12.14.2021

Tomorrow can shape up to be a very PIVOTAL day for markets.

Equities seemed to have reached a short term top and it appears we are in a CORRECTIVE wave lower, this can be seen clearly in the NASDAQ chart, where the A-B-C corrective move is unfolding.

With this RISK BACKDROP the USD has been slightly benefited, if we see the DXY chart, the move in the USD started earlier in the cycle and our thesis has it is almost at the end of the current wave (wave-3).

keeping this in mind, we want to have a GAME PLAN to go into tomorrow’s pivotal meeting. This is what we are thinking:

1- The USD could have an initial knee-jerk rally that takes it to the low of the EUR range, and even breaches it for a small amount of time. We think EURUSD 1.1170/1.1180 is possible. We will watch where and if it bases out to react to it. If it goes through those levels, we have to reassess and formulate a plan to get LONG USD at the proper levels. Our THESIS is that most of the HAWKISHNESS is priced in.

The weekly close will be our signal, if it closes very offered we will be forced to BUY USD. We have time as the move would be great (think EUR 1.100 or lower).

2- Equities – there is a bit more negativity to equities. We feel that the TECH sector is the most vulnerable and we see ~ 400 basis points of downside possible. Having said that, we do not think this is the BIG corrective wave that awaits markets. We think that after the dust settles there could be a RUN HIGHER in all equities.

GOLD/SILVER – We continue to like the SILVER CHART. We think it is carving a base/bottom and expect a STRONG MOVE to $25+ in the next move higher in RISK. Gold has more vulnerabilities, we are less constructive but feel there are levels to BUY AND HOLD it as well (update on that coming on different post).

We are ready to act tomorrow with a GAME PLAN that revolves around BIG LEVELS in USD pairs.

We will focus on EURUSD; GBPUSD and USDJPY as they are the biggest recipients of flow. We will post all day tomorrow and keep you all updated on all of our actions.

As always, if you have any questions, please feel free to email us: info@bcmptr.com