WEEKLY MARKET OUTLOOK
FOR THE WEEK OF APRIL 17, 2023
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Important Prices
S&P Outlook
Bull Case: New demand at 4137.50 created on Thursday and tested on Friday held price up. Price currently within daily supply and will not invalidated until a break of 4204.75. Take note of 8 HR supply at 4195.25 that sits within current Daily supply. Next strong supply above 4204.75 sits at 4233.25 which has been tested in the past.
Bear Case: Supply rejected price at 4177.50 but bulls were able to hold price above 4100 and created new demand at 4137.50. There is a tight 8 HR consolidation that sits at 4195.25 which might give some resistance. If price does reject, bears would need to bring price back below daily trend line and ultimately break below 4100.
What’s Moving The Markets?
Elon Musk Takes On AI
Elon Musk is working on launching an artificial intelligence start-up called “X.AI”, that will rival ChatGPT-maker OpenAI. Musk is assembling a team of AI researchers and engineers, has secured thousands of graphics processing units from Nvidia, and is also in discussions with some investors in SpaceX and Tesla about funding his new venture. This announcement comes just weeks after a group of AI researchers and executives, including himself, called for a 6 month pause in developing systems more powerful than OpenAI’s GPT-4, citing potential risks to society. This news only emphasizes the race between the world’s largest tech companies and most powerful individuals, investing heavily into the development of generative AI.
Encouraging CPI Data
The CPI report is an essential measure of inflation, tracking the average change in prices paid by urban consumers for a basket of goods and services. The new CPI data released on Wednesday morning showed investors an exciting theme: inflation seems to be under control, and the economy is back on the right track. Bond markets are also rallying, with yields on 10-year US Treasuries falling, indicating that investors are now more confident in the current economic situation and are less worried about soaring inflation.This positive outlook may mean that the Fed will be less inclined to raise interest rates again in the short term. The market’s positive response to the CPI has the potential to pour more fuel on the fire, adding to the rally we have had over the past month.
U.S.Dollar Has Lost 98% of It’s purchasing power
The U.S. dollar has been a constant headline in the past few weeks with international trade seemingly focused on doing away with the currency’s current uniformity. Amidst the international conflict surrounding the U.S.dollar, it has lost an astounding 98% of its purchasing power since 1971.This is all the more concerning after Saudi Arabia’s finance Minister recently stating the nation’s willingness to trade with alternative currencies instead of the U.S. dollar. Although bad news for the dollar, this could open the door to other asset classes, such as cryptocurrencies, to outperform traditional currencies and investments, as well as increase widespread adoption of these decentralized currencies.
AI Making Way Into Trading
ChatGPT has been a popular topic this year, disrupting how we live and work by offering personalized and accurate responses through machine learning. This new technology has paved the way for trading bots that combine AI technology with quantitative trading, aiming to outperform the markets. By leveraging the advantages of AI, these bots can in theory help you make more profitable trades and avoid the common pitfalls that lead to losses. Although this technology is advancing, it is not entirely new. Wall Street has long used automated algorithms for tasks such as placing trades and managing risk. The big issue AI faces is that market data is “noisier” than language and other data, making it harder to use it to explain or predict market moves.
IMF’s CBDC Guidance
The interest in central bank digital currencies (CBDCs) has reached an unprecedented level leading to the International Monetary Fund (IMF) planning to release a detailed handbook on CBDCs to provide guidance and support as interest in digital currencies grows.Recognizing the urgency to support central banks in their CBDC endeavors, the IMF has collaborated with nearly 30 countries seeking assistance emphasizing the importance of CBDC capacity development to prevent a digital divide. The resource aims to provide valuable information, experiences, and frameworks to help countries navigate the complex world of CBDCs, addressing all the potential risks.
EARNINGS RELEASE CALENDAR
FOR WEEK OF APRIL 10th
Expert Insights and Predictions
“$BTC Weekly – Bitcoin previously experienced a harsh ~78% drop down to roughly ~$15,500. Majority if not all of Bitcoin bear cycles are followed by 80% correction. I personally believe the low has been put in according to the cycle I’m sharing.
Since early 2015 Bitcoin has followed a bear market cycle lasting 364 days followed by a long bull cycle lasting 1064 days. As the 1064 day bull cycle has already started, I’m currently looking for bitcoin to head back up to $50,200 in the following months.”
“$ES Monthly – Pinned between 50%” It was awesome to see the price bounce off ~3500 back in early October which was also extremely close to a 50% retracement. Since then, $ES has had trouble closing a monthly candle above 4155.25 which is also another 50% retracement. Over the past year $ES has yet to put a monthly candle close above 4155.25.
As the month of April comes to a close I’m watching to see if $ES can find strength and put a monthly close above 4155.25. If $ES can put the monthly close above 4155.25 I’ll be looking for a run up to at-least 4208.50 & back to its golden pocket Fibonacci retracement between 4309.25-4351. If there is no monthly candle close above 4155.25 however, $ES will still be pinned between its 50% Fibonacci retracements.”
Economic Data Calendar
