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Last month saw the famous January Effect in full form across the board. It seems to have arrived at full steam this year, resulting in significantly higher inflation metrics across the board. The annual Core PCE Index, the Fed’s preferred gauge of inflation, edged higher to 4.7% from 4.6% in the same period, compared to analysts' forecast of 4.3%. On a monthly basis, Core PCE inflation and PCE inflation both rose 0.6%. Over the long run, core PCE gives a clearer picture of the underlying inflation trend as it removes the volatility in food and energy.
Rising PPI is a driving factor of why home builders’ margins are being squeezed and unaffordability continues to go up. Without a dramatic drop in commodity prices, downward supply will continue to outpace the downward demand, entrenching high home prices.
Bullish PMIs from China and production cuts from Russia are supporting Crude markets after their recent sell-off from a hawkish stance from the Fed, threatening global demand. The embargo on Russian products, shifts in weather and refinery maintenance make sure that interesting dynamics play out in the Refined product space.
ETH has been consolidating in the $1,500-$1,720 range for quite some time now. If ETH can hold the $1,600-$1,625 demand level, ETH will likely make a move to test the upper part of that range around $1,700. This recent price action has been bullish above $1,600 – a major psychological level that needs to hold strong if bulls wish to push this rally further towards $2,000. In the short term, a small dip to test the 4hr demand level around $1,620 is likely to give bulls momentum towards the upper consolidation range of $1,700. This scenario can be expected since ETH has formed an inverse head and shoulders reversal pattern on the 4hr chart. ETH has also had bullish engulfing candles on the 4hr and Daily timeframes, signaling strength in that direction.
The $1,550 to $1,600 range has proven to be a significant demand zone for ETH. Buyers are present in this zone as we have seen 3 bounces and formed a bullish pattern (inv hs). ETH is kind of in no-man’s land here if you are searching for an entry. However, a pullback to $1,600-1,625 can pose a good opportunity for a long entry.
This week we look at the benefits of travelling and exploring outside of our comfort zone. Taking care of your own well being is not just about meditating and looking within, it’s about expanding your world views and building connections.
From stocks to fixed income and commodities, just about everything fell in a reversal of January’s spirited rally. The least-bad return among major US assets was a decline of 1.4% through Monday from high-yield bonds. That was followed by a drop of roughly 2.5% each in Treasuries and the S&P 500 Index, a 3.2% slide in investment grade and a 5% slump in commodities.
It has been a rough February for many market participants as the volatility has gone up quite a bit post a very bullish bear market rally in January. All the inflation metrics that were trending lower towards the end of the year are showing a spike up. I believe this could be part of a situation where we see higher inflation in the beginning of the year. Its possible this is just a blip and the trend will continue of price stability and wage inflation coming lower but we shall be data dependent just like the fed to make our judgment and investment decisions. The next 4 big items for march which should be filled with tremendous volatility will be Powell speaking to congress, Payrolls, CPI and March 22nd FOMC.
We are looking at buying certain crypto and NFT assets and re-buy some of the stocks we sold. Our focus is going to be on $MATIC, $SOL, $ETH, $AVAX and $CRV for trades next 2 weeks. In addition we are going to restart our Gold and silver trades paired with longs on Google and disney. For entry and exit levels subscribe to the newsletter for more.
CRYPTO: 16%
NFTs: 17%
STOCKS: 10%
PRIVATE EQUITY: 16%
STABLECOINS: 41%