Opinions

Archive for Opinions – Page 2

08 Apr

Trade of the Week: Cryptos to rise again this CPI week?

By ForexTime

Bitcoin back to within 2% of record high!
All 11 FXTM Crypto CFDs climbing in tandem with Bitcoin
Cryptos often rise the same week that US inflation data is released
Cryptos’ weekly advance is tampered with 2 days of declines
Solana offered “strongest hedge” against Gold on CPI days so far this year

Cryptos are skyrocketing today (Monday, April 8th)!

At the time of writing, Bitcoin is surging over 4% and sliced well beyond the $70k psychological level.

The “OG” crypto is now trading at its highest levels since mid-March when it posted a record high of $73,850.

Perhaps more importantly for bulls (those hoping that prices will go higher), Bitcoin appears to have conquered the stubborn $71,400 resistance region which had capped prices in late March.

Bitcoin’s advance has lifted up many other cryptocurrencies along with it.

Within the 11 different crypto CFDs offered by FXTM:

At the time of writing, Ethereum is the best-performer so far today, surging over 6%
Besides Bitcoin, there are also one-day gains of more than 4% so far for Litecoin, Chainlink, Cardano, Dogecoin, and Bitcoin Cash respectively
Solana, Ripple, Avalanch, and Polygon are each rising over 2%

Potential breakout for Ripple and Litecoin?

Today’s surge is also translating into a couple of cryptos testing key resistance levels:

Ripple is now testing its 50-day simple moving average (SMA)

Litecoin is threatening to break above its upper downward trendline, which has supressed its prices since that April 1st intraday high.

The above-listed price movements come at the onset of a massive week for global financial markets.

The latest US inflation data is due this Wednesday, April 10th.

NOTE: CPI = consumer price index, is used to measure inflation

This monthly inflation data release out of the world’s largest economy often causes trillions of dollars to move across global financial markets.

Traders and investors decipher what the latest CPI figures would mean for the Fed’s interest rates outlook – arguably the primary focus of markets worldwide.

How do cryptos tend to behave on CPI weeks?

1) Cryptos have risen every week that the highly-anticipated US inflation data is released so far in 2024!

Here’s how cryptos have generally fared, as measured by the Bloomberg Galaxy Crypto Index, the same week as the US CPI announcement:

Week ending March 15th = +0.9%
(US CPI released on March 12th, 2024)

Week ending February 16th = +9%
(US CPI released on February 13th, 2024)

Week ending January 12th = +5.6%
(US CPI released on January 11th, 2024)

NOTE: The Bloomberg Galaxy Crypto Index measures the performance of some of the largest cryptocurrencies traded in USD, 8 of which are offered by FXTM as Crypto CFDs namely Bitcoin, Ethereum, Cardano, Solana, Avalanche, Polygon, Litecoin, and Chainlink.

These 8 cryptos account for 92.4% of the Bloomberg Galaxy Crypto Index.

If the upward momentum currently evident across the crypto complex can persist …

that would only extend this trend of cryptos posting weekly advances when US inflation data is released.

2) Weekly advance, but with 2 days of declines

To be clear, it’s not a straight path upwards for cryptos towards a weekly advance.

Each of those CPI weeks so far this year has seen 2 different days of declines for the Bloomberg Galaxy Crypto Index.

Such volatility ensures that crypto CFDs traders still have opportunities this week to potentially benefit from both rising and falling prices.

3) Solana has so far acted as “perfect” hedge against Gold

In trading, “hedging” means protecting against potential losses by making offsetting investments.

It’s like buying insurance for your investments to minimize risks from price changes.

And we know that Gold is a popularly-traded product on CPI release days.

The precious metal tends to post a larger-than-usual move on the days that the US consumer price index (CPI) is released.

Bullion has, on average, seen a $25 move between its highest prices and its lowest price on any given trading day so far in 2024.

This chart below shows the larger-than-average moves (white bars that extend above the red line) for gold on the 3 days that has seen CPI announcements so far this year.

However, the official CPI number can and do surprise markets, and may go against the trader’s position.

In order to potentially offset such losses,

Solana has been shown to offer a strong hedge against gold on CPI days.

Note how Solana has fared in comparison to Gold on US CPI release days so far this year:

US CPI release on March 12th, 2024
Gold = -1.12%
Solana = +1.46%

US CPI release on February 13th, 2024
Gold = -1.33%
Solana = +0.67%

US CPI released on January 11th, 2024
Gold = +0.22%
Solana = -2.09%

In other words … Solana and Gold have moved in OPPOSITE directions on every single US CPI release days so far in 2024.

Of the 11 crypto CFDs offered by FXTM, this “inverse relationship” (when asset A goes up, asset B goes down, and vice versa) is strongest between Solana and Gold on US CPI announcement days.

This perhaps sets up Solana as a suitable “hedge” against Gold for this upcoming CPI release due Wednesday, April 10th, provided this “inverse relationship” holds strong once more this week.

Remember, past performance is not a guarantee of future results.

And trading is risky at all times!

Thus, it remains to be seen whether the 3 above-listed behaviours exhibited by Crypto CFDs will prove true once again this week.

Regardless, CPI announcements tend to inject massive bouts of volatility across global financial markets.

And that in turn may result in outsized trading opportunities in Crypto CFDs.

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Cryptocurrencies Opinions

06 Apr

Speculators drop Swiss Franc bets for 9th week to most bearish since 2019

By InvestMacro

Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC).

The latest COT data is updated through Tuesday April 2nd and shows a quick view of how large market participants (for-profit speculators and commercial traders) were positioned in the futures markets. All currency positions are in direct relation to the US dollar where, for example, a bet for the euro is a bet that the euro will rise versus the dollar while a bet against the euro will be a bet that the euro will decline versus the dollar.

Weekly Speculator Bets led by British Pound & Australian Dollar

The COT currency market speculator bets were lower this week as four out of the eleven currency markets we cover had higher positioning while the other seven markets had lower speculator contracts.

Leading the gains for the currency markets was the British Pound Sterling (8,244 contracts) with the Australian Dollar (2,767 contracts), the Mexican Peso (1,662 contracts) and Bitcoin (1,235 contracts) also seeing positive a week.

The currencies seeing declines in speculator bets on the week were the EuroFX (-14,400 contracts), the Japanese Yen (-14,124 contracts), the Brazilian Real (-11,948 contracts), the New Zealand Dollar (-1,504 contracts), the US Dollar Index (-1,267 contracts), the Canadian Dollar (-933 contracts) and with the Swiss Franc (-402 contracts) also having lower bets on the week.

Speculators drop Swiss Franc bets for 9th week to most bearish since 2019

Highlighting the COT currency’s data this week is the decline in the speculator’s positioning for the Swiss franc. Large speculative Swiss franc (CHF) currency positions fell this week by a modest -402 net contracts but have now dropped for a ninth consecutive week. The speculator bets have also fallen for the tenth time out of the past eleven weeks as well – for a total 11-week decrease of -18,632 contracts.

This rapid decline in sentiment has taken the CHF speculative position to the most bearish level in the past two hundred and fifty-one weeks, dating all the way back to June 11th of 2019 when the net position totaled -24,788 contracts.

Helping to dent the Swiss franc’s appeal was a recent surprise interest rate cut by the the Swiss National Bank (SNB) in late March. This rate reduction took the interest rate down by 25 basis points to 1.5 percent and marked the SNB as the first major central bank to start a rate cutting cycle after global inflation pushed most central banks to raise rates in the past two years. As a major export country, the interest rate decrease and a falling franc is desirable for Switzerland businesses which will help exports become more competitive.

The CHF exchange rate versus the US Dollar has been on the decline after a strong uptrend from the 4th quarter of 2022 to late-2023 that saw the franc reach the highest exchange rate since 2015 at 1.2099 (CHF futures or CHFUSD). Since that high-point in December, the franc has been on the downtrend and closed out this week at the 1.1172 exchange rate to the Dollar and about 8 percent off that December high.

Currencies Net Speculators Leaderboard

Legend: Weekly Speculators Change | Speculators Current Net Position | Speculators Strength Score compared to last 3-Years (0-100 range)

Strength Scores led by Mexican Peso & British Pound

COT Strength Scores (a normalized measure of Speculator positions over a 3-Year range, from 0 to 100 where above 80 is Extreme-Bullish and below 20 is Extreme-Bearish) showed that the Mexican Peso (100 percent) and the British Pound (82 percent) lead the currency markets this week. Bitcoin (69 percent) comes in as the next highest in the weekly strength scores.

On the downside, the Swiss Franc (0 percent), the Japanese Yen (0 percent), the US Dollar Index (1 percent), the Australian Dollar (4 percent) and the Canadian Dollar (16 percent) come in at the lowest strength levels currently and are all in Extreme-Bearish territory (below 20 percent).

Strength Statistics:
US Dollar Index (0.9 percent) vs US Dollar Index previous week (3.5 percent)
EuroFX (27.5 percent) vs EuroFX previous week (33.6 percent)
British Pound Sterling (82.1 percent) vs British Pound Sterling previous week (76.6 percent)
Japanese Yen (0.0 percent) vs Japanese Yen previous week (11.5 percent)
Swiss Franc (0.0 percent) vs Swiss Franc previous week (1.1 percent)
Canadian Dollar (16.1 percent) vs Canadian Dollar previous week (16.9 percent)
Australian Dollar (4.4 percent) vs Australian Dollar previous week (1.9 percent)
New Zealand Dollar (39.0 percent) vs New Zealand Dollar previous week (43.3 percent)
Mexican Peso (100.0 percent) vs Mexican Peso previous week (99.2 percent)
Brazilian Real (30.3 percent) vs Brazilian Real previous week (45.8 percent)
Bitcoin (68.8 percent) vs Bitcoin previous week (50.2 percent)

Bitcoin & Mexican Peso top the 6-Week Strength Trends

COT Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that the Bitcoin (34 percent) and the Mexican Peso (19 percent) lead the past six weeks trends and are the only positive movers for the currencies.

The Canadian Dollar (-42 percent) leads the downside trend scores currently with the New Zealand Dollar (-40 percent), Swiss Franc (-35 percent) and the Brazilian Real (-26 percent) following next with lower trend scores.

Strength Trend Statistics:
US Dollar Index (-7.3 percent) vs US Dollar Index previous week (-5.6 percent)
EuroFX (-21.8 percent) vs EuroFX previous week (-9.2 percent)
British Pound Sterling (-1.9 percent) vs British Pound Sterling previous week (-10.1 percent)
Japanese Yen (-18.2 percent) vs Japanese Yen previous week (-14.3 percent)
Swiss Franc (-34.7 percent) vs Swiss Franc previous week (-44.4 percent)
Canadian Dollar (-42.3 percent) vs Canadian Dollar previous week (-37.6 percent)
Australian Dollar (-18.7 percent) vs Australian Dollar previous week (-23.8 percent)
New Zealand Dollar (-40.2 percent) vs New Zealand Dollar previous week (-26.8 percent)
Mexican Peso (19.1 percent) vs Mexican Peso previous week (16.0 percent)
Brazilian Real (-25.7 percent) vs Brazilian Real previous week (-13.8 percent)
Bitcoin (34.0 percent) vs Bitcoin previous week (12.7 percent)

Individual COT Forex Markets:

US Dollar Index Futures:

The US Dollar Index large speculator standing this week resulted in a net position of -1,896 contracts in the data reported through Tuesday. This was a weekly lowering of -1,267 contracts from the previous week which had a total of -629 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.9 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bearish with a score of 36.8 percent.

Price Trend-Following Model: Weak Downtrend

Our weekly trend-following model classifies the current market price position as: Weak Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

US DOLLAR INDEX Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	62.1	22.2	12.4
– Percent of Open Interest Shorts:	67.1	23.0	6.7
– Net Position:	-1,896	-305	2,201
– Gross Longs:	23,681	8,446	4,744
– Gross Shorts:	25,577	8,751	2,543
– Long to Short Ratio:	0.9 to 1	1.0 to 1	1.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	0.9	100.0	36.8
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-7.3	5.9	7.2

Euro Currency Futures:

The Euro Currency large speculator standing this week resulted in a net position of 16,794 contracts in the data reported through Tuesday. This was a weekly reduction of -14,400 contracts from the previous week which had a total of 31,194 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 27.5 percent. The commercials are Bullish with a score of 76.7 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 5.5 percent.

Price Trend-Following Model: Downtrend

Our weekly trend-following model classifies the current market price position as: Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

EURO Currency Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	27.6	60.4	10.8
– Percent of Open Interest Shorts:	25.1	65.3	8.3
– Net Position:	16,794	-33,432	16,638
– Gross Longs:	188,258	412,480	73,567
– Gross Shorts:	171,464	445,912	56,929
– Long to Short Ratio:	1.1 to 1	0.9 to 1	1.3 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	27.5	76.7	5.5
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-21.8	21.0	-7.7

British Pound Sterling Futures:

The British Pound Sterling large speculator standing this week resulted in a net position of 43,414 contracts in the data reported through Tuesday. This was a weekly rise of 8,244 contracts from the previous week which had a total of 35,170 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 82.1 percent. The commercials are Bearish with a score of 23.6 percent and the small traders (not shown in chart) are Bullish with a score of 50.1 percent.

Price Trend-Following Model: Weak Uptrend

Our weekly trend-following model classifies the current market price position as: Weak Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

BRITISH POUND Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	44.9	41.1	11.5
– Percent of Open Interest Shorts:	25.1	59.1	13.3
– Net Position:	43,414	-39,400	-4,014
– Gross Longs:	98,352	90,146	25,106
– Gross Shorts:	54,938	129,546	29,120
– Long to Short Ratio:	1.8 to 1	0.7 to 1	0.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	82.1	23.6	50.1
– Strength Index Reading (3 Year Range):	Bullish-Extreme	Bearish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-1.9	5.4	-13.2

Japanese Yen Futures:

The Japanese Yen large speculator standing this week resulted in a net position of -143,230 contracts in the data reported through Tuesday. This was a weekly decrease of -14,124 contracts from the previous week which had a total of -129,106 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.0 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 94.3 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

JAPANESE YEN Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	17.4	64.8	15.9
– Percent of Open Interest Shorts:	62.6	20.7	14.8
– Net Position:	-143,230	139,494	3,736
– Gross Longs:	55,190	205,195	50,476
– Gross Shorts:	198,420	65,701	46,740
– Long to Short Ratio:	0.3 to 1	3.1 to 1	1.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	0.0	100.0	94.3
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-18.2	11.1	27.7

Swiss Franc Futures:

The Swiss Franc large speculator standing this week resulted in a net position of -22,370 contracts in the data reported through Tuesday. This was a weekly decline of -402 contracts from the previous week which had a total of -21,968 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.0 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 3.1 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

SWISS FRANC Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	24.4	64.5	11.1
– Percent of Open Interest Shorts:	50.0	20.0	29.8
– Net Position:	-22,370	38,683	-16,313
– Gross Longs:	21,220	56,144	9,682
– Gross Shorts:	43,590	17,461	25,995
– Long to Short Ratio:	0.5 to 1	3.2 to 1	0.4 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	0.0	100.0	3.1
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-34.7	40.8	-30.7

Canadian Dollar Futures:

The Canadian Dollar large speculator standing this week resulted in a net position of -51,223 contracts in the data reported through Tuesday. This was a weekly decrease of -933 contracts from the previous week which had a total of -50,290 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 16.1 percent. The commercials are Bullish-Extreme with a score of 84.3 percent and the small traders (not shown in chart) are Bearish with a score of 20.0 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend. The current action for the model is considered to be: New Sell – Short Position.

CANADIAN DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	22.4	61.0	14.1
– Percent of Open Interest Shorts:	48.4	34.4	14.7
– Net Position:	-51,223	52,481	-1,258
– Gross Longs:	44,220	120,307	27,748
– Gross Shorts:	95,443	67,826	29,006
– Long to Short Ratio:	0.5 to 1	1.8 to 1	1.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	16.1	84.3	20.0
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-42.3	31.9	-1.7

Australian Dollar Futures:

The Australian Dollar large speculator standing this week resulted in a net position of -102,685 contracts in the data reported through Tuesday. This was a weekly increase of 2,767 contracts from the previous week which had a total of -105,452 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 4.4 percent. The commercials are Bullish-Extreme with a score of 97.5 percent and the small traders (not shown in chart) are Bearish with a score of 25.5 percent.

Price Trend-Following Model: Downtrend

Our weekly trend-following model classifies the current market price position as: Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

AUSTRALIAN DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	15.4	73.3	9.1
– Percent of Open Interest Shorts:	61.0	22.5	14.1
– Net Position:	-102,685	114,086	-11,401
– Gross Longs:	34,557	164,790	20,421
– Gross Shorts:	137,242	50,704	31,822
– Long to Short Ratio:	0.3 to 1	3.3 to 1	0.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	4.4	97.5	25.5
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-18.7	15.5	-1.7

New Zealand Dollar Futures:

The New Zealand Dollar large speculator standing this week resulted in a net position of -7,528 contracts in the data reported through Tuesday. This was a weekly reduction of -1,504 contracts from the previous week which had a total of -6,024 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 39.0 percent. The commercials are Bullish with a score of 66.8 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 13.3 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

NEW ZEALAND DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	32.0	62.2	5.5
– Percent of Open Interest Shorts:	44.1	44.9	10.6
– Net Position:	-7,528	10,695	-3,167
– Gross Longs:	19,725	38,421	3,383
– Gross Shorts:	27,253	27,726	6,550
– Long to Short Ratio:	0.7 to 1	1.4 to 1	0.5 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	39.0	66.8	13.3
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-40.2	45.2	-56.0

Mexican Peso Futures:

The Mexican Peso large speculator standing this week resulted in a net position of 133,730 contracts in the data reported through Tuesday. This was a weekly rise of 1,662 contracts from the previous week which had a total of 132,068 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 100.0 percent. The commercials are Bearish-Extreme with a score of 0.0 percent and the small traders (not shown in chart) are Bearish with a score of 47.6 percent.

Price Trend-Following Model: Strong Uptrend

Our weekly trend-following model classifies the current market price position as: Strong Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

MEXICAN PESO Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	60.9	36.1	2.7
– Percent of Open Interest Shorts:	18.4	80.4	0.9
– Net Position:	133,730	-139,435	5,705
– Gross Longs:	191,685	113,502	8,643
– Gross Shorts:	57,955	252,937	2,938
– Long to Short Ratio:	3.3 to 1	0.4 to 1	2.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	100.0	0.0	47.6
– Strength Index Reading (3 Year Range):	Bullish-Extreme	Bearish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	19.1	-18.6	2.4

Brazilian Real Futures:

The Brazilian Real large speculator standing this week resulted in a net position of -3,261 contracts in the data reported through Tuesday. This was a weekly lowering of -11,948 contracts from the previous week which had a total of 8,687 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 30.3 percent. The commercials are Bullish with a score of 68.5 percent and the small traders (not shown in chart) are Bullish with a score of 52.2 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

BRAZIL REAL Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	58.2	34.8	6.6
– Percent of Open Interest Shorts:	64.5	32.2	2.9
– Net Position:	-3,261	1,359	1,902
– Gross Longs:	30,318	18,139	3,413
– Gross Shorts:	33,579	16,780	1,511
– Long to Short Ratio:	0.9 to 1	1.1 to 1	2.3 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	30.3	68.5	52.2
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-25.7	25.2	-0.3

Bitcoin Futures:

The Bitcoin large speculator standing this week resulted in a net position of 160 contracts in the data reported through Tuesday. This was a weekly advance of 1,235 contracts from the previous week which had a total of -1,075 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 68.8 percent. The commercials are Bearish with a score of 39.1 percent and the small traders (not shown in chart) are Bearish with a score of 32.2 percent.

Price Trend-Following Model: Strong Uptrend

Our weekly trend-following model classifies the current market price position as: Strong Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

BITCOIN Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	81.7	5.1	5.4
– Percent of Open Interest Shorts:	81.2	8.5	2.6
– Net Position:	160	-1,008	848
– Gross Longs:	24,311	1,513	1,619
– Gross Shorts:	24,151	2,521	771
– Long to Short Ratio:	1.0 to 1	0.6 to 1	2.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	68.8	39.1	32.2
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	34.0	-56.2	-1.1

Article By InvestMacro – Receive our weekly COT Newsletter

*COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets.

The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting). See CFTC criteria here.

06 Apr

Speculator Extremes: Silver, Gasoline & Peso lead Bullish & Bearish Positions

By InvestMacro

The latest update for the weekly Commitment of Traders (COT) report was released by the Commodity Futures Trading Commission (CFTC) on Friday for data ending on April 2nd.

This weekly Extreme Positions report highlights the Most Bullish and Most Bearish Positions for the speculator category. Extreme positioning in these markets can foreshadow strong moves in the underlying market.

To signify an extreme position, we use the Strength Index (also known as the COT Index) of each instrument, a common method of measuring COT data. The Strength Index is simply a comparison of current trader positions against the range of positions over the previous 3 years. We use over 80 percent as extremely bullish and under 20 percent as extremely bearish. (Compare Strength Index scores across all markets in the data table or cot leaders table)

Here Are This Week’s Most Bullish Speculator Positions:

Silver

The Silver speculator position comes in as the most bullish extreme standing this week. The Silver speculator level is currently at a 100.0 percent score of its 3-year range.

The six-week trend for the percent strength score totaled 46.7 this week. The overall net speculator position was a total of 53,147 net contracts this week with a gain of 2,311 contract in the weekly speculator bets.

Speculators or Non-Commercials Notes:

Speculators, classified as non-commercial traders by the CFTC, are made up of large commodity funds, hedge funds and other significant for-profit participants. The Specs are generally regarded as trend-followers in their behavior towards price action – net speculator bets and prices tend to go in the same directions. These traders often look to buy when prices are rising and sell when prices are falling. To illustrate this point, many times speculator contracts can be found at their most extremes (bullish or bearish) when prices are also close to their highest or lowest levels.

These extreme levels can be dangerous for the large speculators as the trade is most crowded, there is less trading ammunition still sitting on the sidelines to push the trend further and prices have moved a significant distance. When the trend becomes exhausted, some speculators take profits while others look to also exit positions when prices fail to continue in the same direction. This process usually plays out over many months to years and can ultimately create a reverse effect where prices start to fall and speculators start a process of selling when prices are falling.

Gasoline

The Gasoline speculator position comes next in the extreme standings this week. The Gasoline speculator level is now also at a 100.0 percent score of its 3-year range.

The six-week trend for the percent strength score was 36.5 this week. The speculator position registered 83,723 net contracts this week with a weekly rise of 7,994 contracts in speculator bets.

Mexican Peso

The Mexican Peso speculator position comes in next this week in the extreme standings. The Mexican Peso speculator level also resides at a 100.0 percent score of its 3-year range.

The six-week trend for the speculator strength score came in at 19.1 this week. The overall speculator position was 133,730 net contracts this week with a small rise of 1,662 contracts in the weekly speculator bets.

Coffee

The Coffee speculator position comes up number four in the extreme standings this week. The Coffee speculator level is at a 96.6 percent score of its 3-year range.

The six-week trend for the speculator strength score totaled a change of 11.9 this week. The overall speculator position was 67,482 net contracts this week with a boost of 11,447 contracts in the speculator bets.

Steel

The Steel speculator position rounds out the top five in this week’s bullish extreme standings. The Steel speculator level sits at a 93.6 percent score of its 3-year range. The six-week trend for the speculator strength score was 7.6 this week.

The speculator position was -714 net contracts this week with an increase by 1,074 contracts in the weekly speculator bets.

This Week’s Most Bearish Speculator Positions:

Japanese Yen

The Japanese Yen speculator position comes in as the most bearish extreme standing this week. The Japanese Yen speculator level is at a 0.0 percent score of its 3-year range.

The six-week trend for the speculator strength score was -18.2 this week. The overall speculator position was -143,230 net contracts this week with a decline of -14,124 contracts in the speculator bets.

Swiss Franc

The Swiss Franc speculator position comes in next for the most bearish extreme standing on the week. The Swiss Franc speculator level is at a 0.0 percent score of its 3-year range.

The six-week trend for the speculator strength score was -34.7 this week. The speculator position was -22,370 net contracts this week with a dip of -402 contracts in the weekly speculator bets.

US Dollar Index

The US Dollar Index speculator position comes in as third most bearish extreme standing of the week. The US Dollar Index speculator level resides at a 0.9 percent score of its 3-year range.

The six-week trend for the speculator strength score was -7.3 this week. The overall speculator position was -1,896 net contracts this week with a drop of -1,267 contracts in the speculator bets.

Australian Dollar

The Australian Dollar speculator position comes in as this week’s fourth most bearish extreme standing. The Australian Dollar speculator level is at a 4.4 percent score of its 3-year range.

The six-week trend for the speculator strength score was -18.7 this week. The speculator position was -102,685 net contracts this week with a gain of 2,767 contracts in the weekly speculator bets.

1-Month Secured Overnight Financing Rate

Finally, the 1-Month Secured Overnight Financing Rate speculator position comes in as the fifth most bearish extreme standing for this week. The 1-Month Secured Overnight Financing Rate speculator level is at a 8.2 percent score of its 3-year range.

The six-week trend for the speculator strength score was -39.6 this week. The speculator position was -220,606 net contracts this week with a decrease by -48,562 contracts in the weekly speculator bets.

Article By InvestMacro – Receive our weekly COT Newsletter

COT Updates Forex and Currency News Opinions

05 Apr

Week Ahead: EURCAD ready to breakout?

By ForexTime

Big week for minor currency pair

BoC + ECB rate decisions in focus

EURCAD trapped within 300 pip range

Prices gaining bullish momentum on D1

Bloomberg model: 76% chance EURCAD – (1.45454 – 1.48439)

Key central bank decisions, speeches from policymakers, high-impact data, and earnings announcements by US banks may inject markets with fresh volatility next week:

Sunday, 7th April

CNH: China forex reserves

Monday, 8th April

GER40: Germany industrial production
JPY: Japan current account balance
CHF: SNB President Thomas Jordan speech
SEK: Riksbank Governor Erik Thedeen speech
USD: Minneapolis Fed President Neel Kashkari speech

Tuesday, 9th April

AU200: Australia consumer confidence
CN50: China aggregate financing, money supply, new yuan loans
TWN: Taiwan CPI
CHF: SNB Vice Chair Martin Schlegel speech
SEK: Riksbank Deputy Governor Martin Floden speech
ZAR: South Africa manufacturing production

Wednesday, 10th April

CAD: BoC rate decision
JP225: Japan PPI
NZD: RBNZ rate decision
TWN: Taiwan trade
NAS100: US March CPI, FOMC minutes, Chicago Fed President Austan Goolsbee speech

Thursday, 11th April

CN50: China CPI, PPI
EUR: ECB rate decision
US30: US initial jobless claims, PPI, New York Fed President John Williams, Boston Fed President Susan Collins speech
GBP: BOE policymaker Megan Greene speech
SEK: Riksbank Deputy Governor Per Jansson speech

Friday, 12th April

CAD: Canada existing home sales
CNH: China trade
GER40: Germany CPI
JP225: Japan industrial production
NZD: New Zealand food prices, PMI
UK100: UK industrial production, Manufacturing production, Trade balance, GDP (MoM)
USD: University of Michigan consumer sentiment, San Francisco Fed President Mary Daly speech
US500: Citigroup, JPMorgan and Wells Fargo earnings

The spotlight shines on the EURCAD which has been trapped within a 300-pip range since December 2023.

Given how the Bank of Canada (BoC) and European Central Bank (ECB) rate decisions have the potential to rock the minor currency, a major breakout may be on the horizon.

Here are 3 reasons why:

1) BoC rate decision

The Bank of Canada is expected to leave interest rates unchanged at 5% on Wednesday.

When considering the two consecutive downside surprises in inflation, expectations are rising over the central bank cutting interest rates in summer. Nevertheless, much attention will be directed towards the policy statement for fresh insight into the central bank’s future rate decisions.

Traders are currently pricing in a 72% probability of a 25-basis point BoC cut by June 2024 with a move fully priced in by July.

Should the BoC hint that a rate cut could be on the horizon, the CAD is likely to weaken – boosting the USDCAD as a result.

If the BoC signals that more time may be needed before rates are lowered, this could lend support to the CAD – dragging the USDCAD lower.

2) ECB rate decision

Markets widely expect the European Central Bank to leave interest rates unchanged on Thursday.

Back in March, the European Central Bank signalled that interest rates could be cut by June after lowering its forecast for inflation. So much focus will be on Lagarde’s press conference for additional clues on future policy moves, especially after inflation fell to 2.4% in March – its lowest rate in more than two years.

Traders are currently pricing in a 92% probability of a 25-basis point ECB cut by June with a move fully priced in by July.

A dovish sounding ECB that confirms that rates will be cut in June may hit the euro, sending the EURCAD lower.

If the ECB sounds more hawkish than expected, the euro may jump – pushing the EURCAD higher.

3) Technical forces

EURCAD seems to be gaining bullish momentum on the daily charts with prices trading above the 50, 100 and 200-day SMA.

A solid breakout above 1.4700 may trigger a move towards 1.4750 which has proved a tough nut to crack. Should bulls secure a solid daily close above this level, it could open the doors towards 1.4850.

Should prices drop below the 100-day SMA at 1.4665, this could trigger a selloff towards the 50-day SMA and 200-day SMA at 1.4620. Below this point, will be the low at 1.4545.

The Bloomberg FX model now forecasts a 76% chance that EURCAD will trade within the 1.45454 – 1.48439 range through next week.

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Forex and Currency News Opinions

04 Apr

America’s green manufacturing boom, from EV batteries to solar panel production, isn’t powered by renewable energy − yet

By James Morton Turner, Wellesley College

Panasonic’s new US$4 billion battery factory in De Soto, Kansas, is designed to be a model of sustainability – it’s an all-electric factory with no need for a smokestack. When finished, it will cover the size of 48 football fields, employ 4,000 people and produce enough advanced batteries to supply half a million electric cars per year.

But there’s a catch, and it’s a big one.

While the factory will run on wind and solar power much of the time, renewables supplied only 34% of the local utility Evergy’s electricity in 2023.

In much of the U.S., fossil fuels still play a key role in meeting power demand. In fact, Evergy has asked permission to extend the life of an old coal-fired power plant to meet growing demand, including from the battery factory.

With my students at Wellesley College, I’ve been tracking the boom in investments in clean energy manufacturing and how those projects – including battery, solar panel and wind turbine manufacturing and their supply chains – map onto the nation’s electricity grid.

The Kansas battery plant highlights the challenges ahead as the U.S. scales up production of clean energy technologies and weans itself off fossil fuels. It also illustrates the potential for this industry to accelerate the transition to renewable energy nationwide.

The clean tech manufacturing boom

Let’s start with some good news.

In the battery sector alone, companies have announced plans to build 44 major factories with the potential to produce enough battery cells to supply more than 10 million electric vehicles per year in 2030.

That is the scale of commitment needed if the U.S. is going to tackle climate change and meet its new auto emissions standards announced in March 2024.

The challenge: These battery factories, and the electric vehicles they equip, are going to require a lot of electricity.

Producing enough battery cells to store 1 kilowatt-hour (kWh) of electricity – enough for 2 to 4 miles of range in an EV – requires about 30 kWh of manufacturing energy, according to a recent study.

Combining that estimate and our tracking, we project that in 2030, battery manufacturing in the U.S. would require about 30 billion kWh of electricity per year, assuming the factories run on electricity, like the one in Kansas. That equates to about 2% of all U.S. industrial electricity used in 2022.

Battery belt’s huge solar potential

A large number of these plants are planned in a region of the U.S. South dubbed the “battery belt.” Solar energy potential is high in much of the region, but the power grid makes little use of it.

Our tracking found that three-fourths of the battery manufacturing capacity is locating in states with lower-than-average renewable electricity generation today. And in almost all of those places, more demand will drive higher marginal emissions, because that extra power almost always comes from fossil fuels.

However, we have also been tracking which battery companies are committing to powering their manufacturing operations with renewable electricity, and the data points to a cleaner future.

By our count, half of the batteries will be manufactured at factories that have committed to sourcing at least 50% of their electricity demand from renewables by 2030. Even better, these commitments are concentrated in regions of the U.S. where investments have lagged.

Some companies are already taking action. Tesla is building the world’s largest solar array on the roof of its Texas factory. LG has committed to sourcing 100% renewable solar and hydroelectricity for its new cathode factory in Tennessee. And Panasonic is taking steps to reach net-zero emissions for all of its factories, including the new one in Kansas, by 2030.

More corporate commitments can help strengthen demand for the deployment of wind and solar across the emerging battery belt.

What that means for US electricity demand

Manufacturing all of these batteries and charging all of these electric vehicles is going to put a lot more demand on the power grid. But that isn’t an argument against EVs. Anything that plugs into the grid, whether it is an EV or the factory that manufacturers its batteries, gets cleaner as more renewable energy sources come online.

This transition is already happening. Although natural gas dominates electricity generation, in 2023 renewables supplied more electricity than coal for the first time in U.S. history. The government forecasts that in 2024, 96% of new electricity generating capacity added to the grid would be fossil fuel-free, including batteries. These trends are accelerating, thanks to the incentives for clean energy deployment included in the 2022 Inflation Reduction Act.

Looking ahead

The big lesson here is that the challenge in Kansas is not the battery factory – it is the increasingly antiquated electricity grid.

As investments in a clean energy future accelerate, America will need to reengineer much of its power grid to run on more and more renewables and, simultaneously, electrify everything from cars to factories to homes.

That means investing in modernizing, expanding and decarbonizing the electric grid is as important as building new factories or shifting to electric cars.

Investments in clean energy manufacturing will play a key role in enabling that transition: Some of the new advanced batteries will be used on the grid, providing backup energy storage for times when renewable energy generation slows or electricity demand is especially high.

In January, Hawaii replaced its last coal-fired power plant with an advanced battery system. It won’t be long before that starts to happen in Tennessee, Texas and Kansas, too.

About the Author:

James Morton Turner, Professor of Environmental Studies, Wellesley College

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Energy Opinions

04 Apr

Expert Shares the Best Silver Stocks for the Breakout

Source: Ron Struthers (4/3/24)

Ron Struthers of Struthers Resource Stock Report compares six silver stocks to the SLV ETF, shares Pan American, a gold producer with many silver lines, and touches on Mag Silver, which he believes is not well known enough.

This chart compares the silver ETD ‘SLV’ to 5 well-known silver producers, Hecla, Coeur Mining, Majestic Silver, Mag Silver, and Pan American Silver. Also, non-producer Discovery Silver.

Like gold stocks, silver stocks are beaten up. SLV shows a 40% gain since the September/October 2022 bottom, while only Coeur Mining has outperformed, but that is because it is really a gold producer now. Hecla has almost caught SLV, and Pan American shows a small gain during the comparison period.

Coeur Mining Inc. (CDE:NYSE) might be remembered as a silver stock, but in 2023, 70% of its revenue came from gold. They do have about an equal value of reserves in silver compared to gold, so there is still leverage to silver. Couer stock has moved up lately, and that is related to the gold price increase.

First Majestic Silver Corp. (FR:TSX; AG:NYSE; FMV:FSE) used to be one of my favorites, but I am not too happy with their performance of late. In 2023, production was 26.9 million silver equivalent (AgEq) ounces, consisting of 10.3 million silver ounces and 198,921 gold ounces. It gets about 60% of its revenue from silver.

Hecla Mining Co. (HL:NYSE) is an old well, well-known silver stock, and currently about 60% of revenues are from silver production. It should do well with rising silver prices.

Two silver stocks lagging on the chart that should do more than catch up are Pan American Silver and Mag Silver, so I am adding these two to our Selection list along with Discovery Silver as huge leverage to silver and a take-over target and also lagging silver on the chart.

Pan American Silver

^{Recent Price – $15.80}

^{Dividend yield – 2.5%}

^{Shares Outstanding – 364.7}

Pan American Silver Corp. (PAAS:TSX; PAAS:NASDAQ) trades like and is valued like a silver company, but it is really a gold company when it comes to production, so it is one of the gold stocks that has lagged recently.

However, Pan American has huge silver resources, over 1 billion ounces Measured and Indicated, so it is like a gold stock with several silver linings.

For 2023, silver production was 4 million ounces, and gold production was 882,900 ounces.
For silver, they realized a price of $22.94, so gross revenue was about $468 million.
For gold, they realized a price of $1,951/oz, so gross revenue was $1.72 billion.

You can see that gold is over 70% of revenues, but the stock has not responded to the rising gold price, as well as many other gold stocks.

They have 1,033,800,000 M&I ounces of silver at $6/oz in the ground is about $6 billion value, and 16,083,600 M&I ozs gold at $150/oz in the ground is about $2.4 billion.

PAAS has a market cap of US$7.76 billion, less cash plus debt, for a value of $6.12 billion. You can look at the stock as either the silver is valued cheaply or the gold is valued cheaply. The current dividend gives about a 2.5% yield, and I expect this to rise as gold and silver go higher.

Pan American enters 2024 in a solid financial position with cash and short-term investments totaling $440.9 million and the full $750.0 million available under our undrawn credit facility. Total debt of $801.6 million was related to construction and other loans, leases, and two senior notes Pan American assumed through the acquisition of Yamana.

Pan American acquired Yamana Gold this year, which will drive growth in 2024. The company is very diversified, with 11 producing mines, so rather than get into each mine, this graphic from their presentation gives you a good idea of the diversity.

Conclusion

The company is well diversified and in strong financial shape. Their gold and silver ounces are valued cheaply like most miners now, but I don’t believe the stock has responded as well to the rising gold price as others. I see it catching up.

The company believes its stock is undervalued as well because it announced a normal course issuer bid to buy back up to 5% of the stock. They will have rising revenues and cash flow for 2024.

Its guidance for 2024 is 21 to 23 million ounces of silver at AISC of $16 to $18.50 per ounce. For gold, it is projecting 880,000 to 1 million ounces of production at AISC of $1,475 to $1,575. PAAS will have very good margins for 2024, and the higher gold and silver prices will add significantly to this.

Of note, and because New Pacific Metals -NUAG is on our list, Pan American owns an ~11.6% undiluted interest in New Pacific, which is advancing the Silver Sands exploration project in Bolivia.

Don’t be surprised if Pan American buys out New Pacific. The stock is way down from 2020/2021 highs, so it has lots of legroom to the upside. We need to see a close above $17 for a higher high and confirm the turnaround. I see that soon.

I believe the stock could easily break the $20 resistance and get back close to $30 or better this year.

That makes the Call Options attractive as well. I like the January 2025 $20 Call option for US$2.50.

Mag Silver

^{Recent Price – US$11.45}

^{Share Outstanding – 103 Million}

^{Mostly Institutional held – owning 70%}

^{No debt and US$68.7 million cash on Dec 31, 2023}

I have followed MAG Silver Corp. (MAG:TSX; MAG:NYSE American) for many years.

It is a relatively new producer because its mine just started production in 2023, so it is probably not known so much as a major silver producer. This principal asset is a 44% interest in the Juanicipio Mine located in Zacatecas, Mexico, which achieved commercial production at its 4,000 tonnes per day (“tpd”) processing facility on June 1, 2023.

MAG’s partner is Fresnillo Plc., a London-based company that debuted on the London Stock Exchange in 2008 following a successful, profitable, and decades-long track record as a Mexican mining company.

Due to its history as part of the Peñoles Group, Fresnillo can trace its origins back to the commencement of Peñoles’ mining operations in 1887 and smelting and refining operations at Torreon in 1901. The Juanicipio mine is high grade at 472 g/t silver and low cost at $9.18/oz AISC, so it will be a real cash cow for Mag Silver now that it is in production. A mine does not get much better than this one, and I don’t think the stock reflects this fact.

The silver recoveries are good at 88%, and in the last half of 2024, the mine generated a free cash flow of about $103 million, of which $33.4 million went to Mag Silver.

This is a great slide from their presentation that shows free cash flow at very conservative base case pricing and at spot prices.

Free cash flow of $180 M/year at current spot prices. If we get the prices I expect, hang on tight.

The mine has M&I resources of 406,277,000 AgEq ounces — Mag Silver 44% would be 178,740 ounces. The current valuation for MAG is about $6/oz silver, which is about the average of other companies, but this is an above-average mine.

There is tons of upside exploration potential here, so it will be a very long mine life, and the potential the mill rate could be expanded in a few years to increase production.

Conclusion

About 75% of revenue is from silver, so this is a pretty pure play on silver. Cash flow for the fourth quarter was around US$36 million, and with higher silver prices, we could easily see cash flow in 2024 for MAG around $160 million.

The stock is trading at around 11.5 times cash flow, according to MarketWatch. If it simply maintains that multiple, the stock should move to about $18.00 in 2024. On the chart, the long-term downtrend has been broken, and the stock is about to break out to a higher high and above the first resistance, around $12.00.

Discovery Silver

^{Recent Price – CA$0.85}

^{Shares Outstanding – 395 million.}

^{Eric Sprott owns 23% and Institutions 37%}

Many of you will remember Discovery Silver Corp. (OTCMKTS:DSVSF) as it was on the Selection List for quite a while, but we got stopped out in 2022 at $1.55.

We can buy back much cheaper now. Discovery’s flagship project is its 100%-owned Cordero project, the world’s largest undeveloped silver deposit. The feasibility study completed in February 2024 demonstrates that Cordero has the potential to be developed into a large-scale, long-life project with low unit costs and attractive economic returns that offers the combination of margin, size, and scalability.

Cordero is located close to infrastructure in a prolific mining belt in Chihuahua state, Mexico. In the chart below, Mag Silver would fit between Ays and Hecla.

Summary of Cordero feasibility study results:

Large-scale, long-life production: 19-year mine life with an average annual production of 37 million ounces silver equivalent in concentrate in year 1 to year 12 and 33 Moz AgEq in concentrate over the life of the mine;
Highly profitable: low unit costs with all-in sustaining costs per AgEq ounce of under $12.50 (U.S.) in year one to year eight and under $13.50 (U.S.) over the LOM, placing Cordero in the bottom half of the cost curve;
Tier 1 reserve base: reserves of silver: 302 Moz, gold: 840,000 oz, lead: 3.0 billion pounds, and zinc: 5.2 billion pounds, positioning Cordero as the largest undeveloped silver deposit globally;
Clear upside potential: 240 million tonnes of measured and indicated resource sit outside of the feasibility study pit, highlighting the potential to materially extend the mine life at modestly higher silver prices;
Low capital intensity: initial development capital expenditures of $606 million resulting in an attractive after-tax net present value to capital expenditure ratio of 2.0;
Attractive economics: base-case after-tax net present value discounted at 5% of $1.2 billion (U.S.), growing to $2.2 billion (U.S.) in year 4, when the project reaches final completion to 51,000 tonnes per day.

Conclusion

On December 31, Discovery had a strong cash position of almost CA$59 million, so they have plenty enough to move this through permitting to the construction phase. DSV submitted an Environmental Impact Assessment (MIA) in August 2023; the review process is ongoing.

The deposit is massive. With the Feasibility and more drilling, the Measured & Indicated Resource grew by 70 Moz AgEq to 1,202 Moz AgEq within the pit outline.

Discovery has a market cap of US$255 million less cash, a value of about US$210 million. This puts a value per ounce of a measly US$0.17 cents. I expect a lower valuation with a lower grade deposit, but the average grade in the first few years of mine life is around 100 g/t silver, which is pretty decent for an open pit.

As you can see on the chart, this had a much higher valuation with fewer ounces and about the same silver price, but it is beaten down like every miner. The downtrend is broken, and the stock is close to breaking out to a higher high and resistance around $0.95. From here, it could soon get back to the $1.50 area.

As you have probably noticed from yesterday’s report, silver broke out today, currently at $26.77 on Comex.

I bought silver coins from my dealer yesterday, Colonial Acres. It is the most silver coin I have seen in stock there for years. I would not wait long; I expect this will soon get bought up.

Important Disclosures:

Mag Silver Corp. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Pan American Silver Corp.
Ron Struthers: I, or members of my immediate household or family, own securities of: Pan American Silver Corp. and Discovery Silver. I determined which companies would be included in this article based on my research and understanding of the sector.
Statements and opinions expressed are the opinions of the author and not of Streetwise Reports, Street Smart, or their officers. The author is wholly responsible for the accuracy of the statements. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Any disclosures from the author can be found below. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.

For additional disclosures, please click here.

Struthers Resource Stock Report Disclosures

All forecasts and recommendations are based on opinion. Markets change direction with consensus beliefs, which may change at any time and without notice. The author/publisher of this publication has taken every precaution to provide the most accurate information possible. The information & data were obtained from sources believed to be reliable, but because the information & data source are beyond the author’s control, no representation or guarantee is made that it is complete or accurate. The reader accepts information on the condition that errors or omissions shall not be made the basis for any claim, demand or cause for action. Because of the ever-changing nature of information & statistics the author/publisher strongly encourages the reader to communicate directly with the company and/or with their personal investment adviser to obtain up to date information. Past results are not necessarily indicative of future results. Any statements non-factual in nature constitute only current opinions, which are subject to change. The author/publisher may or may not have a position in the securities and/or options relating thereto, & may make purchases and/or sales of these securities relating thereto from time to time in the open market or otherwise. Neither the information, nor opinions expressed, shall be construed as a solicitation to buy or sell any stock, futures or options contract mentioned herein. The author/publisher of this letter is not a qualified financial adviser & is not acting as such in this publication.

Metals Opinions

03 Apr

A century after the EEG was discovered, it remains a crucial tool for understanding the brain

By Giridhar Kalamangalam, University of Florida

Jena, Germany, 1924: Working in near-isolation and with painstaking tediousness, the psychiatrist Hans Berger observes rhythmic electrical activity from the scalp of human subjects. He is convinced the activity arises from within the brain and coins the term “electroencephalogram.”

It is 10 years before the scientific community accepts Berger’s work, birthing the field of electroencephalography, or EEG for short.

Today, the electroencephalogram – also abbreviated as EEG – is widely known as a medical test measuring brain electrical activity that’s used on patients who have, or are suspected to have, neurological disorders. The EEG provides a window into the living brain, with a continuous electrical readout of what is happening inside our heads. The procedure may be short, often just a 30-minute recording. But for patients monitored for diagnosis or treatment of brain disease, it can be continued for much longer – days or even weeks.

As a neurologist specializing in epilepsy, I use EEG on a daily basis. Our team at the University of Florida interprets thousands of EEGs a year in neurological patients. I also run a research lab where our goal is to understand the basic structure of the EEG in health and disease.

A history of unexpected twists

The story of EEG is colorful and littered with fables. Berger’s interest in brain electricity was not to combat disease, though that was his day job as a physician, but to find a biological basis for his belief in telepathy. He wondered whether the brain waves of EEG could convey thoughts through space, allowing people to read each other’s minds. He was unsuccessful in his mission, but the field he founded nonetheless took off.

By the mid-1930s, researchers had observed the striking differences between the awake and asleep EEG. The EEGs of patients with brain disease turned up a variety of unprecedented observations.

And then came a defining moment for modern medicine. In December 1934, a group of Boston physicians observed the rhythmic EEG spike-wave appearance of seizures in patients with “petit mal” epilepsy. Petit mal is an anachronistic term for a type of epilepsy where a patient’s flow of thought, speech or action momentarily freezes during seizures. For the first time, the symptoms and behavior of patients during seizures were correlated to a brain signal occurring in lockstep.

EEG quickly evolved from a scientific curiosity to a mainstream clinical tool. The first clinical EEG laboratory was set up at Massachusetts General Hospital in 1937. The practice grew in the ensuing decades into the specialized services that institutions like ours have offered since the 1970s.

The EEG explained

So what, exactly, is the EEG?

Imagine taking two small metallic discs connected by a conducting wire. Place one disc on the scalp and connect the other to a neutral reference, such as the ear. Watch a tiny alternating current flow in the wire, proportional to the electrical activity sensed by the conducting contact. This activity is the EEG, the electrical milieu that bathes brain tissue.

In turn, the EEG arises from the excitable nature of nerve cells, or neurons. When neurons fire, action potentials – brief, high-voltage spikes traveling outward from their cell bodies – set up local electrical activity in other neurons, causing current to flow within and outside them.

These local current flows may cause the targeted neurons to fire in turn and set up yet more current flows. Thus, the system sustains itself. The average overall activity is a mix of many different frequencies, with the five main ones called delta, theta, alpha, beta and gamma waves.

If the EEG were just random up-and-down drift – “the bloodless dance of action potentials,” commented a skeptical early 20th century neurologist – it would be much less interesting. The remarkable fact is that EEG tends to spontaneously organize into patterns in time and space.

The spike-wave pattern of petit mal, referenced earlier, is a classic example, but scores of others are now known. Clinical EEG practice is just recognizing characteristic EEG patterns and correlating them to specific disease states.

Fluctuating neurons

Beyond the clinic, an unsettling scientific question emerges. Simply put, how do electrical patterns arise in the brain? How do the billions of neurons and their trillions of local current flows fluctuate in just the right ways to create globally ordered structure?

Our research group has been interested in the fundamental question of pattern formation in EEG. It turns out that activity in the brain is naturally repetitive – that is, oscillatory. This is due to the way neurons are connected and the fact that they interact by excitation and inhibition to produce push-pull effects.

Considering local oscillations as fundamental building blocks, we showed that the EEG over the entire brain could be built up from such elementary blocks. More interestingly, the differing frequencies could be made to coalesce, or synchronize, into a common rhythm. We recognized that synchronization of this type underlies some seizurelike patterns observed in patients.

EEG is but one way to study the brain.

EEG, AI and the mind

Pattern formation in nature is deeply fascinating. How does a leopard get its spots? How does the audience at a concert spontaneously settle into a rhythmic applause? Many such questions trace their origin to a classic paper on biological pattern published in 1952. Its author was Alan Turing, better known as the father of computer science and early advocate of artificial intelligence, or AI.

The hardware underlying the majority of today’s AI systems are neural networks. Neural networks were introduced in 1943 by Warren McCulloch, a physician and electroencephalographer. Like Berger, McCulloch’s interest in EEG extended beyond brain disease. He wondered where in the brain’s neurons and EEG lay the capacity to think. He conceived the idea of grouping artificial neuronlike computing units into networks, analogous to how real neurons in the brain interconnected.

Together with Walter Pitts, he proved that such neural networks could function as a general-purpose computer. The seminal McCulloch-Pitts ideas were refined over the ensuing decades and reside in the “deep learning” neural networks of today’s AI.

Deep learning AI has infiltrated all areas of biomedicine, including neurology. For example, AI systems can successfully interpret brain scans. AI methods have also been used to analyze EEG.

Can AI systems be trained to deduce thoughts from the EEG? Can AI approach Berger’s quest for telepathy? Incredibly, recent deep-learning AI research has shown that some aspects of mental activity may be decoded from EEG.

In 2024, EEG turns 100. What windows will it open into the brain and mind in the future? Doubtless, clinical applications will grow. Surely, brain pattern generation will be better understood. Perhaps EEG will glimpse the content of the mind. And for neurologists like me surveying the AI revolution, there’s the quiet pride that EEG was really at the start of it all.

About the Author:

Giridhar Kalamangalam, Professor of Neurology, University of Florida

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Opinions

03 Apr

Turkey’s economy is paying the price for years of policy mistakes

By Gulcin Ozkan, King’s College London

For many years, it wasn’t the economy that determined voting behaviour in Turkey. The country’s president, Recep Tayyip Erdoğan, won almost every election he contested despite a deteriorating economic outlook.

This is commonly explained by the importance of identity politics in a country that has been polarised by the policies of Erdoğan’s ruling Justice and Development (AK) Party over its 22 years in power.

However, Erdoğan’s streak came to a screeching halt on Sunday March 31 following Turkey’s local elections. His AK Party lost the popular vote for the first time since 2002 and the main opposition group claimed victory in key cities including Istanbul and Ankara.

The reason why this time was different lies in the huge accumulated costs from years of policy mistakes that are now beginning to bite in a serious way.

So, what was the economic outlook as the country went to the polls?

On March 21, Turkey’s central bank raised interest rates unexpectedly to 50%. The move was the latest in a succession of rate rises that have followed Erdoğan’s re-election as president in May 2023. It was viewed as evidence of the central bank’s determination to fight runaway inflation that is hovering close to 70%.

The rising interest rates have been widely applauded as a much-needed reversal from the unorthodox monetary policy that had gone on far too long. Erdoğan’s unconventional policy stance arose from his deep-held conviction that raising interest rates would increase inflation rather than reduce it.

The pandemic and Russia’s invasion of Ukraine caused inflation to soar worldwide. While almost every central bank raised interest rates in response, Turkey went on an interest rate cutting spree. Keeping rates artificially low contributed to the rise in domestic inflation, and has made Turkey an inflation champion on a par with Argentina and Venezuela.

Decoupling from other emerging economies

Emerging markets have been surprisingly resilient in the face of the global financial squeeze. Unlike in the past, many emerging economies have avoided huge fluctuations in their exchange rates, have not been subject to debt distress and have managed to keep inflation under control.

One reason for this is the success of emerging economies in improving their policy frameworks, particularly by enhancing the independence of their central banks. More specifically, central banks in these countries have significantly improved their communication and transparency, and have become much better at forecasting inflation. As such, countries including Chile, Czech Republic and South Africa have outperformed their counterparts in advanced economies.

Sadly, Turkey was an outlier in this sphere. The country has completely ditched the independence of its monetary policy to such an extent that its central bank has had six different governors in the last five years.

Politics has also played a disproportionate role in the making of economic policy. Changes to the Turkish constitution, which were put in place in 2018, gave Erdoğan significant executive powers to push for very generous spending ahead of the 2023 presidential elections.

Minimum wage rose substantially and costly pension schemes and subsidised housing projects were put in place. This expansion in public spending naturally contributed to the inflationary pressures that were already brewing.

Turkey’s outlier position in loose monetary policy, cutting rates between 2021 and 2023 while everyone else had been tightening, is the very reason why its central bank is now having to push rates up while others are just starting the easing cycle.

Why does this matter?

Getting monetary policy wrong matters for most countries. But it matters particularly for countries like Turkey that are highly open to trade and financial flows, and for whom exchange rate movements are a crucial source of fluctuation in the domestic economy.

One of the biggest losers of Erdoğan’s unorthodox monetary policy has been the Turkish lira. Over the past six years, the value of the lira has fallen dramatically against the US dollar. In January 2018, you would have needed to part with 3.76 liras to purchase one US dollar. Today, this figure stands at 31.9 liras.

Large fluctuations in the value of the lira matter for the Turkish economy for several reasons.

First, a significant part of Turkey’s imports are inputs used in the production process, particularly of vehicles, machinery and mechanical appliances that make up nearly half of the country’s exports. Any fall in the value of the lira will push up input costs and hence prices, reducing the competitiveness of the country’s exports.

Second, Turkey imports a substantial part of its energy from abroad. In much the same way, any depreciation of the lira will make it more expensive to import energy.

Third, Turkey is sitting on substantial external liabilities in foreign currency terms. This makes the depreciation of the lira even more costly. Any loss in its value magnifies the amount of resources required to repay a given level of foreign currency liabilities.

Moving forward

Turkey’s return to more orthodox economic policy is good news. But it is so overdue that even the sharp reversals in policy have not been sufficient to turn the tide on its economy, especially in the fight against inflation. Persistent inflationary pressures have forced citizens to increase their holdings of foreign currency, which has put further pressure on the lira.

Facing a slowdown in foreign capital inflows, the authorities have had to burn significant amounts of foreign currency reserves to prevent the lira from depreciating further. The sharp rise in interest rates on March 21 should be seen in a similar vein and as the price the country is having to pay for its past policy mistakes.

More importantly, it has been nearly a year since Turkey returned to more conventional economic policy and there is no plan for a restructuring of the economy with proper institutional reform at its core. If proof is needed as to whether robust and independent policy institutions benefit economic performance, you need look no further than the recent resilience of other emerging economies.

Brazil, for example, hasn’t only rebounded strongly from the pandemic. It has managed to control inflation and boasts one of the best performing currencies in the world.

About the Author:

Gulcin Ozkan, Professor of Finance, King’s College London

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Economics & Fundamentals Opinions

02 Apr

UK100 index teases record high

By ForexTime

UK100 index broke above 8k mark today
This stock index came to within 150 pips of its all-time high
Falling UK house prices fostered bets for UK interest rate cuts
“Dovish” Bank of England weakened GBP, cheered UK stocks
Could this be the 12th FXTM stock index to reach record high this year?

The UK100 index came to less than 0.2% away from its record high!

This stock index broke above the psychological 8,000 level, before easing back lower at the time of writing.

What is a stock index?

Imagine a stock index being a basket of many different stocks.

The index measures the overall performance of all those stocks inside that “basket”.

So, rising stock prices inside that “basket” tends to push the index’s prices higher, and vice versa.

What does the UK100 stock index track?

FXTMs UK100 stock index tracks the performance of the benchmark FTSE 100 index.

The FTSE 100 is a blue-chip index, measuring the performance of the 100 biggest companies listed on the London Stock Exchange.

This includes well-known companies such as Shell, AstraZeneca, HSBC, Unilever, and BP, among others.

How far away is the UK100 from its current record high?

The current ATH (all-time high) for this stock index, using intraday prices, stands at 8051.4 posted on 16th February 2023.

Note that this UK100 index tends to move by an average of 0.9% on any given trading day over the past two years.

In other words, this UK100 stock index remains well within reach of its current record high.

If the UK100 stock index can set a new record high soon, that would raise the tally to …

12 of the 18 different stock indices offered across FXTM’s platforms that have posted their respective record highs so far in 2024!

UK100 playing catch up with global peers

Note that the UK100 stock index is up “just” about 3% so far in 2024.

That pales in contrast to the year-to-date gains shown in these stock indexes:

JAP225: +19%
NETH25: +13%
EU50: +12.7%
TWN: +11.7%
US500: +9.9%

Why is the UK100 stock index rising today (Tuesday, April 2nd)?

Today (April 2nd, 2024), it was revealed that UK house prices in March 2024 fell 0.2% compared to February 2024.

This was the first month-on-month decline for UK house prices since December 2023.

While falling UK house prices may ease inflationary pressures, it could also mean stagnating economic growth.

Either way, the data points to a greater likelihood that the Bank of England may cut its Bank Rate sooner rather than later.

How does the BOE’s rate outlook impact the FTSE 100 stock index?

The prospects of UK interest rates moving lower tends to weaken the British Pound, which in turn lifts up the FTSE 100.

At the time of writing, markets are pricing in a 72% chance that the Bank of England will lower its benchmark rate at its June 2024 policy meeting.

Those 72% odds are significantly higher compared to the 42% chance accorded just a month ago (early March 2024) for the same event (BOE rate cut in June).

As a general rule, markets tend to weaken the currency belonging to the central bank that’s about to lower its interest rates.

Also note that the FTSE 100 index and Sterling tend to go in opposite directions (inverse relationship).

In fact, using Bloomberg data, over any given 5-day rolling period over the past 30 years …

the FTSE 100 has moved in the opposite direction as the British Pound, 95% of the time!

Hence, the thought of lower BOE rates = weaker Pound = higher UK100 stock index.

How high could the UK100 stock index go?

Wall Street analysts predict that this UK100 stock index could flirt with the 9,000 mark, 12 months from now.

That suggests potential gains of over 12% over the next 12 months!

If investors can become even more optimistic about the UK and global economic outlook, supported by lower interest rates in the UK, that should help this UK100 stock index realise its upside potential.

Beware of technical pullback

However, on the daily timeframe, note that the UK100’s 14-day relative strength index (RSI) has broken the 70 line and into “overbought” territory.

History suggests that such a technical event may lead to a price pullback in the near future.

Still, once the froth has been cleared from this technical pullback, the UK100 stock index may resume its uptrend that began in late-October 2023, provided the fundamental reasonings remain sound.

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Opinions Stock Market News

30 Mar

Speculator Extremes: MXN, Gasoline & Silver lead Positions

By InvestMacro

The latest update for the weekly Commitment of Traders (COT) report was released by the Commodity Futures Trading Commission (CFTC) on Friday for data ending on March 26th.

Here Are This Week’s Most Bullish Speculator Positions:

Mexican Peso

The Mexican Peso speculator position comes in as the most bullish extreme standing this week. The Mexican Peso speculator level is currently at a 100.0 percent score of its 3-year range.

The six-week trend for the percent strength score totaled 16.1 this week. The overall net speculator position was a total of 132,068 net contracts this week with a rise of 3,398 contract in the weekly speculator bets.

Speculators or Non-Commercials Notes:

Gasoline

The Gasoline speculator position comes next in the extreme standings this week. The Gasoline speculator level is now at a 99.1 percent score of its 3-year range.

The six-week trend for the percent strength score was 19.5 this week. The speculator position registered 75,729 net contracts this week with a weekly gain of 5,721 contracts in speculator bets.

Silver

The Silver speculator position comes in third this week in the extreme standings. The Silver speculator level resides at a 96.9 percent score of its 3-year range.

The six-week trend for the speculator strength score came in at 58.5 this week. The overall speculator position was 50,836 net contracts this week with a decline of -1,599 contracts in the weekly speculator bets.

DowJones Mini

The DowJones Mini speculator position comes up number four in the extreme standings this week. The DowJones Mini speculator level is at a 92.8 percent score of its 3-year range.

The six-week trend for the speculator strength score totaled a change of -0.6 this week. The overall speculator position was 20,012 net contracts this week with a dip of -2,433 contracts in the speculator bets.

Bloomberg Commodity Index

The Bloomberg Commodity Index speculator position rounds out the top five in this week’s bullish extreme standings. The Bloomberg Commodity Index speculator level sits at a 92.6 percent score of its 3-year range. The six-week trend for the speculator strength score was 22.4 this week.

The speculator position was -3,119 net contracts this week with a rise of 4,736 contracts in the weekly speculator bets.

This Week’s Most Bearish Speculator Positions:

Swiss Franc

The Swiss Franc speculator position comes in as the most bearish extreme standing this week. The Swiss Franc speculator level is at a 0.0 percent score of its 3-year range.

The six-week trend for the speculator strength score was -44.9 this week. The overall speculator position was -21,968 net contracts this week with a decrease of -1,468 contracts in the speculator bets.

Australian Dollar

The Australian Dollar speculator position comes in next for the most bearish extreme standing on the week. The Australian Dollar speculator level is at a 1.9 percent score of its 3-year range.

The six-week trend for the speculator strength score was -23.7 this week. The speculator position was -105,452 net contracts this week with a boost of 2,086 contracts in the weekly speculator bets.

Japanese Yen

The Japanese Yen speculator position comes in as third most bearish extreme standing of the week. The Japanese Yen speculator level resides at a 3.2 percent score of its 3-year range.

The six-week trend for the speculator strength score was -15.6 this week. The overall speculator position was -129,106 net contracts this week with a drop of -13,094 contracts in the speculator bets.

US Dollar Index

The US Dollar Index speculator position comes in as this week’s fourth most bearish extreme standing. The US Dollar Index speculator level is at a 3.5 percent score of its 3-year range.

The six-week trend for the speculator strength score was -5.6 this week. The speculator position was -629 net contracts this week with a dip of -1,308 contracts in the weekly speculator bets.

Soybeans

Finally, the Soybeans speculator position comes in as the fifth most bearish extreme standing for this week. The Soybeans speculator level is at a 9.7 percent score of its 3-year range.

The six-week trend for the speculator strength score was 1.8 this week. The speculator position was -153,714 net contracts this week with an increase by 13,939 contracts in the weekly speculator bets.

Article By InvestMacro – Receive our weekly COT Newsletter

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