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
It turns out that yesterday’s Fed annoucement of higher rates and the prospects of more to come was a giant snooze-fest for traders who just assumed the party will last forever and that, despite numerous signs of slowdown and recession, these markets remain essentially bullet-proof.
We will simply see how GDP growth data and durable goods orders will affect that outlook. The WSJ has it’s own commentary here.
I think one of the things that could affect our and the world’s economy could be a spiraling social issue within the People’s Republic of China, the one of massive youth unemployment. Social unrest because of lockdowns and the malinvestment in real estate have caused the Chinese Communist Party to worry about securing power. As I will not get into here but may in a separate piece later, one way to divert attention is through war, and Chairman Xi, with has own issues with arable land and with social unrest, could use war to cement power. Taiwan might be that flashpoint. I may write a piece on this later.
For now, lets focus on the charts.
Volume in the US for MNQU23 yesterday was quite variable, and so much so that even in simulation, I really did not like the setups, including the potential spread trap at the annoucement of Federal Reserve interest rate policy, and I stood aside. As the market rallied in the afternoon, it turns out that after the US close both Asia and Europe continued what happened earlier overnight as we got to the 0500 EDT hour.
The Fibonacci scale is wide because of the price variation from the lows yesterday. There is an absence of commercial holdings above 15805.25 and below 15515, so anything could happen between today and Friday.
If MNQU23 can remain above the 15619 VWAP line, then chances are quite good that it can exceed 15805 to hit 15884.25 and perhaps 15984.50 by Friday.
If not, there could be support found around 15619, but failing to hold that level likely creates conditions for a retest of 15515. If that fails then prices could fall back to 15436 and even 15335.75 by Friday.
We will see how GDP and durable goods orders shake up things. If it does and sellers dominate, you are likely give up a lot of what was gained late yesterday afternoon and overnight. If the market likes what it sees, then MNQU23 will likely head back to the 16-handles that it conquered again earlier in July. I was a little shocked overnight that the buying persisted. We will simply have to observe and wait for trade conditions to fit the trade plan before taking action.
That is all for now. I hope your Thursday treats you well in your wallet and in the increase in your happiness!
Today’s Economic Data Courtesy of Trading Economics dot com. Be sure to refresh the date at the top left.
