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’s CPI came in at 0.2% or 2.5% annualized, and long-only investors were handed the equivalent of a fully mature and potty-trained labrador retriever, and the markets, including MNQZ23 performed a body-slam rally we have not seen in a while.
Even Michael Burry pulled off his big short trade, apparently losing up to 40% of that position. He did bet again against the semiconductor industry as he took a substantial position short in that sector.
Despite the good news (and I have my doubts about the CPI figure myself as I look at prices on the street), all the other problems remain. The worthless U.S. Dollar continues to be printed and borrowed and governments still pile up debt for dubious projects, including climate change prevention, even as those industries, particularly wind energy fatigue even with subsidies. All the issues at the consumer level with debt and depleted savings will cap the consumer economy at some point soon. Housing inflation is hurting people on the street as well. If you not watched the video link about savings you should. People on the street are still suffering.
Even the real estate brokerage industry is taking a hit , given the fractured state of that industry as inventory tightens and a jury verdict that stated commissions were kept too high by broker agreements.
I think the belief in a soft landing is a bit overblown no matter who promotes the idea. The evidence is everywhere for a pullback as I have mentioned many times in the last few weeks. PPI will give us a glimpse of future inflation this morning.
Chairman Xi Jinping of the PRC and President Joe Biden are meeting at the Asia Pacific conference in San Francisco, all decked out as if it were Beijing, complete with metal walls to keep the “great unwashed” away. Hopefully at least something will be done about the export of fentanyl into this country, which has resulted in many of the deaths of over 200,000 Americans from drug overdoses in the USA in 2020 and 2021 and almost 79,000 in the first nine months of 2022. We will see what comes of that meeting.
Let’s get back to the charts.
If MNQZ23 can remain above 15865, then it has an excellent chance, given a lack of commercial holdings above that price, to rally above 16049.75 and beyond to 16075.75 and 16218 by Thursday if buyers become aggressive. If not, then MNQZ23 could fall back to support to that cluster of VWAP lines at 15708.25 and back perhaps even to 15553, the hourly swing low, if sellers become aggressive. I have no idea if it can fall back beyond that to 15482.50 and 15392.50 by Thursday, but anything is possible on the assumption that this market operates as it did in the mid-1970s, when every price move was predicated on inflation or the price of gold. Things can get that bipolar these days.
I have no idea what will happen as a result of PPI data at 0830 EST today. I got bounced from a long position (the one that launched into hyperspace yesterday) for a 15 NQ point loss per contract. I have traded those moves nicely in the past, but yesterday was not one of those days.
I will look again today to see if something is worth trading based on my trade plan. We shall soldier on as opportunities exist every day! Have a productive and happy Wednesday everyone.
Today’s Economic Data Courtesy of Trading Economics dot com. Be sure to refresh the date at the top left.
