US500 4 HOUR CHART – Retracement or more?
Backing off from its record high and needs to re-establish above 5700 to ease a retracement risk,
Stocks weighing hooes for a sift landing vs. geopolitical risks, election uncertainty and Powell indicating a less aggressive Fed
WSJ: BOE Warns of Sharp Correction as Geopolitical Worries Mount
The BOE’s Financial Policy Committee has repeatedly warned that valuations of many financial assets, particularly equities, are “stretched”
This is worth repeating from How Should You Trade in a Geopolitical Marketl
A “geopolitical market” needs a continuous flow of news to keep risk elevated.
I posted this article a few months ago and in it is a primer on trading in a geopolitical market. It is worth reading along with the latest article (scroll below)’
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How to Trade in a Geopolitical Market
EURUSD 4 HOUR CHART – ON THE DEFENSIVE
EURUSD wa already on the defensive before the Iran attack and will remain that way as long as it trades below 1.11.
On the downside, a firm break of 1.1056-50 would be needed to put the key 1.1000-05 bottom of the 1.10-1.12 range in play.
Note on Geopolitics: with the Jewish New Year starting Wednesday night, the risk of retaliation would seem to be more over/after the weekend than prior to it.
XAUUSD 4 HIOUR CHART – MAGNETIC 2650
No change to what I posted yesterday as markets wait for the next move by Israel
Geopolitical tensions/safe haven flows cut short thoughts of a retracement so let’s keep it simple.
Record high is 2683 but if you assume range is 2600-2700m then look for 2650 to set the trading bias.
USDJPY 4 HOUR CHART – SAFE HAVEN?
With safe haven JPY buying failing to follow through (low 142.96), USDJPY focus is on 144.50-55, which would need to be broken to shift the focus to 145.
Only above 145 would put the 146.49 high on the radar.
Otherwise, range would be 142/143-145.
Note comments from the BoJ Governor expressing caution on hiking rates seemed to be a factor.
Brent Crude Oil / WTI
Update: WTI Crude Oil Closes Higher as Iranian Missile Strike on Israel Threatens a Spreading War
West Texas Intermediate (WTI) crude oil rose on Tuesday on rising geopolitical risks after Iran launched a missile strike on Israel to avenge the killing of Hassan Nasrallah, the head of Hamas, and other senior leaders of the militant group.
WTI crude oil for November delivery closed up US$1.66 to settle at US$69.83 per barrel, while December Brent crude, the global benchmark, was last seen up US$1.96 to US$73.66.
Iran launched an estimated 200 missiles at Israel, according to the Guardian, threatening to spread war to the oil-rich Persian Gulf. An Israeli military spokesman said the country will retaliate against Iran as some missile hit their targets in the country.
Offensive Selling: How to Set Targets and Profit Using Fib Extensions
How to Use Fibonacci Extensions
The Fibonacci extension is a mathematical-based technical analysis tool used to project price targets. The Fibonacci method is for many a preferred tool to use for offensive selling for two reasons:
1. Flexibility: Fibs eliminate the need for all or none decisions by providing multiple target levels, allowing investors to pyramid out of the position.
2. Reactive: Whether it is due to a “self-fulfilling prophecy” or not, the history shows that price tends to react and “respect” key Fib levels.
Traders may each have unique ways of using fibs, but I use them as follows:
– I draw extensions from the top of the base to the bottom. For targets, I use the 1.618% as my first trim area, 2.618% for my second target zone, and the 4.236% extreme extension for my remaining position (normally, I am out of most of my position by this time and only have runners left).
Understand that you can use Fibs for any time frame but I have found that they are the most powerful for long-term price targets.
Tesla – TSLA
Tesla Stock Speeds Ahead Of Mag7 Peers, Can October’s Robotaxi Reveal Keep The Momentum?
Tesla Inc TSLA stock revved up in September, soaring over 24% and leaving its Magnificent Seven peers in the dust.
Year-to-date gains for the car manufacturer stock are a modest 5.32%. Still, Tesla’s recent surge outpaces rivals like Nvidia Corp NVDA and Amazon.com Inc AMZN by a wide margin.
The question now: Can Tesla sustain this rally, or is it running out of gas?
The upcoming Robotaxi event, scheduled for Oct. 10 in Los Angeles, is also fueling investor optimism. CEO Elon Musk has hyped this event as potentially Tesla’s most significant moment since the Model 3 launch, and Wall Street bulls like Dan Ives and Adam Jonas expect key updates on FSD and autonomous driving.
Nvidia – NVDA
Nvidia Stock Slips to Start a Crucial Quarter. What’s at Stake ?
Nvidia stock slid Tuesday at the start of a crunch quarter for the chip company.
Shares fell 3.7% to close at $117.
The tech sector took a hit after Iran fired a barrage of missiles at Israel, escalating the conflict in the Middle East. Investors flocked to safer areas of the market, and the Nasdaq Composite dropped over 1%.
Nvidia has climbed 136% in 2024, powering the company’s market capitalization to nearly $3 trillion and cementing its status as an artificial-intelligence bellwether.
The fourth quarter is likely to be crucial for growth, given the chip designer is expected to ramp up production of its new Blackwell graphics processing units. It has said it expects the GPUs to drive “several billion dollars” worth of sales.
NAS100 4 HOUR CHART – Sub-20K
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In a geopolitical market do technicals matter?
Looking at this chart, note how 19623 held
To keep it simple, some disappointment that it did not follow S&P and DOW to new record highs and needs to renew 20K to neutralize a retracement risk.
With geopolitics a focus, look at short-term charts and risk on/risk off to trade the NAS.
AUDUSD 4 HOUR CHART – GEOPOLITICS
You saw the sensitivity to risk off in a market which will be keeping one eye on the headlines.
With the Jewish New Year starting Wednesday night, there is a very tight window for retaliation so there may be some breathing room for the rest of the week.
On the downside, .6850 blocks ;6800-15
On the upside, .6895 would need to be renewed to restore aa bid.
Contrary to popular belief in some circles, US arms sales to Israel have not declined in recent years. The average annual sales to Israel were just over $1 Billion from the years 2015 through 2019, with not even ½ of $1 Billion in 2019.
In the year 2020 that figure skyrocketed to over $5.3 Billion US Dollars. – Per Carnegie Endowment for International Peace.
Side note but related, I am still on the sell side of EurJpy and UsdChf primarily for the moment.
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