USA100 (USA100) weekly downtrend opportunity based On 1.00 Lot Calculation:
- DESCRIPTION: The USA100 is a capitalization weighted index of 100 of the largest non-financial firms listed on the NASDAQ. The index is filled with many growth companies that are highly sensitive to rising interest rates.
- INFLATION is at its highest reported level in 40 years. June’s CPI printed at 9.1%, Year-over-Year, and the July CPI report, scheduled for August 10th is forecast to be 8.8%. The U.S. Federal Reserve’s target inflation rate is 2%.
- RECESSION: The United States officially entered a recession when the 2nd Quarter GDP came in at -0.9% after the 1st Quarter GDP declined 1.6%. Several different U.S. Treasury yield curves have inverted.
- FORTRADE ANALYSIS: The U.S. central bank is still in the early stage of an interest rate hiking cycle which will have a negative impact on the USA100, which is made up of interest rate sensitive growth and technology stocks.
- COMMENTS BY FEDERAL RESERVE OFFICIALS: On July 31st, Minneapolis Fed President Neel Kashkari said, “We are committed to bringing inflation down and we’re going to do what we need to do. We are a long way away from achieving an economy that is back at 2% inflation, and that’s where we need to get to.” On August 2nd, San Francisco Fed President Mary Daly said, “The Federal Reserve still has a lot of work to do before it gets inflation under control,” and added rate hikes are “Nowhere near almost done.” St. Louis Fed President James Bullard commented on August 2nd, “I think that inflation has come in hotter than what I would have expected during the second quarter,” and “Now that that has happened, I think we’re going to have to go a little bit higher than what I said before.”
- WALL ST. ANALYSIS: Zoltan Pozsar, Managing Director of Credit Suisse, recently warned that inflation is now a structural problem. He believes the U.S. central bank may raise rates to 5% to 6% and hold them there to achieve a reduction in aggregate demand. Nomura’s Charlie McElligott sees the Fed Funds rate sitting higher for longer than the market is currently anticipating. He does not share the market's view that the Fed will ease in 2023. According to the Barclays Equity Strategy Team, "The emerging Goldilocks narrative for equities is that bad data and peak inflation will prompt more dovish CBs. We are skeptical and would fade the rally, cognizant that bearish sentiment/positioning can extend the short squeeze."
- TECHNICAL ANALYSIS: The daily Relative Strength Indicator (RSI), the Stochastic Indicator, and the Moving Average Convergence Divergence Indicator (MACD) of the USA100 all show the index is overbought and may be poised for sell-off.
(USA100), August 4, 2022
Current Price: 13,300.00
|
USA100 |
Weekly |
|
Trend direction |
|
|
15,400.00 |
|
|
14,700.00 |
|
|
14,000.00 |
|
|
12,500.00 |
|
|
11,750.00 |
|
|
11,000.00 |
Example of calculation based on weekly trend direction for 1.00 Lot1
|
USA100 |
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|
Pivot Points |
||||||
|
Profit or loss in $ |
-21,000.00 |
-14,000.00 |
-7,000.00 |
8,000.00 |
15,500.00 |
23,000.00 |
|
Profit or loss in €2 |
-20,638.82 |
-13,759.21 |
-6,879.61 |
7,862.41 |
15,233.42 |
22,604.42 |
|
Profit or loss in £2 |
-17,259.38 |
-11,506.25 |
-5,753.13 |
6,575.00 |
12,739.06 |
18,903.13 |
|
Profit or loss in C$2 |
-26,977.86 |
-17,985.24 |
-8,992.62 |
10,277.28 |
19,912.23 |
29,547.18 |
- 1.00 lot is equivalent of 10 units
- Calculations for exchange rate used as of 08:55 (GMT+1) 04/08/2022
Fortrade recommends the use of Stop-Loss and Take-Profit, please speak to your Client Manager regarding their use.
- You may wish to consider closing your position in profit, even if it is lower than suggested one.
- Trailing stop technique can protect the profit – Ask your Client Manager for more detail.