This week was a very difficult week, as you know. I can say that it was a week where sellers were dominant everywhere, in almost every instrument. Therefore, since the majority did not trade in the leveraged market and were spot investors, I can say that although the market was two-way, it was generally a bad week. The biggest factor of this is of course the slowdown in the global economy, the deterioration in the global economy. There had already been a weakening in China, especially in the housing sector, and there was deflation in China. The deterioration here has slowly started to spread to other parts of the world. High interest rate hikes have killed demand, to be honest. Maybe America did this on purpose, but now everyone will pay the price. In other words, we will all see the consequences of these interest rate hikes that came in a short time, from 0.25 to 5.5.
If we look at this week from a macro perspective, of course the most important event of this week was the interest rate decision. The interest rate was left constant as expected, but even though the former New York FED president said that there could be a rate cut at this meeting, the expectation was that it would remain constant anyway. But Powell has not been able to successfully communicate about the interest rate process in this meeting. In other words, he clearly made me feel the political pressure on him. Democrats are pressuring to lower interest rates, they made the plan accordingly before the election. But when Trump's chances of winning increased all of a sudden, especially when Biden insisted, now the Democrats have caught wind with Kamala Harris, perhaps. But the polls, although controversial, seem to be ahead in some polls. But when Trump's chances of winning are high and Trump openly threatened that if you lower interest rates, he would be considered an election meddler, Powell could not manage this pressure in my opinion.
FED members tried to remain apolitical at the meeting, but the data actually forces a rate cut right now. The ISM data came in at 48.6, the worst data since mid-2020. The employment data was quite bad during the week. There is an increase in unemployment applications. Didn't the FED know about Friday's employment report? In other words, it is interesting because both the TDI came out bad, there is a deterioration in wages, and if the unemployment rate increases rapidly, it will not be good for the stock markets. It jumped from 4.1 to 4.3. Therefore, if this unemployment rate continues to increase like this, of course, a recession will gradually come, the recession we expect after the election will probably come quickly. Of course, it is too early for a technical recession, it is too early to use strong expressions right now, but when I look at the trend, there have been trend formations that have made me suspicious, especially oil, for a long time. These are also slowly showing.
If we talk about numbers, I mentioned a weakening in the dollar index last week. They really held up well until Friday. In other words, the FED, the Bank of England, cut interest rates with a vote of 5 to 4. This was also effective, but the technicals worked again on Friday. It fell below 104 and gained more value, especially the euro. Of course, the pound did not gain that much value because of the interest rate cut in the GBP. The currencies that are equivalent to the dollar index gained value. Now, as long as it remains below 104, I think the dollar index will lose value, at least in the short term. Therefore, I think it is more logical to be in the short term in other currencies.
As a result of the FED's delay in interest rate cuts, Nasdaq fell to 18250 trend support. This week, the volatility index Vix, also known as the fear index, went up sharply above 21.5 and I had such an analysis as the market would be suppressed. The candlestick, which increased by 90% this week, really broke 20 - 21 and there was a very sharp movement. There was only an increase of around 50% on Friday. Therefore, the volatility index Vix here normally measures the 30-day volatility in S&P, but this is not the case in reality. In reality, when Vix increases, markets automatically go into sales. Therefore, in risky markets, especially Nasdaq left gaps above this week. There may be a reaction purchase this week. We need to be a little careful with short positions.
Senator Elizabeth Warren had just called the FED chairman to an emergency meeting and warned that they should lower interest rates. Unless such a development occurs, the weakening of the American economy seems to continue in parallel with the weakening of the global economy. Call it a recession, call it a stagnation, this is starting to be priced in faster than we expected. Of course, even though the 18250 trend support has not been broken, I think the reactions in Nasdaq will be a short opportunity again. If I am not mistaken, there was a gap left above around 20250. Maybe we will go out to buy it, but after that, that is, unless the outlook improves or there is a new comforting development, such as interest rate cuts or other extra measures, the market is currently reacting quite harshly. Therefore, I think there is still a downside margin.
The charts are already broken, especially oil has slowly started to fall below support. So, it is a period to be careful, I am not sure if it will be like 2020, but it is a period to be careful.
On the Bitcoin side, I think there is a margin of up to 50,000 under 61,300 and I think it will be downward. So I think it is also turning downward. It sold off at the first resistance before it could pass 71,000. So I think it is also downward.
I think the future is clear for ounce gold if it passes 2,500. I think ounce gold will benefit from the economic recession to the maximum extent. The fact that the American 10-year bonds are also below 4 means that the recession is slowly being priced in and I think this will be positive especially for ounce gold with interest rate cuts.
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