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
The markets reacted negatively to Moody’s downgrade of banks (which one might expect they’d react) and there is still a lot of overhang as analysts and the true experts on inflation, American families and American investors, as to what to do if inflation hits hard, which is what most people on the ground fear, and the political elites ignore as they shovel money into sink holes like Ukraine.
One forecast I found gives you an idea of what a broad cross-section of analysts think. I found this overnight from Steno Research (whom I do not endorse specifically nor am I compensated by) which shows that roughly 80% of analysts see CPI at 3% or above (far above any estimated or actual 2% per annum rate that the Federal Reserve used to use as a target). That means more pain and I think that underestimates the damage to the economy over 10 years, if this administration’s goals are in place of adding a minimum of $2 trillion of spending each year for the next 10 years. All of that money will have to be printed, since tax revenues cannot cover it. That kind of spending is unsustainable and I mean ARGENTINA-STYLE unsustainability. We are quite frankly staring hyperinflation in the face. It looks like Drago facing Rocky Balboa in Rocky IV and Drago saying “I must break you.” It will take a ton more work than just to “hit the one in the middle.”
There’s other things out there as China’s economy continues to slide, but lets get to the charts.
Yesterday’s slide fell all the way back to just above the 15212 VWAP line, but MNQU23 was continually purchased back afternoon and the rally continued until the 0500 EDT hour as sellers reappeared. One thing you will like is that I produced a video of the trade I put on as a first test and I will present that over the weekend.
If MNQU23 can remain above 15419, it should relatively easily push through to 15423.75 on its way to 15457 and even 15488 by Thursday. If that does not happen, MNQU23 likely falls back at least to structure price support around 15377.50 and failing that it probably pulls back easily to 15343.50 and back to 15288.50 by Wednesday.
I picked up 25 NQ points short yesterday, and I will explain that fully in an upcoming video and write-up.
I have no idea whether there will be a rally a collapse or a meandering market after the CPI is announced on Thursday at 0830 EDT. The only thing I present below is a three-drives-to-a-bottom pattern that could complete by the end of this week. Here it is:
If selling takes over today and tomorrow and it is aggressive, we have already seen this market pull back to a pretty solid VWAP line at 15212 which caused institutions and traders to pile on. Should that level get punched out by selling, the target of 15193.75 is not unreasonable. WILL THAT HAPPEN? I HAVE NO IDEA, but it is one possible outcome of another aggressive selloff.
That’s it for now. If you have questions, leave them in the comments. Have a productive and profitable Wednesday, and have some fun while you’re at it!
Today’s Economic Data Courtesy of Trading Economics dot com. Be sure to refresh the date at the top left.
