What you see above is a floor trader (one of the few left on the NYSE tomorrow morning) panicking as news of one sort of the other comes out. This face is probably no different than ones seen over the last three weeks as it appears that once and for all we may be seeing the manifestation of years of stupid Fed policy, idiotic U.S. Congressional fiscal policy by one side or the other of the Uniparty fascists in Washington D.C. and all the war piggery and malfeasance in entitlement policy, immigration, blatant Federal, state and local lawfare used against opponents of the Uniparty, and other continuing nonsense.
Anyone who has read my old forum notes at what used to be called Tradehard.com (which became TradingMarkets.com before it collapsed), my several years of writing for the now defunct mrswing.com and even the years I wrote for thebuffalotrader.com/blog, knows what a total manure compost pile our Federal government is. I began ranting about margin rates late in the dot-bomb era, I ranted about the reduction in interest rates to allow unqualified borrowers to buy homes and how that would wreck the housing market, which it did. And after the Great Recession in 2008, I began a soft and then very aggressive abandonment of all long positions in stocks through 2013, when I abandoned my last holdings of energy stocks as oil exceeded $100/bbl after many years of holding them. From that point on, I traded everything at the margin and begin to buy discounted real estate to gain income and capital gains beyond that.
If you want to know what is happening now, perhaps you should listen to a couple of Doomberg podcasts on YouTube, this one from a month ago, and this more recent one. If you want perspective on how the rate increases in Japan have created, in effect, a reverse yen carry trade against the dollar that could wreck our bond market, follow Michael Gayed on X.
I could wax endlessly on the current insanity, but others already have.
Let’s just look at the most convenient way to observe MNQH24, and that is through the weekly charts.
BULLISH CASE
I literally waited until this evening’s open to see if we would gap down (which we did) before trying to analyze this chart. The reason for that is that I wanted to see if the area area around 18100 and all the VWAP control points might hold initially, and so far, they did. I was anticipating that this week we would test those areas, and we have. This leads to a primary assumption. If through all this tumult, MNQU24 can old that support and manage a continued rally from there, it is not impossible that once again the “I know we are getting a rate cut no matter how that damages the U.S. economy longer term” crowd wins the argument, there could be one more AB=CD rally to 21678.50. Will it happen? I have no clue, and neither do you. It is POSSIBLE? Yes it is, and that is the maximum extent of any bullish estimate of price movement I could make.
BEARISH CASE
To make the bearish estimate, I am assuming that solid VWAP control point support will hold around 18068.75 into tomorrow morning, and that some news from the Bank of Japan or the U.S. Federal Reserve will allow some kind of relief rally that will stall out just before the 38.2% bullish retracement level to reach 18178.50, When resistance holds, I would then assume that the markets would sell off again in a price-symmetrical fashion to an AB=CD low of 16263.75 level. That would represent a 22.49% correction from the all-time high, which is a reasonable proposition if markets continue the craziness into the next month or so. Is THAT going to happen? Again, I have not one clue. Is it possible? YES, and it would be a somewhat normal correction of massive excesses brought about by the 2.5 year “covidiocy” period in U.S. and the world.
We face every fiscal and financial catastrophe, and potential world conflict including nuclear annihilation, all at the same time. All I can do as a chart analyst is to give you what I think are full capacities for bullish and bearish activity and present them to you to consider
Sometime around 0400 EDT, when the European market opens up for a couple of hours, traders will began to sculpt the direction of NQ and other markets, and we will begin to see the action.
When you trade, always use charts and have reasonable price targets to assure that you collect reasonably large profits over time and that your risk parameters are reasonable so that you don’t lose large sums of money when you trade, and you take reasonable profits as you can.
I am going to leave it there. Thank you for supporting the Buffalo Trader’s Writing Desk! More will be coming shortly, including a couple of trending strategies you can hold onto longer for better profit to loss rations.
I will return shortly! Have a great night and an incredibly profitable and successful week next week.
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