If you haven't read last week's report, you can read it here: https://www.buymeacoffee.com/yavuzakbay/weekly-market-report-28-10-2023
This week, especially the cryptocurrency and stock markets were active. The main reasons for the movements here were undoubtedly the figures and macroeconomic stances announced during the week. First of all, let's examine what statements have been made on a global scale, starting from Monday.
Markets opened on Monday with ISM Manufacturing PMI figures. The index fell from 49 last month to 46.7 this month. The markets' and my own personal expectation was to remain at this level, but the index fell 2.3 points, making everyone the opposite. I can say that this decline means that markets are expecting a potential contraction in the US manufacturing sector. This contraction is especially due to the high borrowing costs created by the FED. I have been stating on many platforms for months that if the FED raises the interest rate further than this level or keeps it at this level, it will cause more harm than good on a macro basis, and it looks like this will happen.
In addition, FED Chairman Powell made various statements on Monday. In particular, he said the Fed is focused on achieving a good labor market over a long period of time. But he reiterated that their priority is price stability. In other words, we are aware of the impact of interest rates and we are trying to solve these effects without reducing interest rates. Is it possible? I think it's not impossible, but very difficult. So, do I think they will lower interest rates? Previously, I did not even think that the FED could remain hawkish until this time, but since I see that they do not care about the bad effects of interest rates anymore, I do not think that they will reduce it until at least the middle of 2024.
ISM Service PMI data was announced on Wednesday, but since there is almost no change in the data, I do not see it worth talking about.
I think the most valuable statement came on Friday. US unemployment data has been announced. Around June, I said that interest rate increases would increase unemployment more than ever before, and it happened as I said. At first, no one was very disturbed by the situation because unemployment did not rise above 3.6% for months, but unemployment has been rising non-stop for 3 months. This month unemployment was announced as 3.9%. I think it will see 4% next month and the rise will continue.
GOLD
First of all, if we look at the ounce of gold, it remained above the level I mentioned this week and I think the rise will continue, especially as long as it remains above $1980. However, in the meantime, since the rise is very rapid, a correction is possible, therefore, in the break of $1980, it may go down to the $1940 support level, but I think the rise will come from this level again.
NATURAL GAS
The EU's natural gas tanks are nearly 95 percent full, exceeding Brussels' 90 percent target. The European region, especially after Russia's invasion of Ukraine, saw the supply danger and stored much more gas than normal. Yes, the EU should now be more defensive against the energy shock, but unfortunately they cannot guarantee whether this reserve will meet all the needs for the winter. With the EU's storage capacity almost complete, companies are also going to Ukraine, where Europe's largest tanks are located, to fill natural gas to store their reserves. Some even pay to use LNG transport tankers as "floating storage" by leaving them full on the sea to increase capacity. When we look at the market prices during this period, we see that natural gas has been rejected for weeks, especially at the $3.60 level. Even though it is in an upward trend, I think that the decrease in demand for natural gas as the tanks fill up may push natural gas prices down to at least $3.40.
OIL
Last week, I said that oil formed a symmetrical triangle and that it would fall to the support level of the triangle within the week. What I said happened and oil is currently trading at $85.12. Oil may rise to $92 again, especially if it stays above $84.50. However, if the candle closes below $84.50 in the daily time frame, my first target will be $82.
DXY
When we moved to the indices section, we witnessed that the dollar index decreased by nearly 2% this week. This decline in particular was a lifeline for stocks, cryptocurrencies and indices. Currently, my target on the dollar index is $104,500. This means that the pressure on the markets will decrease, at least for a while.
SPX
Last week, I said on various pages that SP500 made an Elliot wave and completed the last wave at $4130, where the volume profile was at its highest level. I have already considered this level as a possible bottom and this week it came true. But does this rise mean missing an opportunity? No. The reason for this is that after Elliot Wave 5 forms, the chart forms ABCD formation. Therefore, my expectation next week is that the index will drop to at least $4260.
BIST100
(Since I am very far away from Turkey's macroeconomic outlook, my analysis of the index will be completely technical. Changes in Turkey's economic policy, etc. may completely change this analysis.) I think that the RMA moving average in particular is very useful in the index. Especially after the RMA20 breakout on the 16th of the month, the fact that the index dropped to RMA45, which I see as a reference, and held there is an indication of how well the moving average works. Like my brother Huseyin, I think that these levels are balance for the index. I added RMA100 to the chart as a reference just in case. As I said, since I am not very aware of macro conditions, I wanted you to see that the index will hold at 6400 in a negative scenario. But what I see now is that 7417 is support and daily candle closings above 7844 will start the run in the index.
BITCOIN
Bitcoin intended to start a small run this week, but faced serious selling pressure and fell below the $34900 resistance. I have said in several places during the week that Bitcoin's current outlook is either bull flag or Bart. They hunted those who thought there was a bull flag formation and made futures purchases with a bull trap. Movements that I have seen and become familiar with in the cryptocurrency market. I said 5 days ago that if $34900 is not broken, my target is $33700, and I'll say it again. At the breakout of $33700, Bart formation may come into play and pull it at least up to $31000. However, if $34900 is broken, the bull flag will be raised and the target will be $38000. I will manage my risk accordingly.