*Weekly Market Forecast & Trading Competition Update
One social media post can change it all - everybody trading or investing had to witness that last week once again. With Donald Trump suddenly announcing that from June 1st, 2025, there would be 50% tariffs on imported products from the European Union, most of the so-called risk-on financial markets hit the brakes quite hard. This was especially true for cryptocurrencies, with Bitcoin currently fighting hard to stay above the very important 107,000 USD support zone. This actually perfectly showcases what I was talking about in my last video: Everything is positive until Donald Trump says something about tariffs again… After 26 years of investing and trading, it still does not cease to amaze (and frighten) me how dependent the market sentiment has become on Trump. Within the short-term trading we are usually doing here, this holds a special challenge for us as markets often go suddenly and violently into one direction, just to as quickly reverse on the next social media post on Trump. We are currently far outside anything you can short-term model when it comes to statistical edge with the usage of my indicators. So, once again, I urge you to have your risk management in place and rather accept that trades also end up as losers than trying to force the markets to go in the direction of your position. The good news is that if you manage to not lose money in these markets, you are already doing much better than 95% of the other traders out there…
*Weekly Market Forecast & Trading Competition Update
One social media post can change it all - everybody trading or investing had to witness that last week once again. With Donald Trump suddenly announcing that from June 1st, 2025, there would be 50% tariffs on imported products from the European Union, most of the so-called risk-on financial markets hit the brakes quite hard. This was especially true for cryptocurrencies, with Bitcoin currently fighting hard to stay above the very important 107,000 USD support zone. This actually perfectly showcases what I was talking about in my last video: Everything is positive until Donald Trump says something about tariffs again... After 26 years of investing and trading, it still amazes (and frightens) me how much market sentiment has become dependent on Trump. In the short-term trading we usually do here, this presents a special challenge for us as the markets often move suddenly and violently in one direction, only to quickly reverse on the next social media post from Trump. We are currently far outside the statistical advantage range when using my indicators for short-term modeling. So, once again, I urge you to have your risk management in place and rather accept that trades can also end up as losses than trying to force the markets to go in the direction of your position. The good news is that if you manage to not lose money in these markets, you are already doing much better than 95% of the other traders out there...
The struggles even professional traders had with the markets also showed in the trading competition I was participating in this week…. Out of the 7 traders participating, only 1 managed to end the week in profit! I ended up in position number 2 with a loss of 40 USD on the 20,000 USD I was using… only thanks to the rigorous risk management I applied of not risking more than 0.5% per position, as the choppiness of the markets gave my strategy a hard time. However, I will continue to trade that account with the strategy and once I have good numbers and more confidence that the strategy works well, I will roll it out to this community as well. I was getting a lot of questions like 'When are you releasing the new strategy?' Well, as always the answer is: When I am confident that it can earn money for you… One of the core principles of this community has been and always will be: I only release strategies where I used my own money first to prove they work and to always show trading as it is: A hard job with a lot of things that can set you back - not like so many other communities out there that promise you something like 'earn 1% per day or 100% per week.'
That being said, let’s look at some charts:
The difficulties even professional traders faced in the market were also reflected in the trading competition I participated in this week... Out of the 7 participating traders, only 1 managed to end the week in profit! I ended up in position number 2 with a loss of 40 USD (based on the 20,000 USD capital I was using)... This was only because I strictly adhered to risk management, with each position risking no more than 0.5%, as the market's choppiness made my strategy struggle. However, I will continue to trade this account with this strategy, and once I have good data and more confidence that the strategy is effective, I will also roll it out to this community. I have received many questions like 'When are you releasing the new strategy?' Well, as always, the answer is: When I am confident it can earn you money... One of the core principles of this community has been, is, and will always be: I only release those strategies that I have proven effective with my own money first and always show the real face of trading: it is a tough job with many factors that can set you back—not like many other communities that promise things like 'earn 1% per day or 100% per week.'
That being said, let’s look at some charts:
Bitcoin had a nice breakout to a new all-time high, just to go into reverse mode again upon Trump's talks about tariffs for the EU. It is important that 107,000 USD holds; otherwise, we run into a situation where the market's structure could easily break down with a pullback to 94,000 USD. We really need to sit and wait for what comes next; in my opinion, both scenarios are equally likely… It sadly depends, once again, on what Mr. Trump decides to tweet next week.
Bitcoin had a nice breakout to a new all-time high, just to go into reverse mode again upon Trump's talks about tariffs for the EU. It is crucial that the 107,000 USD level holds; otherwise, we could face a market structure that could easily break down to 94,000 USD. In my view, we really need to sit and wait for what happens next; both scenarios are equally likely… Unfortunately, this again depends on what Mr. Trump decides to tweet next week.
Same picture in the S&P 500 with the exception that we are currently trading below the all-time high. The area until 5,700 actually is a good support as the bull market support bands are trading there currently and have been a great area for buying in the past.
The situation of the S&P 500 index is similar, except we are currently trading below historical highs. The area around 5,700 points is actually a good support level, as the bull market support bands are currently trading there and it has historically been a great buying area.
Gold, of course, remains extremely bullish in this environment of uncertainty, but would also retrace to potentially 3,050 - 3,100 USD if the sentiment for stocks and crypto flips to the positive side again.
Since tomorrow, May 26th, 2025 will be a public holiday in the USA, the stock markets will remain closed. We will probably see a week of lower volatility because of that, as many bankers will take the whole week off. So be prepared that there could be a lot of sideways market choppiness tomorrow.
Important economic news next week
Gold in this environment of uncertainty remains extremely bullish, but if the sentiment for stocks and cryptocurrencies flips to the positive side again, Gold might also retrace to 3,050 - 3,100 USD.
Since tomorrow, May 26th, 2025, will be a public holiday in the USA, the stock markets will remain closed. We may see a week of lower volatility because many bankers will take the whole week off. So be prepared for a lot of sideways market choppiness tomorrow.
Important economic news next week
With the exception of Monday, we have several important economic news releases next week, especially the FOMC minutes on Wednesday, which will surely move the markets. So be careful with your trading around these events.
Live trading sessions
I want to do 2 live trading sessions next week - Tuesday and Wednesday. However, please be aware that these depend highly on how the markets are behaving: If we see low volatility and only sideways action in a narrow band, I might not trade at all. I will let you know, of course, here in the group.
Have a good start into the next week!
Apart from Monday, we have several important economic news releases next week, particularly the FOMC minutes on Wednesday that will definitely drive the markets. So be cautious when trading around these events.
Live trading sessions
I want to conduct 2 live trading sessions next week - on Tuesday and Wednesday. However, please note that this highly depends on market performance: If we see low volatility and only sideways action within a narrow band, I might not trade at all. Of course, I will inform everyone in the group.
Wishing everyone a smooth start to the next week!