My weekly preparation in the face of undecided markets

The week is off to a flying start, and frankly, we are going to have to keep a cool head. Between the indices hitting their yearly lows and an order book that looks a bit empty, the context demands discipline. My goal today? To give you a clear read of the situation so you can approach your choices methodically and stress-free. In fact, we are calmly going to prepare ourselves, step by step, to avoid the pitfalls.

The shadow of Jerome Powell and global tension

This Monday, all eyes are on the Fed chairman. He will speak at 4:30 PM, and that inevitably brings its share of volatility. However, we need to inject a little nuance into our analysis. Jerome Powell is soon going to step down. As a result, his words will probably have a much less massive impact than if he were at the beginning of his term. While waiting for his speech, trading volumes are likely to crash heavily.

On the geopolitical front, there is total asymmetry between Iran and the United States of America. Missiles continue to rain down on both sides, the US military is deploying new paratrooper units, but the endgame is not yet defined. Diplomats are keeping as many scenarios open as possible. In short, faced with this uncertain climate, caution becomes our best mental framework.

My 4 key observations on the markets

To structure our current analysis, here is what particularly catches my attention:

1. The fragility of the indices: On Friday, we closed at the yearly low without the slightest attempt at a rebound by the end of the session. Overnight, it initially followed the same bearish logic before a slight recovery took place. On the CAC 40, the major support level of 7,500 points played its role well by stopping the fall at 7,509.5. As for the Nasdaq, it is stagnating without a clear direction between 23,300 and 23,350 points.
2. The illusion of a technical rebound: Currently, the DAX and the Dow Jones (which, by the way, has not yet been tested at 45,000 points) are bouncing back a little. But beware of the classic mistake: this is purely a technical rebound due to the recent colossal drop. It is absolutely not a crazy buying energy pushing towards a new bullish trend.
3. Bitcoin's critical threshold: The cryptocurrency just hit a 15-day low overnight. It is holding on as best it can under $70,000. Basically, if we break the decisive $65,000 threshold, the situation could deteriorate sharply, especially since the monthly pivot at 69,000 firmly blocks any upward movement.
4. The surge in oil prices: The WTI barrel crossed the $100 mark to trade around $120. It is by far the most dangerous asset to trade right now. Do you remember last week? A simple statement from Donald Trump caused prices to drop violently by nearly 20%.

Monday morning: patience and inertia

If there is one relevant image to keep in mind this morning, it is that of a symphony orchestra trying to play while half its musicians are still in bed. The US markets are still asleep. Monday morning is very often the scene of false starts. We observe very promising, green openings in Europe, only to end up in a chasm of red ink as soon as the US wakes up.

The nuance here is simple: it is technically not the time to take large positions. It is much wiser to cultivate good inertia and let the stratification of American orders clarify the trend in the coming hours.

Conclusion

To summarize, the only real information the market is giving us this morning is this: sit on your hands. We are waiting for the professionals from across the Atlantic to step onto the floor, and we are listening to Powell. Keep your discipline; protect your capital above all else. We will see you very soon for new videos on the channel; remember to hit the bell so you don't miss anything!

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