Ticker tape by TradingView

The A1 Edgefinder is a fundamental trader's dream tool. This market scanner tool allows you to see a variety of metrics such as COT data and retail sentiment on 37 different currency pairs. This week, our team released some major updates on the A1 Edgefinder that you won't want to miss out on. Let's take a peak at the new look:

New Score Meter

The market scanner now has a meter that measures each pairs strength or weakness, making it extremely easy for users to read. This new feature reads from -7 to +7 suggesting whether a pair is a strong sell or a strong buy according to the technical and fundamental metrics that are updated hourly. Right below the meter is a breakdown of all the scores to show which metric carries the most weight for either directional bias. Those scores are tallied up to reach an overall rating on the pair.

New Commodities

Our latest version of the Edgefinder now does commodities like gold and oil. This will allow traders to see what is happening in the commodities market including its strengths and weaknesses relative to the US dollar. These features use the same metrics that are used for currency pairs, which will cause the scanner to react accordingly.

Hourly updates

The information you see on each metric is pulled from pools of data every hour to make sure you don't miss changes going on throughout the day. Some metrics are more prompt than others and require special attention like trend readings, retail sentiment and even economic events. Find out about about an interest rate hike, GDP growth, inflation rates, jobs numbers all within an hour of publication. And of course, you won't be needing to fetch all of these data yourself. The Edgefinder will track it and organize it for you 24 times a day.

Historical Score Chart

The historical score chart is a very important addition to the scanner which allows for the user to see how price performed on any given day and the days after compared to its score.

This new feature is really helpful for tracking price action relative to the overall score of the pair. As you can see, once price moved from a +1 to a +2, the scanner indicated a potential buy here. Then, price shot back up to +3, and price moved up with it.

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Traders see some green today as the S&P climbs a little over 1% today. After several weeks of red, investors may see a minor turnaround for the time being. However, SPX500 bulls should still be wary of a few things that warn of a recession.

Potential Bottoming

There are signs that the index could be bottoming and ready to shift momentum to the upside, however, the past few times have failed to do so. But, with every failed attempt, we have seen a significant bounce that encourages traders to scale back in. The problem is that volatile swings in either direction that ultimately end up in lower lows keeps investors from having enough confidence in the market.

Bond yields have come back up again to around 2.86% which points towards strength in the USD. Treasuries have retained a 2.8% yield for the past month or so. The dollar index has been pulling back regardless, so it could be indicating that either the USD has been priced in or that we are gearing for another long setup on the dollar.

COT suggests that the dollar is still long-heavy while both long and short contracts increase from last Tuesday. At the same time, institutional holdings on the SPX500 have decreased while short contracts saw an increase. The number of long vs short contracts is continuing to even out which is alarming to investors.

SPX500 Setups

spx500

A look on the 4H timeframe helps us see that a bottom could be coming soon based off a few technical indicators. Lower lows have been made but at a decreasing rate. Instead of a stair-like pattern we used to see, the lower lows are forming a kind of slope pattern. This could be indicating that a push higher is likely. The question lies in how much higher will it go before retracing once again.

spx500

The 1D timeframe also provides some potential ideas of where the index could move from here. This current bounce could take the market to that falling trend line which has held up pretty well for three attempts in the past. However, if that gets broken, we could see another test a little higher around the $4060s. So, for this week, I am not expecting a bottom to form here, but I do expect a bounce at least to take price a little higher.

UK100

spx500

UK100 looks somewhat promising on the 1D after price runs up 1.5%. Price was quick to come back up from the bounce off the 200 DMA which suggests that a potential break in this wedge formation could happen. If price does end up breaking and closing above this level, we may see a run higher towards the 7620s.

There are plenty of things to consider when your looking to choose a forex broker and thousands of options for you to choose from. How do you know which broker is the best fit for you? How can you be sure your broker is legitimate? Here are a list of the top 5 most important things to look for in a broker!

1. Choose a broker that is regulated + secured

A regulated broker is a broker which is federally monitored and is continually being watched by local governments. Regulation ensures that what you are going to be doing with your money is relatively secure. Without regulation, a broker has free range on how they choose to handle your money. Because of this, you could face more issues trying to deposit or withdrawal money.

Choose a forex broker

2. Choose a forex broker with good transaction costs

Forex brokers make their money through through fixed rate commissions, and/or taking a small bid/ask spread on your trade. Spreads and commissions are similar but spreads can be a bit more dynamic and get wider or smaller based on the markets liquidity. During an off hour, spreads get bigger, during a busy trading hour, they tighten.

When you are checking out a broker be sure to look at the reviews online as well as go through their website. Look for any information about what the broker says about their own spreads and their own commissions. Be competitive here and aim to find good spreads and commissions offered by different brokers.

3. Choose a broker that offers easy deposits + withdrawals

At the end of the day, it doesn't matter how well you do with your trading account if you can't withdrawal your money. When looking for a broker, you want to have easy access to deposit and withdrawal from your account. Usually, a well regulated broker will have a very smooth process with this as opposed to unregulated brokers.

4. Choose a broker with competitive trading platforms + tools

Another aspect to take into account when choosing a forex broker is what trading platforms and tools they provide. You want to make sure that the platforms that your broker is offering are competitive and align with your preferences. Further, checkout the tools that they offer traders on their website.

5. Choose a forex broker with helpful customer support

Lastly, and perhaps most important, you want to make sure your broker has exceptional customer support. When facing issues regarding your money, you want to feel confident that your broker will provide you will easy access to support. Read reviews and reach out to the customer support of different brokers so you can get a feel for how reliable their customer support is.

Hopefully, reading this article provided you with insight on how to choose a great broker. Checkout a list of our favorite brokers here. Or take our broker quiz here to find the best broker for your needs!

Choose a Forex Broker

Trend trading is perhaps one of the most commonly used strategies in the forex world. In this article we will be sharing tips on how to determine the end of one forex trend and the potential start of a new one. We will share 3 specific clues that you should be looking for when trend trading that will help improve your entries and exits.

Clue 1: Trend Line Break

One of the first indicators that a forex trend is ending is a trend line break. Taking a look at the chart below, you can see that there are multiple points throughout this bullish trend where price was supported by the bulls. Throughout this trend, the pair continued to form higher highs and higher lows which proves price to be strong. However, at some point this forex market was ready to start heading south. At this point, circled in the image below, buyers were no longer able to buy this market higher. This was the first time throughout this trend we see a pullback which is not supported by the bulls, showing that the market is likely ready to reverse.

How to Tell When a Forex Trend is Ending!
The first clue that a forex trend is ending is a trend line break.

Clue 2: Failure to Create a Higher High

After a trend line break, the first sign that a forex trend is ending, we see a bullish push back that fails to meet higher highs. Throughout the bullish trend price continued to reach higher highs. However, after the initial trend line break we see lower highs beginning to form. Thus, indicating that bears are pushing the market back down.

How to Tell When a Forex Trend is Ending!
The second clue that a forex trend is ending is a failure to meet higher highs.

Clue 3: Broken Support Levels

Finally, we see this level of support, which has held for many weeks get violated and broken beneath. Price eventually dropped below a significant level of support showing that sellers have control of this market.

How to Tell When a Forex Trend is Ending!
The final clue that a forex trend is ending is broken support levels.

How to Use A Forex Trend To Your Advantage

Looking back, we had 3 major clues that this trend may be headed to the downside. these clues are possible things you can look for to potentially find the start of new trends or the end of a trend. We had a bullish structure and when we saw this structure break it gave us a clear indication that sellers may have some room to run. Our second indication was the forming of a lower high. Finally, there was a break of structural support. With this information about trend trading, we could have identified the series of lower highs and potentially taken a short position.

Watch The Video: How to Tell When a Forex Trend is Ending!

Sean Streb

Summary: Worse Not Better

Inflation saw a decent spike for the Sept -Oct period. Prices are up across the board but the majority of price increases are still in localized sectors. For the full report visit this link.

Note the sharp increase from Sept to Oct. Image courtesy of BLS.gov

This could be as sign that inflation will get much worse. Keep in mind that the economy is sitting on a powder keg of newly printed dollars. We have not seen a demand spike that will kick inflation into high gear at this point.

Energy: Oil + $100 dollars a Barrel?

Aside from food, energy has seen the largest consecutive increases over the last 1 month and 12 month periods. Energy is up 4.8% since September. In the last 12 months, energy is up 30%! This is the largest 12 month increase since the period ending in 2005. Last time this happened, Brent Crude Oil bunched through $100 a barrel almost a year later. In this current market, I think that supply shortages and increased demand will soon see oil jump in the next year or sooner.

I am working on an article talking directly about the future price of oil and that will be out in a few days. I will also be talking specific stocks that myself and professional analysts really like that will allow the average investor to take advantage of the increase in the price of oil.

Can You Trust These Numbers?

Most likely. But I'm always skeptical.

The Beauru of labor statistics changed how it measured inflation several times since the 1980’s. Depending on how you measure the numbers the CPI will change. Sometimes this is necessary, but sometimes the changes can skew things in order to make things look better than they actually are. The CPI is a based off a “basket” of goods; that is to say a set of goods that the average consumer usually buys during a 1 month period. Since Iphones and other gadgets didn’t exist in the 80’s and 90’s, this type of tech spending changed the way CPI is measured.

Using 1980-Based measurements (courtesy of shadow-stats) we see that inflation is nearing 15%! Keep this in mind before accepting the current number at face value. Trust but verify.

For questions and comments, you can reach me at smstreb97@protonmail.com or through the A1Trading discord at @smstreb97

Technical Outlook:

Price has been in an overall pretty strong uptrend for the most part over the last year, we're only seeing some retracement now from the strong ascending channel. 0.70 is a key horizontal level that has been jumping between support or resistance since 2018. If we do see a change in trend, this is an important level to look out for where we could see price consolidate around.

0.756 is a key shorter-term horizontal level which was a clear level of support during the ascending channel, and now that price has broken out of this chart pattern, is seen as clear resistance in July and now last week.

Price has formed this intraday ascending channel, and we recently saw price reach the top, make a couple of rejections and is now on its way to continue the trend and head towards the next higher low and the channel's bottom around 0.727. I expect price to make this move and continue this trend.

Retail Sentiment:

Looking at retail sentiment, it's pretty mixed as there isn't a clear winner with one action being over 60%, however, most traders are somewhat bearish on this market. There isn't a huge difference in volume either so it's not very likely we'll see financial institutions manipulate this market. Most traders are looking to catch the trend continuation back down towards the bottom of the ascending channel it looks like.

Upcoming News:

We're seeing many macroeconomic data to look out for, a lot more affecting the USD rather than AUD, therefore the price of AUDUSD will most likely be affected by what's going on with the dollar, positive USD news will push AU lower and negative news will push AU higher.

The US central bank is going to have a monetary policy meeting on Wednesday. Back in September, chief Jerome Powell anticipated that they could begin a gradual tapering process at their next summit, with the Minutes of the meeting indicating the central bank would probably start by cutting $10B/month in Treasuries and $5B/month in mortgage-backed securities.

On Wednesday, the USD will publish the ADP survey on private job creation, while by the end of the week, the country will unveil the October NFP report. Following the terrible September headline number of 194K, the country is expected to have added 455k new job positions, dropping the unemployment rate by 0.1% to 4.7%.

Fundamental Outlook:

RBA Governor Philip Lowe was somewhat vague on when the RBA would raise rates, saying that the bank would be “patient” and wait until economic conditions were suitable for a rate hike. Lowe has said on numerous occasions that the bank would not raise rates prior to 2024, but the markets have been much more hawkish, given the country’s strong recovery and high inflation. The markets have been aggressive in pricing in a series of rate hikes, with the cash rate projected to rise to around 1.5% by the end of next year. Unless growth and inflation drastically decrease, a strong case can be made for Lowe having to accelerate forward guidance to 2023. If Lowe insists on the 2024 timeline, the Australian dollar could face further headwinds.

Looking at the US economy overall, we're expecting to see a bullish USD as the Fed is expected for a rate hike as inflation is going to be higher for longer and the Fed will take advantage of this, to normalise rates by as many as 2 or 3 rate hikes in the next 15 months. This should be dollar supportive, especially considering conditions elsewhere and other central banks offering less clarity. Additionally, as mentioned earlier with the FOMC meeting on Wednesday, the Fed is closer to begin tapering, bond yields may finally start moving higher, along with US dollar strength.

Today I'll share some economic analysis on the CPI report and what to look for in order to tell if inflation will get worse. Lastly, I'll cover some ways that you can make an investment play on inflation.

September CPI Report

The Consumer Price Index report for September 2021 was published on October 12, 2021. Prices increased for urban consumers by 0.4 percent in September on a seasonally adjusted basis. This is slightly higher than August which came in at 0.3 percent. On a 12 month basis, the CPI is up 5.4% from September 2020.

CPI's impact on Inflation

Largest Price Increases

Energy

You have likely seen your gas prices so I don't need to tell you that prices are up, but it's worth noting how much. All major energy indexes are up this month. The entire energy index increased by 24.8% on a12 month seasonally adjusted basis. Gasoline is up 42.1% and Natural Gas is up 20.6% over the same period. Electricity also increased by 5.2%.

CPI's impact on Inflation

Food

The index for food was up 4.5% over the past 12 months. The largest movers in the food index were meat products. Meat, fish, poultry, and eggs increased 10.5% and the index for beef is up 12.6% in the last year.

CPI's impact on Inflation

Will Inflation Get Worse?

We've all heard someone in the last few months say something to the effect of : "40% of all dollars were printed in the last year" with an ominous reference to potential inflation. This is more or less correct as the US government has printed a ton of new dollars, but printing more money doesn't directly lead to inflation. If we look at the velocity theory of money we can understand why. The velocity of money is essentially a way of measuring how fast money changes hands, given the price level, GDP and money supply.

Rearranging this, we can see that the speed at which money changes hands is a function of the price of goods, the GDP and the Money supply. Price levels and GDP haven't shifted much, but the M money supply increased a lot. This means that the Velocity of money should be low. And velocity is very low.

This means that inflation hasn't hit us hard yet.. If inflation really starts to pick up, the velocity of money should see a noticeable increase as more dollars start to change hands to pay for the increased price of goods. This is demand inflation. Prices have increased in specific areas, but we have yet to see large scale inflation.

Case Against Inflation

The Federal reserve has shown that it is hesitant to drastically increase interest rates from their near 0 levels, and are more than willing to increase the amount of assets on it's books. As a result the the amount of dollars in the system increases. Under normal circumstances, low interest rates and an increase in the money supply increases the demand for goods and services. But we haven't seen this. Why?

Individuals and businesses have thus far used PPE loans and government stimulus to pay off debts and cover their bases during the pandemic. Since these individuals and businesses can pay for the goods and services that they need, they don't demand more. There is no pressure for a demand shock at this time. The money generated by Fed is sitting idle in bank accounts, investments and institutions.

We are currently in a supply shock in the U.S., increasing in the price of select goods, but we haven't seen a drastic increase in demand or a change in velocity of money. This doesn't eliminate the possibility of future inflation though. That money is still in the system, and we could still be sitting on a powder keg.

Making an Investment Play on Inflation

Currently, I am looking at stocks and asset classes that I think will rise in the event of inflation. Ill share my methodology for my search and give some stocks that I think fit into this criteria. Ill try and explain why I think some industries will do well and why others will not. This is not advice, I am only sharing my opinion and observations.

Methodology:

  1. Find stocks in an industry that can easily pass on price changes to their consumers. This means that when prices do increase, identify those companies that can change the price of their goods VERY fast and pass them onto consumers
  2. Find an industry that deal in inelastic goods or assets that are still demanded by consumers regardless of the price change, consumers will demand a similar amount of the good.
  3. Assets who's production is not slowed down by supply chain issues or price increases. By necessity, all industries are affected by supply chain problems. The key here is finding those that are affected the least.
  4. Make sure these stocks have solid fundamentals.

Things to Consider:

Oil and Natural Gas Producers: Natural gas is up in price by 20.6% and Fuel Oil is up 41.7% since last year. Winter is coming in the United States and Europe and the prices for these commodities are already increasing. Couple this with inflation and supply problems, producers will benefit immensely from this. These guys find the material, and sell it. they only get more money if the price of the commodity goes up and people still need to full up their gas tanks and heat. their homes. The risk is that shipping problems could cause issues.

$OXY, $APA,

Coffee Producers and Futures : America has an addiction to coffee, this is no secret. An article from yahoo finance, described how Caribou Coffee is buying tons of Coffee beans in anticipation of supply shortages. This commodity shows robust demand despite price increases. One difficulty I see with this is finding the right way to invest in this commodity. I'm trying to avoid companies like Starbucks, Nestle and Keurig that sell coffee directly to consumers as they may not be able to pass on as the price increase. It seems like that is the only option aside from directly purchasing futures. One possibility is $JO, which is an ETF that tracks monthly coffee futures contracts.

Things to Avoid

Refiners and Pipelines: Avoid these like the plague if oil and gas prices go up. These companies take a hit when prices increase because they cannot pass prices onto their consumers quickly, yet they still have to meet the demand of consumers to stay in business.

Beef and Pork: If inflation hits this sector Americans will substitute out the expensive red meats for cheaper alternatives like chicken. This is due to the fact that most Americans have a predetermined budget for grocery shopping and will maximize the amount of food they get.

For questions and comments, you can reach me at smstreb97@protonmail.com or through the A1Trading discord at smstreb97

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Inflation Concerns in the Market, GU Drops, Gold on Support
5/12/2021

GBP/USD Analysis 
GU sank after good news on both currencies reported today. Price could be experiencing a retracement on the 4H chart and setting up to hit support around 1.4000s.
Gold Analysis 
Gold still struggles to break above the 200 DMA but seems to have found support in the $1820s. If price can sustain itself above this mark on the 4H chart, it would be a bullish sign that price will continue to retest the moving average and not come back down to additional support around the $1800 area.
SPX500 Analysis 
SPX dips hard under support on the 4H chart as products are becoming more and more expensive due to inflation. This news has concerned most investors who are lessoning their stake in stocks. A close under this support zone could mean some more bearish movements will likely happen along with a dip to $3987.

Yields Climb, USD/CAD Falls, SPX in the Red
3/12/2021

USD/CAD Analysis
UC on the daily chart can't break above the falling trend line and retests lows in the 1.24000s. This is the lowest price has been since 2018 which shows how powerful this down trend has been. Employment data came out today for CAD which was better than expected, and most likely the reason why the pair fell again today. 
BTC/USD Analysis
Looking at bitcoin from a technical standpoint on the daily chart, price is now back up to all-time highs for its second test on the resistance. Traders are most likely looking for a breakout to the upside which would probably keep price running up into the 60ks. If not, the crypto has support at 52658 and the 42-43Ks zone.
SPX500 Analysis
SPX500 on the daily chart takes a breather near the highs after a few days of green fueled by the senate passing of the $1.9 trillion stimulus bill. Bond yields are rising again which could be the cause of today to be in the red, but it's the tech stocks that are dragging the market down for the most part. NASDAQ is sliding and the Dow made a new all time high today, so keeping an eye on treasury yields will be important going forward for sector-specific opportunities (tech, blue chip, etc.)
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