EliteTrades

Metals typically perform better when interest rates are lower, as rate cuts tend to weaken the value of the dollar—especially benefiting silver. Since assets like silver and gold are traded against the dollar, they often experience gains in such environments, and this trend is likely to continue throughout the year.

Silver is more responsive to changes in interest rates than gold due to its practical industrial applications in addition to its role as a precious metal. In the event of a stock market downturn, metals could serve as a more secure investment option.

Germany's business model was based mainly on two factors.
1. Cheap energy from Russia.
2. Exports to China.
Both of those factors have been eliminated due to the war in Ukraine and the bad business environment in China.
Hence the German economy is in the ropes.

The strategy of using the 200-period Moving Average (MA) in combination with the Stochastic Oscillator is a popular method for identifying trading opportunities by aligning both trend and momentum.

1. 200 Moving Average (MA) Overview:

Trend Identification: The 200 MA is often used to gauge the overall trend direction. Price above the 200 MA suggests a bullish trend (buying bias), while price below the 200 MA indicates a bearish trend (selling bias).

2. Stochastic Oscillator Overview:

Momentum Indicator: The Stochastic Oscillator is a momentum indicator that compares the closing price to the range of prices over a set period, usually 14 periods. It consists of two lines:
%K: The main line, which measures the current closing price relative to the high-low range.
%D: The signal line, which is a moving average of %K.

Overbought and Oversold Zones: The Stochastic Oscillator ranges from 0 to 100, with levels above 80 considered overbought and levels below 20 considered oversold.

3. Combining 200 MA and Stochastic Strategy:

The strategy aims to filter trades based on the prevailing trend (as indicated by the 200 MA) and to time entries using the momentum signals provided by the Stochastic Oscillator.
Steps for Long Trades (Bullish):

Trend Filter with 200 MA:
Price must be above the 200 MA to consider a long trade. This confirms that the overall trend is bullish.

Stochastic Oversold Signal:
Wait for the Stochastic Oscillator to drop below 20 (oversold zone) and then start rising. The buy signal is often generated when the %K line crosses above the %D line from the oversold territory, indicating a potential upward momentum shift.

Entry Point:
Enter a long position when both conditions are met: price above the 200 MA and the Stochastic gives a buy signal (i.e., %K crosses %D upward).

Exit:
The trade could be exited when the Stochastic moves into the overbought territory (above 80) and starts crossing down, or if the price drops below the 200 MA.

Steps for Short Trades (Bearish):

Trend Filter with 200 MA:
Price must be below the 200 MA to consider a short trade. This indicates a bearish trend.

Stochastic Overbought Signal:
Wait for the Stochastic Oscillator to rise above 80 (overbought zone) and then start falling. The sell signal occurs when the %K line crosses below the %D line from the overbought territory, signaling potential downward momentum.

Entry Point:
Enter a short position when both conditions are met: price below the 200 MA and the Stochastic gives a sell signal (i.e., %K crosses %D downward).

Exit:
Exit the trade when the Stochastic moves into the oversold territory and crosses up or if the price moves above the 200 MA.

4. Advantages:

Trend and Momentum Combination: The strategy ensures that trades are placed in the direction of the broader trend, while timing entries with short-term momentum shifts.

Objective Rules: Using two clear technical indicators helps remove emotional decision-making from the trading process.

5. Drawbacks:

False Signals: The strategy may generate false signals in choppy, sideways markets where the trend is not clear, leading to whipsaws.
Lagging Nature: Both the 200 MA and Stochastic are lagging indicators, which means that signals might occur after the price has already moved considerably.

6. Risk Management:

Always incorporate stop-loss levels and risk management principles to protect against market volatility and ensure that losses are minimized on false signals.

On August the 5th, the VIX hit almost 40. At the time almost everybody was talking about more volatility to come. Fast forward to today, the VIX is at 15. Nobody told the retail traders that volatility was caused by the unwinding of the YEN carry trade and not by systemic forces of the market. The moral of the story is ‘when you can’t explain what’s going on in the market, trust your trading plan and carry on.’

SELL-OFF !!!

Unemployment worries in the U.S.,
a high interest rate environment and
geopolitical tensions in the Middle East,
precipitated a sell-off which is reminiscent of a crash.
Hold on to your seats!

A trading plan is a comprehensive blueprint that outlines a trader’s strategies, objectives, and risk management techniques for executing trades. Here’s why sticking to a trading plan is crucial:

1. Discipline and Focus: A trading plan promotes discipline by providing clear guidelines. It helps traders stay focused on their goals and avoid impulsive decisions driven by emotions.

2. Risk Management: By specifying risk tolerance, stop-loss, and take-profit levels, a trading plan helps manage risk effectively. It prevents overexposure and limits potential losses.

3. Consistency: Following a plan ensures consistent decision-making. Traders can evaluate their performance over time and make necessary adjustments.

Remember, consistency is key to trading the markets.

French President Emmanuel Macron’s decision to call snap parliamentary elections after his party’s defeat in the European Parliament vote has had significant repercussions, including effects on the stock prices of major French banks.

French banks, especially those listed on the CAC (French stock market index), have experienced fluctuations in their stock prices due to the political uncertainty caused by the snap elections.

BNP Paribas
7-Day Return: -2.2%

Crédit Agricole
7-Day Return: -3.5%

Société Générale
7-Day Return: -3.9%

Why copper is going up?

Supply Constraints: Slow growth in copper supplies due to discouraged investments in mines and declining copper content in ore.

Energy Costs: Copper production is energy-intensive, and rising oil and natural gas prices have increased demand for copper.

Energy Transition: As solar energy and battery costs decline, demand for copper in renewable technologies (e.g., electric vehicles) rises.

Investor Interest: Investors use copper as an inflation hedge, and recent supply shocks have strengthened its position.

Speculation: Hedge funds investing in copper futures have driven prices to record highs.

The 200-day moving average is an important part of technical analysis as it is widely regarded as a key indicator of long-term market trends and investor sentiment.

Traders and analysts often use the 200-day moving average to assess the overall direction of a market or the price movement of a specific asset. If an asset's price is above the 200-day moving average, this is usually interpreted as a bullish signal, suggesting that the long-term trend is positive. Conversely, if the price falls below the 200-day moving average, it can be interpreted as a bearish signal, indicating potential weakness in the market.

The 200-day moving average also acts as a support or resistance level, with price often bouncing off or consolidating around it during trend reversals or pullbacks. Overall, the 200-day moving average is a valuable tool for traders and investors looking to gauge the strength and direction of long-term market trends.

Geopolitical tensions, interest rates and negative correlation to the dollar has pushed gold higher.

Going strong.
96.17% increase since the start of the year.

Warren Buffett once said: "I've never caught tops and bottoms. Yet, I am still a billionaire.

Have a healthy and fruitful 2023 !

If you bought Exxon Mobil, BP or Shell a year ago then Xmas came early.

Trade your plan NOT your prediction.

The dollar is king !

A number of hedge funds and money managers were buying into growth stocks, in Q2, as the Nasdaq 100 (NDX) (QQQ) was down than 22%, while the S&P 500 (SP500) (SPY) was down about 16.5%. Time to follow the smart money and buy some undervalued tech stocks?

The US Economy Is Poised to Slow as the Fed Taps the Brakes.
However, labor supply lower than job openings.

Supply-chain disruptions,️ market volatility, resource insecurity and ️ displacement of people create an unpleasant mix for world economies.

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