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
It turns out that GDP growth, though not spectacular, was at least not horrific enough to cause sellers to run once again to hit the bid and to sell in US markets yesterday, and what looked like a nascent rally began after 1000 EDT and carried on until the 0500 EDT hour in Asia and in Europe.
The news of the last couple of days has been a bit more cautious if not foreboding, but then again the bipolar market (though I am a Jimi Hendrix fan and like to say “manic depressive”) the waves of alternative emotions run high, it is to be expected. Jamie Dimon still thinks the Fed will have to press for higher rates ( as I do), and he thinks the world could face a 7% prime rate.
What is even a bit more daunting is that raw material costs including extraction are exploding once again in mining. While the PRC has the USA and EU in an uncomfortable wrestling hold over lithium supplies, things worsen for alternative sources in Australia. If U.S. and EU governments really force what I consider a rather psychotic plan to electrify all vehicles, people already priced out of $70,000+ electric cars ain’t seen nothing yet. Some people may be walking to work if oil prices reach $150/bbl.
The PRC is now competing at a very high level against Apple and other phone makers with a new Huawei smartphone chips. When one considers that Russia and China both have hypersonic nuclear missiles and that the USA seems to be falling behind in semiconductor technology, an invasion of Taiwan would pose an even bigger threat to our basic industries, bereft of domestic semiconductor production. Apple has its own competitive issues in Japan as well, as their iPhone market share has once again fallen below 50 percent.
And in other news, lawyers are still up in Google’s, Amazon’s, and even Tesla’s grills over anti-trust issues and racial discrimination. Even Elon Musk is being probed. The case against Amazon might be broad based, but might also be quite weak.
We will see how the economic maelstrom shakes out, but let’s have a look at the charts.
I used a scale that did not encapsulate price action inside the 0 to 100% Fibonacci scale, as the range of price action overnight did not fully reflect the possibility of a breakout or breakdown based on the coming economic news, and the fact that the gaps between commercial holdings is so wide, which could lead to a bigger price move in either direction. It is Friday though, so squaring positions for the weekend might mute that action.
If MNQZ23 can remain above 14949.50, it could rather quickly regain price levels of 15027.25 to even 15128.25 by Monday. If not, it seems quite possible that it could fall back to support at around 14861.75 and perhaps even fall back to 14769.50 or close to that support level. If that fails, it does open up the possibility of a pullback all the way to the previous pullback to 14656.25 and a further slide back to 14571 and even 14476 by Monday. The news would have to be pretty negative to drive prices lower if that happened, but with all the dour news out there, anything is possible.
Sadly, my time for trading was limited yesterday and I ate 4 NQ points in losses per contract in an attempt to get long around 1000 EDT. Unfazed by that setback, I will look for yet another opportunity to trade this morning if that trade plan allows it.
I will write more this weekend on volume and may infuse how price action can be used to set trades up with volume. I do not want eyes to cross when the content is read, so I will mull over how to handle that.
Have a wonderful, profitable, and progress-filled Friday. Have a fun weekend too!
Today’s Economic Data Courtesy of Trading Economics dot com. Be sure to refresh the date at the top left.
