👀 US Election Year Seasonality, Fear & Greed index, China going beyond parabolic

Hi guys, it’s Kieran! Another week in the markets is upon us, so let’s get into it.

📢 Prop Firm Industry News

Another one bites the dust. FundedLions is pausing operations. They are however running a refund program for affected traders. This appears to be a situation forced upon them by pricing changes made by their broker, who in turn have said it has been forced upon them by cTrader increasing their prices for active accounts. A messy situation, but at least they are trying to compensate affected traders to some extent.

From Payout Junction, check out the firms with the highest payout volume (Rise) over the last 7 days 🏆️ 

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🕜 Economic calendar

Here are this week’s red folder news events. Key events to look out for are Fed Chair Powell’s speech tonight, Eurozone CPI inflation tomorrow, US unemployment numbers Thursday, and Non-Farm payrolls Friday. A few hand grenades there to look out for 😁 

📈 The Macro View

Positioning picking up. A lot of longs added last week. Goldman Sachs positioning indictor is still not ‘stretched’ but the ‘long stocks’ trade (S&P500 etc) is getting more crowded now and the chance of a pullback has increased.

S&P500 vs CNN's Fear & Greed index.

Sentiment has clearly shifted and we are rapidly approaching ‘Greed’ territory. Not a reason to take risk off the table solely on this basis alone, but keep in mind that reversals are now more likely.

China going beyond parabolic

The Chinese government announced a stimulus package aimed at bolstering the economy, with a specific focus on supporting the capital markets. The result? Well it’s safe to say that the market liked it. China equity index CSI 300 taking off like a rocket 🚀 

US Election is 5 weeks off. Plan accordingly.

S&P 500 seasonality in Election years tells an interesting story. Based on previous election years since 1950, the S&P 500 composite has gone risk-off from now until election day, then had a big relief rally.

It’s worth spending some time this week studying the last few US elections to see how the price action would have effected your personal trading strategy. In ‘Risk-off’ market regimes things can get out of control pretty quickly, so be prepared.

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

Kieran

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