For the video, the discussion of the monthly chart begins at the start, the discussion of the weekly chart begins at 4:33, the beginning of the discussion of the daily chart begins at 7:05. ( You can skip the argument I had with Siri as I realized I had closed off a chart before it edited version below was completed at about 9:50 to 12:06. I refused to splice and edit the video but forgot to turn the video recording off :D )
The charts look like this:
Monthly:
Monthly MNQU23 with targets:
There is a monthly MNQU23 bullish target I have shown before:
I didn’t cover this chart in the above video as most are concerned about MNQU23 and other charts rolling over. I will get into that in a moment.
Weekly MNQU23:
Daily MNQU23:
Daily MNQU23 with targets:
With the one exception to absolute bullishness being the weekly MQNU23 charts, which shows a slight crack in the armor in terms of total volume, everything looks like the only direction is up.
There are still issues related to historical stock valuations best discussed in this video from Game of Trades. I do not endorse their website or their paid material nor do I pay for it myself. I just like the presentation regarding valuations. The QQQ and futures indexes like MNQU23 are driven higher mainly by the large market cap participants. Many of those (MSFT, AMZN, NVDA, NFLX, GOOGL, and AAPL are rather expansively overvalued versus history (as shown in this video). Even though we have avoided recession through the first half of 2023, chances are quite high that if employment (whether it involves people holding two jobs or not, which is suspected), at some point, those jobs will be cut as business slows. Signs of that include the recent cutting of hours my many American employers, which is the last resort before layoffs begin.
To add to the mess, Federal interest rate payments will continue to rise as long as we print and spend (and we will do so with no cap until at least January 2025 by law). This article discusses that issue.
And as far as possible earnings recessions beginning, one can see the trend in earnings could be topping out.
Could they improve? Possibly, but history and interest rate hike issues make take precedence over earnings.
The consumer debt picture could be settling down as well, but credit card rates are higher than ever before, meaning if consumers get into a pinch to spend beyond their means again, it is going to hurt.
I will get into the international issues later in another piece, as I think that is still the biggest threat to American and in fact world economic growth in the next 5 to 10 years. The food crises that may develop from the Ukraine may-lay and the proposed nitrogen cuts in fertilizer by the EU and the USA could have a drastic effect on yields which could create food shortages worldwide including the USA. India has stopped exporting rice. It is estimated (and I will find the lead research on this quote in an Australian article, but up to 50% of the world population’s calories come from rice. A report, shown here can be quoted with regard to Asian calorie demand:
“Rice is the crop of the Asia-Pacific Region. The projected demand by the year 2025 is mind boggling (Hossain, 1995), as in major Asian countries rice consumption will increase faster than the population growth. In summary, in Asia, the rice consumption by the year 2025, over the base year 1995, will increase by more than 51 percent (Table 1). Another significant change will be the development of many mega cities of the size of 10-15 million people over and above the general urbanization of the populace. Thus, the number of consumers will grow and the number of producers will be reduced dramatically. The current demand of 524 million tonnes is expected to increase to over 700 million tonnes. Rice will continue to supply 50-80 percent of the daily calories, and thus the average growth rate in production has to keep pace with the growth rate of the population.”
Food will become a larger issue with more (and in my opinion, more malevolent) government intervention on behalf of “climate change” mania most all of which is unmerited in this writers opinion. Let John Kerry eat catsup.
The basic conclusion is that regardless of fiscal insanity and sector rotation, we will see how this market reacts to all of the stimulus given to it from all different directions, governmental, economic, and behavioral. History says we should watch carefully and hedge, and I tend to agree with that concept and advice. The market’s gonna do what the market’s gonna do. I just try to provide a balanced picture of what is happening, no matter how unbalanced it looks.
Have a great week next week all. I will be back!
