Harnessing Global Economic Trends: Navigating Market Dynamics and Unlocking Investment Opportunities in the Tech Revolution Era

Good evening, everyone!  

I'm excited to be here at Diamond Ridge Finance Academy as we delve into innovative investment concepts and strategies together. Through consistent learning and practical application, I hope we can all elevate our professional expertise, achieve sustainable wealth growth and ultimately strive toward financial independence!

Last night, we studied the basic patterns of trends, analyzing the core logic behind market price movements, from price trends to hotspot trends. Price trends reflect changes in supply and demand in the market and can often be interpreted using technical tools like moving averages and candlestick patterns. On the other hand, hotspot trends are driven by market focus and sentiment, leading to rapid short-term fluctuations.  

Price trends are essential because they are key for identifying medium to long-term trading opportunities. For example, using signals from the 21-day moving average, we can accurately determine support and resistance levels to find the best buying or selling points. However,hotspot trends focus more on capturing market-driven events like policy benefits or new technological applications, which often bring above-average returns to specific assets or sectors.

In practice, combining price trends with hotspot trends is a highly effective strategy. Through technical analysis, we can confirm whether the trend pattern of a particular asset aligns with market hotspots. If both point to an upward trend, the chances of success for investors increase significantly.  

Tonight’s session will build on this by exploring breakout patterns within trends, helping you understand the key features of trend reversals and acceleration phases. This will not only help us seize bigger market opportunities but also avoid risks associated with failed trends. Before diving into tonight’s content, let’s first take a quick look at the market overview.

The UK stock market remained cautious today, with the FTSE 100 index experiencing slight fluctuations as expected. This reflects the combination of light year end trading and weak economic data. In Oct, the UK economy unexpectedly shrank due to slower production and construction output. The National Institute of Economic and Social Research highlighted that geopolitical issues and uncertainties surrounding the Autumn Budget had a negative impact on the overall economy.  

Specifically, UK GDP fell by 0.1% month over month in Oct, increasing pressure from consecutive declines. Manufacturing dropped 0.6%, driven by lower output in manufacturing, mining and quarrying, following a 0.5% dip in Sept. Meanwhile, construction saw only a modest 0.1% growth. Growth in services remained stagnant, with food and beverage services leading to a 0.6% decline in consumer facing sub-sectors.  

This continued slide in economic data is rare during the post-pandemic recovery phase, underscoring the challenges facing the UK economy.

The economic downturn in Oct was influenced by several factors. On one hand, businesses paused or adjusted operations while awaiting the Autumn Budget. On the other, geopolitical issues and tax policy uncertainties heightened market hesitation. Despite Chancellor Rachel Reeves emphasizing the need for tax hikes in her budget statement and pledging support for public investment, business groups expressed deep concerns about the cost impact of these measures. Companies are likely to pass on higher tax burdens to consumers, further suppressing demand and delaying economic recovery.

Despite weak economic data, Dec consumer confidence showed some recovery, adding a hint of optimism to the market. However, rising inflation expectations remain a growing concern. Surveys indicate that the public’s median inflation expectations for the next five years rose from 3.2% to 3.4%, the highest since 2022. This trend could weigh on consumer and business investment, raise operating costs and increase pressure on the Bank of England's monetary policy.  

Currently, the market widely expects the Bank of England to deliver three rate cuts next year, each by 25 bps, to stimulate economic activity. However, this gradual path of easing must strike a balance between boosting growth and controlling inflation. Compared to other European economies, the UK’s performance remains significantly weaker, adding to the challenges for policymakers.

Meanwhile, the European Central Bank (ECB) announced a 25-bps cut to its deposit rate on Thursday, lowering it to 3%. This marks the ECB’s fourth rate cut this year and aligns with market expectations, signaling the eurozone’s continued easing cycle. The move aims to reduce borrowing costs, boost household spending and encourage business investment. However, it has also increased UK exports to the EU, surpassing exports to the rest of the world for the first time.  

For the EU, the easing policy carries risks. While a weaker euro improves export competitiveness, it may raise import costs, putting pressure on industries reliant on raw materials and energy. Market analysts widely believe the ECB will continue rate cuts, targeting deposit rates of 1.5%-1.75% by 2025. This could inject economic vitality into the eurozone but also pose risks of asset bubbles. Coupled with the impact of the Middle East war, the complexity of the global trade environment continues to deepen.

In the US market, stocks have been performing strongly lately. The surge in tech stocks, driven by advancements in Artificial Intelligence (AI), has been a major highlight. At the same time, optimism about potential Fed rate cuts has further fueled investor enthusiasm. However, as year end earnings reports roll in, the market's focus is shifting to the Fed's policy direction and its long-term impact on the economy.  

Next week, the Fed will hold its final policy meeting of the year. Markets widely expect another 25-basis-point rate cut. If this happens, it will be the third rate cut this year, bringing the total reduction to 100 basis points and setting the federal funds rate range to 4.25%-4.5%. This policy is aimed at stimulating economic growth while addressing potential economic slowdown pressures.

The policy adjustments of major central banks globally reflect the delicate balance between economic recovery and inflation control. The Fed's rate cuts could weaken the dollar's strength, encouraging international capital to flow into riskier assets. Meanwhile, the ECB’s rate cuts aim to boost economic growth but may also increase market volatility.  

Geopolitical tensions, trade policy uncertainties and inflation fluctuations remain key global economic variables in the coming months. In this context, central banks must weigh the pros and cons of short-term stimulus and long-term stability to ensure recovery without creating asset bubbles or over-reliance on policy measures.

Beyond policies impacts, the real focus is on economic trends heading into 2025. The Fourth Industrial Revolution, powered by the digital economy and AI, has become a key driver of the US market. The rapid growth of the digital economy is reshaping industries, from boosting productivity to launching innovative products. AI is transforming sectors like manufacturing, financial services, healthcare and smart transportation.  

For example, breakthroughs in generative AI are providing businesses with new models and growth opportunities. Tech giants are building competitive ecosystems through the synergy of cloud computing, data analytics and AI model training, attracting significant capital to the tech sector. This trend is expected to drive deeper integration and innovation in global tech markets.

As the tech revolution progresses, the thriving digital economy provides a powerful engine for long-term growth. Whether it’s the tech stock boom in the US or global central banks’ stimulus policies, they’re laying the foundation for future innovation and industrial upgrades. In this journey, AI, renewable energy technologies and 5G communication will continue to lead the way.  

By 2025, investors should watch for the interplay between policies and technology, particularly in areas like AI, clean energy and digital transformation. The tech revolution is not only a critical driver of economic recovery but also the central force reshaping the global competitive landscape.

Some learners have expressed confusion about "trends". So, what are trends? A trend is the dynamic process of something developing in a certain direction or pattern. In investing, trends describe the movement direction of market prices. Understanding trends is not only key to macroeconomic analysis but also provides important guidance for investment decisions.  

Economic trends reflect the long-term direction of economic activity, influenced by factors like technological progress, changing consumer habits and policy shifts. For example, during the Fourth Industrial Revolution, AI and digital economy development have become dominant forces. This kind of economic trend has profound impacts and shapes future growth. For investors, identifying economic trends helps spot industry opportunities and create medium to long-term strategies.

Economic trends represent the broader environment, while price trends are the direct expressions of specific markets. Price trends can be upward, downward or sideways. Accurate trend analysis is a core element of profitable investing. Price trends often follow the three-phase evolution of Dow Theory: the accumulation phase, the rapid growth phase and the excess phase.  

Especially, Chief Analyst Hanover has summarized these "price trends" based on market sentiment and capital flows, providing precise insights into these three phases. In practice, technical analysis tools help identify the direction and strength of price trends. For instance, when prices break through resistance levels and the 21-day moving average is trending upward, it signals a bullish trend. Conversely, a bearish trend forms under the opposite conditions.

We’ll take DOGE/USDT as an example to analyze how price trends form. Driven by the Trump economy, DOGE has become one of the hottest investment choices right now. However, it’s worth noting that before its significant price surge, its technical pattern had already developed into a bullish trend, as shown in the chart.  

Before Chart 1, the 21-day moving average was trending downward, indicating a bearish trend. Then, as the price went through the fluctuations in Charts 1 and 2, the 21-day moving average began to flatten out and slowly turn upward, providing support for the price increase.  

Attentive learners may notice a clear pattern: when the price breaks upward and retests the top of the previous range without falling below it, it often signals another upward trend. For example, in Chart 2, the green candle engulfs the red candle, leading to an upward move. Then the price pulls back to the low near Chart 3, which happens to be the high point after the breakout in Chart 1. Similarly, after the breakout in Chart 3 above the 21-day moving average, the price pulls back to the level near Chart 4, which corresponds to the high during the breakout in Chart 2.

From this analysis, we can see that the formation of a price trend is quite simple: the price keeps breaking resistance levels and the lows keep getting higher. During this process, every pullback that forms a green candle engulfing a red candle is a buying opportunity. Moreover, once the trend is established, the potential for future price increases becomes even greater. For instance, after three breakouts, DOGE/USDT surged from around $0.15 to over $0.45, delivering more than triple the profits.  

This same trend can also be seen in other fields, such as the tech industry. The continuous development of AI technology is driving the progress of the tech sector. Similarly, the upcoming release of the Quantitative Trading System 5.0 next month is expected to push its token prices higher with each technological iteration. So as long as we grasp these trend patterns, making profits becomes much easier.

That’s it for tonight’s session. I hope today’s discussion helps everyone gain a deeper understanding of investment rules and truly recognize the importance of quantitative trading systems. With the Quantitative Trading System 5.0 about to launch, I encourage you to actively participate and make full use of this advanced tool to enhance your investment decisions.  

For those who want to seize the wealth opportunities brought by the tech revolution, please prepare your investment accounts in advance, especially for stocks and mainstream crypto accounts. Through these accounts, we can align with tech development trends, leverage the advantages of different asset classes and build investment portfolios with stable earning potential.  

If you have any questions during your actual investments, feel free to reach out to me anytime.  

After tonight’s session, please think about:  

1. The current economic situation in the UK and globally.  

2. What are the core principles of trend analysis? How can we capture market trends?