Key Insights
$.SPX(.SPX)$ breaks five-month win streak, with $Gold - main 2412(GCmain)$ seemingly becoming the ultimate risk-off asset.
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1. Market recap
As US market is dragged down by the overwhelming risk aversion sentiment, uncertainty increases.
On October 31, the $.SPX(.SPX)$ slid 1.9% on Thursday, its worst daily loss since early September. The tech-heavy Nasdaq 100 fell 2.4%.
Both the $.SPX(.SPX)$ and $.IXIC(.IXIC)$ recorded their largest single-day declines since September 4.
Stocks were sent lower by declines in megacaps amid busy earnings, while Magnificent Seven stocks slid. The unexpected acceleration of the Fed's favorite inflation indicator dampened expectations of Fed rate cuts.
No (good) news is bad news.
The conservative earnings outlooks given by Big Techs have only lowered market expectations.
On Thursday, $Apple(AAPL)$ 's latest earnings report was mediocre, with insufficient substantive benefits. In this quarter, Apple's revenue increased slightly by 6.07% year-on-year (which is its best quarterly growth number in two years), but its net profit decreased by 35.81% (mainly due to the one-time back tax payment in the European Union).
After excluding the impact, the net profit was $24.9 billion, slightly better than market expectations ($24.3 billion). Still, Apple quickly squelched any optimism that news might have sparked by projecting slower growth—in the “low to mid single digits” range—for the December quarter. Apple shares were trading down 1.5% in after-hours trading, after falling nearly 2% during regular trading.
In the previous trading day, although the earnings report showed double beating, $Microsoft(MSFT)$ 's revenue outlook still couldn't hide its fatigue, and $Meta Platforms, Inc.(META)$ also warned that a sharp increase in capex next year might lower the net profit level.
Recently, gold has climbed to yet another record. Boosted by demand for safe havens ahead of the election, gold managed to shrug off robust US jobs and growth data, in a further sign that the metal may well be the “ultimate risk-off asset.”
2. Trend is Gold traders' best friend
As the US election approaches (with only 5 days remaining, Ready? Go!), some market funds have begun to seek refuge.
Wall Street believes that the market needs to prepare for the uncertainties of the November election, and investors need to guard against potential volatility risks.
On Thursday, the $Cboe Volatility Index(VIX)$ , which measures market volatility, rose by 13.81% intra-day to 23.16, returning above the long-term average of 20.
The continuous growth of gold ETFs, supported by market risk aversion, has a resonant effect with silver ETFs.
From the perspective of macroeconomic data, due to the decline in job vacancies and the decline in GDP data released on the 30th, the indicator for the monetary tightening and inflation trade-off in the United States has rebounded.
From the perspective of the impact of recent events, there is widespread concern that if Trump wins the November election, the short-term fiscal easing policy after taking office will force the Fed to return to the old path of raising interest rates.
The risk-averse trading in the $Gold - main 2412(GCmain)$ market is usually less correlated with economic data and technical aspects. If one merely limits the analysis to economic data or technical aspects, it is easy to overlook the underlying logic of risk aversion, not only failing to identify opportunities but also easily falling into market traps. In the short term, gold allocation valuation is not cheap, and the chips are slightly crowded, which may lead to fluctuations.
However, in the long term, it remains a high-probability asset driven upward. In addition, $Silver - main 2412(SImain)$ ETFs resonate with gold, combined with low inventory and soft landing expectations. Despite the high volatility in the short term, a moderately bullish approach is still preferred.
$SPDR Gold Shares(GLD)$ & $iShares Bitcoin Trust(IBIT)$ beat $Invesco QQQ(QQQ)$ & $ProShares UltraPro Short 20+ Year Treasury(TTT)$ in October
Fun fact: Donald Trump’s VP J.D. Vance asset portfolio revealed $Invesco QQQ(QQQ)$ , $SPDR Dow Jones Industrial Average ETF Trust(DIA)$ , $SPDR S&P 500 ETF Trust(SPY)$ $Fidelity Wise Origin Bitcoin Fund(FBTC)$ , $SPDR Gold Shares(GLD)$
3.Manage your trades like a pro
Excellent trading management is the key to trading success, which is as important as the quality of the initially formulated trading plan.
Trading management refers to the management of positions after buying and before selling. Correct trading management determines whether a trader makes a consistent profit or eventually incurs a loss.
In simple terms, build your effective position in multiple steps, and determine each buying point through continuous observation. Once the direction is correct, decisively add positions; once the prediction is wrong (we can't always know what is happening in the market in the first place), timely stop losses, which is the key to survival (No Good Game please). Phew, it was pretty close.
New to it? Nevermind!
To become a consistently profitable trader, trading management is a compulsory introductory lesson. It is difficult for novices to gain rich experience and feelings, and thus cannot obtain sufficient exercise and train strong muscles, agile reactions, and sensitive nerves, simply by reading and doing homework diligently.
Cultivating the ability of trading management, focusing on practical experience and making real-time decisions, joining trader communities and having real-time live chats can be very helpful. We can observe how experienced veterans operate in the community and listen to the trading management ideas they share, just like athletes watching game videos. Sometimes there are even unexpected gains (once again, we can't always know what is happening in the market in the first place).
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