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 less than bullish data continues to come in, particularly on $SPX earnings yields versus 3-month treasuries, repeated today with this video for those of you who missed yesterday’s post. That is often a bellwether of lower equity prices in the next 2 to 3 years (though there are notable exceptions outlined in that video. Monetary policy is now as tight as it was in the 1980s, and that is not often good for business.
What makes that worse is that the pressure seems on with the central bank group after last weeks Jackson Hole, WY summit to keep hiking rates, particularly in the USA. I will leave the BRICS currency and membership discussion for later, but that is weighing China trade with the west, which is why countries like Vietnam and Mexico are eager to take that trade away from China, leading to a more precarious decline in China’s economy.
Then there is housing in the USA. Housing is the most unaffordable since 1950. (I could tell you a story about my father that relates to that, but not today). Mortgage rates have nearly doubled since 2020, and that makes housing largely unaffordable for first time buyers. It is still much cheaper to rent, but even rent puts pressure on people to choose between groceries and rent at times.
I could keep going, like the relative under performance of 493 of 500 $SPX stocks, especially with respect to inflation, but let us focus on the charts for now.
If MNQU23 can remain above 14999, then it has a chance to break out above Friday’s swing high of 15026.50 to hit 15101 or even 15195.75 by Tuesday. If not, MQNU23 could find support 14889.75, and failing that, given the strong rally that happened on Friday, it could fall back easily to 14752.75 and slide back near two VWAP lines to 14678.25 and 14583 by Tuesday. Again it depends on who shows up.
I was able to pick up 35 NQ points long per contract on Friday, but did not yet run the trader/scalper strategy that I will this morning, assuming there is a trade that matches the trade plan.
If you have questions about Part 1 or Part 2 of Setting Up The Trade, leave them in the comments and I will discuss them as quickly as I can.
That is all I have for now. Have a wonderful, productive and profitable Monday!
Today’s Economic Data Courtesy of Trading Economics dot com. Be sure to refresh the date at the top left.
