Price, Price Spread, Lagged Price/Volume Spread, and Binary Price/Volume Indicator
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
MNQZ23 did indeed break out to the upside yesterday, perhaps because of the belief that interest rates would begin to fall and that everything would be normal again (as if anything feels normal after the last 4 years or so). That belief seems to have spread to the U.S. dollar, which is now weakening considerably against other currencies at present.
The real question is, is this the end of the inflationary spiral and a precursor to a soft landing, or perhaps the preamble of the final (or extended) collapse of the American middle class? It could perhaps be both, particularly if political elites destroy the underpinnings of the U.S. Dollar by profligate spending without true and disciplined budgetary controls. Both of those articles are helpful in understand just how tenuous a hold people have on economic security in this environment. Everyone should read both of them.
It is now even becoming increasingly impossible to rent a home for most families as the expenses and taxes associated with that house have increased with inflation. Renting a house used to be the intro for young small families to at least test out their American dream.
In tech news, there is now an open rebellion among employees of OpenAI against its board of directors for firing Sam Altman. I don’t want to repeat myself, but the stunning thing to me is that a company would allow a dynamic leader and founder run to an oligarchic company where innovation might well be restrained or designed to destroy less well capitalized companies at the peak of their innovative capacity. As a funder of a previously successful start-up, an open rebellion by one fearful developer crushed our ability to sell the completed and profitable entity to a company that could fund its expansion (and it literally could have done that to the great benefit of all of us). It destroyed quite a few people’s destinies and lead to one individual’s bankruptcy. If leadership fractures, sometimes the competitors win by default. Amazon, which seems a bit behind both Microsoft and OpenAI, is now teaching AI tactics to retain their best and brightest employees. I just hope oligarchies do not win the AI race, as I think it could be used to limit freedoms. I think healthy competition would help to improve standards of living rather than limiting them.
The other interesting news involves competition over semiconductor packaging, making chips capable of interacting more directly with the technologies they drive. Given China’s want to expand its grip on economies of scale, the Biden administration is attempting to create a National Advanced Packaging Manufacturing Program to expand American manufacturers’ ability to compete with the PRC’s own domestic semiconductor packaging efforts. That program could allow companies like Intel to compete globally again.
Perhaps I can write further on these issues another time. Let’s look at the charts.
If MNQZ23 can remain above 16049.75, then it has a good probability of rallying beyond 16122.50 to 16156 and perhaps 16198.75 by Wednesday. If not, there is a good probability, if sellers become aggressive, for MNQZ23 to revert back to the intermediate swing low at 15999.25 (and perhaps I will create a video about the choice of that low for the Fibonacci scales this weekend). If prices fall below that, we will see a big chunk of the previous day’s rally erased as prices fall to 15965.75 and even 15923 by Wednesday. There is greater empty space between commercial holdings to the upside than to the downside, but no one knows for certain which side will win.
I was poised long yesterday waiting to ride the bull train, but my stops got punched for a 10 NQ loss. I did adjust for the second entry, but that got taken out at breakeven. It has been a rocky couple of weeks, but I will get back in the saddle this morning to see if anything fits my trade plan to execute a trade.
I hope everyone has a profitable Tuesday and that everyone enjoys the day. Thank you again for supporting this Substack. I have reached a new peak in readership and subscribers. That doesn’t happen without you. I greatly appreciate that.
Today’s Economic Data Courtesy of Trading Economics dot com. Be sure to refresh the date at the top left.
Thanks David. Saving the two articles for later but I don't believe that inflation is over like this, not in the long-term, as we will see another period of accelerated economic growth which = more inflation.