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
There is so much crazy stuff happening in the world the last few days, I decided to compile it here simply because the world is recognizing it now. I dubbed this the “tinfoil hat” edition of the Buffalo Trader’s Writing Desk, but I do believe that much of what is said here has merit, and it is scary indeed.
The war footing seems ingrained in American politics now, as the American Uniparty seems drawn to war. As U.S. and British troops train in Ukraine, Russian leadership threatens a wider war, and Russia now is planning to test nuclear weapons at the North Pole. (Not a conspiracy website, just the often politically motivated and often incorrect New York Times).
In the east, even our allies, the Taiwanese, are sharing sensitive semiconductor technology with Huawei with our enemies in the PRC. We already know that Huawei and other companies have spied on our military technology, and now this?
In the credit markets, two forecasts have been made, one by J.P. Morgan, stating that a financial accident caused by skyrocketing yields could crush U.S. and other world banking systems and the other by Rick Santelli. Rick Santelli’s argument is the one I made last fall when I stated that the policy mistakes of a decade or more of below zero interest rates (after inflation and for a very short period BEFORE inflation) has to be pressed out of these markets. His projection is for 14% to 16%. Mine was around 23%, but I think Mr. Santelli’s arguments and his estimates are seasoned by years in the bond pits. The point is, the Fed put is dead and now the damage must be corrected in a more painful way than it might have had we just let some really horribly-run money-center banks die, and (in my opinion) restored our currency with some asset backing. That is beginning to happen now in Asia, but not here. In my view it needs to happen here, but it is not.
There is some positive news on the energy front though, as there is a company that believes it has created a “wafer” technology to cheaply produce hydrogen fuel. Read that one in your spare time.
Let’s drop the crazy news cycle and go to the charts.
MNQZ23 climbed out of its late afternoon hole last night in Europe and Asia until selling began again to a degree around 0500 EDT. If MNQZ23 can remain above 14939.75, it has a shot at regaining 15046.25 and rally to 15106.50 and perhaps even 15183 by Wednesday. If that doesn’t happen, there is support that is lodged somewhere in that VWAP cluster but seems close to price support around 14883.50. Failing that, it could be a very short trip back to 14824.75 and it could correct back to 14764.50 and even 14688 by Wednesday. It is possible that worsening employment might be a signal the Fed policy seems to be working and that the worst is over (which is ISN’T), but that could give bulls some incentive. All I can say with any confidence given the data we have is the moves to the upside or downside could be dramatic given the huge gaps in commercial holdings above and below the current price range. I HAVE NO CLUE WHICH WAY IT WILL GO, which is why I stick to my trade plan.
I ended up with another 12 NQ points per contract profit yesterday to the long side in the morning and I went on to other business. If something looks compelling to the trade plan I use, I will trade again today. I will watch things carefully as trading opens.
That is it for me today. Make money, have fun, and get something done today in pursuit of your goals!
Today’s Economic Data Courtesy of Trading Economics dot com. Be sure to refresh the date at the top left.
