These will be my final posts about COVID19. I just thought there might be someone out there in a situation similar to mine, having a loved one with heart condition or diabetes in this current situation can be very nerve wracking, so maybe getting these drugs early could help reduce the stress.
The recovery rate is high and the most dangerious days are the first 7 days, so if someone you love has this virus and they are passed their first 7 days, chances are they will recover fully from it, so just keep them calm and don't let them stress over it.
take care of yourself out there.
The recovery rate is high and the most dangerious days are the first 7 days, so if someone you love has this virus and they are passed their first 7 days, chances are they will recover fully from it, so just keep them calm and don't let them stress over it.
take care of yourself out there.
Now back to business..
As you all already know, governments and central banks everywhere are trying as hard as they can to curb the effects of COVID19 on the economy. Trump managed to push the feds into continuing REPO and injecting more cash to prop up the stock market and he has ordered the energy sector to stack their strategic reserves with oil as much as possible. these efforts have created a massive demand for USD in the market which has caused all other currencies to dive against the USD along with precious metals like gold and silver.
the VIX index (aka fear index) soared to 75 on Thursday and it has closed above 50 for four straight days.
in my opinion its still too soon to label the efforts taken so far, as effective..
COVID19 is only one element of this whole mess... we also have the corporate debt bubble which is close to bursting with how low the oil prices have gotten lately (which is why I think the recent dive of BTC is a good opportunity to buy and hold for a year or two.. fighting debt with adding more debt has never worked before and with feds printing so much USD, BTC is going to appreciate A LOT in the next 24 months)
for next week, I'm going to just stick to sharing pure technical analysis for analyzing the charts and highlighting important price levels, sharing the different scenarios I can see the market moving in, and just let you guys judge things on your own.
Have a nice weekend
As you all already know, governments and central banks everywhere are trying as hard as they can to curb the effects of COVID19 on the economy. Trump managed to push the feds into continuing REPO and injecting more cash to prop up the stock market and he has ordered the energy sector to stack their strategic reserves with oil as much as possible. these efforts have created a massive demand for USD in the market which has caused all other currencies to dive against the USD along with precious metals like gold and silver.
the VIX index (aka fear index) soared to 75 on Thursday and it has closed above 50 for four straight days.
in my opinion its still too soon to label the efforts taken so far, as effective..
COVID19 is only one element of this whole mess... we also have the corporate debt bubble which is close to bursting with how low the oil prices have gotten lately (which is why I think the recent dive of BTC is a good opportunity to buy and hold for a year or two.. fighting debt with adding more debt has never worked before and with feds printing so much USD, BTC is going to appreciate A LOT in the next 24 months)
for next week, I'm going to just stick to sharing pure technical analysis for analyzing the charts and highlighting important price levels, sharing the different scenarios I can see the market moving in, and just let you guys judge things on your own.
Have a nice weekend
Alright, I got some messages from members asking me about US stock market and which stocks should they invest in to take advantage of the low prices..
Here is the thing, while I firmly believe we shouldn't freak out about cronavirus in terms of thinking it could be the end of the world (cause it isn't!) we still should be very mindful of its effect on businesses.
Like I heard from a couple people they are thinking about investing in cruiseship companies or Shell..
while I understand the reasoning behind it, I think you shouldn't just assume the pandemic won't affect those companies at all.
For example, Shell, although its share prices have been falling hard, buying those shares is in no way a guarantee for earning profits (whether in form of dividends or shares appreciating in value) because Shell is going to be one of the companies that will get hit the hardest from Saudi and Russian fight over market share. its Shell's market share they are trying to win back, and they will win it back for sure, now that Saudis are pumping oil in the market at $25 per barrel.
the Saudis are capable of keeping oil at $25 for a long time because they are still selling it with a very small profit. so they are sacrificing their own profit to win back market share and it will be successful. the only thing that can change this situation is the russians and americans sitting behind a negotiation table and come up with a deal where they give Saudis a win, in order to keep themselves from losing all their market share.
the same goes for any other company you want to invest in.. don't just think of the fall as a temporary thing.. we will be dealing with virus in the next 12 to 18 months... so if the company you want to invest in has too much debt and can't stay floating for 2 years without making profits, then investing in it will only cause you to lose money (whether in form of having shares of a company that declares bankruptcy, or in form of buying shares of a high dividend paying company and they stop paying dividends)
you should follow Warren buffet way of value investing. buy shares of companies that you think people will start using their services in the next 2 months (their services won't be affected much by the pandemic and people will keep using it)
otherwise, if you invest in companies that are affected heavily from the pandemic, then you should know that the investment will be a long term one.
Here is the thing, while I firmly believe we shouldn't freak out about cronavirus in terms of thinking it could be the end of the world (cause it isn't!) we still should be very mindful of its effect on businesses.
Like I heard from a couple people they are thinking about investing in cruiseship companies or Shell..
while I understand the reasoning behind it, I think you shouldn't just assume the pandemic won't affect those companies at all.
For example, Shell, although its share prices have been falling hard, buying those shares is in no way a guarantee for earning profits (whether in form of dividends or shares appreciating in value) because Shell is going to be one of the companies that will get hit the hardest from Saudi and Russian fight over market share. its Shell's market share they are trying to win back, and they will win it back for sure, now that Saudis are pumping oil in the market at $25 per barrel.
the Saudis are capable of keeping oil at $25 for a long time because they are still selling it with a very small profit. so they are sacrificing their own profit to win back market share and it will be successful. the only thing that can change this situation is the russians and americans sitting behind a negotiation table and come up with a deal where they give Saudis a win, in order to keep themselves from losing all their market share.
the same goes for any other company you want to invest in.. don't just think of the fall as a temporary thing.. we will be dealing with virus in the next 12 to 18 months... so if the company you want to invest in has too much debt and can't stay floating for 2 years without making profits, then investing in it will only cause you to lose money (whether in form of having shares of a company that declares bankruptcy, or in form of buying shares of a high dividend paying company and they stop paying dividends)
you should follow Warren buffet way of value investing. buy shares of companies that you think people will start using their services in the next 2 months (their services won't be affected much by the pandemic and people will keep using it)
otherwise, if you invest in companies that are affected heavily from the pandemic, then you should know that the investment will be a long term one.
With trump suggesting retail companies like Amazon and Apple to close down their shops due to covid19 spreading in US, dow jones index is likely to open with a big gap down (-1170 pips)
Oil and USD likely to gap down while Gold and other currencies likely to gap up when market opens.
#DOWJONES 🇺🇸: 21870 (-1170 pip)
#DAX GER30 🇩🇪: 9225 (-325 pip)
#FTSE 🇬🇧 : 5315 (-335 pip)
Oil and USD likely to gap down while Gold and other currencies likely to gap up when market opens.
#DOWJONES 🇺🇸: 21870 (-1170 pip)
#DAX GER30 🇩🇪: 9225 (-325 pip)
#FTSE 🇬🇧 : 5315 (-335 pip)
Trading With Linorth
Some of US senators basically begging the Saudi Prince to change his approach towards oil market
CFO Khalid al-Dabbagh said Aramco was “very comfortable” with oil at $30 a barrel and would still be able to meet its dividend commitments and shareholder expectations at that price.
Credit market is melting out of the fear that companies hit with COVID19 will not be able to repay their debts (understandable) and if oil prices stay at 24-30 dollar range, the corporate debt bubble is going to burst next. oil makes up 11% of the HYG junk bond ETF. oil impacts corporate credit. $86 billion due now through 2024 .. most of it junk status.
with AI being behind the wheel in financial markets, analyzing data and trading based on it. I wonder if the governments will be able to prevent a complete melt down of world economy?
we'll have to wait and see, I guess..
with AI being behind the wheel in financial markets, analyzing data and trading based on it. I wonder if the governments will be able to prevent a complete melt down of world economy?
we'll have to wait and see, I guess..
Trading With Linorth
Credit market is melting out of the fear that companies hit with COVID19 will not be able to repay their debts (understandable) and if oil prices stay at 24-30 dollar range, the corporate debt bubble is going to burst next. oil makes up 11% of the HYG junk…
with all of this in mind, I still believe this crash is a good opportunity for everyone to build a decent stock portfolio and reap the benefits of it in 3-5 years.
you just have to analyze the companies you want to invest in a bit differently this time. look at corporate debt more than anything. don't pay attention to dividends first, you don't want a high dividend paying company that can file chapter eleven in less than 12 months or simply stop paying dividends. you want to invest in companies with a bright future and manageable debt.
those are the ones you should want to buy when they are dirt cheap.
here is a good list of questions you should ask yourself before investing in a company:
How long they have been in business?
How are they making money? what is their main product? how popular is that product?
Is the “need” for the product going to be there in 10 years?
Which companies are their biggest competitor?
Is there something innovative that sets them apart from the competition?
How sustainable is the business model?
And if you want to see if the share price of a company have tanked as much as possible or if there is still room for it to fall more, all you need to do is to investigate their main product and see if it has parts that are going to be delayed or become unavailable due to COVID19 lockdowns. is the delay already priced in? or will the effect of it be shown later?
do your due diligence. don't just buy every dip thinking this crash is like the one in 08 where market recovered in a year. back then while the market collapsed, the everyday life of people wasn't affected so recovery happened quicker after the government stimulus was implemented. this time, this virus is going to affect our day to day living for a while.. and this time people aren't willing to just let the government bail out banks and corporations easily.
with recent rate cuts a lot of people are looking to move their money into stocks, so I thought it couldn't hurt to put this post up as a warning.
If you have a +$500K stock portfolio, you can reach me directly (@Linorth) for consultation on it or for help in diversification.
you just have to analyze the companies you want to invest in a bit differently this time. look at corporate debt more than anything. don't pay attention to dividends first, you don't want a high dividend paying company that can file chapter eleven in less than 12 months or simply stop paying dividends. you want to invest in companies with a bright future and manageable debt.
those are the ones you should want to buy when they are dirt cheap.
here is a good list of questions you should ask yourself before investing in a company:
How long they have been in business?
How are they making money? what is their main product? how popular is that product?
Is the “need” for the product going to be there in 10 years?
Which companies are their biggest competitor?
Is there something innovative that sets them apart from the competition?
How sustainable is the business model?
And if you want to see if the share price of a company have tanked as much as possible or if there is still room for it to fall more, all you need to do is to investigate their main product and see if it has parts that are going to be delayed or become unavailable due to COVID19 lockdowns. is the delay already priced in? or will the effect of it be shown later?
do your due diligence. don't just buy every dip thinking this crash is like the one in 08 where market recovered in a year. back then while the market collapsed, the everyday life of people wasn't affected so recovery happened quicker after the government stimulus was implemented. this time, this virus is going to affect our day to day living for a while.. and this time people aren't willing to just let the government bail out banks and corporations easily.
with recent rate cuts a lot of people are looking to move their money into stocks, so I thought it couldn't hurt to put this post up as a warning.
If you have a +$500K stock portfolio, you can reach me directly (@Linorth) for consultation on it or for help in diversification.
Eight giant U.S. banks said they would access Fed’s discount window, in a move meant to remove the stigma of using it. The banks including JPMC, BoA & Citi will use facility to “reassure financial institutions of all sizes” that they can tap it too.
___
Apparently in America socialism is not OK when it's done for the people, but when its for the bankers, suddenly its heroic! lol
___
Apparently in America socialism is not OK when it's done for the people, but when its for the bankers, suddenly its heroic! lol
The feds injecting $1.5T in market has surprised everyone and the reason for the shock is quite obvious.
A government whose domestic debt amounts to about $ 23.5 trillion
And its gross domestic product (GDP) is less than $ 22 trillion
how can they confirm the injection of several trillions of dollars into the market in one week?
When the Dollar is not backed by gold, how can US government inject such amount of unsecured liquidity in a market that is crashing?
All of this is happening while there are talks of cutting back or possibly stopping tax income which is a big part of the government income
This is the biggest gambling move from US government in the history of its existence.
This is the exact same reason some US senators are objecting the plan.
The next government that gets behind the wheel after the 2020 election is going to be the heir of the greatest challenges in the history of world economy.
A government whose domestic debt amounts to about $ 23.5 trillion
And its gross domestic product (GDP) is less than $ 22 trillion
how can they confirm the injection of several trillions of dollars into the market in one week?
When the Dollar is not backed by gold, how can US government inject such amount of unsecured liquidity in a market that is crashing?
All of this is happening while there are talks of cutting back or possibly stopping tax income which is a big part of the government income
This is the biggest gambling move from US government in the history of its existence.
This is the exact same reason some US senators are objecting the plan.
The next government that gets behind the wheel after the 2020 election is going to be the heir of the greatest challenges in the history of world economy.
Trading With Linorth
The feds injecting $1.5T in market has surprised everyone and the reason for the shock is quite obvious. A government whose domestic debt amounts to about $ 23.5 trillion And its gross domestic product (GDP) is less than $ 22 trillion how can they confirm…
Steven Manuchen (Secretary of the Treasury):
Corona virus outbreaks could lead to US unemployment rate rising by 20%!
(Things are obviously way worse than previously thought)
Corona virus outbreaks could lead to US unemployment rate rising by 20%!
(Things are obviously way worse than previously thought)
#EURUSD - Weekly
Assuming the demand for USD stays high for the first 2 quarters of 2020, I think we can expect the chart moving down towards the PRZ area (highlighted blue area)
I have also put in the important support/resistance lines in there.
will add more daily and 4h analysis once I post all the weekly charts for major pairs.
Assuming the demand for USD stays high for the first 2 quarters of 2020, I think we can expect the chart moving down towards the PRZ area (highlighted blue area)
I have also put in the important support/resistance lines in there.
will add more daily and 4h analysis once I post all the weekly charts for major pairs.
#GBPUSD - Weekly
For GBP things are a bit different as we have entered uncharted territory.
I think with brexit and coronavirus teaming up against England's economy, its realistic to expect that GBP will move towards parity with USD.
of course this also depends on negotiations with Europe and whether or not there will be a big government bailout for businesses in UK.
either way, I can see 0.95 as the ultimate target for the bears in the market. but of course there is going to be a lot of resistance on major resistance levels along the way.
For GBP things are a bit different as we have entered uncharted territory.
I think with brexit and coronavirus teaming up against England's economy, its realistic to expect that GBP will move towards parity with USD.
of course this also depends on negotiations with Europe and whether or not there will be a big government bailout for businesses in UK.
either way, I can see 0.95 as the ultimate target for the bears in the market. but of course there is going to be a lot of resistance on major resistance levels along the way.
#USDJPY - Weekly
For this pair, things are a bit tricky because while the USD is in high demand right now, JPY is a safe haven currency. so in short term USD might overpower JPY, but once the money starts to move towards safe haven currencies and commodities like gold, we might see this pair diving for the PRZ area at 85.000
I have used red arrows for the bearish case and green arrows for bullish case.
keep in mind that even for the bearish case we might still see a touch of PRZ area at 117.500 before moving down towards 85.000 (I just didn't want to draw the same arrows in two colors)
For this pair, things are a bit tricky because while the USD is in high demand right now, JPY is a safe haven currency. so in short term USD might overpower JPY, but once the money starts to move towards safe haven currencies and commodities like gold, we might see this pair diving for the PRZ area at 85.000
I have used red arrows for the bearish case and green arrows for bullish case.
keep in mind that even for the bearish case we might still see a touch of PRZ area at 117.500 before moving down towards 85.000 (I just didn't want to draw the same arrows in two colors)
#SP500 - long term view
I see the highlighted red area as the current supply area and I wouldn't think about buying a dip (even for a corrective move) before it touches 1900-2000 highlighted blue area.
If people stand in the way of yet another government bailout, I can see it even touching 1575-1710 area as the companies with too much debt just get wiped out.
I see the highlighted red area as the current supply area and I wouldn't think about buying a dip (even for a corrective move) before it touches 1900-2000 highlighted blue area.
If people stand in the way of yet another government bailout, I can see it even touching 1575-1710 area as the companies with too much debt just get wiped out.
#dowjones - long term view
Similar to S&P500, I think we might see a corrective move from the 17000-18000 highlighted in blue area towards the supply area (highlighted in red)
but I can still see it deflating towards that big area highlighted blue at the bottom in a worst case scenario situation.
Similar to S&P500, I think we might see a corrective move from the 17000-18000 highlighted in blue area towards the supply area (highlighted in red)
but I can still see it deflating towards that big area highlighted blue at the bottom in a worst case scenario situation.
As the feds are injecting more dollars into market a significant amount of money is moving towards gold!
spreads have widened in most brokers as much as 100 pips!
be careful out there.
spreads have widened in most brokers as much as 100 pips!
be careful out there.
Due to halting of mining in gold mines in south africa, canada and switzerland it seems like the demand for gold has skyrocketed and some banks in netherlands, switzerland and germany which provided purchases of gold, silver and platinum to their clients will disable those services for their clients from Friday.
So its not far fetched to assume something similar could happen in most forex brokers that provided trading of Gold and silver to their clients as a CFD.
Its still very likely for us to witness a surge in gold prices next week.
(This is not a signal for buying gold, just sharing info, thats all)
So its not far fetched to assume something similar could happen in most forex brokers that provided trading of Gold and silver to their clients as a CFD.
Its still very likely for us to witness a surge in gold prices next week.
(This is not a signal for buying gold, just sharing info, thats all)
Guys I really wanted to start sharing signals on lower timeframes like H1 this week. But I know that a lot of liquidity providers and market making brokers are stop hunting the retail traders with widening of spreads mostly when economic data comes out on news events we have this week.
For now the general sentiment in the market is that despite all the QE and credit lines feds are throwing at the market, the USD scarcity is still there.
I think the demand for USD will remain high for at least another month or two.. so I would keep the bullish bias on USD for trades in lower time frames.
I will post analysis of charts in lower time-frames like H1.. but I still dont want to issue signals for trading. Just merely sharing technical analysis of the charts alone.
All the subscribers of my signal service (@linorth_bot) will have their subscriptions renewed for as long as the signal service stays inactive, before I start sending out signals again. So no need to worry if you got a message from the bot telling you that your subscription has ran out, it will get renewed once I start things up again.
Thank you for the support.
For now the general sentiment in the market is that despite all the QE and credit lines feds are throwing at the market, the USD scarcity is still there.
I think the demand for USD will remain high for at least another month or two.. so I would keep the bullish bias on USD for trades in lower time frames.
I will post analysis of charts in lower time-frames like H1.. but I still dont want to issue signals for trading. Just merely sharing technical analysis of the charts alone.
All the subscribers of my signal service (@linorth_bot) will have their subscriptions renewed for as long as the signal service stays inactive, before I start sending out signals again. So no need to worry if you got a message from the bot telling you that your subscription has ran out, it will get renewed once I start things up again.
Thank you for the support.