They revoked the spending cap, now what?

10 июн. 2023 г.

Hey guys, how's it going? Welcome to my first article on TradingView America, where I'll be discussing more about futures indices and sharing my opinion based on what I believe.

I have been writing for 2 years in the TradingView Brazil community, and now I feel comfortable seeking a new experience. I hope TradingView America can become my new home, where I'll be writing wholeheartedly without any issues.

I believe that at some point, everyone goes through changes, and this will be my change, perhaps a permanent one, because I feel that the best opportunities are abroad. As a Brazilian, I have sought a lot of knowledge outside Brazil, and with everything I have learned, I also want to help people, especially with operational knowledge of the American S&P 500 futures index.

Additionally, I will be writing several other articles based on Forex and always providing some insights based on futures assets.

Well, I want to start by talking about the American life, something that has already made a big impact, but I want to delve deep into it, especially in terms of order flow analysis.

Firstly, the VIX, as you can see here:
link:

I felt as if the debt ceiling removal was indeed good news. However, what we don't know is that in the long run, it may not be as good. Why am I saying this? Because debt doesn't become an issue in the short term, but in the long term. When you have debt on the scale that the United States has, some concerns start to arise. Obviously, we see a setup of buying pressure here in the S&P that has been happening since June 5th. They have been capitalizing on and catalyzing this buying pressure strongly.

We know that for those who trade the S&P 500, the asset tends to rise whenever there is an opportunity. But if we look at the context, let's stop and think: do you really think that the next time the United States faces the same situation, they will resort to the same strategy of increasing the debt ceiling? Why this question? If they have already removed the spending limit, wouldn't they have no choice but to pay the debt next time? So, would that actually be a good thing, right?

Yes, apparently so, but how will the United States pay off debt if they don't have the money for it? I can't help but think that they are merely postponing the inevitable. While funds and investment banks are taking advantage to create a synthetic rally to some round level, probably around 400 or 600. Some individuals might sell at higher prices and set tight stop-losses, profiting greatly from the socio-economic situation of the United States.

Obviously, I'm not criticizing funds or banks for doing this, as in the Brazilian market, where I hear about it quite often, we see these same profiles every day.

For example, they use information about an event that happened in Brazil, the Joesley Batista's statement, implicated as a suspect in passive corruption and money laundering in the Ministry of Culture. As a result, if we observed the market on that day, it dropped by 10%. But over time, the market rose more than 50% compared to that period. Take a look here: link:

Obviously, these are completely different circumstances from what the United States has been experiencing lately. Additionally, the Brazilian market is easier to manipulate than the American market. However, manipulation exists everywhere, as we already know. It's not something new, starting from the flash crash of 2010, the subprime crisis of 2008, the dot-com bubble of 2002, among other events of market manipulation in the United States.

The S&P 500 seems confident with this rally, and I believe that many people are also happy about it, as their portfolios are appreciating significantly. However, we know that caution is needed in the financial market. When the market becomes overly stretched, it can be a cause for concern. The bottom line is that we should stay alert, riding this buying flow in the S&P 500, but always with caution, as the market can reach a dangerous point, which would also be risky for the treasury.

I hope you enjoyed my first article prepared for TradingView America. My other posts can be found in the Brazilian domain. Take care and see you next time.