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
As I copied the charts at 0500 EST, MNQU23 really began to recover from the overnight selloff in Europe, so you will see the validity of resistance zones as I write about them, but that will come shortly.
As the post-U.S.-Labor-Day rush to the end of the year begins, all the problems we had in January still exist and could worsen. Regional U.S. Banks still suffer from losses in U.S. Treasuries and a collapsing commercial real estate market as Fed interest rates continue to rise. China’s economy suffers after draconian authoritarian “covidiocy” lockdowns, citizen and youth (especially) confidence in the government falls to the floor, and is even a context for Xi Jinping’s desire for war with Taiwan (and perhaps the West). Banks are now forced to tighten lending standards, making start-ups and credit loans more difficult for business. All this is happening as the yield curve on U.S. Treasuries suffers one of its deepest inversions ever. The signs of U.S. and global recession are everywhere.
I could go on, but let’s check out the charts.
Markets have rallied since I marked up these charts, but I still believe they are valid for today’s trading. Yesterday’s selling ( on light volume, which is why I did not trade) began after 1100 EDT and lead to a post-session fad in Asia and a full-blown sell off in Europe until 0500 EDT.
If MNQU23 can remain above the 15440.25 VWAP line, then it has a shot to at least rally back to resistance around 15488.25 and if buyers press the issue, it ould literally rush through 15500 and 15516 to rally to 15539.25 and perhaps to 15556.50 and 15572.75 by Wednesday. If not, then odds are pretty high that 15418.50 will be taken out and that targets of 15382.50 and 15359.75 are possible by Wednesday.
There is not a ton of hot economic news until Wensday’s ISM Services Purchasing Managers Index is reported on Wednesday, so its up to traders’ perception of ongoing events that should drive price action.
I picked up 34 NQ points long on Friday. Hopefully volume returns to full force today so that the goofy volume jags will disappear.
That is it for now. I may divide Part 3 of Setting Up the Trade into three parts regarding volume, as it is important in determining what price will do as it moves on strong volume. That will come over the weekend. It may literally take three weekends to write about it, but I think it will be helpful to your understanding of how I measure and profit from price action.
Have a profitable and happy Tuesday!
Today’s Economic Data Courtesy of Trading Economics dot com. Be sure to refresh the date at the top left.
