WEEK 39 23RD SEPT 2019: WEEKLY ROUND UP, GOLD, FED RATE CUT, BOND YIELD

Disclaimer: All information shared is solely for learning purpose and it does not constitute to a buy/sell call.

 

Everything happens for a reason. This is a saying that has been familiar to many of us during different points in our lives. Every choice we make, every outcome that happens from these choices, every person who comes into our lives, and every person who leaves — all of these elements have a reason. They make us who we are today. Do comment if you can relate to the same in your own lives 🙂

It is not by chance that you are reading this post, you would have been connected through trading/investing FB group, your friends, added by someone whom cared for you etc. I believe that this is a sign from the universe for us to be connected to help each other to grow and get better along the way.

For instances, just by sharing on the views on Gold last week, I have received feedback of a different perspective within the group which in turn helped me to review my own strategy. That gives me a good reason to be motivated to write an article each week.

Would like to take this opportunity thank my accountability partner for ensuring that I complete this week’s article no matter what.

Note: This post is delayed as I am currently travelling. Grateful to be able to get to 1 of the Seven wonders of the world and managed to see all the Big 5 in the Safari tour!

 

Quick round up of what happened last week:

  1. Following with the attack on Saudi’s Oil production facilities, Oil have been extremely volatile (moving up/down > 5% in a day). This further strengthened our strong believe and the advocacy of having a Guaranteed stop loss. In trading account, I would not be able to bear to see a large 12% unprotected downside risk. The risk to reward just don’t make any sense.
  2. Fed reduced interest rate by 25 basis points as expected by market consensus. This signifies further pressures in the global economy.
    Powell mentioned that economy grew by 2.5% locally, however, US exports have been down and future investments have been clouded by uncertainty.
    Key factors affecting Fed rate: US Unemployment rate, US & Global Economic outlook, US Inflation of 2%.
  3. Gold did a wigsaw post Fed’s announcement (refer to gold analysis below)
  4. Trade war flip flop returned – there seem to be a cycle on trade war with one common objective that we noticed – that is to have Fed reducing interest rates

 

Updates on Gold:

  1. Further to Fed’s rate cut, Gold did a wigsaw to do a deep back test before picking off to resume uptrend.
  2. We have noted that the backtest is still holding the support of 1,480 very well.
  3. It may not sound logical why Gold falls when Fed cut the interest rate. We have however noticed many occurrence where market will do a fake deep backtesting to clear off the weaker players before heading towards the real direction.
  4. It is currently on its way to go back to 1,550 and break new highs.
  5. It would be ideal to trade Gold this week due to the resumption of trend lines.

 

 

Updates on Bond Yield:

  1. After Fed’s decision to reduce interest by 25 basis points, we can see that Bond Yield is now back on a downward trend

 

 

Should you have any queries on the above posting, do feel free to post in the Telegram group as well. Please feel free to share to those whom you think may benefit as well.

 

Stay safe, stay alert and NEVER over trade in any circumstances. Lets learn and enjoy the journey together!

 

Regards,

Ernest Koh

InvestWhizz Founder