Not every chart needs a trade. Sometimes the job is simply to identify where the risk/reward starts becoming interesting. While screening for potential shorting opportunities, I came across this setup. The idea was to combine market structure + liquidity + imbalance + trend rather than short simply because price was falling. 🔍 What caught my attention? 1️⃣ Bearish structure Price had already experienced a strong decline and was trading below a downward-sloping moving average. That suggested that the broader momentum was still favouring sellers. 2️⃣ Equal High = liquidity above The Equal High marked on the chart is an area I would watch closely. Rather than assuming resistance will hold, I look at clustered highs as a potential area of buy-side liquidity. A move toward or through that area can become important when assessing a potential reversal. 3️⃣ IFVG — potential resistance The purple Inverse Fair Value Gap (IFVG) becomes the key area I'm watching. If price retraces into this z...
Economics in Action: How Spending Shapes Prices
Economics isn't just graphs and numbers; it's a living, breathing entity that influences our daily lives. A key player in this dynamic is government revenue expenditure. But how does it impact commodity prices?
Direct Demand: When the government spends, demand for certain commodities can spike. Like a ripple in a pond, this can cause prices to surge.
Subsidy Sway: Governments often subsidize essential goods. A tweak here, like reducing a subsidy, can elevate prices. Conversely, increasing subsidies might make things cheaper at the checkout but doesn't always reflect true market value.
Currency and Cost: Government spending affects a country's fiscal health and its currency value. A stronger currency can reduce the price of imports, whereas a weaker one can make them costlier.
Inflationary Intricacies: Excessive revenue expenditure can fan the flames of inflation, eroding our purchasing power and nudging commodity prices upwards.
Infrastructure Impact: Efficiently spent funds on infrastructure can reduce distribution costs, making goods cheaper. But neglect? That can make prices soar due to supply chain inefficiencies.
In a nutshell, government spending and its nuances play a pivotal role in determining how much we pay for goods. Every time there's a change in the financial winds at the top, we feel it in our pockets. It's truly economics in action!
⚠️ Disclaimer
Information shared is for educational purposes only kindly do your own due diligence before investing in the stock market.