Volatility – Lost Worlds http://lost-worlds.com/ Tue, 22 Nov 2022 02:30:49 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://lost-worlds.com/wp-content/uploads/2021/05/cropped-icon-32x32.png Volatility – Lost Worlds http://lost-worlds.com/ 32 32 S&P 500 volatility risk as dollar falls on reliable theme: Fed hikes https://lost-worlds.com/sp-500-volatility-risk-as-dollar-falls-on-reliable-theme-fed-hikes/ Tue, 22 Nov 2022 02:30:49 +0000 https://lost-worlds.com/sp-500-volatility-risk-as-dollar-falls-on-reliable-theme-fed-hikes/

S&P 500, Dollar, Fed Forecast, Recession Risks and Liquidity Talking Points:

  • The market outlook: USDJPY bullish above 141; EURUSD bullish above 1.0000; Gold bearish below 1,750
  • The S&P 500 range on Monday was the smallest in three months: a historical comparison with a period before a major technical break
  • Thanksgiving liquidity will have some influence going forward, but that doesn’t mean the market will just freeze in place…just look at how the dollar is moving

Recommended by John Kicklighter

Introduction to Forex News Trading

We have entered a week where there is a known slowdown in activity: the well-known impact of the Thanksgiving holiday in the United States on broader markets. Liquidity and volatility don’t always benefit from a positive correlation, but calm conditions without provocative fundamental updates can lull market participants into a comfortable holding pattern. This seems to be the pace the markets were aiming for to start this week. As the World Cup tournament distracted many traders, the benchmark S&P 500 (one of my favorite and imperfect measures of “risk”) carved out an exceptionally small trading range. The under-24-point range throughout the session represented the smallest stretch of the day in place percentage since August 18. For the viewer of the chart, this happens to be the end of the consolidation after a bullish leg from July to August. Many may focus on the change in direction – which was significant – but I think the escalation in activity is a more reliable comparison. These are exceptionally small trading ranges for both the Monday session and the last 7 day chop; and the risk of volatility stimulated by low liquidity is probably very high. Yet, if such a break occurs before the holidays; tracking will be just as easily stalled by the lack of liquidity in Thursday’s US session.

Chart of S&P 500 with 100 and 200 day SMA and 1 day historical range (daily)

Chart created on Tradingview Platform

While many “risk” trending assets struggled to generate significant heat in active trading over the past session, there was a noticeable outlier in terms of traction. The US Dollar managed to gain a significant rebound during the last session. And, while it wasn’t a record load by a long shot, it represented one of the biggest one-day rises we’ve seen since the market started to really challenge the prevailing trend. . This would lead to an interesting capitulation of the bullish leg of EURUSD after it failed to hold above 1.0350 as well as USDJPY extending its rebound above 141 – and would put pressure on Japanese political authorities who had failed to gain ground in previous months through active intervention. in the name of the yen. Equally good progress was recorded in key commodities priced in dollars, such as gold which accelerated in its four-day slide. Crude Oil, on the other hand, came under severe strain during the first half of Monday’s session but managed to reverse most of its losses and fight a rally away from the greenback.

Recommended by John Kicklighter

How to trade EUR/USD

Chart of the DXY Dollar Index overlaid on the June 2023 implied federal funds rate (daily)


Chart created on Tradingview platform

What moves the dollar where broader capital markets are struggling? Basic motivation. While the economic record was very light at the opening this week, there is nevertheless active speculation around interest rate expectations. The rebate demanded on the dollar after the October CPI release two weeks ago appears to have significantly exceeded real expectations for interest rates as measured by Fed Funds futures or other similar measures. With Fed officials like Loretta Mester offering such comments that she thinks the central bank is “far close” to the end of its tightening regime, it’s no surprise that there is active rebalancing going on. fundamental assumptions via the dollar. That said, rate forecasting remains an open theme based more on the balance of speculation via products such as Treasury yields than on forecast data – as there isn’t much over the next session that will tip the scales here without the central bank talking. That said, recession fears may carry more weight over the next 48 hours.

Risk of a critical macro event on the global economic calendar for next week


Calendar created by John Kicklighter

As we face further rhetoric from central banks in the coming session – including the leading trio of Fed hawks in Mester, George and Bullard – the focus is likely to shift to economic forecast – or more correctly, the assessment of the recession. The past session has seen an increasingly deep inversion in the 2- to 10-year Treasury yield curve watched by investors. As of Monday’s close, the negative figure is the highest in four decades. Further evidence of economic pain is unnecessary, but the Chicago Fed’s National Activity Survey for October reinforces a trend in the data punctuated by the Conference Board’s leading economic index on Friday. We will see the most important and time-sensitive look at economic activity in developed countries with Wednesday’s PMI release; but for now, the market is ready to operate complacently. What happens when the market is more accepting of an impending recession? and what will solidify this painful perspective?

Chart of average weekly performance of the S&P 500 by calendar year since 1900


Chart created on Tradingview platform

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Expect S&P 500 and dollar volatility to be loaded with uneven liquidity next week https://lost-worlds.com/expect-sp-500-and-dollar-volatility-to-be-loaded-with-uneven-liquidity-next-week/ Sat, 19 Nov 2022 00:00:01 +0000 https://lost-worlds.com/expect-sp-500-and-dollar-volatility-to-be-loaded-with-uneven-liquidity-next-week/

S&P 500, Dollar, Fed Forecast, Recession Risks and Liquidity Talking Points:

  • The market outlook: USDJPY bullish above 141; EURUSD bullish above 1.0000; Gold bearish below 1,750
  • Congestion has built for the S&P 500 and the dollar, which will build on expectations already presented by the upcoming Thanksgiving holiday cash drain.
  • The divergence in the Fed’s rate forecast may put pressure on a breakout of the dollar, but it is also important to monitor the broader rate forecast and the threat of recession

Recommended by John Kicklighter

Building confidence in trading

Not two weeks ago, we were in the midst of exceptional volatility which rightly proved favorable to “risk on” and a “dollar bearish” outlook. The catalyst for this move was the weaker than expected US consumer inflation report, which in turn would tap into the theme of interest rate speculation, which is reliably acting in the market. Despite speculation around a lower “terminal” benchmark rate this update would trigger, there hasn’t been much of a run after the initial load. This should come as no surprise given the still high rate of price pressures and headwinds from issues like an incoming recession. There may be a precarious balance in the macro backdrop, but it’s the ebb of liquidity we have ahead of us that could ultimately prevent a risk measure like the S&P 500 from clearing its well-established technical range that many moving averages, Fibonacci retracements and historically significant levels.

Chart of S&P 500 with 100 and 200 day SMA and 1-day (daily) rate of change

Chart created on Tradingview platform

Taking our benchmark for what is ahead of historical norms, November is known as a period in which volume and volatility historically decline as the underlying S&P 500 averaged its second-best performance ever. the calendar year. However, there are other activities to be found within the month itself. On a more granular basis, the 47th week of the year (which we are entering) averaged the third largest weekly loss of the year. That would seem at odds with expectations of a late holiday market with Thanksgiving next Thursday. It should be noted that historically, holidays in the United States do not always fall on the same week of the year, although they usually fall between the 47th and 48th week.

Chart of average weekly performance of the S&P 500 by calendar year since 1900


Graphic created by John Kicklighter

Whether Thanksgiving is the 47th or 48th week of the year, the implications for volatility appear to be about the same. If we look at the historical averages of the VIX since the beginning of its official series (1990), there is historically a drop in activity. Again, there are always possibilities for exceptions. In fact, in 2021 there was an increase in volatility during the 48th and 49th weeks of the year. It all depends on the fundamental direction of the market as well as scheduled and unscheduled events running through the wires. On this front, we have a seriously unresolved backdrop for a darkening recession. When it comes to upcoming event risk, there are a few known releases that have the ability to stir the markets.

Chart of the current VIX and the average weekly level of the VIX since 1990


Graphic created by John Kicklighter

Risks and Themes of Scheduled Events

Based on the expected economic record for the coming week, there is definitely a bottleneck in notable releases through the end of next week, but there are more than a few high profile listings that I will be watching for potential. of volatility. For the most comprehensive and overarching theme, the overall and timely picture of economic activity will come through November PMIs due Wednesday. The compass of these economic measures has been pointing south for the past few months and many are in technical contraction. If this trend continues, the threat into which reality sinks will only increase. Meanwhile, indicators like the Chicago Fed’s US National Activity Index, Durable Goods Orders and New Home Sales will reflect important aspects for the world’s largest economy. Earnings may also be light this week, but updates from Best Buy, Dollar Tree and even Baidu will talk about important standards (even carry, inflation and China).

Risk of a critical macro event on the global economic calendar for next week


Calendar created by John Kicklighter

While the threat of recession remains for me the most nebulous, and therefore the most powerful fundamental theme that is progressing; there are other topics that are more than capable of generating volatility. For the US dollar and financial markets, the outlook for monetary policy remains a strong driver. Last week, the Fed’s speech offered an unequivocal underlying message: that despite the recent ebb in inflation, there was still more tightening to be done – and at a higher terminal rate than previously expected. In terms of market expectations through fed funds futures, the rate implied through June 2023 wobbled only slightly and has since rallied above 5.00%. This provides a significantly divergent short-term position between these implied rates and the performance of the dollar. Will they continue to diverge or realign? And, if one corrects the other; who will capitulate.

Recommended by John Kicklighter

Get your free USD forecast

Chart of the DXY Dollar Index overlaid on the June 2023 implied federal funds rate (daily)


Chart created on Tradingview platform

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3 Ways to Turn Bitcoin Volatility to Your Advantage Today https://lost-worlds.com/3-ways-to-turn-bitcoin-volatility-to-your-advantage-today/ Tue, 15 Nov 2022 05:14:30 +0000 https://lost-worlds.com/3-ways-to-turn-bitcoin-volatility-to-your-advantage-today/

FTX, one of the largest cryptocurrency exchanges in the world, recently went bankrupt.

Several billion dollars in value evaporated in minutes when this unhealthy institution collapsed.

It created a true “blood in the streets” moment, weighing heavily on the price of Bitcoin.

Bitcoiner Matt Odell summed it up best:

“It’s a story of fiat inducements, shitcoin games, regulatory corruption and counterparty risk that ended in inevitable disaster. It will serve as a costly reminder that bitcoin held in self-custody is unique in its zero counterparty risk. You can easily and cheaply store it yourself and send it around the world without trusting anyone or asking permission. Learn how to hold bitcoin yourself and how to use it sovereignly.

It should be pointed out that FTX, and other similar companies, are not at all the same thing as Bitcoin – an emerging global currency that no one can inflate or control and which is accessible to everyone.

For example, suppose an unscrupulous gold storage company has become insolvent. This would not mean that the gold is defective.

The collapse of FTX will undoubtedly be a drag on the price of Bitcoin in the short term. But on the bright side, it will help cleanse the industry of bad actors and offer crucial lessons.

I don’t expect the collapse of FTX to have a lasting negative effect on Bitcoin.

Bitcoin has been through several more explosive incidents in the past and emerged stronger than ever (see the 2014 Mt. Gox bankruptcy, for example).

However, I expect Bitcoin to remain volatile, as it has always been since its inception.

Something is wrong with the lack of value to the importance of global money without volatility.

For example, Bitcoin has fallen from zero value in 2009 to $69,000 in November 2021 to around $17,000 today, down more than 75% from its previous peak.

It is essential to keep in mind that recent volatility is normal.

It is common for Bitcoin to have large corrections of 50% or more, which has happened eight times. Additionally, there have been three occasions where Bitcoin has declined by 80% or more.

If you zoom out and look at the big picture, Bitcoin’s volatility has mostly been on the upside over the long term.

Say you go back four years ago and tell someone that Bitcoin “crashed” to $16,000. It would have been so amazing that you would probably be laughed out of the room.

Bitcoin continues to rebound stronger than ever due to the fundamentals underlying this megatrend. This is a new and superior form of money in the early stages of adoption.

The monetization of a new global currency is unlike anything anyone has ever seen. It doesn’t happen overnight, and it’s an inherently volatile process.

As adoption grows and Bitcoin becomes more established as a currency, volatility should subside, but likely at a much higher price. That’s why you want to buy Bitcoin – and the best Bitcoin mining stocks (more on that below) – before the rest of the world discovers its superior monetary properties, namely its complete inflation resistance of its supply.

It will be a wild ride – like a violent roller coaster – but I think it will reward patient investors.

Bitcoin’s volatility is the price we have to pay to earn outsized gains as it undergoes the monetization process.

Here is the bottom line.

Investors will face volatility in Bitcoin for the foreseeable future.

Instead of looking anxiously at price charts daily, I suggest focusing on the big picture and the fundamentals of the underlying trend.

The key is to understand the disruption before most, invest early, and have positions small enough to ride the megatrend without worrying about volatility crushing you at the worst possible time.

Whenever you see volatility in the price of Bitcoin, ask yourself two things:

1) Does Bitcoin still have superior monetary properties (total inflation resistance of its supply)?

2) Is Bitcoin still unstoppable?

If the answer to both of these questions is “Yes”, I wouldn’t be too worried.

With that in mind, let’s take a close look at three crucial strategies that can help tame Bitcoin’s wild volatility.

Strategy #1: Average Dollar Cost (DCA)

The best way to buy Bitcoin is to avoid buying it in one big purchase.

Instead, given the volatility of Bitcoin, a long-term Dollar Cost Average (DCA) approach is optimal.

For example, suppose you want to invest $10,000 in Bitcoin. Instead of buying $10,000 all at once, buy about $192 every week for a year.

DCA greatly reduces the risk of buying too much at the top of a cycle and not buying at the bottom.

This is how DCA can turn Bitcoin’s volatility in your favor.

Swan Bitcoin offers a convenient platform that automates DCA purchases for you, including withdrawals to your own wallet, which is essential for eliminating counterparty risk. I have personally used it and found their service helpful.

More details can be found at the link above, including a useful calculator that displays a DCA strategy’s performance in the past and a $10 free Bitcoin bonus for signing up with this link.

Strategy #2: Don’t let anyone else hold your Bitcoin

Bitcoin is a digital bearer instrument. A bearer security gives whoever owns it ownership of it.

If you hold your Bitcoin on Coinbase or another platform, you don’t really own your Bitcoin and are taking on significant counterparty risk. Instead, you own a Bitcoin IOU, which is something quite different, as FTX customers are currently finding out.

It’s much safer to keep your Bitcoin off the exchange’s website in your own self-service wallet, where you control the private keys.

For starters, start with the Muun Wallet or the Blockstream Green Wallet for your phone. Both are excellent choices and are among the easiest to use. BlueWallet is a good choice for intermediate users on mobile phones. Finally, Electrum and Sparrow Wallet are great options for laptops and desktop computers, which are often more secure than a mobile phone.

Whichever self-service wallet you use, ALWAYS make sure you have backed up your wallet correctly. Each wallet is different and will give you instructions for making the backup. This way you won’t lose your funds if you lose your phone or laptop.

It is crucial to complete this step when setting up your self-service wallet, as it is the ONLY way to recover your funds if something happens to your device. Bitcoin has no customer service.

Strategy #3: Have a four-year time horizon

Plan to hold Bitcoin for at least four years, through a halving cycle.

According to its fixed protocol, we know precisely how the supply of Bitcoin will increase in the future. A key feature is that the new supply is halved every four years, a process known as halving.

Rarely has there been a period when the price of Bitcoin was lower than it was four years ago. When this happened, it was fantastic buying opportunities. But, of course, past performance does not indicate future results.

The 200-week moving average (200 WMA) is a useful metric because it contains nearly four years of price data, roughly the length of a halving cycle. Historically, the 200 WMA has been a good indication of the Bitcoin price floor.

As we can see in the chart above, now is one of those rare times when Bitcoin price is trading below its 200 WMA.

However, the opportunity may soon be gone.

Historically, Bitcoin’s biggest upside moves happen very quickly…especially in the midst of a financial crisis.

With several crises unfolding right now, the next big move could be imminent.

That’s why I just published an urgent PDF report, it’s called:

The Most Dangerous Economic Crisis in 100 Years…The Top 3 Strategies You Need Right Now

It details how this could all unfold soon…and what you can do about it. Click here to download the PDF now.

‘Many potential buyers are waiting for mortgage rate volatility to subside’: Mortgage rates hit 7.08%, Freddie Mac says https://lost-worlds.com/many-potential-buyers-are-waiting-for-mortgage-rate-volatility-to-subside-mortgage-rates-hit-7-08-freddie-mac-says/ Sat, 12 Nov 2022 13:47:00 +0000 https://lost-worlds.com/many-potential-buyers-are-waiting-for-mortgage-rate-volatility-to-subside-mortgage-rates-hit-7-08-freddie-mac-says/

By Aarthi Swaminathan

The 30-year mortgage rate has not been at this level since mid-2002

By the Numbers: The housing sector continues to face headwinds.

The 30-year fixed-rate mortgage averaged 7.08% as of Nov. 10, according to data released Thursday by Freddie Mac (FMCC).

The 30-year-old was last at this level in mid-2002.

That’s an increase of 13 basis points from the previous week – one basis point equals one hundredth of a percentage point, or 1% of 1%.

Last week, the 30-year was at 6.95%. Last year, the 30-year averaged 2.98%

The average 15-year mortgage rate rose to 6.38%.

“The housing market is the most interest rate sensitive segment of the economy, and the impact of rates on homebuyers continues to evolve,” said Sam Khater, chief economist at Freddie Mac, in a press release.

“Home sales have declined significantly and as we approach the end of the year, they are not expected to improve,” he added.

The variable rate mortgage averaged 6.06%, up from the previous week.

What do they say? Some buyers are tired of waiting for rates to stabilize and jump with rates of 7%, an industry group said.

“Although mortgage rates remained above 7% last week, home buying inquiries rose for the first time in six weeks,” said Bob Broeksmit, president and CEO of Mortgage. Bankers Association, in a statement.

Still, “many potential buyers are waiting for mortgage rate volatility to decrease, along with a clearer picture of the economic outlook,” he added.

Mortgage demand remains weak overall as refinances plunge, the MBA said Wednesday.

The yield on the 10-year Treasury fell to 3.8% in Thursday’s morning trading session.

Do you have ideas on the housing market? Write to MarketWatch reporter Aarthi Swaminathan at aarthi@marketwatch.com

-Aarthi Swaminathan


(END) Dow Jones Newswire

11-12-22 0847ET

Copyright (c) 2022 Dow Jones & Company, Inc.

Silvergate Provides Statement on Digital Asset Market Volatility https://lost-worlds.com/silvergate-provides-statement-on-digital-asset-market-volatility/ Wed, 09 Nov 2022 18:51:00 +0000 https://lost-worlds.com/silvergate-provides-statement-on-digital-asset-market-volatility/

LA JOLLA, Calif.–(BUSINESS WIRE)–Silvergate Capital Corporation (the “Company” or “Silvergate”) (NYSE:SI), the leading provider of innovative financial infrastructure solutions for the digital asset industry, today released the following statements regarding the recent volatility in the digital asset market.

As a prudently regulated bank, we manage our balance sheet to provide liquidity to our customers while maintaining a strong capital position in excess of the capitalization status required by federal banking regulations,” said Alan Lane, Managing Director of Silvergate. . “We are a key infrastructure provider with an established track record, giving our customers the confidence they need in times like these. »

Mr Lane added: “In addition to our available-for-sale portfolio of $8.3 billion as of September 30, 2022, as a federally regulated banking institution, we have the ability to borrow from the Federal Home Loan Bank and the Federal Reserve Bank, further strengthening our liquidity position.”

Silvergate’s flagship product, the Silvergate Exchange Network (“SEN”), continues to offer customers the ability to transfer US dollars 24/7.”When our clients want to take advantage of trading opportunities on the more than 100 different exchanges that do business with Silvergate, the SEN facilitates those funds flows in near real-time, 24/7,” said Ben Reynolds, President of Silvergate. .

Silvergate also offers selected and subscribed customers access to Bitcoin-backed loans known as SEN Leverage. To date, these loans have continued to operate as intended with zero losses and zero forced liquidations.

About Silvergate

Silvergate Capital Corporation (NYSE:SI) is the leading provider of innovative financial infrastructure solutions and services for the growing digital asset industry. The company’s real-time payments platform, known as the Silvergate Exchange Network, is at the heart of its suite of customer-centric payment, lending and financing solutions, serving a growing class from digital asset companies and investors around the world. Silvergate is enabling the rapid growth of digital asset markets and reshaping global commerce for a digital asset future.

VIXM ETF: a less volatile way to profit from volatility https://lost-worlds.com/vixm-etf-a-less-volatile-way-to-profit-from-volatility/ Wed, 02 Nov 2022 21:09:34 +0000 https://lost-worlds.com/vixm-etf-a-less-volatile-way-to-profit-from-volatility/

Andrei Popov/iStock via Getty Images

By Rob Isbitts


ProShares VIX Mid-Term Futures Contracts (BATS: VIXM) earns a buy rating from us, primarily due to its ability to play a role in portfolio hedging in bear markets. VIXM tries to take advantage of rising volatility in the S&P 500. This often means that it benefits from declines in the S&P 500, but that is not the case 100% of the time. So, any investor considering using this ETF or other volatility-based ETFs should do their homework. So, let’s try to start the process here.


The S&P 500 VIX Index (VIX) is the stock market’s primary benchmark for “volatility” – specifically, how much the market is expected to rise and fall over the next 30 days. Unlike some other VIX-based ETFs which seek to capitalize only on very short-term spikes in volatility, VIXM typically looks to the next 5 months, which provides a smoothing effect on the VIX investment concept.

Exclusive ETF Ratings

  • Attack/Defense: Defense

  • Segment: Hedged Stocks

  • Sub-segment: Volatility

  • Correlation (vs. S&P 500): High (negative)

  • Expected volatility (vs. S&P 500): very high

Maintenance analysis

VIXM holds futures contracts that expire in each of the next four or five months. For example, at the time of this writing (early November 2022), the ETF had four different maturities: February, March, April and May. Thus, the ETF calls the futures contracts “medium term”. The March and April contracts each account for around a third of total assets, with the remainder split between the shorter (February) and longer (May) contracts.


When the stock market panics, volatility increases. When this happens, VIXM aims to be one of the few green elements on an otherwise red screen. And, while short-term VIX-based ETFs act more as trading vehicles or substitutes for holding options on the S&P 500, VIXM’s multi-month “ladder” approach offers some of the action. , but without the immediate sharp decline whenever the S&P 500 price spikes higher and the VIX spikes lower. VIXM’s ETF wrapper also provides a transparent and convenient way to access VIX futures, which many investors will likely find too cumbersome to spend a lot of time and effort on.


VIXM’s average daily dollar trading volume of around $3 million is rather low. However, as the chart below shows, when the market becomes volatile, volume can spike, making this ETF more liquid. The downside is that VIXM can become popular quickly and then see that popularity fade just as quickly.

Data by YCharts

Another potential weakness here is that in a sudden market decline like what we saw in early 2020, VIXM’s laddered futures approach may not become a big winner as quickly and with as much force as a shorter-term “long VIX” ETF.


The obvious opportunity with VIXM is the fact that the stock market is currently in a mess. And, as we don’t see any signs that the situation will materially improve any time soon (new all-time highs are over 20% higher from here), there should be enough room left in the bear market to deploy ETFs. VIX for those who identify with and understand their pros and cons.

But there is a more interesting opportunity that may be more timely when it comes to VIXM. Specifically, since it seeks to respond to increasing volatility over the medium term and there are other VIX ETFs that hedge the short term, there may be situations where these can be paired in a portfolio to get the full “volatility ladder” effect.


And, just as quickly, it makes sense to talk about the threats associated with using VIXM or any other VIX-related ETF. Contrary to what it seems, many investors now believe it’s best not to use the stock market as a casino. VIX is a fickle beast, and ETFs looking to profit from rising market volatility, falling volatility, or both should be handled with “kid gloves” at all times. These vehicles are best used as side dishes in your wallet, not as a main dish. Because the biggest threat from using VIXM and its peers is not the ETF itself, but trader error: investors who attempt to overplay their hand and use them as purely speculative tools.

Exclusive technical evaluations

  • Short term rating (next 3 months): Buy

  • Long-term rating (next 12 months): Sell


ETF Quality Opinion

As someone who has been investing professionally for three decades, but has never traded futures or shorted stocks, bear market ETFs like VIXM have been a great tool at my disposal over the years. . The question of liquidity could be a thorn in the side of professional investors. However, with any ETF, there are risks to consider when determining if, when and how to use one in a portfolio.

ETF Investment Notice

We rate VIXM as a buy for the reasons stated above. However, our exclusive VIXM technical ratings, featured above, are perhaps a better way to sum up our opinion of this quirky, overlooked, but potentially powerful ETF. Bear markets generally don’t end until volatility has reached a level well above what we have seen in this cycle. This graphic shows the 2020 version.

Data by YCharts

For this reason alone, VIXM is on our radar as long as a bear market is in place. But the VIX doesn’t stay high forever, and we suspect that at some point in the next 12 months the storm will have passed, at least for a while. This makes VIXM a more opportunistic tool than something we would expect to beat the table on year after year.

Macroeconomic Forecast for 2023: Exchange Rate Volatility Remains Elevated, Global Economy on the Verge of Recession https://lost-worlds.com/macroeconomic-forecast-for-2023-exchange-rate-volatility-remains-elevated-global-economy-on-the-verge-of-recession/ Mon, 31 Oct 2022 10:31:45 +0000 https://lost-worlds.com/macroeconomic-forecast-for-2023-exchange-rate-volatility-remains-elevated-global-economy-on-the-verge-of-recession/

In the study assessing the foreign exchange market for 2023, iBanFirst provides a macroeconomic overview for the coming year and the potential impact that the evolution of the main currencies could have on Romanian companies that process international payments and should adopt a exchange risk hedging policy .

iBanFirst experts say that we are in an unprecedented situation, rarely has a recession been predicted so far in advance. Several economies are on the verge of collapse: the euro zone, the United Kingdom and countries where the housing bubble has inflated considerably in recent years, such as Canada and Australia. On the other hand, the United States could avoid a recession if the real estate sector, which represents 5% of American economic growth, does not weaken in the period to come. The momentary drop in prices reflects a market adjustment, but not a market collapse.

China will not be a growth engine next year. According to iBanFirst’s forecast, China’s growth rate is expected to slow significantly in 2023 to around 3%. The Chinese government’s objective is to adjust the economy, currently penalized by the zero-Covid strategy and the heaviness of the restructuring of the real estate market which began in September 2021. Investors anticipate a total loss of 130 billion dollars generated by the Chinese promoters. ‘ default.

A strong dollar in a volatile currency market

For the currency market, the prospect of a recession means a return to volatile conditions as well as a depreciation of the US dollar. According to iBanFirst experts, the US dollar is overvalued against most currencies. For example, it is about 28% overvalued against the euro when measured at the real exchange rate.

Although some analysts raise the possibility of a new coordinated intervention on the foreign exchange market by the major developed countries, as was the case with the Plaza Accord in 1985, this remains hypothetical in the short term. We are still far from the overvalued levels of that time, so we are more likely to see individual central bank interventions to limit the depreciation of their national currencies.

According to iBanFirst forecasts, the euro dollar the exchange rate will tend to rise in 2023, rising from a low of $0.90/euro in the first quarter to $1.05/euro in 6 months and reaching a peak of $1.08/euro from here the end of the year.

“Over the coming year, international businesses will continue to operate in a highly volatile business environment and are exposed to currency risks. In order to maintain their competitiveness on foreign markets, they must anticipate market fluctuations, develop medium and long-term forecast scenarios and consider implementing a hedging strategy. Our team of forex specialists come to import-export businesses with the necessary know-how and customized hedging tools to help them overcome the challenges they may face in executing cross-border transactions,” says Alin Latu, Country Manager iBanFirst Romania.

Evolution of the leu against the euro

Forecasts for the coming year regarding the development of the leu are slightly pessimistic. The exchange rate for 2023 will be influenced by several major factors, the main factor being the level of inflation. As we see a reduction in inflation, the leu will weaken against the European currency. We consider the recent appreciation of the leu as transitory, directly influenced by the inflows of foreign investors in government securities denominated in lei, but also by the strict liquidity management practiced by the National Bank of Romaniaadded Alin Latu.

iBanFirst expects the national currency to depreciate against the euro over the next year. Thus, the expected average exchange rate for the 6-month horizon is 4.95 – 4.98 lei for one euro, while for the 12-month horizon it is 5.03 – 5.05 lei for one euro.

Oil Price Volatility Creates Uncertainty for Texas Jobs https://lost-worlds.com/oil-price-volatility-creates-uncertainty-for-texas-jobs/ Fri, 28 Oct 2022 22:51:17 +0000 https://lost-worlds.com/oil-price-volatility-creates-uncertainty-for-texas-jobs/

AUSTIN (KXAN) — President Joe Biden announced last week that 15 million barrels would be released from the Strategic Petroleum Reserve in December. Since then, gas prices have fallen slightly in Texas and across the country.

But the continued uncertainty fueled by the war in Ukraine and the risk of recession makes it difficult to predict the next price direction.

Todd Staples, president of the Texas Oil & Gas Association, sat down with KXAN to share his thoughts on what gas prices and jobs could look like for Texans in the near future.

“We really need to protect consumers, we really, really need a home energy plan and unleashing American energy leadership,” Staples said.

The American Petroleum Institute reported that there are approximately 4.5 million barrels of oil accumulated, which is why Texans are currently seeing a reduction in oil prices.

“I think we’re always going to have volatility, until we figure out if we want to be energy independent, we want to be energy secure, and we want to encourage jobs, growth and production right here. to America,” Staples said.

The current oil climate has affected the energy sector and jobs in Texas.

“It creates uncertainty and you have investment pressures, you have supply chain issues and labor issues which all impact the ability to produce more. And so we really need to have some certainty here. And I think when you have that, you’ll see American companies developing a long-term investment plan. said Staples.

The federal Energy Information Administration is monitoring the near-term outlook for the price of West Texas Intermediate crude. And at the moment it is difficult to predict this value.

The Administration’s forecast for January predicts that a barrel could sell for as low as $52 – or as high as $132. The ongoing war in Ukraine could push prices higher, while the risk of a global recession could drive prices down.

Despite market volatility, Puma has a positive third quarter – WWD https://lost-worlds.com/despite-market-volatility-puma-has-a-positive-third-quarter-wwd/ Wed, 26 Oct 2022 07:52:30 +0000 https://lost-worlds.com/despite-market-volatility-puma-has-a-positive-third-quarter-wwd/

BERLIN- Competitors like Nike and Adidas have announced problems in recent weeks, but German sportswear brand Puma continued to break its own records in the third quarter.

During the July-September period, Puma’s sales increased by 16.9%, excluding currency, to reach 2.35 billion euros. It is only the second time that Puma, the world’s third-largest sportswear company, has crossed the 2 billion euro mark in a quarter. The first time was this summer.

“Despite all the global uncertainties, the third quarter was… the best quarter in Puma’s history,” chief executive Bjorn Gulden said in a statement. “Improved product availability [was] thanks to a more stable supply chain, better than expected sales and the continued momentum of the global Puma brand,” he explained.

The company’s results were also better than market analysts had predicted.

Puma’s home market of Europe continued to be the German brand’s best territory, and sales there increased 18.5%, excluding currency, in the third quarter to 971.7. millions of euros.

North America has been a top priority for Puma over the past few years, with the brand completing its first full basketball season in 2019, with the help of music mogul Jay Z, the brand’s creative director. for the dedicated Puma Hoops line. The strategy continued to pay off this quarter. In the Americas, Puma sales increased by 18.8%, excluding currency, to reach 931.8 million euros. During this year, Puma’s sales in the Americas increased by 28.1% to reach 2.69 billion euros.

Unlike its competitor Adidas, Puma is not as exposed to the Chinese market. Previously, about a fifth of its sales came from the Asia-Pacific region. Ongoing COVID-19 shutdowns and a Chinese consumer boycott of Western goods have caused various problems for Adidas, and Germany’s biggest brand issued a profit warning late last week. Meanwhile, Puma’s sales in the Asia-Pacific region actually improved for the first time this year, rising 9.8%, excluding currency, in the third quarter to 450.9 million euros. . During the year, however, sales in this territory remained negative.

“While COVID-19-related lockdown measures have always impacted business in Greater China, other key markets in Asia-Pacific saw strong growth,” the company explained in the earnings release. positive in the third quarter.

Puma’s total year-to-date sales were €6.27 billion, reflecting growth of 18.2%.

The only negatives from the brand’s announcement were cost and the fact that Puma’s sales growth rate had slowed slightly during the year. During the first quarters of 2022, Puma had recorded an average growth of around 19%.

On top of that, the company also said it is facing higher inventory which will likely need to be refreshed later. Puma’s operating expenses also rose by 25.8% and cost the company 853.2 million euros between July and September. Puma explained that this was due to higher sales, marketing and distribution costs.

On the positive side of the ledger, the brand’s earnings before interest and taxes improved by 12.6% to 257.7 million euros.

Based on the confident third quarter results, the company reconfirmed its guidance for the year. Puma expects sales to improve in the mid-teens of 2022 and EBIT to be between 600 and 700 million euros.

“While the first nine months of the year have been strong for Puma, we continue to navigate a highly uncertain geopolitical, macroeconomic and competitive environment,” the brand’s statement said, adding that the war in Ukraine, inflation and energy prices were “leading”. uncertain consumer behavior and demand volatility.

Bitcoin volatility in the $18,000-$20,000 range is rising https://lost-worlds.com/bitcoin-volatility-in-the-18000-20000-range-is-rising/ Sat, 22 Oct 2022 20:33:04 +0000 https://lost-worlds.com/bitcoin-volatility-in-the-18000-20000-range-is-rising/
  • Altcoin Sherpa, bearish on three altcoins, also warns of a possible BTC price crash.
  • Bank of America analysts say BTC’s moves against other assets show it could once again become a safe haven.

Altcoin Sherpa, a well-known anonymous crypto analyst, has revealed that he is bearish on three altcoins – Fantom (FTM), Injective Protocol (INJ) and Near protocol (NEAR). He tweeted that the smart contract enabled ghost blockchain (FTM) governance token is NEAR crashing.

Sherpa also has a similar view on the native token of the decentralized derivative exchange, Injective Protocol (INJ). However, he added that he was about to exit his trading position in INJ due to a huge selling trend.

Regarding NEAR (the native token of the decentralized application platform, the Near protocol), Sherpa explained why he was bearish on this. However, he said that NEAR’s weak price resistance at this time could cause it to fall. Altcoin Sherpa also shares his Bitcoin price prediction.

Sherpa predicts a drop in the price of BTC as it has been trading in the $19,000 range for the past four months. He further explained that Bitcoin is likely to test three lower price levels based on previous trends.

Sherpa is famous for its near-accurate predictions of the price movement of most altcoins, including DOGE and Ethereum. So it’s no surprise that his 185,000 Twitter followers are always eager to hear from him.

Bitcoin changes correlations, safe haven again?

Meanwhile, analysts at Bank of America believe Bitcoin’s moves against other digital assets indicate that investors may start to see it as a safe haven again. Their claims follow the period when Bitcoin was traded as a risky asset.

The leading digital asset had a 40-day correlation to the NASDAQ 100 of around 0.72, down from zero in mid-August. It also had a correlation of 0.50 and 0.69 with the S&P 500 and gold, respectively.

These have flattened out and are even below the record levels seen a few months ago. Andrew Moss and Alkesh Shah (Bank of America analysts) see this bitcoin movement as an indication of where the correlation is going.

The analysts wrote, “Gold’s steady rise in correlation and a decline in positive correlation with the S&P 500 suggests investors are reconsidering Bitcoin as a safe haven.” This outlook is important given macro-economic uncertainties and a market bottom yet to be seen.

With the stimulus due to the COVID-19 pandemic flooding global economies, Bitcoin has traded alongside risky assets for the past two years. This parallel trend continued despite raising rates from global central banks such as the US Federal Reserve to curb rising inflation.

Bank of America’s rating is similar to recent information shared by Galaxy Digital CEO Mike Novogratz. During an interview on Thursday, Novogratz said Bitcoin and Gold can be compared to the “canary in a coal mine.” Therefore, he expects the price of BTC to surge ahead of altcoins.