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
Yesterday a relief rally ensued in MNQZ23, and suddenly the world realized what ZIRP (zero interest rate policy) did to asset prices, something I knew would happen 15 years ago, as a rational risk-free rate of return after inflation below zero is removed (something we’ve not seen in over a decade). When time value of returns are made rational again, skewed risk benchmarks lead to insane valuations. These insane valuations enrich (falsely) banks, hedge funds, mutual funds, politicians (and other criminals), and lead ultimately to the destruction of retirement funds and pension funds. The prima facie example comes from Bill Gross, former PIMCO bond manager, who spells it all out in this article.
Then comes this article from the Wall Street Journal, which could have been written by the finance-equivalent of Captain Obvious (image below).
Proponents of MMT (modern monetary theory) are about to be beaten to within inches of their lives in terms of investment performance by free market fundamentals that Austrian economists have understood for quite some time. The only other things that need to be shored up are some kind of asset backing for the U.S. Dollar (something that might never happen, leading to de-dollarization and the loss of reserve currency status) and the end of the mindless printing of money by the Fed and Gramma Yellen at the U.S. Treasury. It will have to happen eventually, just don’t hold your breath as the decisions are made, likely out of desperation.
There are all kinds of crazy stuff going on, including a healthcare workers strike, and critical employment numbers hit tomorrow. Perhaps I can comment on the dynamics of all of that, but that will come another time.
Let’s look at the charts.
Asia idled prices on MQNZ23, but European traders began to sell again, and that drove prices back toward the 14861 level at the 0500 EDT hour.
If MNQZ23 can rally above the 14959.50 VWAP line, it has a shot at rallying back above the 14955.75 swing high to 14997 and 15050 by Friday. If not, and 14861 does not hold as support, it could be a fairly quick trip back to 14803.50 swing low, and beyond that to 14709.50 and 14651.25 by Friday.
No one knows what will happen, but news may drive these markets higher or lower (in quite substantial price moves) as gaps above and below current price levels are wide. All I can do for now is stick to my trade plan, take profits and manage risk levels to keep moving.
I picked up another 17 NQ points profit per contract long yesterday, but I did indeed wait for the second breakout from resistance levels, which eliminated the boot of previous days. It takes patience and discipline to make that happen, even when you have a substantial edge.
That is all for me today. Have a wonderful Thursday everyone!
Today’s Economic Data Courtesy of Trading Economics dot com. Be sure to refresh the date at the top left.
Traditional profile should, are now known and exploited by aI. The game evolves.