Price, Price Spread, Lagged Price/Volume Spread, and Binary Price/Volume Indicator
Price and Total Volume With 50-period Moving Volume Average
Fibonacci Price Scale With Targets
If you read my weekend analysis, you know that we still haven’t broken above the last monthly swing high on MNQH24 (the contract has rolled over from MNQZ23).
This week is almost the equivalent of the beginning of 2024 for U.S. equity markets. We find out (if the data is accurate, which I sometimes question) whether or not inflation has been tamed and whether the Fed may or even can cut rates.
A great number of pundits have forecast a soft landing, and thus higher equity prices well into 2024 assuming the Fed can cut rates, there are other opinions based on this historic inability of the Fed, Congress, or the tooth fairy of ever actually having a soft landing, as J.P. Morgan’s Marko Kolanovic thinks. He prefers cash until the tiff over what true interest rates will be going forward, and in his opinion, that issue is not anywhere near being settled. If you have read this Substack you already know that the situation with the reverse repo market is dire and that tank is projected to be empty in the middle of Q1 2024. Japan is faced with a situation of raising interest rates now and that forces competition with U.S. Treasuries wearing the albatross of a negative Moody’s rating around their necks.
The whole issue of inflation has not gone away, and as food prices and labor prices continue to escalate, putting pressure on margins, combine that with the fact that consumer savings are tapped out at nearly every economic stratum, you have to wonder just how strong the economy is, as the consumer drives the U.S. economy. The folks on the ground see the problem, when the pundits and politicos ignore it.
And what about the USA’s situation in world affairs? Even our former allies work against us now, as you can see from this Erdogan speech. As the USA wonders how it got into a position of military weakness if you remember the CSIS armaments inventory analysis, our nation continues to attempt to support Neo-nazi backed leadership in Ukraine as this regime kills off its best and brightest in a failed war. While our political elites squandered our claim to natural resources like uranium, the USA has to play a desperate game of catch-up to meet its energy needs, let alone its clean energy needs. The USA, of its own volition, wants to put American soldiers into a failed war that could lead to a world war.
And if you think U.S. politics were horrible in 2023, just imagine a GOP presidential nominee being held in a military facility after being convicted, and then being inaugurated in prison in 2025. It could happen, and that is just one political scenario among thousands of other crazy ones. 2024 and 2025 will change this republic in one way or the other forever. Get your popcorn, your fallout shelter, your storable food supplies, your teddy bear, or your safety blanket, and watch the action.
The future can look bright if we can clear up all the criminality around us. The tech sector and other industries are improving as hopefully, friendly and free-market-oriented artificial intelligence expands its influence on the domestic and world economy. What we need to guard against are the elitist plans of making standards of living achievable at all levels, something Jeff Bezos is apparently not a fan of. I think that the video producer’s point about the financialization of housing is on point. However, as many of you know if you have known me for a while, I think the home mortgage deductions are the same thing. The problem is not the deduction so much as the government taxes the crap out of you and then tries to “give you a break” by handing you a deduction. That alone causes house prices to inflate. When you tax property even AFTER you own it outright, and then print trillions of dollars worthless money to fund entitlements, you begin to see how the government and crony capitalists can indeed dump you on the street and then not allow you to afford another way in. It’s another ‘don’t get me started’ piece that I may write one day if I have the time.
Enough of that discussion. Let’s get to the charts.
If MNQH24 can remain above 16231, it should have a high probability of reaching the swing high of 16329.50 and beyond to 16364.75 and eventually to 16409.50 by Tuesday. If not, it is a very short journey back to 16200.25 and beyond to 16165 and farther back to 16120.50 by Tuesday. A lot will depend on the data we see, but all I can do is watch patterns, the volume profile, and price and volume momentum to determine which way to trade. Anything can happen.
Once again, I did not trade on Friday, as the volume did not meet my criteria in the early morning timeframe I traded in. We will saddle up again this morning and see what happens.
That is all for this trading day. Be happy, and productive, and make the most of your Monday! Thanks for supporting this Substack.
Today’s Economic Data Courtesy of Trading Economics dot com. Be sure to refresh the date at the top left.
