There is no such bad outlook for now in Nasdaq, 19450 - 18300, until these supports are broken. In fact, the biggest risk here is actually the possibility of a double top here, there is a possibility of a double top around 21000 and giving up from here, but I honestly don't think the outlook has deteriorated yet. Of course, there are risks here right now, even the stock ownership of households has reached 1999 levels, there are many small investors in the stock market, in the US side, in terms of what we understand. But I think Nvidia is still on the upside. Nvidia is generally a leading indicator for the market. Therefore, I don't think it's right to give downside targets here until the market, that is, the trend, is disrupted. Especially for many years, October has been a month of uncertainty and correction before the election. When we look at it from a statistical perspective, there is this risk, but as someone who follows the market instantly, I think there is no need to think about shorting here for now before the trend is disrupted and it first falls below 19300.
Frankly, I still like the formation of Nvidia. Pullbacks have generally been seen in election years. The performance of S&P 500 from now on will be priced in whether there will be a recession in the US. There is no recessionary situation right now. On the contrary, we see that inflation is being tried to be revived in the style of the 1970s and interest rates are being tried to be kept high. This week, they completely printed the VIX at 23. Now, if it goes above 23, there will be a sale in the US. It is beneficial for this to be in front of us. In fact, if this sale starts in the US, it may spread to the global market, but its weekly candle is a bit downward. Therefore, if it goes above 23 - 24, as I said, if we saw that Nasdaq is slowly starting to deteriorate, positions can be considered accordingly. De Facto, frankly, when the VIX goes up, the market goes into sales. It went up by 40% in 2 weeks, I think if anyone buys UVIX here, they have made a profit because they are seriously leveraged. Tesla produced its 3 millionth vehicle in its factory in Shanghai. Since the factory started operating in 2019, it took 30 months to exceed the 1 million vehicle production threshold, while it completed the transition from 2 million to 3 million in just 13 months. Most of the vehicles produced are exported to European and Asia-Pacific markets.
US inflation data came in higher than expected. The Producer Price Index was a little better, to be honest, it was lower than previous data in my opinion. But the Consumer Price Index came in high, of course. But what really matters is what they call super core inflation. In other words, there is an inflation like services inflation that neglects housing. There is a bit of stickiness in that, frankly. Therefore, the concept of recession in the US seems to be delayed a little. When the interest rates naturally remained high, there was buying in DXY, which brought sales to the market. They pressed from here last week. DXY is getting stronger, as long as DXY does not fall below 100, it has not yet entered an upward trend, it has resistance around 103.8. But if these points (103 - 104) are passed in Dxy, we can say that Dxy has already made a bottoming and will go up. Macro developments definitely do not support this, but they have not dropped below 100 as a trend for now.
US 10-year bonds have increased terribly for 2 weeks. Now, since the end of the 1970s, an interest rate that has been falling is close to zero, the US, which they call zero interest rate policy, has always tried to keep interest rates low. Of course, when the US tried to keep it low, many Central Banks, especially developed countries, tried to keep it low, but I can say that it is now the dominant power in the market. It did not allow it to stay below 4 downward. I am not sure if it will stay above 4 for now. We need to follow this together with TLT. If it goes above 4.25, US 10-year bonds will strengthen. In fact, I think the natural background of this increase is that inflation is still high and a 50 basis point interest rate cut was priced in the past weeks. Last week, a FED member Bostic talked about keeping interest rates constant in November. The third quarter bank balance sheet season in the US started positively. JPMorgan recorded a surprise increase in net interest income, while its net profit fell to $12.90 billion. Wells Fargo, on the other hand, reported a net profit of $5.11 billion, earning $1.42 per share. Both banks made provisions for credit defaults.
What I see right now is not keeping interest rates constant but reducing them by 25 basis points at the next meeting, which is currently priced in the market, and the voting members of the FED think the same way. Frankly, even if it is 25 basis points, it is negative for interest rates to remain high right now, but if it gets stronger here, it may also cause a sale in the market. If the interest rate attraction increases, there is already over $6 trillion in the Money Market Fund. Money goes to interest, so this may be a factor that suppresses the stock market. We can read this as strengthening if it goes above 4.25 and interest rates will remain high as Powell has been saying for a long time. Strengthening bond yields and DXY are also putting pressure on ounce gold.
As long as it cannot make a new high, as long as gold can no longer settle above $2700, I still think there is a correction risk. Silver looks a little more positive compared to gold. This is a technical expectation. Don't get me wrong, in the medium term, there were 10-year auctions in American bonds this week. That was not very bright either, of course if there is no demand, selling the bonds may make the interest more attractive. But normally, in my opinion, it should also bring a decrease in DXY. But if the interest rates remain attractive for a while, there may be an increase in DXY. Of course, if inflation remains high here, I think it can be positive for these metals. We are still maintaining our medium term upward targets, primarily $3000 in ounce gold.
Bitcoin scared me last week, it came down. I had mentioned the possibility of a stop below 56000. For now, they threw a nice fake from there and bought it up. If we make a daily close above 63450 and then stay above 67000 and then 73000, a new rising trend will begin. I am a little more hopeful here, in other words, I am completely technically hopeful. Because they did not release it below 57000 and then bought it. Bitcoin has generally shown positive performance in the first and last quarters in terms of statistics. MikroStrategy has a very troubled boss, but the technical appearance of the stock is good. It made 20% last week. If the technical appearance of MikroStrategy works and continues upwards, as I think, it can also carry Bitcoin up. In other words, this shows that there is institutional investor interest in Bitcoin. MikroStrategy being so buyer-oriented will obviously reinforce our upward expectations in Bitcoin. I think it will be more positive if this resistance around 67000 is overcome. I am still hopeful, to be honest.
I think Brent oil will continue to rise again this week. It consolidated a little last week. Frankly, this week it seems like it will push this $85 mark. There would be a very serious sale below $68. But they did not allow it because there would be a situation like a Covid collapse. As you know, the United States is the country that sells the most oil in the world. In fact, it sells oil at a level never seen before in history. Here, somehow, they bought it above $68. Right now, the outlook is pushing upwards to $85-86. I even think it could break this resistance. This is also extremely negative in terms of the continuation of inflation in the world. However, if DXY continues to increase, the petro-dollar system is suddenly negative for countries struggling with inflation. Oil prices fell again after a 3.6% increase the day before. While the price of a barrel of Brent oil is approaching $79, US crude oil is traded below $76. The decline is due to Israel's retaliatory plans against Iran and supply risks in the Middle East.
The November 5 US presidential elections are approaching. Now, we see that Trump is clearly ahead with 54%. The gap has started to widen, interestingly. Because the market actually made a move to elect Kamala. Kamala seems to have taken a back seat recently. A study was conducted by a non-political organization, and according to this, if Trump is elected, he will spend much more money. I think this is positive for the market. In other words, maybe the outlook in bitcoin will also break upwards, and maybe they are pricing Trump right now. A very close election is going on. I was thinking more that Kamala would be elected. They built the whole system on Kamala being elected. But recently, Trump has been making such an attack. Trump seems to be coming to the forefront in the voting. As long as inflation data remains high, maybe the interest rate cuts will continue more modestly.
In other words, the money Trump will spend is especially about this tax cut, Trump is thinking of removing taxes from people living outside the US. This is actually not good for the dollar. In other words, if the budget deficit increases like this, of course if there are no buyers for bonds, interest rates may go up like in the 10-year auction last week, obviously. But in some way, this normally requires DXY to fall down firmly. But right now, technically, the trend is up in DXY. The US elections are critical for Bitcoin, as they are for all markets. In past cycles, Bitcoin has made new highs regardless of who won the election. The question on everyone's mind before the November election: Will history repeat itself? When we look at crypto's past bull cycles, the Halvings that took place in the same year as the US elections stand out. Halvings have triggered a rally in Bitcoin so far, regardless of whether the US President is a Republican or a Democrat. After 2012, 2016 and 2020, the 4th Halving, which took place in April 2024, is one of the main factors that give investors hope.
In addition, we have seen periods in the past when the Fed cut interest rates following the presidential elections where the markets performed well. Regardless of how the presidential election turns out, the fact that the Fed started to cut interest rates in September gives hope to crypto investors. When we examine the presidential candidates, the first thing that comes to mind when it comes to Bitcoin is Republican candidate Donald Trump. Trump, who did not support Bitcoin during his first term as President, has changed his position on crypto with a sharp maneuver in recent months. Arguing that crypto is an important playing field in the US-China competition, Trump states that he wants to make the US the “crypto capital of the planet.” One of Trump’s promises, who believes that the US should establish a strategic Bitcoin reserve, is to dismiss SEC Chairman Gensler, whose approach to the crypto space has drawn the ire of crypto asset investors.
It is less clear how Democratic candidate Kamala Harris will approach crypto assets if she takes office. Although he last made a statement in September saying that they would encourage innovative technologies such as artificial intelligence and digital assets to maintain the competitiveness of the US, Harris' avoidance of definitive and ambitious statements about crypto assets creates question marks in the minds of investors. In past cycles, BTC has renewed its peak every time and received new historical updates. Frankly, a new peak may come in BTC after November. This is not only related to the US elections, but also parallel to the Fed interest rate decisions and global interest rate cuts. I think that monetary expansion with interest rate cuts will also have a positive impact on crypto.
Such a picture keeps reflation at the forefront in the US. There was an early interest rate cut, just like in the Walker period in the 1970s. This time, there may be a discussion that interest rates should increase again. It is too early right now, the market is still continuing at around 25 basis points, with FED members having voting power. Inflation in the US in September exceeded expectations by increasing by 0.2% monthly. While annual inflation decreased to 2.4%, core inflation exceeded estimates by increasing by 0.3% monthly. Excluding food and energy, annual inflation was 3.3%, which was considered a negative signal for the Fed's monetary policy.
This week, there is an interest rate decision from the European Central Bank and inflation data in the Eurozone. There are also retail sales, industrial production, and crude oil stocks in the US. There has been an upward trend in oil. This is also a positive development for the market, as recession expectations have been postponed. The European Central Bank plans to accelerate interest rate cuts in the coming months to support the economy. Analysts expect a quarter-point cut in the meetings next week and in March. The benchmark interest rate is expected to fall to 2% by 2025.
The South Korean Central Bank has reduced interest rates by 25 basis points to 3.25% for the first time since mid-2020. The bank stated that there is room for further cuts, and this decision was made considering the country's shrinking economy and falling private consumption.
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