Traders Market Weekly: Geopolitical Chess

February 28, 2025

FEAR NOT Brave Investors

Where have we been and where are we going? Join our weekly market thread on Traders Community…

Market Dynamics and Instability

The Week That Was – What Lies Ahead?

Fear and Greed Feed Volatility

Contents

Click on the links below to navigate to the relevant section.

• Part A: Stock markets
• Part B: Bonds
• Fed and Banks
• Part C: Commodities
• Energy – Oil and Gas
• Gold and Silver
• Part D: Foreign Exchange
• Geopolitics and Economics
• Economy Week ahead

Editorial

This week brought a more intense extension of the previous where we asked “markets by week’s end were asking the question when is too much chaos enough, at what point do we stop embracing it? Tariffs, budgets, DOGE, elections, Russia, Ukraine, Gaza, Israel, what has Trump said now? Then we have central bankers’ earnings and economic data to digest. So much chaos through it all.” We finished with the now infamous shouting match in the oval office President Zelenskyy, President Trump and V.P. J.D. Vance. We would suggest watching the whole 45 minutes not just the four minutes ranting at the end of it. The heated meeting led Mr. Trump to tell Mr. Zelenskyy he is “gambling with World War III.”

For our Geopolitical desk it was very telling of what has gone on when you look at it objectively and more pointedly the reaction from Europe and the political aligned and mainstream media. A little tip when people start off with, they aren’t aligned they usually are if they need to tell you in situations like this. The obvious is this should have been behind doors, however people want full disclosure, so this is what you get. Granted the Americans should have taken the high road and turned the cheek, that said it’s pretty clear the US had believed that a deal had been done, and Zelenskyy appeared to be renegotiating live, knowing what reaction he would get and how the media would react. This factor needs to be recognized.

Ukraine has been devastated, suffering the loss of hundreds of thousands of its citizens, total destruction of cities and villages, unspeakable war crimes of this there is no question. Why is any effort by Trump to try and find peace seemingly intentionally road blocked and labeled as pro Putin? History shows Putin is willing to throw bodies into the ‘meat grinder” does that mean the world tries nothing, it appears that’s what the non-Trump side wants, sadly.

One starts to believe the various conspiracy theories out there have merit when you look at this event, the coverage and reaction objectively. It is worth watching the interview U.S. Secretary of State Marco Rubio did after the event. The mineral deal with U.S. involved gives the Ukraine security that needs without screaming troops on the ground to Putin. To the GP desk here it comes across that Europe intentionally wants this to be NOT acknowledged and Zelenskyy must know that, or he wouldn’t have agreed after a week of meetings, makes you wonder.

One thing Trump has wanted back in Trump 1.0 was the Europeans to pay a fairer share in NATO, after this the grandstanding by Europe et al have no choice. Be careful what you wish for. Trump is clearly pushing for peace, it appears that’s not what many don’t want, and the loss of lives don’t matter.

Geopolitical Chaos Ramps Up (From Last week, was Trump set up to Fail?)

• “I think I have the power to end this war, and I think it’s going very well. But today I heard, ‘Oh, well, we weren’t invited.’ Well, you’ve been there for three years. You should have never started it. You could have made a deal.” President Trump, February 18, 2025
• “We’ve seen this disinformation, we understand it comes from Russia. Unfortunately, President Trump — and we have great respect for him as a leader of people we also respect very much — he lives in this disinformation space.” Ukraine President Volodymyr Zelenskyy, February 19, 2025
• “Think of it, a modestly successful comedian, Volodymyr Zelenskyy, talked the United States of America into spending $350 Billion Dollars, to go into a War that couldn’t be won, that never had to start, but a War that he, without the U.S. and ‘TRUMP,’ will never be able to settle. The United States has spent $200 Billion Dollars more than Europe, and Europe’s money is guaranteed, while the United States will get nothing back. Why didn’t Sleepy Joe Biden demand Equalization, in that this War is far more important to Europe than it is to us — We have a big, beautiful Ocean as separation. On top of this, Zelenskyy admits that half of the money we sent him is ‘MISSING.’ He refuses to have Elections, is very low in Ukrainian Polls, and the only thing he was good at was playing Biden ‘like a fiddle.’ A Dictator without Elections, Zelenskyy better move fast or he is not going to have a Country left. In the meantime, we are successfully negotiating an end to the War with Russia, something all admit only ‘TRUMP,’ and the Trump Administration, can do. Biden never tried, Europe has failed to bring Peace, and Zelenskyy probably wants to keep the ‘gravy train’ going. I love Ukraine, but Zelenskyy has done a terrible job, his Country is shattered, and MILLIONS have unnecessarily died – And so it continues…” President Trump, Truth Social, February 19, 2025.
• “The idea that Zelenskyy is going to change the president’s mind by badmouthing him in public media… everyone who knows the President will tell you that is an atrocious way to deal with this administration.” Vice President Vance, February 19, 2025

Our geopolitical desk in analyzing these in context of ending the war, aware of Putin’s emperor lust and of the need to access rare earths with China’s dominance sees these Trump & Vance comments as chess moves ala chaos theory.

If Ukraine agrees to the rare earth deal, it helps justify the cost, helps take some China retaliation risk off but the big one it makes Ukraine less vulnerable to Putin’s stated aim of taking all of Ukraine. Why? Much of the critical minerals are in the Eastern regions of Ukraine (Donbas) captured by Russia. This makes it more palatable to the U.S to support and protect and Trump has got the response he wanted from the EU, increase your share of the military cost of NATO. Now we will see if these assumptions are correct over the coming weeks.

Back to the markets.

Quick Look at The Week Gone By:

• Dow Jones Industrial Average: +3.1% YTD
• S&P 500: +1.2% YTD
• S&P Midcap 400: -0.8% YTD
• Nasdaq Composite: -2.4%
• Russell 2000: -3.0% YTD
• Crude oil fell back below $70/bbl, widening its February loss to $2.75, or 3.8%,
• U.S. Dollar Index climbed 0.4% to 107.62, extending this week’s gain to 0.9%. The Index lost 0.8% in February.
• Gold futures settled $2,848.50/oz, this week it lost -3.5%.
• The 2s10s slope was unchanged this week, but compressed by ten basis points in February as the 10-yr note outperformed. The 10-yr yield dropped to 4.23%, which was 19 basis points lower this week. The 2-yr yield dropped to 4.00%, which was 19 basis points lower for the week.
• 2-yr: -8 bps to 4.00% (-19 bps this week; -24 bps in February)
• 3-yr: -8 bps to 3.98% (-22 bps this week; -30 bps in February)
• 5-yr: -8 bps to 4.03% (-23 bps this week; -33 bps in February)
• 10-yr: -5 bps to 4.23% (-19 bps this week; -34 bps in February)
• 30-yr: -4 bps to 4.52% (-15 bps this week; -29 bps in February)

This week’s key economic reports were mainly soft:

• Conference Board’s Consumer Confidence Index dropped to 98.3 in February (consensus 103.1) from an upwardly revised 105.3 (from 104.1) in January. This was the largest monthly decline since August 2021. The drop in confidence was seen across all age groups with worries about tariffs, inflation, and future employment prospects driving the decline.
• December FHFA Housing Price Index (actual 0.4%; prior revised to 0.4% from 0.3%) December S&P Case-Shiller Home Price Index (actual 4.5%; consensus 4.4%; prior 4.3%)
• New home sales decreased 10.5% month-over-month in January to a seasonally adjusted annual rate of 657,000 units (consensus 681,000) from an upwardly revised 734,000 (from 698,000) in December. On a year-over-year basis, new home sales were down 1.1%.
• MBA Mortgage Applications Index -1.2% week-over-week (prior -6.6%) with refinance applications down 4% and purchase applications flat
• Initial jobless claims for the week ending February 22 increased by 22,000 to 242,000 (consensus 220,000). Continuing jobless claims for the week ending February 15 were 1867K (prior revised to 1867K from 1869K)
• The second estimate for Q4 GDP was 2.3% (consensus 2.3%; prior 2.3%) while the second estimate for the Q4 GDP Deflator was 2.4% (consensus 2.2%; prior 2.2%). The growth was driven largely by consumer spending and government spending, but with targeted efforts by the Trump administration to cut government spending and to implement tariffs, there will be concerns about GDP growth decelerating in coming quarters due to less of a contribution from consumer spending and government spending.
• January Durable Goods Orders were up 3.1% (consensus 1.8%; prior revised to -1.8% from -2.2%). Excluding transportation, durable goods orders were flat (consensus 0.4%; prior revised to 0.1% from 0.3%). Nondefense capital goods orders, excluding aircraft — a proxy for business spending — logged a healthy 0.8% increase in January, offsetting the headline disappointment of an unchanged reading for durable goods orders, excluding transportation.
• January Pending Home Sales declined 4.6% (consensus -0.8%) following an upwardly revised 4.1% decline (from -5.5%) in December.
• January Adv. Intl. Trade in Goods -$153.3 bln; Prior was revised to -$122.0 bln from -$122.1 bln. Likely a byproduct of the tariff push as importers worked to get ahead of the tariffs, yet it will likely stoke President Trump’s push to get going with the tariff implementation.
• January Personal Income 0.9% (consensus 0.3%); Prior 0.4%, January Personal Spending -0.2% (consensus 0.2%); Prior was revised to 0.8% from 0.7%, January PCE Prices 0.3% (consensus 0.3%); Prior 0.3%, January PCE Prices – Core 0.3% (consensus of 0.3%; Prior 0.2%. There was welcome disinflation on a year-over-year basis, yet there was a noticeable 0.5% month-over-month decline in real personal spending, which is going to be a big drag on Q1 GDP forecasts. Net-net, not a great report for the growth outlook considering, too, that the personal savings rate jumped to 4.6% from 3.5%.
• February Chicago PMI 45.5 (consensus 41.2); Prior 39.5

*** Economic summaries via Briefing

Week Ahead Catalysts

• In the week ahead US reciprocal tariffs, Russia and Ukraine talks, and US budget negotiation will dominate developments.
• US President Trump’s SOTU speech Tuesday evening
• US tariffs (Tuesday): Tuesday brings the US deadline for imposing 25% tariffs on Canada and Mexico and an extra 10% on China.
• ECB (Thursday): A 25bps cut is priced and widely anticipated. The next meeting in April is also mostly priced. Guidance to date has emphasized preference for returning toward a neutral rate which implies a handful of cuts this year.
• US nonfarm payrolls (Friday): I went with 140k for my nonfarm payrolls estimate with an up-tick to 4.1% in the unemployment rate. Bloomberg consensus is at 160k. Seasonal adjustments for February tend to downplay seasonally adjusted payrolls for months of February in the post-pandemic era. Weather is likely to be an ongoing disruption. There may be an early glimpse of job losses in Washington, although the bulk of that lies ahead. This week’s other labor market indicators will further inform expectations.
• Fed’s Powell (Friday): Powell speaks about the economic outlook on Friday (12:30pmET) after payrolls and just before the FOMC goes into communications blackout the next day ahead of the March 18th–19th meeting. What he says is likely to reinforce the patient narrative, offer an interpretation of the very recent softening in macroeconomic data in terms of his views on momentum versus distortions, and with the broad tone perhaps being highly influenced by whether tariffs proceed this week and by nonfarm.

Tariff Tampering

In the background we have the French, British and German political quagmires, the collapse of the Assad government in Syria and the aftermath of the failed South Korea 2-hour military takeover.

Debt …. Keeps Building

An overheating economy, coupled with tariff and trade war risks, creates a bond market challenge.

A Reminder: U.S. and global yields surged higher as the Fed began its easing cycle:

• Ten-year Treasury yields, closing September 17th at 3.65%, ended the year 92 bps higher at 4.57%.
• EM bonds were taken behind the woodshed. For the quarter, spikes in dollar-denominated yields included Panama 177 bps, Brazil 137 bps, Mexico 99 bps, Peru 87 bps, Chile 85 bps, Indonesia 83 bps, Philippines 75 bps, Saudi Arabia 71 bps, and Turkey 58 bps.
• The spike in local currency bond yields was even more dramatic: Brazil 272 bps, Colombia 177 bps, Mexico 109 bps, Turkey 87 bps, Chile 85 bps, Romania 78 bps, Poland 64 bps, Indonesia 54 bps, and the Czech Republic 42 bps.

Was DeepSeek the beginning of the end of the AI Speculative Bubble?

Let’s Not Forget: 2024 Punter Facts to Be Aware of:

At this point logic tells us the bubbles burst, or inflation accelerates late in the cycle. Logic doesn’t apply in manias, however.

• “Investors plowed more than $1 trillion into U.S.-based exchange-traded funds in 2024, shattering the previous record set three years ago
• The rebound from last year’s lackluster flows marked a broad embrace of U.S. assets in a year in which the S&P 500 gained around 25%
• Total assets in U.S.-based ETFs reached a record $10.6 trillion at the end of November, according to… ETFGI data, an increase of more than 30% from the start of 2024.
• Invesco’s QQQ, which tracks the tech-heavy Nasdaq-100 Index attracting more than $27 billions of fresh cash through mid-December. It was an eye-popping figure after QQQ brought in $7.3 billion in 2023” – Wall Street Journal (Jack Pitcher)
• SIFMA data showed total 2024 U.S. corporate (“investment grade/high yield, nonconvertible/convertible, callable/noncallable and fixed rate/floating rate”) issuance surged 30.2% to $1.957 TN.
• “BofA Securities was the top arranger of US leveraged loans in 2024 as the value of deals rose 122%. Companies borrowed $2.22 trillion of loans vs. $1 trillion in 2023.” – Bloomberg
• “The muni market saw $507.585 billion of debt issued in 2024, up 31.8% from $385.061 in 2023. This surpasses the previous record of $484.601 billion in 2020…” – Bond Buyer
• MMFA expanded $873 billion, or 14.6%, in 2024. MMFA ballooned at a blistering 27% pace during the final 22 weeks of the year, a period when the Fed aggressively loosened policy. MMFA expanded an incredible $2.289 TN, or 50%, since the Fed began “tightening” in March 2022 – and $3.214 TN, or 88%, since the start of the pandemic (February 2020).
• Non-Financial Debt (NFD – from the Fed’s Z.1) expanded at a seasonally adjusted and annualized (SAAR) $3.342 TN in Q1, $3.471 TN in Q2, and $3.642 TN during Q3. For perspective, NFD expanded $2.534 TN in 2007 – an annual record that held all the way to pandemic 2020’s historic $6.797 TN.
• As of September 30th, Treasuries had inflated $1.965 TN, or 7.6%, over the previous year; $3.970 TN, or 16.8%, over two years; and $10.957 TN, or 66%, over 19 quarters.
• Total (Debt and Equities) Securities inflated $24.447 TN, or 19.0%, over the previous year, and $58.714 TN, or 62%, over 20 quarters – to a record $153.181 TN.
• Total Securities ended Q3 at 522% of GDP, dwarfing cycle peaks 375% (Q3 2007) and 357% (Q1 2000).
• Household Net Worth (Assets less Liabilities) inflated $17.277 TN, or 11.4%, in the 12 months ended September 30th – to a record $168.8 TN.
• Net Worth inflated $49,873 TN over 17 quarters, or 42%. Household Net Worth ended September at 575% of GDP, above previous cycle peaks 488% (Q1 2007) and 444% (Q1 2000).

Basis and Carry Trade Sustainable?

Risk Matters: Don’t forget the August 5th, 2024, Carry Trade Shake:

Don’t forget your trading rules, especially as liquidity falls

There is a reason we have strict trading rules here based on psychology, math, experience and avoiding false narratives and dribble out there. That said pay attention to the time of year, the bonus pay dates (no we aren’t being cynical), tax markings and look the previous run ups into Dec 31. Don’t let the grifters out their sway you, VIX is historically low, what does that tell you? Protection is cheap and the market is complacent with no fear. Here endeth the lesson.

Two paths to bankruptcy: gradually and suddenly. – Ernest Hemingway

Where is the Fear in Instability?

Leveraged speculation, including “basis trades,” “carry trades” and run deep and why the yen and Mexican peso are deeply relevant to this whole structure. Wednesday’s currency trading was the most chaotic since August 5th. The old carry trade influence, disorderly yen strength was behind August 5th instability. Yen fell 1.7% this week to the weakest level versus the dollar since July. August 5th instability was quickly quelled by dovish comments from a key Bank of Japan official, soon followed by a dovish Powell in Jackson Hole.

Compressed risk premiums and CDS prices are indicative of complacency. Markets behave this way when there is some underlying monetary disorder (dislocation in liquidity creation). What all this does for markets is keep risk measures on, we see in the vicious VIX fails and short-term option volumes. It is when the risk avoidance measures, or tolerance fails this can trip up the whole structure of buying and cycling through risk assets.

In the backdrop we have war abroad in the Ukraine and Middle East, unsettled relations between Taiwan and China. At home in the US universities and cities to the North have become a quagmire of protest, illegal immigration placement and political vitriol that have deeply divided these regions. The cost of living through it all has sent many working through middle class families to the brink and beyond, insurance costs have risen over 100% in a year in some cases to name just one inflation cost that politicians lie about.

While complacency reigns supreme in equities bonds are awake to the risk out there. The MOVE (bond volatility) Index rose another five the week prior to the election, to a one-year high 133. The VIX for its’ part was crushed after the election.

“We have a market trying to interpret the Fed who is trying to find out how they can interpret their long-only portfolio at a risk parity where rates cannot rise.”– MoneyNeverSleeps

Our weekly reminder for risk, timely given the V shape to ATH. The downside is clear with the absence of moral hazard from repeated Federal Reserve market bailouts in an environment of some would say obscene liquidity pumps. Pure greed is the other part, not wanting to miss out on fees. The obvious question is, how deeply ingrained is this attitude through the markets? How do we ween the markets off this continuous dip feed? At this point the Central Banks have kicked that answer down the road.

Our take remains the Fed is not just focused on inflation but risks such as the commercial real estate debacle. the high US dollar and the massive Federal debt refunding cost.

We need to grasp all the risks to be wary of but not ignore price reaction. We always talk here about expect the unexpected and now that is front and center, gage the market’s reaction, the market is always right and that’s why we focus on the crowd psychology aspect.

Unsuspecting investors in their millions have or will lose meaningful amounts of their savings. They bought into the mania, threw caution to the wind, and will suffer the consequences regardless of the warnings of unsustainability. The reason we started TradersCommunity was for situations like this many moons ago. Beware of those ‘experts’ who never saw the sell off and chided you for believing it now claim to be gurus measuring risk. It’s a bit late when some of these stocks and markets are down 50-90%. Beware of those who claim long term investment when it all goes wrong. Anyhoo..

Oh China

In September 2024 Xi Jinping promised to spend whatever it takes to reach growth targets as he tapped the reflation panic button. A Reuters article placed Beijing’s stimulus at $1.4 TN. On top of a system locked in massive credit expansion, upwards of $5 TN annually. He is pushing hundreds of billions to the stock market, hundreds of billions to the festering local government sector, hundreds of billions to the to attempt to arrest the slide in the apartment markets.

January 31 – Bloomberg: “China’s residential sales resumed falling in January… The value of new-home sales from the 100 biggest real estate companies dropped 3.2% from a year earlier to 227.6 billion yuan ($31.4bn), after being flat in December… Beijing is struggling to revive the property market amid weak domestic demand and a worsening job situation. While the housing sector has picked up modestly on the back of government support, improvements have mostly been in the second-hand market as buyers remain concerned about developers’ ability to finish projects on time.”

January 27 – Financial Times (Thomas Hale and Chan Ho-him): “Leading Chinese property developer Vanke has forecast a $6.2bn annual loss and announced the sudden resignation of its top leadership, reigniting concerns over funding and confidence across China’s economically critical real estate sector. The developer, partly owned by local authorities in Shenzhen, is the latest focal point of a cash crunch that began with the collapse of peer Evergrande in 2021 and has since engulfed a host of other developers including Country Garden. After weeks of swirling concerns over the health of Vanke, the company said… chair Yu Liang had resigned for ‘work adjustment reasons’. It said chief executive Zhu Jiusheng had departed for ‘health reasons’. The ‘sudden and simultaneous’ resignations were ‘unprecedented in recent memory’ for a big participant such as Vanke, said Foreky Wong, founding partner at Hong Kong advisory company Fortune Ark Restructuring.”

January 28 – Bloomberg: “China Vanke Co. has been thrown a lifeline by state authorities, a rare show of support that signals the developer may be too big to fail even after dozens of property firms defaulted amid China’s punishing housing slump. As part of an overhaul unveiled late Monday, Vanke’s two top veteran executives stepped down after the company warned of a record $6.2 billion loss. An official from Shenzhen Metro Group Co., its largest state shareholder, will take over as chair.”

December 18 – Financial Times (Demetri Sevastopulo): “China has increased its arsenal of operational nuclear warheads to 600 from 500 in just a year, as the People’s Liberation Army continues a rapid expansion of its forces, according to the US defense department. In its annual ‘China Military Power Report’, the Pentagon said the PLA had expanded its arsenal by 20% in the 12 months from mid-2023 and was on track to have 1,000 operational warheads by 2030. The Pentagon has in recent years warned that the US will soon face two nuclear peers as China’s arsenal grows closer in size to the US and Russia.”

December 16 – Reuters: “China’s capital markets outflow reached a record high of $45.7 billion in November, according to official data tracking cross-border payments, as Donald Trump’s U.S. presidential election win roiled global portfolio flows. Cross-border receipts from portfolio investments were $188.9 billion, while payments totaled $234.6 billion, resulting in the biggest monthly deficit on record…”

Any pushback to fledgling tightening these days ensures excessively loose financial conditions.

Geopolitical Tinderbox

PART A – Stock Markets

Highlights This Week – USA

• S&P500 declined 1.0% (up 1.2% y-t-d),
• Dow rose 1.0% (up 3.0%).
• Nasdaq100 slumped 3.4% (down 0.6%).
• S&P 400 Midcaps slipped 0.2% (down 0.8%),
• Small cap Russell 2000 fell 1.5% (down 3.0%).
• Utilities slipped 0.6% (up 6.0%).
• Banks increased 0.9% (up 6.2%),
• Broker/Dealers were little changed (up 9.0%).
• Transports dipped 0.3% (up 0.6%).
• Semiconductors sank 7.2% (down 4.3%).
• Biotechs lost 1.4% (up 5.7%).
• With bullion reversing $77 lower, the HUI gold index dropped 2.5% (up 13.4%).

Highlights – Europe Stocks

• U.K.’s FTSE equities index rallied 1.7% (up 7.8% y-t-d).
• France’s CAC40 dipped 0.5% (up 9.9%).
• German DAX equities index rallied 1.2% (up 13.3%).
• Spain’s IBEX 35 equities index surged 3.1% (up 15.1%).
• Italy’s FTSE MIB index gained 0.6% (up 13.1%).

 Highlights – Asia Stocks

• Japan’s Nikkei 225 Equities Index sank 4.2% (down 6.9% y-t-d).
• South Korea’s Kospi sank 4.6% (up 5.6%).
• India’s Sensex equities index lost 2.8% (down 6.8%).
• China’s Shanghai Exchange Index declined 1.7% (down 0.9%).

 Highlights – Australian Stocks

• Australia’s ASX 200: Friday -0.3% to 8296.20 (-3.0% on the week) Off Record high
• ASX closed at a five-week low, as a sell-off in Australian banks over past 5 days piled pressure on.
• The Australian dollar slipped below US64¢.
• Friday: 6 of the 11 sectors in the red. Commonwealth Bank shares closed at a five-week low, down 2.6 per cent to $151.73, as a sell-off in US banks overnight added to pressure on the sector. The ASX’s financials sector is down 7.5% this week following a slew of lackluster earnings results from banks including ANZ, Westpac and Bendigo Bank as profits from deposits and loans get crunched. Iron ore miners gained. BHP up 2.8% to $41.26, Fortescue 2.3% to $18.65 and Rio Tinto 2.8 % to $123.49.

Commonwealth Bank (ASX)

Commonwealth Bank reversed off hard off new closing record last Thursday after earnings. CBA shares closed at a 5-week low, down 2.6% to $151.73, as a sell-off in US banks overnight added to pressure on the sector. The ASX’s financials sector fell 7.5% this week following a slew of lackluster earnings results from banks including ANZ, Westpac and Bendigo Bank as profits from deposits and loans get crunched. Iron ore miners gained.

 Highlights – Emerging Markets Stocks 

• Brazil’s Bovespa index dropped 3.4% (up 2.1%),
• Mexico’s Bolsa index fell 2.6% (up 5.7%).
• Turkey’s Borsa Istanbul National 100 index increased 0.6% (down 1.7%).

Technical Analysis 

Technical Analysis of key markets via KnovaWave

S&P 500

Daily: The SPX has traded like clockwork hitting the 78.6% extension right on cue into election.

Background: The move fueled by the violent ABC for the 5 waves up for SPX continue right into bottom of the median line to give us an (a) or C of a 4. with impulse after completing 5. Reversed hard with energy fueled from the power impulse down from near +1/8 ATH. On the way up (just like down) It accelerated after it broke the Tenkan through the rejected Kijun and then the Kijun to close back over the median and 8/8. Bulls this was a (ii) of a 5. Bears this is a a-b of a C off a completive V of degree. We watch if this low was a (iii), (a) or C. Will determine if sharp ABC completed off all time highs. We have to respect the number of alternatives of degree of 5. With such trends keep it simple support is Tenkan and Kijun and watch for ABC. No fear is the driving element.

The break up was from above the 200dma. The balance from sharp reversal after the initial 3 wave down from the SPX wave 5 extension as Covid19 fed impulse accelerated under the Tenkan. From there we had seen the ABC or 1-2-3 spinning around the 61.8% of the move. Support began at the October 2019 lows. A manic wave 5 or 3 of some degree was a resolution for the ages. Note the 100% extension from the emotive element and MM levels when the spit kicks in. A manic wave 5 or 3 of some degree was a resolution for the ages. Note the 100% extension from the emotive element and MM levels when the spit kicks in

Weekly: The weekly confirms the daily sequence into the 78.6% extension.

Background: The reenergized SPX tripped in 3 to test recent break up at Tenkan from there we had had a powerful rally to ATH. Again notice what happened “Each new high has evolved after testing Tenkan key support which is the next line after Friday’s dump & minor bounce.” We watch for a spit of a spit Extensions are difficult to time, keep it simple.

Key for the impulse higher was the spit or retest of MM 8/8 and Tenkan San, which held with the previous highs and Tenkan.  To repeat “We look for 3 waves down and reactions to keep it simple with the alternatives in the daily.”  Keep an eye on the put/call ratio with recognition to the sheer size of contracts AND keep in mind the stimulus distortion. The spit per channel fractal and Adams rule launched back over the cloud where we were encased AND we back tested it. Watch if a spit or clear break support as Chikou rebalances

Dow Jones

NVIDIA (NVDA) and Sherwin-Williams (SHW) replaced Intel (INTC) and Dow Inc. (DOW) in the Dow Jones Industrial Average starting on Friday, November 8.

NASDAQ 100

Nasdaq fell just short of retesting the ATH after it counced hard after the August rout.

Background: Fuel was after it broke and held the weekly Tenkan to see a spit of a spit fail which is completive of 5 of some degree with Chikou rebalancing. From there we sold off right to Tenkan (as did SPX) and bounced hard Support Tenkan to Kijun. Watch Chikou for divergence for continuation or failure. Divergence with Russell also a clue.

Russell 2000

The small cap Russell RUT broke out of multi year flag and then spat the previous high. Unlike SPX and NDX we could not get to new ATH until near the end of this cycle after it got through Tenkan and Kijun on the bounce. This is the index showing more of the fast money crowd and is trading like it. Needs to get traction in here for bulls. Support +1/8 through 7/8 (cloud base)

US Stocks Watch

Investors (and algos) will focus on the conference calls and outlooks. Last quarter everyone expected the worse, we saw critical updates on production in coronavirus impacted regions and if there is extended halting of operations weighing on multi-nationals. 

NVidia $NVDA

Nvidia Shares have been well poised for what happened over the Lunar New Year Weekend, they are up roughly 28-fold in the past five years. They had completed a potential double top spitting the 4.618 fib extension. That said timing the impulse is one of patience, discipline and usually hindsight.

The surprise here was it came over the Luna New Year break. The Chinese AI DeepSeek was listed for free and went top of the Apple & Google app stairs. Panic ensued and NVidia finished down 17% Monday, the biggest loss of market capitalization in history with a $560 billion evaporation. The Semiconductor index sank 9%. NVDA shares performed a dead cat bounce at best and closed 15.8% lower at the end of the week.

The impact was amplified given trading had boomed in products that allow investors to amp up bets on the world’s most popular equities, with investors pouring a record of more than $6.5 billion into such “single-stock ETFs”, vehicles that track just a single company but use derivatives to intensify bullish or bearish wagers. A major winner in this category was a fund from GraniteShares, which provides two times the daily returns of market powerhouse Nvidia Corp. The strategy, which trades under the ticker NVDL, saw assets explode to a peak of $6.7 billion in late November 2024, with returns in excess of 350% that year. Funds tracking MicroStrategy, Tesla Inc. and Coinbase Global Inc. have followed similar paths.

The move tracked by the KnovaWave extension model followed the announcement of NVDA 4/1 split come levels off the energy break NVidia hadn’t looked back with many gaps below until it hit the 2.618 target of the exhaustion phase. We saw another power move off the $200 retest (old $800) & earnings off $300 which retested. It is a clear leader of SOX SMH look for cues there and ABC failures for changes.

Apple $AAPL

Apple gently motored up to new ATH over the massive $160 then $170 thru to $180 gamma level to new ATH. These levels will be key energy levels. Support from previous highs, resistance now Fibs and Murrey Math levels. Remember the impact $AAPL has, at least short term on all the major indices.

Tesla $TSLA

In the second half, mom and pop then ditched financial companies en masse – only for the cohort to ride the “Trump trade” wave and become the S&P 500’s biggest gainers between July and November. And like many investors during the brief market crash in August, the retail crowd panic-sold some of their hottest assets, including Nvidia and Tesla – all at the lows. That proved painful. Shares of Elon Musk’s EV-maker, for example, have almost doubled since then.

Wrong-sided positioning like this has pushed the retail group’s gains this year to a mere 9.8%, according to Emma Wu, a quantitative and derivatives strategist at JPMorgan, and colleagues. That’s their second-weakest performance in any year when the index posted a positive return since 2015.

Exxon Mobil $XOM

Part B: Bond Markets

Highlights – Treasuries

• U.S. Treasuries finished February on a strong note, sending the 10-yr yield to a level not seen since early December while the 2-yr yield reached a level last seen in late October.
• The market saw more buying as the day went on, rising through the release of a Personal Income/Outlays report for January, which showed a 0.5% m/m decline in real personal spending, which will weigh on growth expectations. Accordingly, the Atlanta Fed noted in today’s update to its GDPNow forecast that a 1.5% contraction is being projected for Q1, down sharply from the previous estimate that called for 2.3% growth. The Atlanta Fed noted that downward changes in the contribution of net exports to GDP and a much lower estimate of real personal consumption expenditures were behind the revision.
• Treasuries edged above their morning highs in the afternoon as Ukraine’s President Zelenskyy visited the White House, but did not sign the rare earths deal. The meeting was cut short after a tense exchange in front of the cameras, during which President Trump said that Ukraine’s leader is disrespecting the United States. President Trump issued a statement, saying that President Zelenskyy is not ready for peace and that he should return once he is.
• The 2s10s slope was unchanged this week, but compressed by ten basis points in February as the 10-yr note outperformed.
• Crude oil fell back below $70/bbl, widening its February loss to $2.75, or 3.8%,
• U.S. Dollar Index climbed 0.4% to 107.62 Friday, extending this week’s gain to 0.9%. The Index lost 0.8% in February.

• Total money market fund assets surged $60.5 billion to a record $6.974 TN. Money funds were up $840 billion over 31 weeks (23% annualized) and $965 billion y-o-y (16.1%).
• Total Commercial Paper jumped $25.6 billion to a seven-month high $1.307 TN. CP has increased $219 billion y-t-d and $30 billion, or 2.3%, y-o-y.

• 2-yr: -8 bps to 4.00% (-19 bps this week; -24 bps in February)
• 3-yr: -8 bps to 3.98% (-22 bps this week; -30 bps in February)
• 5-yr: -8 bps to 4.03% (-23 bps this week; -33 bps in February)
• 10-yr: -5 bps to 4.23% (-19 bps this week; -34 bps in February)
• 30-yr: -4 bps to 4.52% (-15 bps this week; -29 bps in February)
• NB: At Close 2/28/24

Highlights – Federal Reserve

• Federal Reserve Credit declined $30.6 billion last week to $6.729 TN. Fed Credit was down $2.161 TN from the June 22, 2022, peak.
• Over the past 285 weeks, Fed Credit expanded $3.002 TN, or 81%. Fed Credit inflated $3.918 TN, or 139%, over the past 642 weeks.
• Fed holdings for foreign owners of Treasury, Agency Debt dropped $12.3 billion last week at $3.290 TN.
• “Custody holdings” were down $64 billion y-o-y, or 1.9%.

Highlights – Mortgage Market

• Freddie Mac 30-year fixed mortgage rates dropped nine bps this week to a two-month low of 6.76% (down 18bps y-o-y).
• Fifteen-year rates fell 10 bps to 5.94% (down 32bps).
• Bankrate’s survey of jumbo mortgage borrowing costs had 30-year fixed rates up 10 bps to 7.04% (down 28bps).

The Fed is effectively throwing additional fuel on historic speculative manias. Central banks have been adding liquidity to avoid systematic failure.

Global Bonds

Highlights – European Bonds W/E 2/28/25

• Italian 10-year yields slipped two bps to 3.54% (up 2bps y-t-d).
• Greek 10-year yields declined six bps to 3.24% (up 3bps).
• Spain’s 10-year yields declined five bps to 3.05% (down 2bps).
• German bund yields fell six bps to 2.41% (up 4bps).
• French yields declined seven bps to 3.15% (down 5bps).
• The French to German 10-year bond spread narrowed one to 74 bps.
• U.K. 10-year gilt yields dropped nine bps to 4.48% (down 9bps).

Highlights – Asian Bonds W/E 2/28/25

• Japanese 10-year “JGB” yields reversed five bps lower to 1.38% (up 28bps y-t-d).

Part C: Commodities

Highlights This Week

• The Bloomberg Commodities Index dropped 3.8% (up 4.0% y-t-d).
• Spot Gold fell 2.6% to $2,859 (up 8.9%).
• Silver slumped 4.0% to $31.163 (up 7.8%).
• WTI crude slipped 45 cents, or 0.6%, to $69.95 (down 3%).
• Gasoline declined 1.9% (up 10%),
• Natural Gas dropped 7.1% to $3.834 (up 6%).
• Copper dipped 1.2% (up 13%).
• Wheat sank 9.0% (down 3%),
• Corn dropped 7.8% (down 1%).
• Bitcoin sank $12,230, or 12.7%, to $84,230 (down 10.1%).

Agriculture Futures

Cocoa

Cocoa futures were the best performing in 2024, surging by 176% for the year. Since then, we have had a vicious pullback. of around a 1/3 or $4,000. Cocoa a great example of how controlled or limited surplus can determine price. Africa produces 60% of global cocoa and nearly half of the world’s cocoa comes from just two West African countries, Côte d’Ivoire and Ghana.

The surge in 2024 cocoa prices was due to political and weather disruptions in West Africa. The crops were already struggling thanks to underinvestment in cocoa farms with growers struggling to replant diseased trees.

Coffee

Coffee futures followed cocoa higher and was up 73% for 2024, reaching a 47-year high as markets grappled with persistent supply concerns in key growing regions. While it has corrected off those highs in 2025, not to the extent of cocoa. The premium bean, arabica futures price doubling in 2024. Extreme weather in Brazil and Vietnam affected supply whilst demand was pressured by booming demand in markets like China.

Cocoa and coffee brought inflation to the consumers drinking and and eating habits as companies passed on the price rises.

BDI Freight Index

• The Baltic Exchange’s dry bulk sea freight index, which measures shipping rates for vessels transporting dry bulk commodities, logged the 12th consecutive session of gains on Friday, rising 70 points to its highest since December 3rd at 1,229 points.
• The capesize index, which typically tracks vessels transporting 150,000-ton cargoes such as iron ore and coal, climbed 245 points to an over 12-week high of 1,818 points.
• The panamax index, which usually tracks vessels carrying 60,000-70,000 tons of coal or grain, was down for the fourth session, falling 29 points at 1,063 points;
• The supramax index eased for the second session, shedding 8 points at 895 points. The index rose more than 18% for the week, registering its second straight weekly gain.
• Source: Baltic Exchange 2/28/25

Metals

Copper

Copper is the bellwether industrial metal and moves on supply risks and hopes for global recovery in demand. Disruptions at major mines and Chinese plants which produce more than half of the world’s refined copper impact price.

February 26 – Bloomberg (Alfred Cang, Archie Hunter and Mark Burton): “The world’s top commodity traders are rushing to ship copper to the US from as far afield as Asia as Donald Trump’s threat of import tariffs on the metal creates a huge opportunity for profit. The gap between copper prices in the US and the rest of the world widened sharply after the president… ordered the Commerce Department to examine potential levies on the metal. On Wednesday, prices on New York’s Comex surged as much as 4.9% to trade more than $1,000 a ton above the London Metal Exchange benchmark, which rose 1.2% to about $9,500 a ton.”

Gold

Gold hit record highs as inflation, safe haven, and Russia and China buying to avoid sanctions pushed it higher. The price rose against multiple currencies, including the U.S. dollar. GS ‘reiterating a target of $3,000 an ounce by December 2025. The structural driver of the forecast is higher demand from central banks, while a cyclical lift would come from flows to exchange-traded funds as the Federal Reserve cuts, they said.”

Energy

Oil prices in 2024 traded in a relatively stable range given the world conflicts in energy supply related regions. Intraday Brent prices stayed within a $24/b range, between $68/b and $93/b the narrowest trading range since 2019. Adjusting for inflation, 2024 was the narrowest since 2003. A moribund world economy working against Middle East and Russian tensions. The selling has continued in 2025.

U.S. energy companies played the smart card pushing production higher familiar with the cycle of oil prices. Natural gas demand grew as did record U.S. production, we saw increased electricity consumption, driven by the AI mania.

US Crude Oil (WTI)

Daily: WTI Crude Oil gave back all its rally that evolved from retesting the pennant breakout last December after completing the correction in 3 waves. from there it has fallen to new lows and the upside burst has effectively rinsed short and trapped new speculative buyers with the market now rinsing them as it falls to test support. The market has behaved as expected as we have said being in a completive mode for bulls with the upside impulse, it was a question of degree on the topside, as it will be on the downside. Use the Murrey math 240/60 grid. Was oil completing a C or IV? Support is previous lows and the bull flag. The bear case is the high was a complete 5.

Weekly: WTI crude oil futures held the support line from July 2021, having plunged around 50% off 2022 highs. The market is now back testing it. The break to the topside of its sphere of influence to close out the quarter over Kijun and Tenkan failed, and which are now resistance. Risk support is the grid. Resistance weekly channel, Murrey Math levels and previous breaks (off monthly). Bear case is Wave 5 complete.

What we broke……. Crude Oil in the past quarter built a huge bull flag. We watch if the recent break was false, or we fail. Very clear pattern.

The key is crowd behavior to help tell the story which in energy is often around geopolitics. A great example of why we watch ABC corrections and from here we get the energy from the break being balanced. This move that was powered by 50 dma Tenkan spit of a spit – hence the fractal energies reverberations.

US Natural Gas (Henry Hub)

Daily: US Natural Gas futures are a great example of rebalancing mania. The market is still correcting the manic 5 post the Ukraine invasion and beyond. Since the breakdown of the correction channel with failed breakups we have continued to multi year lows in a pennant formation after holding the daily 1/8. We now look at our Adam’s theory fractal rules with fractal spits powering these moves lower. Two clear alternatives, we are correcting the highs 5 or that was a 3 and we go higher. Resistance is heavy: 2/8 and cloud above. Kijun, 50 dma and cloud. Support is previous lows. Important to watch how this energy was built for shape correlation.

Like the larger wave on the way up it accelerated through previous highs (flat topped triangle energy) and over the resistance at 8/8 and new highs. We successfully tested that break in a pennant ABC. Previous highs (flat topped triangle energy) and 8/8 and new highs underscore the structure that fed the move and is key longer term in the collapse lower.

Weekly: Natural gas has been busy correcting the past months when it blew through all levels of support after breaking the weekly 50wma and the Kijun gave a kiss of death. From there we formed an island reversal which has resolved to the topside, trapping shorts and bears. Recall it broke down out of the corrective channel (Wave 4 or IV) to new multi-year lows. The instability and volatility stem from the sharp reversals that have failed indicative of speculative fervor like the previous impulsive spikes. Support is the flat Kijun and Tenkans. Resistance the near highs and previous uptrend. Bulls need all the damage down to be rebuilt. Kijun became the accelerator given energy lower and now higher came from a clean break of the Kijun

Part D: Forex Markets

John Maynard Keynes, 1920: “There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction and does it in a manner which not one man in a million is able to diagnose.”

• For the week ended Feb 28, 2025, the U.S. Dollar Index rallied 0.9% to 107.562 (down 0.9% y-t-d).
• On the upside, nil.
• On the downside, the Brazilian real declined 2.6%, the New Zealand dollar 2.5%, the Australian dollar 2.3%, the South Korean won 1.8%, the Canadian dollar 1.6%, the South African rand 1.6%, the Swedish krona 1.2%, the Singapore dollar 1.1%, the Norwegian krone 1.0%, the Japanese yen 0.9%, the euro 0.8%, the Mexican peso 0.6%, the Swiss franc 0.5%, and the British pound 0.4%. The Chinese (onshore) renminbi declined 0.36% versus the dollar (up 0.29% y-t-d).

Key Currencies Versus the US Dollar

 Australian Dollar – AUDUSD

The Australian dollar traded towards a 5 year low in the New Year in a tumultuous week, it has continued lower after breaking a three-month low of US65.1¢ on news of a Donald Trump’s US election victory before rebounding to US66.51¢ on hopes of fresh China stimulus. The Aussie dollar had been correcting since completing a 5 at the psych 80 level to fall under the weekly cloud in emotive fashion. The Australian dollar fell to test of the August lows of 0.7106 with Omicron fears. When that double bottom support broke it retested the Murrey Math Levels. Resistance the Cloud, Tenkan and Kijun like many commodities. From there it has been a combination of a stronger US dollar, a collapsing Chinese economy & concerns over the US economy.

Japanese Yen – USDJPY

USDJPY is consolidating the break after weakness with Treasury yields to rush to +2/8 and channel convergence. It came a long way from that 108.00 massive support for dollar-yen back through the top of the flat-topped triangle at 151/152 whcih it spins around in 2025. Any change will come from the weekly Kijun. Use your USDJPY Murrey 7/8 8/8 grid for now. EURJPY AUDJPY will determine risk on/off.

Yen weakness provided key support to dollar melt-up dynamics with BOJ slow-motion “normalization” in a world of fast-moving dynamics. The dollar yen traded 160.17 this cycle, the first time above 160 since April 1990. Governor Kazuo Ueda on that move basically ceded the yen fragility issue to the Ministry of Finance (MOF), affirming it wasn’t in the BOJ’s purview. He conveyed little concern for yen weakness, while downplaying its inflationary impact. The market accordingly took the yen out to the woodshed.

Chinese Yuan – USDCNH

China has been battling a weak economy for years and has been flooding its economy with liquidity to no avail, the result, falling yields and a record low for the Yuan against the US dollar. So far it has been defended at a triple top.

To begin 2025 the onshore yuan weakened past the level that China had been defending throughout December. The yuan breached the psychological milestone of 7.3 per dollar for the first time since late 2023, amid concerns over China’s economic struggles and a widening bond yield discount to the US. The move came even as the central bank maintained its support for the currency with its daily reference rate that Friday.

February 26 – Reuters: “Chinese authorities are rolling out fresh measures to limit capital flight, including increased scrutiny of overseas investments, as the yuan currency comes under mounting pressure. President Donald Trump’s tariffs threats are heightening Sino-U.S. tensions and discouraging inbound foreign investment… China has increased scrutiny of overseas investments by domestic companies and their use of proceeds from Hong Kong share sales… Meanwhile, China’s commercial banks sold the most foreign exchange to their clients since July last month… The conversion ratio – a gauge that measures households and corporates’ willingness to sell dollars for yuan – fell to the lowest level in seven months. Xinquan Chen, an economist at Goldman Sachs, said the current account showed sizeable currency outflows in January.”

January 12 – Bloomberg: “China has ramped up its support for the yuan with tweaks to its capital controls and a vow to crack down on market disruption, after the currency dropped close to a record low against the dollar in offshore trading. The People’s Bank of China and other regulators pledged to strengthen their management of the foreign-exchange market, deal with any behavior that may disrupt the market and prevent the risk of a large move in the yuan… The PBOC also adjusted its rules for cross-border flows…, allowing firms and financial institutions to borrow more from overseas, which may help increase capital inflows and support the yuan.”

South Korean Won – USDKWN

The won has slightly appreciated so far this year after tumbling since October 2024 by a cumulative 12% depreciation to the dollar both on domestic political developments and external concerns related to a less dovish Federal Reserve and trade policy risks.  It had dropped to its weakest level in 15 years.

The Americas

The Canadian dollar and Mexican dollar have weakened since the mention of Trump tariffs on the two countries.

Canadian Dollar – USDCAD

The Loonie has been in a steady downtrend since 2021, on yield pressures, weakening economic metrics and political uncertainty. The USDCAD hit a 3 year high in June and corrected that in 3 waves led by the AUD and NZD with oil price impacting direction from there the selling of the Loonie resumed. From there it broke the 2020 highs and tested 1.48 before reverting back on tariff gamesmanships in 2025.

Mexico Peso – USDMXN

Mexico’s currency is part of a carry trade that involves investors borrowing in currencies that have low interest rates, such as the Japanese yen or Swiss franc, and buying higher yielding ones such as the Mexican peso or, recently, the U.S. dollar. It has boomed in popularity as interest rates have diverged around the world and market volatility has stayed low. after the Mexican election this year the peso had a dramatic fall against the yen – it dropped 4.4% on that Monday in its biggest daily decline since the COVID-19 crisis.

The peso had climbed to the strongest in almost nine years driven by relatively high local interest rates and low currency volatility until, that sell off.

Brazilian Real – USDBRL

December 19 – Bloomberg (Martha Beck, Vinícius Andrade, Maria Eloisa Capurro and Leda Alvim): “As the currency craters in Brazil, thrusting the country’s markets into the international spotlight for the first time in years, a grim reality is setting in for top economic aides to President Luiz Inacio Lula da Silva. They are, they fear, powerless to do much to stop the panic… The central bank has ramped up intervention in currency markets to try to stem the losses amid what Governor Roberto Campos Neto called an ‘atypical’ outflow. It has stepped in either directly or through swaps almost every day for the past week, spending close to $14 billion to give some support to the real… On Thursday alone it sold $8 billion in back-to-back spot auctions — that’s the biggest daily sale of dollars since at least 1999, when Brazil adopted a floating exchange rate regime…”

Europe

Euro – EURUSD

Euro continued to bump up against that downtrend line from 2020 and spinning around the 50% of that year’s panic sell. The euro trades in what seems like eternal flags in the channel. We watch if Kijun (pink) testing Tenkan (orange) creates any impulse as EURUSD consolidates under the cloud and break up level from 2022. Watch 3 waves to see development for continuation and for impulse off Chikou rebalance. Governed by EURGBP and Bund volatility.  

British Pound – USDGBP

British pound rose in a classic rising wedge since its late 2022 spike classic retest until its daily break late 2024 which brought a weekly kiss of death. From there a weekly cloud break with magnet pulls of cloud twist after ABC correction – will need Tenkan to break through Kijun for more strength. The upcoming months will be heavy on UK data and EU, Ukraine speculation which could mean an eventful time for the British pound.

Bitcoin

Bitcoin is the world’s biggest digital asset; it had already staged a remarkable comeback in 2023. Then in January the approval of US Bitcoin exchange-traded funds was a further catalyst for gains. Donald Trump’s victory in November turbocharged BTC, sparking a record-breaking rally over the $100,000 level. Along the way, traders poured more than $100 billion into the ETFs, paving the way for similar crypto-related investment vehicles. At the opposite extreme, activity in memecoins, which often trade for a fraction of a cent, exploded.

Trump galvanized the digital-asset community with promises to reverse a US crypto crackdown under President Joe Biden and make America the center of the industry. In the weeks after the election, he announced the newly created post of czar for AI and crypto, and named industry proponent Paul Atkins to replace crypto nemesis Gary Gensler at the Securities and Exchange Commission.

This year also set a record for US ETF fund flows, with Trump’s presidential victory giving already emboldened investors even more incentive to double down. Funds that track the S&P 500 took the most flows, one of this year’s most notable new entrants was BlackRock’s Bitcoin ETF drawing the third-most inflows this year.

Bitcoin traded this week to a new ATH $99,978, ending the week with 2024 gains of 132%. Since the election, Bitcoin has surged 43%, with Ethereum up 39%, Ripple 215%, Cardano 240%, Solana 54%, and Dogecoin 144%. Bloomberg’s monitor page has expanded to include pricing for 58 crypto currencies.

Bitcoin soared 10% to a record $75,959 (ended the week up 80% y-t-d) after the Trump election 2.0. Bitcoin is performing technically to perfection. Impulse begets impulse. To understand panic, understand greed. Bitcoin exploded higher following its correction impulsively upon completing 5 waves up at +2/8. Each Tenkan and Kijun tap saw an explosive kiss of death until we completed 3 waves to around 28,000. From there we have seen extreme volatility to a new record high and retest.

We have seen what you would expect from a 5-wave impulse peak and ABC correction, a violent correction and completion. Use Murrey Math levels for corrections and targets as algorithms control the herd here, support is the cloud and sharp ABC, 1-2 moves. From there prices agitated towards those ATHs as news of a Bitcoin ETF fueled the rally, sound familiar? But this time it wasn’t signaling we are in a 3 high probability but a 5.

On the Risk Radar

 Geopolitical Tinderbox Radar

The Week Ahead – Have a Trading Plan

Watch Earnings, Central Bankers and Geopolitics speeches, reports and rate moves.

Next Week’s Risk Dashboard

Global Week Ahead Highlights

In lieu of a Global Week Ahead publication this week is the following brief summary of the five remaining key developments that are expected after this morning’s Eurozone CPI. There is also US President Trump’s SOTU speech tomorrow evening, but I’ve confined the list to substantive matters.

1. US tariffs (Tuesday): Tuesday brings the US deadline for imposing 25% tariffs on Canada and Mexico and an extra 10% on China. Will the Oscar for best actor in a political drama go to President Trump should he once again fail to enact upon his threats, or will he get the Oscar for best actor in a war movie? If tariffs are enacted, expect swift Canadian retaliation.

2. ECB (Thursday): A 25bps cut is priced and widely anticipated. The next meeting in April is also mostly priced. Guidance to date has emphasized preference for returning toward a neutral rate which implies a handful of cuts this year.

3. Canadian jobs (Friday): My estimate for Canada’s February employment survey is for a gain of 20k. Jobs have been on a tear for multiple months. Historically when Canada gets large back-to-back gains like the past couple of months, the next month strongly favours another gain. Small business hiring plans were resilient in February. The tariff threat could cut both ways, by reducing hiring confidence but also by shifting decisions toward hiring more labour while investing less in a way that raises the weight on labour to meet production since it’s easier to adjust if developments deteriorate.

4. US nonfarm payrolls (Friday): I went with 140k for my nonfarm payrolls estimate with an up-tick to 4.1% in the unemployment rate. Bloomberg consensus is at 160k. Seasonal adjustments for February tend to downplay seasonally adjusted payrolls for months of February in the post-pandemic era. Weather is likely to be an ongoing disruption. There may be an early glimpse of job losses in Washington, although the bulk of that lies ahead. This week’s other labour market indicators will further inform expectations.

5. Fed’s Powell (Friday): Powell speaks about the economic outlook on Friday (12:30pmET) after payrolls and just before the FOMC goes into communications blackout the next day ahead of the March 18^th–19^th meeting. What he says is likely to reinforce the patient narrative, offer an interpretation of the very recent softening in macroeconomic data in terms of his views on momentum versus distortions, and with the broad tone perhaps being highly influenced by whether tariffs proceed this week and by nonfarm.

US Economic Highlights

• Monday: February ISM Manufacturing Index (prior 50.9%) and January Construction Spending (prior 0.5%) at 10:00 ET
• Tuesday: Nothing of note
• Wednesday: Weekly MBA Mortgage Index (prior -1.2%) at 7:00 ET; February ADP Employment Change (prior 183,000) at 8:15 ET; February ISM Services (prior 52.8%) and January Factory Orders (prior -0.9%) at 10:00 ET; and weekly crude oil inventories (prior -2.33 mln) at 10:30 ET
• Thursday: January Trade Balance (prior -$98.4 bln), Revised Q4 Productivity (prior 1.2%), Revised Q4 Unit Labor Costs (prior 3.0%), weekly Initial Claims (prior 242,000), and Continuing Claims (prior 1.862 mln) at 8:30 ET; January Wholesale Inventories (prior -0.5%) at 10:00 ET; and weekly natural gas inventories (prior -261 bcf) at 10:30 ET
• Friday: February Nonfarm Payrolls (prior 143,000), Nonfarm Private Payrolls (prior 111,000), Average Hourly Earnings (prior 0.5%), Unemployment Rate (prior 4.0%), and Average Workweek (prior 34.1) at 8:30 ET; and January Consumer Credit (prior $40.8 bln) at 15:00 ET

Bond Market Highlights

• Monday: 
• Tuesday:
• Wednesday:
• Thursday:

Central Bank Highlights

ECB (Thursday): A 25bps cut is priced and widely anticipated. The next meeting in April is also mostly priced. Guidance to date has emphasized preference for returning toward a neutral rate which implies a handful of cuts this year.

Fed’s Powell (Friday): Powell speaks about the economic outlook on Friday (12:30pmET) after payrolls and just before the FOMC goes into communications blackout the next day ahead of the March 18^th–19^th meeting. What he says is likely to reinforce the patient narrative, offer an interpretation of the very recent softening in macroeconomic data in terms of his views on momentum versus distortions, and with the broad tone perhaps being highly influenced by whether tariffs proceed this week and by nonfarm.

Commentary via Scotiabank

US Earnings Highlights

• The busy earnings season will continue with consumer companies in the spotlight. Retailers take center stage, with industry leaders like Target (TGT), Costco (COST), Best Buy (BBY), Macy’s (M) Abercrombie & Fitch (ANF), Ross Stores (ROST) and The Gap (GAP).
• Tech earnings will also be closely watched, with reports from Broadcom (AVGO), Zscaler (ZS), CrowdStrike (CRWD), JD.com (JD), Hewlett Packard Enterprise (HPE), MongoDB (MDB) and Marvell Technology (MRVL).
• The renewable energy and EV infrastructure space with reports from Plug Power (PLUG), ChargePoint (CHPT) and Stem (STEM). AutoZone (NYSE:AZO), Sociedad Química y Minera de Chile (SQM) and Canadian Natural Resources (CNQ).

• Monday: GitLab (GTLB) Okta (OKTA), Senseonics Holdings (SENS), Cara Therapeutics (CARA), TG Therapeutics (TGTX), Energous Corporation (WATT), Hut 8 (HUT), Ready Capital (RC), AST SpaceMobile (ASTS), Ocular Therapeutix (OCUL), ADMA Biologics (ADMA), Aqua Metals (AQMS), Emergent BioSolutions (EBS), Whitestone REIT (WSR)
• Tuesday: Target (TGT) Plug Power (PLUG), CrowdStrike Holdings (CRWD), Sea Limited (SE), ChargePoint Holdings (CHPT), Best Buy (BBY), Paysafe Limited (PSFE), Sociedad Química y Minera de Chile S.A. (SQM), bluebird bio (BLUE), Stem (STEM), Nordstrom (JWN), Ross Stores (ROST), Box (BOX), AutoZone (AZO), EVgo (EVGO), Celldex Therapeutics (CLDX)
• Wednesday: Zscaler (ZS) Marvell Technology (MRVL), Editas Medicine (EDIT), Veeva Systems (VEEV), Stratasys (SSYS), MongoDB (MDB), Ocugen (OCGN), Dollar Tree (DLTR), Victoria’s Secret & Co. (VSCO), Foot Locker (FL), The Campbell’s Company (CPB), TriplePoint Venture Growth BDC (TPVG)
• Thursday: Costco (COST) Broadcom (AVGO), JD.com (JD), Hewlett Packard Enterprise Company (HPE), Macy’s (M), The Kroger Co. (KR), Gevo (GEVO), Smith & Wesson Brands (SWBI), Mind Medicine (MNMD), Arcturus Therapeutics Holdings (ARCT), Cracker Barrel Old Country Store (CBRL), Xeris Biopharma Holdings (XERS), Fidus Investment (FDUS), Comstock (LODE), BJ’s Wholesale Club Holdings (BJ), Funko (FNKO), Guidewire Software (GWRE), Domo (DOMO), Burlington Stores (BURL)
• Friday: Genesco (GCO) Algonquin Power & Utilities (AQN), Oncolytics Biotech (ONCY), YPF S.A. (YPF), WhiteHorse Finance (WHF), inTEST Corporation (INTT), Mammoth Energy Services (TUSK)

US IPO Week Ahead

No IPOs are currently scheduled to list in the week ahead, although some small deals may list throughout it. Several sizable deals could launch in the coming week. Names include wearable cardiac device maker Kestra Medical Technologies (KMTS), eye disease biotech Aurion Biotech (AURN), industrial power system operator One Power (ONE), and autoimmune disease biotech Odyssey Therapeutics (ODTX).

Source: Renaissance Capital

Focus on yourself and what YOU CAN INFLUENCE, set your trading plan and goals in be set for 2025.

Trade Smart!

Subscribe and Follow

Find us at www.traderscommunity.com

Real Time Economic Calendar provided by Investing.com.

Follow our contributors on Twitter @traderscom @thepitboss16 @knovawave @ClemsnideClem

Note these charts, opinons news and estimates and times are subject to change and for indication only. Trade and invest at your own risk.

Trade Smart!

Focus on yourself and what YOU CAN INFLUENCE, set your trading plan and goals in be set for 2022.

-comment section below data-

Subscribe and Follow

Find us at www.traderscommunity.com

Follow our contributors on Twitter @traderscom @thepitboss16 @knovawave @ClemsnideClem

Note these charts, opinions news and estimates and times are subject to change and for indication only. Trade and invest at your own risk.

Trade Smart!