👀 15 Firms closing down?! Markets in a state of Fear, Buy the dip?

Hi guys, it’s Kieran! Apologies for not sending the newsletter last week, a personal issue cropped up which I had to attend to, but that is now resolved so we’re good to go again!

📢 Prop Firm Industry News

The biggest news of last week was that according to reports, Eightcap has had it’s ASC brokerage license suspended, and Metaquotes has cracked down on them offering Metatrader 4 & 5 as part of their prop firm white label offering. This puts 15+ firms at a very high risk of closure. We heard directly from ‘Funds for Traders’ that they have closed due to this issue and there are likely many more to follow.

We have seen a lot of firms closing recently for a variety of reasons. As such it is more important than ever to trade with reputable firms with a long term track record of honoring payouts. The best place to check this is Payout Junction where you can see every payout that a prop firm makes (via Rise) so you can be confident that the firm you are trading with will actually pay out.

Here are all the firms that have paid out over $1million over the past 30 days:

🔥 Follow Payout Junction on X - https://x.com/payoutjunction

Monitor prop firm payouts LIVE on Payout Junction -https://payoutjunction.com/.

🕜 Economic calendar

Here are this week’s red folder news events. The key event to look out for is Fed chair Jerome Powel delivering a speech at Jackson Hole, Wyoming on Friday. This will come after we see the latest FOMC minutes on Wednesday. These events will offer further guidance on the path of interest rates as it is widely expected that the Fed will cut rates next month.

📈 The Macro View

Market in a state of fear?

Doesn’t feel like it after 2 big green weeks, but according to the fear and greed index, overall market sentiment is still fearful. This is typically interpreted as a contrarian ‘buy’ signal.

Based on last week’s data we learned that:

1. Inflation is cooler. Both the CPI and PPI reports were benign.

2. Growth is still there. Very strong Retail Sales

3. The US consumer is 'steady.' Forward looking 'soft' data suggested the US consumer remains resilient

4. Corporate America is doing well. Very strong set of 2Q results.

Some might suggest that it is a pretty good setup here to buy the dip (not a recommendation though!)

Positioning is not streched

This positioning reading from Goldman Sachs is highly supportive for a constructive equity market. Plenty more buying can take place before we reach anywhere near a sell signal.

Where have the recent gains come from?

Most of the usual suspects of course. Gains from the August 5 panic lows...

Nvidia: +37%
Nikkei: +22%
Bitcoin: +20%
Tesla: +19%
Meta: +17%
Amazon: +17%

More downside ahead? A warning..

Whilst sentiment and positioning offer a very positive environment for further market gains, it is important to remember that anything can happen, and the market tends to do the opposite of what everyone expects.

Keep in mind that what preceded the 1987 stock market crash was a setup very similar to what we are seeing today. A big run-up to all time highs, a 7.5% pullback, a recovery back to 2.5% off all-time-highs, then the huge 35% black Monday correction. History does not usually repeat but it does rhyme. Always keep an open and mind and stay risk managed!

That’s it for this week. Have a good one and stay safe out there!

Kieran

Looking to buy the dip?

My recommended firm, Pipfarm, are offering 30% off any challenge using the code PTWEEKLY. They are highly reputable, all their payouts are visible on Payout Junction, and they offer fantastic 1-Step and 2-Step challenges. You can check out their programs here or click the banner below.

🔥 Follow Payout Junction on X - https://x.com/payoutjunction