To The Moon

Last week, FedWatch data changed rapidly after the beginning of the week, and the Federal Reserve finally chose to raise interest rates by 75 basis points, which further put pressure on risky assets. However, compared with the situation in previous months, there is an obvious positive emerging-US stocks and crude oil showed a bearish reversal pattern.

Oil prices tried to stand firm at the main pressure level of 116, but after the high cross star, outsourcing swallowed up the negative line last week, engulfing all the gains in the previous three weeks, which basically announced the signal that oil prices peaked.

After the problem of high oil price fever is solved, the inflation peak that investment banks have been waiting for a long time is expected to come.As long as inflation does not reach a new high, the pressure on the Federal Reserve and Powell will not be so significant, and the expectation and range of interest rate hikes in the second half of the year will be weakened on the existing basis. Until the end of July, we can keep an eye on the expected changes of the next interest rate hike.

After FOMC last week, there is another interesting phenomenon worth noting. Although the Fed has not raised interest rates by more than half, the market has begun to expect to return to interest rate cuts in 2024. According to this logical path, after the fast and fierce pace of raising interest rates, there is a high probability that they will "go backwards" because they are worried about recession.

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​However, despite the opportunity to kick interest rates, the overall market pressure is still obvious. The US dollar index, one of the important indicators we suggest to pay attention to, set a new high last week, and the current monthly level is also bullish. At present, there is still more than a week's trading time before the closing of the monthly line.

If it closes in the current or stronger form, the space for the US dollar to go up will open after an effective breakthrough. The general direction of strong US dollar and weak US stocks is relatively certain.

Moreover, at present, the monthly chart of US stocks is firmly engulfing the lower shadow line in May, which is an obvious negative bearish signal.The time left for the market is limited. If there is a relatively large reversal trend in the next few trading days, the summer market from July to August will have a greater probability of continuing the current trend and strong and weak pattern.

Investors who want to bargain-hunting or do head trading had better wait patiently and observe. There is no clear signal of turning trend, so don't worry about trading on the left side.

​​Gold's response to interest rate hikes is interesting, and it is still the old routine of falling first and then rising, but the sorting mode in the past four weeks has not been broken. Although there was a big bearish entity last week, the downward shadow line was also significant.

At present, 1806/1785 will be very critical. If this support range is broken, the long-term bullish thinking may need to be changed. In the past two years, we have been suggesting that the average price of 1750 is long-term and long-term, but if the market trend changes, we can't stick to the dead brain of long-term. Going back above 1880/1900 will obviously put bulls in a more comfortable situation and continue to wait patiently for the final directional choice.

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