بمقابلتي المفصلة على سي ان بي سي العربية مع جوالهوا عن المؤشرات و المعادن و العوائد وونواع التضخم و طبعا ... العملات الرقمية  شاهد المقابلة هنا

Yield Shield Peeled

Feb 25, 2021 22:26 | by Adam Button

The broader market is struggling with weather to interpret rising yields as a sign of economic improvement, inflation or dislocation in the bond market. On Thursday, an ugly rise in rates (10 yr hit 1.60%) led to a big reversal in risk with CHF leading and AUD lagging. The US PCE report on Friday will add another big risk. Below are snippets of the past 2 days given by Ashraf to members of the Whatsapp Broadcast Group ---from short-term gold fractals highlighting the importance of selling bounces, to calls on DOW30, SPX and Nasdaq. 

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Yield Shield Peeled - Whatsapp English Feb 25 2021 (Chart 1)

There is a good argument that rising yields reflect confidence in the economy and it's an argument that Fed members have repeatedly made but it didn't add up on Thursday as rates shot higher and the softest 7-year Treasury sale on record led to a quick blowout. At the end of the day, US 5-year yields were up 22 basis points to 0.82% and US 10s had briefly hit 1.60%. On its own, 1.6% isn't anything akin to 'high rates' but at the start of the month they were at 0.98%. They've moved too quickly for anyone's comfort and that message reverberated in to a sharp selloff in US equities as the S&P 500 fell 2.5%.

Initially the FX market shrugged off higher yields, early on Tuesday AUD/USD hit 80-cents for the first time in three years. After a strong US durable goods orders report, the Canadian dollar also hit a three year high. But as the jump in yields grew increasingly disorderly, both reversed in a big way. Cable was also sucked back to 1.40.

Importantly, this was a global jump in yields and while the outlook is strong for this year in the US, global central bankers will not appreciate the speed of this move. The Fed will be facing pressure internally and externally to clamp down on rates.

The first step will be verbal intervention. The Fed's Williams speaks Monday, Brainard on Tuesday and Powell next Thursday so there will be plenty of opportunity.

Yet, if Friday's PCE report shows unwelcome inflation, they may be forced into action sooner. The consensus estimates on both core and headline are +1.4%.

As Ashraf hraf has pointed out in Monday's video (direct open link here), he has been spending all his time with members of the Whatsapp Broadcast Group with intraday trades, analysis and 1-1 dialogue with the clients on their trades and account management.

Yields Hit Nasdaq, Bitcoin Pre-Powell

Feb 23, 2021 14:35 | by Adam Button

Indices broaden their losses as bond yields ask harder questions, with NASDAQ tech sectors feeling the pinch from rising borrowing costs (especially those that finance buybacks), especially as the index is devoid of financials. Bitcoin posted its habitual 30% decline off the highs, testing the key 21-DMA. No coincidence that BOTH Tesla & Bitcoin are 30% off their highs. Or is it? CFTC FX positioning remains in a frustrating freeze but oil positioning is a spot to watch closely. Here is Ashraf's video on indices, fx, gold and oil recorded last night.

Bitcoin hit an air-pocket on Monday in a quick fall to $46,610 from $53,000 before bouncing all the way back to $55,000. Monday's Bitcoin drop took only minutes and highlighted the fragility of the world's biggest crypto. At the same time, it highlighted the resilience of the bull market with dip buyers wasting no time at all. Ultimately, that's the signal from here with retail still at the point where they'd rather double up than cash out.

DXY stabilised at the curcial 90 support, while XAUUSD failed at the 1815/16 predicted in Ashraf's video above, whole US crude oil counts the minutes before it returns to 57--Premium subscribers can see the rationale above. 

Meanwhile, commodity markets continue to strengthen and that's providing a lasting tailwind for commodity currencies.

CFTC Commitments of Traders

Speculative net futures trader positions as of the close on Tuesday. Net short denoted by - long by +.

EUR +140K vs +140K prior GBP +22K vs +21K prior JPY +37K vs +35K prior CHF +14K vs +11K prior CAD +8K vs +10K prior AUD -3K vs -1K prior NZD +12K vs +12K prior

The speculative market continues to be locked in place. Even the latest rally in GBP is being met with skepticism while nothing seems to be able to jar euro positioning.

One spot that is notable is the oil speculative position, which is right in the middle of the 5-year range at just over 500K contracts. Could specs be what drives the next leg of the move?