🗞 Weekly Market Newsletter | Edition No. 17
News Update + A Full Analysis of Major Indices Including Stocks, Crypto, Commodities, Bonds & Forex
Sunday October 30th
Hello Everyone,
It’s the week we’ve all been waiting for.
(well, since September at least 😅)
The next FOMC meeting occurs this week on Wednesday, November 2nd.
During this meeting it’s expected that the FED will move forward with a 75 basis point rate hike.
Let’s recap the significance of this meeting and why it’s an exciting time for the markets:
The phrase *markets are expecting* generally signifies that the rate hikes could be already priced in to the value of assets.
Bearing no surprises on Wednesday (such as a 100 basis point hike) or a further
depressinghawkish tone during the Press Conference, this week has the potential to give us a market bottoming rally into the end of the year.Central Banks around the world are beginning to slow down their pace of hikes and many have forecasted ending rate hikes into Q1/Q2 2023 - this is bullish as capital will begin to flow back into stocks and cryptocurrencies.
Needless to say, I’m more confident than I’ve been all year that the markets have bottomed.
With U.S mid-term elections on the horizon in under two weeks combined with, statistically speaking, 4th quarter market returns generally being the best all year, the odds are more in favour of a bullish end to what has been a brutal fiscal year.
It’s important to remember that the markets (ie. investing) and human psychology are tightly intertwined. The overall sentiment has been bearish for so long that sooner or later that fearful emotion will fade and investors will shift behaviours.
It’s because of this that I study Twitter to grasp on to the body language expressed via public opinion and aggregate news headlines to predict how the markets move - and it appears that there is a global sentiment shift taking place to close the year.
Before jumping into the news headlines from this week and the charts, I’ll conclude my weekly journal entry leaving you with this statement;
If I only had 10 marbles left to risk, it’s likely that 4 of them remain in my hand by the end of this week. The other 6 will be put into the game.*
*not financial advice.
Enjoy this weeks edition, please leave a comment below if you enjoyed the newsletter and feel open to start a conversation on anything that fancies your logic, curiosity or imagination.
- Bramwell
📊 Weekly Poll
📰 BramwellFox MetaCapital’s Weekly News Recap
You may press the 🗞 to read more about each headline.
Major News + Crypto Headlines
🗞 Bank of Canada Surprise Rate Hike (of only) 50 Basis Points
💭 Bramwell’s Thoughts…
This was a super expected yet unexpected move by the Bank of Canada.
Remember, Canada is known for two things;
Hockey
It’s strong Banking sector.
This tells me that the Bank of Canada understands the risks of continuing further rate hikes - especially concerning the Housing market alongside the cash flow problems that interest rates are creating for Canadians.
Is the BOC leading the way for the FED?
Time will tell.
🗞 Elon Musk now own’s Twitter
💭 Bramwell’s Thoughts…
This is one small step for Twitter, one giant leap for Free Speech.
One of the most important news headlines this week may appear unrelated to financial markets - yet the opposite is so true.
Elon Musk taking ownership of the world’s adult playground ends a decade of unbalanced public information censorship and has the potential to alter the outcomes of democracies globally by allowing for a more transparent medium of thought exchange.
The bird has been freed - very bullish for crypto, especially $DOGE, Elon’s favorite coin that experienced a 75% increase on the week on speculation it will be integrated with Twitter as a payment method.
🗞 Big Tech bleeding market cap off of poor earnings quarter.
💭 Bramwell’s Thoughts…
The little devil on my shoulders have been conspiring for years that a day would come when the stocks of big tech would fall so great that the money would need to flow into something newer and more exciting with far greater ROI potential - am I foolish to assume that this day has come?
The Nasdaq is taking a beating as market leaders Microsoft, Google and Meta are bleeding money and missing earnings estimates for Q3.
In fact, Meta fell over 20% to close the week, the sharpest decline in years and lowest stock price since 2016.
Nature is healing.
…but will this money flow into blockchain and web3?
🗞 Rishi Sunak becomes U.K Prime Minister
💭 Bramwell’s Thoughts…
A nation is only as strong as the policies of their leader.
In September we watched as the Euro fell into free fall vs. the U.S Dollar as UK Prime Minister Liz Truss announced tax cuts that we not favoured by the markets.
It also didn’t help public sentiment that the UK is also facing 10.1% inflation, the highest in decades.
After a short stint (44 days to be exact) Liz Truss
rage quitresigned and Rishi Sunak has taken her place as the leader of the UK.We’re yet to see how his perspectives and actions will affect anything, but the vibe is improving.
A stronger UK economy, or at the very least improving national sentiment + stronger fiscal policies will help the Euro restore investor trust while gaining relative strength globally, thus decreasing market share of the U.S Dollar as a part of the DXY basket.
🗞 Ripple Q3 Report + SEC Lawsuit Updates
💭 Bramwell’s Thoughts…
As I began typing this edition, an important
hit piecenews article was published by Roslyn Layton, a finance writer for Forbes who is documenting the Ripple vs. SEC trial as the trial-of-the-century.You
shouldcan read it here.This week there was an explosion of favourable coverage for Ripple;
The Blockchain Association filed for an amicus brief (amicus brief is legal terms for what on the street means *credible reference* ) in support of Ripples position that XRP is not a security.
Ripple released their Q3 report stating that a major milestone has been accomplished as their total holdings of XRP has dipped below 50% total supply - in short this means more partners are using XRP towards it’s primary utility function and that the network is becoming increasingly decentralized.
I’m very bullish on XRP leading the market with legal clarity as a result of a favourable lawsuit outcome. My spare marbles are 80% going to increasing my XRP position as we speak.
🗞 Flare Network is now fully decentralized.
💭 Bramwell’s Thoughts…
While the token distribution event news was a bummer (tl;dr, the Flare token airdrop is the biggest in history and exchanges are being difficult to deal with, airdrop delayed until January) the more promising side of the week was that Flare reached full decentralization.
This is massive.
Flare is the most complex blockchain in the industry and reaching full decentralization is the catalyst that I believe will expedite the XRP lawsuit was required for everything to be ready for utility.
We wait patiently as exchanges line up in orderly fashion and comply with Flare’s requests to receive tokens and fairly distribute them.
BramwellFox MetaCapital’s Weekly Market Review & Technical Analysis
📈📉 The Week Ahead in Charts
Symbols 📈 or 🐂 = Bullish / Positive | 📉 or 🧸 = Bearish or Negative
📉 DXY(U.S Dollar) + 📈CAD
💬 Bramwell’s Commentary, Analysis & Prediction for the Week Ahead:
It’s do or die time for the U.S Dollar.
November 2nd will be the signal that sends the U.S Dollar towards dangerously high levels or below major support while risk assets have their Q4 rally.
The bearish path for the Dollar:
a. Investors have already priced in 75 basis points ahead of Wednesday’s FOMC meeting and markets react bullish to a confirmation that nothing is worse than expected.
b. There will be volatility on the day potentially sending the DXY upwards towards the ~112.5 channel resistance and facing a hard rejection.
c. The DXY falls sharply below the 109.5 diagonal resistance and falling into the bottom standard deviation path seeking to test the high’s of July, which also happens to be the multi-decade median line - just in time for mid-term elections.
The bullish path for the Dollar:
a. Investors expecting a 75 basis points ahead of Wednesday’s FOMC meeting and markets react bearish to a further hawkish tone by Jerome Powell during the press conference following the interest rate hike release.
b. There will be volatility on the day potentially sending the DXY upwards towards the ~112.5 channel resistance and breaks out of the channel.
c. The DXY consolidates between 113-115 before making further moves upwards towards 115-117/120.
I’m personally leaning towards path (1) and have a cash position on the side for any dips that present themselves should the news be favourable on the day.
Should the news be more bearish than expected i’ll have an updated set of targets to the downside ready for next weeks edition.
🎯 Primary Resistance ~112.5 | 🎯 Corrective Target ~108.00
Featured Chart DXY 1D (click to enlarge photo)
I’m expecting the Canadian Dollar to be on edge this week heading into Wednesday’s FOMC.
Being said, I’m leaning bullish on the $CAD to have short term downside followed by a continuation to the upside vs the USD.
🎯 Dip Targets .725 | 🎯 Upside Target .75
Featured Chart CAD 4HR (click to enlarge photo)
📉 US Treasuries
💬 Bramwell’s Commentary, Analysis & Prediction for the Week Ahead:
U.S Treasuries are following the path I set out from last week and we should see further decline should the U.S Dollar continue to correct.
There has been talk of a UST buyback, but most of it rumours and I do not expect for any significant fiscal moves to be made before elections.
I’m anticipating that the US2YR will have a steeper corrective path than the US10YR as my expectations are to see the inverted yield curve adjust to deflect the on-going recession fears.
🎯 US2YR Target 3.5%
Featured Chart US2YR 1D (click to enlarge photo)
I’m expecting the US10YR to slide down to the Daily 50MA (blue) before a support bounce occurs; however still targeting 3.5% by mid-late November.
Featured Chart US10YR 1D (click to enlarge photo)
📈 S&P500 + 📉 VIX + 📈 TSX
💬 Bramwell’s Commentary, Analysis & Prediction for the Week Ahead:
As my bias hedge this week is a bearish dollar, you’ll notice that analysis will favour market cap increases across the board for equities and crypto.
The futures market opened green for the S&P 500 and I’m expecting Monday & Tuesday to flash green before a sell-off into Wednesday.
In the charts this would look like a continued breakout of the current trading range and a mid (red dotted) line test of 3950-3975.
As I’m expecting Wednesday to be a volatile day ending with a bullish reaction, it would mean the S&P to re-test the breakout as support before a further continuation to the upside towards 4100-4125.
Featured Chart S&P500 12HR (click to enlarge photo)
Featured Chart S&P500 5D (click to enlarge photo)
The VIX I’m using as additional support behind this thesis.
The VIX has been in freefall over the past 14 days and I’m expecting nothing to change heading into mid-late November.
Featured Chart VIX 4HR (click to enlarge photo
)
The TSX is showing relative strength vs. its US equity counterparts largely due to a less than expected rate hike by the BOC.
A clean break to the upside of the trading range should see the TSX re-test 19,500-20,000.
Featured Chart TSX 12HR (click to enlarge photo)
📈 Bitcoin + 📈 XRP
💬 Bramwell’s Commentary, Analysis & Prediction for the Week Ahead
:
Bitcoin still ranging in the 20K region with investors anticipating confirmation of the FOMC tone.
With a volatile week, likely BTC breaks down and re-tests the wedge resistance ~19.5-19.6K and flip into confirmed support.
A further breakdown back into the wedge would risk the capitulation risk into 17.5 or further; however, should 19.5K hold as support I’m expecting further continuation up to the Daily 200MA ~23.5K
Featured Chart BTC 1D (click to enlarge photo)
Zooming out and looking at the weekly range two charts below you’ll see my long term expectations for XRP into 2023.
It’s my belief that XRP is in a massive bull-flag and close to exiting the range which will see XRP target $1.50 by early 2023 (or sooner!)
I’m expecting a re-test for XRP down to the support in the .395-.4 range due to intra-week volatility and to touchdown on the important 400MA.
After a retest I’ll be watching for news headlines to act as a catalyst for XRP’s explosion to the $1.20 target.
Featured Chart XRP 1D (click to enlarge photo)
Featured Chart XRP 1W (click to enlarge photo)
📈 Oil + 📈 Gold
💬 Bramwell’s Commentary, Analysis & Prediction for the Week Ahead:
Oil is still playing the tug of war between OPEC and Joe Biden’s Album Petroleum release party.
I want to believe the U.S understands that they’re bluffing with a losing hand in this global energy game as it appears they’re holding only the global reserve currency as top pair against a full house of oil reserves in the East - and that they have a strategy behind this.
I want to believe they know what they’re doing - but it’s very possible that they don’t and with a change in leadership coming in November that the republicans will be handed a hot potato energy crisis as their first obstacle to conquer to save gas prices from blowing up.
These are my two scenarios for Oil, both requiring a very interesting news narrative to accompany the price action.
Featured Chart Oil 12HR (click to enlarge photo)
As for Gold, and I have to lol as it’s so slow moving - but I’m still super bullish.
If I miss any downside targets on cryptos i’ll be rotating my cash into tokenized Gold on the blockchain.
Featured Chart Gold 1D (click to enlarge photo)
👋🏼 Hey!
Thanks for reading this week's Market Update Edition No. 017
If you have any comments, feedback or questions on any material written in this edition please share as I'd love to continue a dialogue below.
If you enjoyed the read, I’d really appreciate if you’d share our community with your network of friends, family & fellow investors!