This week was a normal week overall with no major events. Yesterday’s retail sales data was very positive. The Control Group was +0.7% MoM and +4.9% 6-month annualized, showing that the consumer is strong. This is important because it has a real impact on GDP. Still no recession in sight…
Philadelphia Manufacturing Index also shows positive data… As mentioned in the September 23rd article, if there is no recession, the overall manufacturing industry still seems likely to recover. TSMC’s strong earnings removed one of the market’s concerns.
The ECB cut rates by 25bp as expected, in line with market expectations.
DXY is going up just as I expected. Since DXY has been reflecting a lot of Fed rate cuts, I judged that it has a higher chance of going up than down… And I personally predicted DXY to go up because I expected positive economic data that does not have a recession to be released.
I think that what people say about DXY rising = risky assets falling is a really wrong formula. Since the recession is the biggest topic in the market, risky asset up + DXY up can happen together when positive economic data is released. This correlation can change at any time, which is why it is important to have an accurate understanding of the current situation. Don’t formulate everything.
BTC is showing a strong rise in line with last week’s expectations! Although there is no trigger, the BTC price rise feels like it was influenced by the possibility of Trump winning the presidential election. It is also a week with a large increase in spot ETF inflows.
Let’s re-evaluate the current situation as BTC showed a big upward movement from 59K to 68K. In my personal opinion, it feels like an ambiguous level for derivatives traders to add new positions. Based on 68K, 70-72K above and 64K below… BTC is at a level where any movement can be seen. For derivatives traders, it feels like a good idea to lock in some profits, and those who are long positions below 60K can just wait for a strong breakout move to 70K+. Smart traders have most likely completed their BTC positioning with expectations of a Trump victory.
If BTC falls, I think the important level is 63-64K, and even if the price falls, it should defend the 200DMA to lead to a bigger rise. Since nothing is certain yet, we are considering the possibility that BTC will move sideways along with the stock market until the November presidential election. I don’t think it’s something to think about in a hurry. I understand if the market doesn’t give us a good opportunity to add more positions. We have had many opportunities to add long positions in the past 7 months.
The only variable is if inflation rises again. I don’t think that will happen right away, so it seems a bit more likely that Yield will go down rather than up. It’s definitely not at the level where you should be doing Max Bidding, but yeah… I’m still a bull.
NFA DYOR
<Source : Kevin Gordon, Kathy Jones, Investing.com, MacroMicro>
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