I am going to make the text short today, as we are still at a crossroads. Jerome Powell still seems to have unified Fed Governors in the decision to raise the Fed Funds rate and thus other rates in the U.S. economy which is probably the wisest course of action within reason, as lowering rates continue to imperil asset pricing and asset price discovery. At some point, the ZIRP policy has to be adjusted, and MOST IMPORTANTLY, Federal spending MUST be cut drastically. The banking system is imperiled as regional banks continued to believe the BS about near zero interest rate policy (ZIRP) forever, but got caught in a jam as rates began to rise both by Fed policy and my market action.
If you want to read about the potential bearish outcomes for MNQM23, read them here. That is pretty much still the bearish picture if things go the bears’ way.
What happens in MNQM23 next week will be directly related to this issue. If rates are cut, the free money flows again, and markets likely rally. If that happens, the price-symmetrical AB=CD target is shown here:
You can watch the discussion about volume in the video at 2:59, and the basis of the above pattern can be seen at 6:14.
VXN has settled considerably, and that has led to some fairly slopping trading conditions over the last 3 weeks. We will simply have to see what happens next week as we approach Wednesday’s Fed announcement and the unemployment data that follow on Thursday and Friday.
That is it for now. This was a shorter discussion than normal, but we are basically in the same place we were for the last 3 weeks. We should get an idea of direction by the end of next week (assuming some tidbit of world news or banking issues spring up somewhere).
Have a pleasant, peaceful, and profitable week next week!
More will come soon.
