Just to get you to watch the video, I will not post anything but the weekly and daily charts for MNQH23 that show targets and support, and resistance areas.
Weekly:
Daily:
We need to break above and stay above 11711 to keep the bullish drive alive, and we need volume to follow suit to the last 5 to 6 days and accelerate if we are to see a real rally happen.
I had a discussion with a veteran futures swing, position, and day trader on Saturday about this situation, and he is convinced that until volume returns, there is very little in either direction he is interested in. Last week was very touchy, and I ended up very marginally profitable, but the breakouts were tepid and often reversed quickly in both directions, long and short.
What could drive future action?
If you believe this article, then the correlation between a rising Japanese stock market might historically mean the US markets (including the NASDAQ) could also rally. If anyone is old enough to remember 1995 (I am), we had another incidence of the bond and stock markets both rallying as they are now. Will this precedent become a reality in 2023? Who knows?
If you don’t believe that, as I don’t, for reasons more than this example, you might be more bearish than Asbury Research was last week. Even though this video is from last week (and they don’t produce this data but on a bi-weekly basis), we are still pretty much where we were on January 8. John Kosar’s research indicates that tech and consumer goods stocks are still bearish, and MNQH23 is chock full of technology stocks.
The problem I have with this market is multi-fold. The petrodollar is dead, meaning that from an economic activity perspective or commodity perspective (that main commodity being crude oil), the U.S. Dollar is now worthless. All it would take is for the BRICS to create a commodity market basket of goods valuation base for a currency, and gain leverage in the commodity market pricing (as apparently will soon happen with the price of crude oil) and our special drawing rights as THE world strategic reserve currency will soon be over. Losing that would be devastating for our economy and our standard of living, and even entitlements would have to end because bond buyers would demand much higher interest rates to borrow money from the US. The interest on the debt would swamp the Federal budget, and we could not even pay for our own defense or entitlements that a large plurality of Americans are addicted to now. The cost of goods for manufacturing and for consumer survival would escalate even more than they do now, and we would pretty quickly achieve third-world standards of living in short order. Will that happen? I don’t know, but time is drawing nigh before we find out.
The printing press still does not stop, and the Federal government still taxes the crap out of any energy resource people need to heat and cool themselves, cook with, or travel with. Natural gas prices will be taxed at 17.5% and that started January 1. That will hit consumers hard, and most consumers are tapped out on credit already.
With the printing press speed “set at 11” and no spending or fiscal discipline, the increases in the cost of energy will make manufacturing difficult, and that will drive prices even higher than they are now. With the EPA enforcing restrictions on fertilizers, the cost of produce, meat, and other consumer staples will cost the consumer even more, and that will probably force them to reduce expenditures on technology. If manufacturing is restricted from cost increases, their need for technology may also decrease, and more manufacturers may be forced overseas again to survive.
Conclusion
Until the US monetary, fiscal, and budgetary issues are solved through discipline (and follow the constitution by setting a STRICT budget annually), the clown car that is the US economy will glide closer to the cliff. I am not sure how markets will respond to this.
If this becomes a deep recession in 2023, we are going into it through uncharted waters, as for one of the few times in its history, its political elites care nothing for fiscal or monetary restraint. We are just going to have to ride it out. Get your tickets, your popcorn, your flak jacket, and your crash helmet. It could be time soon to brace for impact. Remember, it’s not about the speed of the fall or the acceleration to the wall, it is the sudden stop at the end that hurts. We will see what happens next.
More soon.
