To The Moon

This week,There are many Fed executives who will comment soonIncluding Federal Reserve Chairman Powell (Monday and Wednesday), FOMC Permanent Voting Committee, New York Fed Chairman Williams (Tuesday), 2022 FOMC Voting Committee, Cleveland Fed Chairman Meister (Wednesday), 2022 FOMC Voting Committee, St. Louis Fed Chairman Brad and Federal Reserve Governor Waller (Thursday and Friday).

In the FOMC statement of the Federal Reserve last week, the decision to raise interest rates by 25 basis points was passed by an eight-to-one vote. Brad, who voted against it, felt that the interest rate should be raised by 50 basis points, and it was far from enough to increase 50 basis points once this year. He felt that,At least five 50 basis point rate hikes are needed in 2022.

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Fortunately for financial markets, the current chairman of the Federal Reserve, his name is Powell, and his current view is that adding 50 basis points once this year is enough.

Unfortunately, for financial markets, Powell is the current chairman of the Federal Reserve, not Yellen and Bernanke. In the Q&A session after Powell delivered his keynote speech overnight, the host threw out such a question-

"Under what circumstances will the Fed not raise interest rates by 50 basis points in May?"

Powell said calmly. "Is there anything that will stop us? No."

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The trend of US stocks fell back, and the overnight gold price failed to further expand its increase at the level of 1937, but stopped. According to the price of interest rate futures market,The chances of the Fed raising interest rates by 50 basis points in May rose to 60%, compared with 52% before Powell's speech.At present, the market is indeed pricing the remaining six interest rate meetings this year, including one interest rate hike of 50 basis points. From the data of the past two decades, the Federal Reserve has never had a precedent of raising interest rates by 50 basis points, usually adding 25.

However, what is different from what ordinary people understand is that,The Fed has entered the cycle of raising interest rates, which is not necessarily "bad" for the long-term trend of gold prices.

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As shown in the above figure,The black line represents the interest rate level of the Federal Reserve, and the yellow line represents the gold price.The two closest interest rate hike cycles of the Federal Reserve are 2015-2018 and 2004-2006 respectively. In these two interest rate hike cycles, the focus of gold price is rising instead of going down, especially in 2004-06.

If we enlarge the time period and compare the interest rate hike paths of the Federal Reserve in the past 40 years, it is very likely that the interest rate hike path in 2022-2023 (virtual red line) will be closer to the 2004-06 round (white line) than the 15-18 round (green line).

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However, we must think clearly that it is not the rise and fall of gold prices caused by the Fed's interest rate increase (interest rate cut), but we have to think about why the Fed is so anxious to raise interest rates.

Whatever it is,At least the apparent reason is inflation.

In fact, this also explains why after Federal Reserve Chairman Powell expressed the idea of raising interest rates by 50 basis points in May, the market volatility did not obviously enlarge, but showed a trend of convergence recently.

I remind everyone in class. "When the volatility is small, the small level of resistance is resistance, and the large level of resistance is resistance. When the volatility is large, a small level of resistance is not resistance, but a large level of resistance is resistance. Knowing how to look at the resistance of big and small levels is just entering the trading door. If you want to do well, you have to understand that when the volatility is small, there are small ways to play, and when the volatility is large, there can be big routines. There is nothing wrong with the strategy itself, but if the users don't know how to choose the timing and don't know how to advance and retreat, they just carve boats and seek swords and fish from trees, and eventually they can only become leeks."

Taking "touching the top crude oil", which everyone has been asking on the message board recently, as an example, let me talk about logic:

Behind inflation, there is a big reason due to the supply caused by the epidemicAnother reason for the disorder of response chain is the haze of energy crisis brought about by Russia-Ukraine conflict.

If the conflict between Russia and Ukraine is not resolved, there is a risk that Europe will impulsively sanction polar bears, which means that WTI crude oil price at US $130/barrel may not be the top of this round of rally.

At present, the price difference between WTI crude oil price futures and spot has soared to a new high in the past 10 years. For example, the difference between one-month futures price and three-month futures price is close to 12 USD/barrel, which is very unfavorable to the increase of crude oil inventories.

Statistics show that in the past short month, short sellers sold 1 billion barrels of crude oil futures, setting a record high and continuing to occupy the market highland.

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Is this situation easy for everyone to think of,The negative oil price turmoil on April 20, 2020? It's just that the present situation is completely reversed from the original one.

This is why in the past few months, I refused to predict where the top of WTI crude oil price will go, and strongly suggested that everyone should not touch the top indiscriminately, even if they are really disobedient, they should go out in time.

Because I have experienced negative oil prices, I once recognized the cowardice because "the rich meet the desperate". I didn't get killed by the market not because I was lucky, but because I knew how to advance and retreat.

If you can't learn how to fear the market yourself, the market will teach you to be a good person one day. Don't come for help at that time, because no one can save a man who died on purpose.

Why do you have to die?

Especially these two days, everyone saw the news of China Eastern Airlines with a heavy heart. Don't you think it is precious to live well and cherish every day when you are happy? !

I can't help but think of the golden sentences I have learned-

We never know what will happen tomorrow, so please cherish every whim.

Those who miss will pick up their mobile phones and dial the phone, those who want to see will leave, those who like will summon up courage to confess boldly, and those who want to go will take the time to start immediately.

If you always think about going when this is finished, or when you must go, you may never see it again.

The past can't be undone, and the future can't be grasped. Cherish the present, there are too many uncontrollable regrets in life. From this moment on, don't take the initiative to create regrets, and don't leave regrets for today and in the future.

I think your Chinese reading level is good, and the central idea I want to express is clear, but it is very helpless that some people will ignore all this and then taste it-

If you want to open a warehouse, you must seize Man Cang Soha, cherish the present and leave no regrets!

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