Stocks, Crypto, Forex, Technical Outlook, Edition #180 (31/01/2022)
Yikes, what a start to the year. But does the Tiger bring fortune for the markets in the year ahead...? Start the week with a HUGE range of technical analysis featuring Stocks, Crypto & Forex 👇
Qluster Research is a reader-supported publication. Sign up for free or subscribe for unlimited access to new posts and our entire technical analysis archive 👇
We didn't start the fire. It was always burning…
The markets really could not have asked for a more bitter start to the new year—especially since there was no shortage of craziness last year.
But, a brief recap of the bygone month reveals no shortage of interesting experiences for traders and investors. Furthermore, an increasingly volatile economic and geopolitical landscape seems to up the ante for market uncertainty.
On one side of the coin...
Currently, the world economy faces a severe threat from congested supply chains that exacerbate worries of a problematic lag in growth.
Notwithstanding uncertainties behind the economic effects of Omicron, these alarming signs of slowing growth underscore the very real dangers of simmering inflation spilling into a steady boil.
Flipping the coin over...
Qluster analysts note several cases where geopolitical tensions pose substantial risks of conflagrating into larger and more deadly conflicts.
In the West, hurdles remain in a peaceful resolution in the dispute between Ukraine and Russia. President Zelensky tells Biden to 'calm down' on the invasion rhetoric as his country faces economic catastrophe. This follows the US President's comments stoking panic in the Ukrainian economy of an impending Russian invasion —notably, the beating of war drums come as Biden faces declining popularity with his domestic audience.
Geopolitics can pose substantial risks and cause extreme conditions for market participants. This might include the armed clashes between the United Arab Emirates (UAE) and Yemen for certain commodities.
Without airing the laundry list of ongoing disputes between China and the US, a manifestation of the 'Thucydides Trap' between the two superpowers would likely unfold to a Black Swan event in the markets like none other in our lifetime.
Chaos. It is no wonder markets are behaving so arbitrarily.
The carnage a 0.5% hike on the official Fed cash rate next month could do to markets leaves little to the imagination—currently sitting at 0.1%.
The actual rate hike adjustment is not yet known. However "a 0.5% has not been ruled out"
However, the savvy practitioner understands that now is not the time to despair...
Meditate on this morsel of wisdom from the wise—'even in crisis, there is opportunity.'
Doom and gloom might be the present reality in the macroeconomy. But, if this is the case, then conviction and pragmatism are certain to prove more invaluable than ever as the world descends deeper into panic and pandemonium.
And, of course, as devout practitioners in the Arts of Technical Analysis, it's all about a balanced and bipartisan perspective here!