🗞 Weekly Market Newsletter | Edition No. 18
News Update + A Full Analysis of Major Indices Including Stocks, Crypto, Commodities, Bonds & Forex
Sunday November 6th
Hello Everyone,
“Life isn’t as serious as our minds make us believe.”
Eckhart Tolle’s book ‘The Power of Now’ fundamentally changed my life by introducing me to the power of mental presence and helping me understand the functions of thought itself.
The quote represents to me a powerful tool that I use to mentally exit the matrix game of life when I need a break from playing it.
Metaphorically a control-alt-delete panic button that dissolves the facades of being a human citizen, on demand.
In hindsight, last week reminded me of this quote as while the global markets continue to scream ‘the-sky-is-falling’ at every anticipated event this year, what follows usually ends up far better than feared.
The markets didn’t flinch this week off the FOMC news. In fact many stocks and cryptocurrencies had a beautiful little rally and ended the week in the green.
How’s that for taking life too serious - jokes on us!
But not at all is fun & games yet for our portfolios as the macroeconomic picture is merely on chaos lunch-break.
We have a very important U.S mid-term election upcoming this week alongside US CPI (inflation data) releases that we (cross our fingers) hope to show decreases in prices and a softening of demand.
Enjoy this weeks edition and ensure you’re following me on twitter to be in-the-know on the world’s most breaking news + fascinating tweets.
- Bramwell
ps. Substack has a new ‘chat’ feature, I’m going to learn more about it and incorporate into #BFMC , try it below!
📰 BramwellFox MetaCapital’s Weekly News Recap
You may press the 🗞 to read more about each headline.
Major News + Crypto Headlines
🗞 FED’s raise rates by 75 bp - now what?
💭 Bramwell’s Scribbles
It’s important to think of high interest rates like a progressive tax on cash-flow and capital assets.
Let me explain;
It’s easy to hold your breath under water for a few seconds, maybe a minute or two but not for hours.
Interest rates are the water, your wallet is your breath.
As you can picture, it’s easy for anyones net worth to drown in a high interest rate environment especially when inflation has not yet cooled down.
This is due to rising costs of living alongside higher costs of borrowing, one of those factors needs to give or we risk recessions / depressions, the drowning of the economy.
That’s the entire point of a central bank, to help impose a ceiling on soaring demand from getting out of control.
Two ways of destroying demand?
Take away everyones job.
Make everyone poor.
Easy.
To be honest, the truth isn’t far from the punchline above.
In Jerome Powell’s FOMC press conference this past week he stated very clearly that the Unemployment % had not yet reached sufficient level for them to see a change in consumer demand.
In fact in the eyes of the FED and their team of economists, the balance sheets of most households are still quite healthy and many have not yet used up their entire savings.
So in summary; the FED is effectively waiting and rooting for mass lay-off’s and more bankruptcies for the coast to be clear.
🫠.
So now what? We continue to wait.
Because investing is a game of patience and discipline - with calculated risk.
The highest return on your investments will come from purchasing the bottom of bear markets and clearly we are now close to bottoming, if not already there now.
If you’re a high time frame investor, you should consider the bullish upside and evaluate where your uninvested cash is best positioned.
*The next (and last of 2022) FOMC meeting is December 14th
🗞 Rumours of global crypto exchange FTX insolvency.
💭 Bramwell’s Thoughts…
It’s a nuisance that I feel obligated to share this breaking news that is creating a stir online, because quite frankly it’s the last narrative the crypto industry needs right now.
In short;
The CEO / Founders of two major crypto exchanges (Binance and FTX) are at odds over a leaked corporate balance sheet outlining the financial health of FTX.
Rumors began spreading today that the ‘FTX’ exchange may become insolvent (meaning users / creditors potentially lose their funds) which brought back PTSD nightmares from earlier this Spring when exchange Celsius filed for bankruptcy after the collapse of the LUNA token that sent all of Crypto into a liquidity crisis sell-off.
Hoping the rumors stay rumors and a clarification statement is released early this week.
*Potential Negative Black Swan Event
🗞 Canadian Exchange Newton re-lists XRP.
💭 Bramwell’s Thoughts…
The Great Re-Listing has begun.
I was pumped to see my favourite Canadian Exchange (Newton) re-list XRP.
They are the first major exchange to do this since the lawsuit and potentially is signalling that clarity must have been given to them legally for them to make this move.
Is something happening behind the scenes?
We will see.
🗞 Consumer Credit Card Debt All-Time-High ($930B)
💭 Bramwell’s Thoughts…
Consumers will be holding their breath going into the Holidays as their debt is piling up onto short term credit cards.
This may mean reduced cash flow and spending on Black Friday and into Christmas which are typically huge revenue generating events for companies.
Should corporate sales and revenue be low, we may be in for poor economic data in Q1 2023 and must be ready and positioned for further sell-offs in the Spring.
On the plus side, less demand and poor sales in Q4 may be the secret ingredient to force a FED pivot and pull-back on rates.
*Viibes up for all of the families and people out there feeling the credit pinch and many living just above the bare necessities - it’s not an easy economy to navigate right now.
🗞 All Eyes on CPI Data, Earnings & US Elections
💭 Bramwell’s Thoughts…
Every single day this week promises to be a firework (and the charts are eerie with low volatility and a little fear heading into Monday) with the continued release of corporate earnings (remember companies doing bad means good for economic contraction indicators) and the CPI data release from October.
On Tuesday, the US will have their mid-term elections and this will be the catalyst of 2022 that can, and likely will, be an explosive media event.
Grab your popcorn 🍿
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:
I’m expecting Monday and Tuesday to be low-key fear-uncertainty-and-doubt days for investor sentiment as the build up to U.S Elections is likely to feel like a fuzzy mess of angry people shouting on the internet and creating unnecessary civil divide.
When all is said and done by mid week I believe the outcome will create further weakness in the U.S dollar as foreign counter-parties take their bets on the U.S economy given its post election state.
I’m leaning bearish on the DXY to re-test 109.25-109 before a decisive move to come at the end the year upon the December 14th FOMC meeting.
Featured Chart DXY 6HR (click to enlarge photo)
How about the Maple Leaf Coin ($CAD)
In October I believed that an IH&S (inverse head and shoulders) was forming for the Canadian Dollar - the patten played out perfectly.
This potential breakout is the evidence I’m gathering to speculate on a weakening DXY and what macro events would have to occur for the U.S Dollar to lose strength.
Take note of how I’m triangulating the charts into forecasts of the world - it’s an important skill to master.
Bullish on the $CAD, targeting .75
Featured Chart CAD 12HR (click to enlarge photo)
📈 US Treasuries
💬 Bramwell’s Commentary, Analysis & Prediction for the Week Ahead:
The tool I’m using here (collared lines) is a downward facing Gann Fan on a high timeframe (monthly).
You’ll see that U.S yields are approaching the last red line of the fan which is approximately US2YR yields of 5.75%
I’m predicting that further treasury bond sell-offs may spike yields into this region before they taper off and I’m attributing this pivot to come from a shift in monetary policy by end of November / December.
Time will tell, but we want to see the US2YR yields begin a corrective pattern sooner rather than later to prevent a full scale technical recession.
Featured Chart US2YR 1M (click to enlarge photo)
📈 S&P500 + 📉 VIX + 📈 TSX
💬 Bramwell’s Commentary, Analysis & Prediction for the Week Ahead:
I’m speculating that the rally on U.S Stocks may continue in the short term off of uncertainty and curiosity over the direction of the economy given cemented U.S leadership positions.
Ultimately I’m targeting 4000 as my upside ceiling and believe the markets will edge bullish to finish the week.
This would confirm a breakout after two months of sell-offs and set the stage for further market bottom confirmation.
Featured Chart S&P500 12HR (click to enlarge photo)
I’m expecting a little spike on Monday and Tuesdays for the VIX as investment positions are hedged and taken headed of data releases and election results; however, it’s my perspective that we will see further downside for the VIX which tends to be inversely correlated with the S&P.
I believe the VIX will spend most of November in the 20-25 region which may give breathing room for the bulls to gain territory.
Featured Chart VIX 4HR (click to enlarge photo)
The TSX didn’t blink off of the FED’s 75 bp hikes and is showing good strength on its way back up to test range highs of 20,000.
*Investors may also take positions and rotate capital into the Canadian Banking / Mining corporations based on continued concerns over global liquidity + supply side energy exports.
Featured Chart TSX 12HR (click to enlarge photo)
📈 Bitcoin + 📈 XRP
💬 Bramwell’s Commentary, Analysis & Prediction for the Week Ahead
I don’t think Bitcoin has finished its rally but I do believe we may see 1-2 days of corrective behaviour as investors pile into cash as uncertainty over election hind-winds loom.
I’m expecting a downside support test of 19.8 - 20K followed by further continuation upwards into 22.2K - 22.5K region.
Featured Chart BTC 12HR (click to enlarge photo)
XRP had s hard re-test back into the triangle, likely knocking out late longs. But I’m expecting a follow through to the upside with a short term target of .55c
Important Notes:
Ripple Swell is occurring in November, it’s a very important catalyst event for the XRP token.
At any moment further news may break regarding the SEC lawsuit.
XRP ledger began minting NFT’s last week which will bring more volume into the ecosystem.
For these reasons, I’m bullish.
Featured Chart XRP 12HR (click to enlarge photo)
📈 Oil + 📈 Gold + 📈 Silver
💬 Bramwell’s Commentary, Analysis & Prediction for the Week Ahead:
Oil should see a short term correction given the week of news releases ahead: however, my thesis remains that as Winter arrives we will see Oil prices reach the $100/barrel target.
My focus:
I’m watching for headlines regarding the U.S Strategic Petroleum Reserves.
I’m listening for geo-political remarks and comments regarding Russian v. Ukraine or the US Election outcomes as the direction of the U.S Government will dictate foreign policy decisions, which in turn affects global trade.
Featured Chart Oil 12HR (click to enlarge photo)
Don’t mind me, still over here sitting on my bullish af gold bias.
As currencies collapse as they always do, humans banks and governments flock to hard money sources and innovation spawns new circulation of liquidity and wealth.
Rise Gold, rise!
Featured Chart Gold 3D (click to enlarge photo)
Everyone should have exposure to precious metals in their portfolio.
But it’s not always about the cliche ‘hedging inflation with Gold’, but also about understanding that these metals have high utility in real life.
Silver has broken out of near decade long range and recently retested the range highs. We can see the trend-line acting as high time frame support and can speculate with the large volume increase that a reversal may begin taking place.
I’m bullish on silver to $25.
Featured Chart Silver 1M (click to enlarge photo)
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