Relief Rally and Crypto Winter

Dear Traders,

As I am writing this newsletter, it’s been a good day for stocks (so far). Gains across Europe extended with most equity indexes recovering roughly half of Monday’s selloff. Gains are broad based, but led by the construction, auto, and banking sectors. We’ll see how the US has done later today. The majority of the stock market is in bear territory and volatility remains high. Bitcoin dropped below $30,000, a drop of over 60% from its high last November, but then bounced back. Brian is away to complete a trek in Peru and Machu Picchu, and Thor and Jarad are leading the trading at the Open. Make sure to watch their recap on our YouTube channel here.

Today’s Global News and Financial Recap

The USD is getting stronger every day, heading toward the highs of March 2020, because the Federal Reserve is moving faster than other central banks around the world in raising interest rates to fight inflation. The US monthly trade gap blew past $100 billion for the first time but did not catch the news much. Yesterday, President Joe Biden re-emphasized that inflation is his top priority and the financial bear market or US trade deficit is not important at this moment. Treasury Secretary Janet Yellen, who previously highlighted the benefits of a weaker USD, turned down the opportunity of expressing concern about the dollar getting too strong. In a brief but telling remark last week, she effectively indicated that USD appreciation will help pull down inflation.

No other number matters these days nearly as much to investors as inflation does — and we are braced for fresh data tomorrow and President Biden’s assessment later today. The US headline number is running way above the Federal Reserve’s inflation target, but there may be respite: economists forecast the annual print for April to come in at 8.1%. While that may be inordinately high, it would still mark a cooling of pressure.

EU talks about a Russia oil ban continue with Hungary coming under increasing pressure not to use its veto on the plan. Oil slumped after the bloc softened its sanctions proposal, scrapping a proposal to ban European-owned vessels from carrying Russian crude.

At Bear Bull Traders…

Tonight, for Tuesday Strategy, Thor will be leading the second part of his series on volume and price analysis. In the previous session, the discussion centered on breaking down how volume affects candle formation. Tonight, with market making in mind, Thor will focus on value and how volume establishes value areas over time. The webinar starts at 8pm ET.

Tomorrow, for Wednesday Psychology, Créde will be heading up a discussion entitled: How to Neutralize Pressure While Trading. Pressure affects the nature and quality of your thinking in specific ways. From the dreaded “paralysis by analysis” to impulsive decision-making, pressure can make you deviate very far from your trading plan. This webinar will explore how pressure impacts your thinking and how you can use practical techniques to harness the power of your cognition and access the right thinking at the right time for peak performance. Créde’s presentation begins at 5pm ET.

At Peak Capital Trading…

Tonight, Aiman will be reviewing his ABCD Pattern TradeBook. As I mentioned yesterday, this webinar will be extremely important in helping you to build a successful strategy.

And Finally…

Ardi is on Twitter and posts some very interesting material on his macroeconomic observations. He posted yesterday about a bounce in the bond market that will usually happen before the stock market.

And later, Ardi posted the IEF chart below which I found very interesting.

If you enjoy Ardi’s reviews, or if you have any questions about his commentary, make sure to sign up for his newsletter here, or contact him directly on Twitter at @Ardi_Aaziznia.

To your success,
Andrew

PS: If you have not already, I urge you to try out our free web-based trading simulator at stocktradingsimulator.com. It’s conveniently available 24/7, whenever you have time to practice honing your trading skills