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 marked the end of a long partnership as Charlie Munger, Berkshire-Hathway CEO Warren Buffett’s partner, passed away. His story is quite remarkable having gone through failure after failure in business and in marriage, but he came out a winner in the end. I still think he was the true brains of the operation at Berkshire Hathaway and was a key player in its expansion. I am certain he will be missed.
It seems despite Congressional runaway spending, and world crises of rather enormous geopolitical impact, investors like Bill Ackman and Fed governor Christopher Waller now think that the economy will achieve something it never really has before, that is, a soft landing. Ackman is betting on a rate cut in Q1 2024 and Waller thinks the economy is cooling, which it seems to be. The only problem with all of that is that the printing presses at the Fed are wide open, and no one cares about cutting spending in Washington. No cap on spending can happen until at least January 2025. The only positive note I can see is that Japan continues to purchase U.S. Debt as China sells it off. The overall risk of global de-dollarization continues however as the Saudis continue to allow oil to be purchased in local currencies. We will simply have to see what happens.
Lastly, it seems the U.S. will again allow every opportunity for intellectual property theft, even if it means the destruction of our military, in my opinion. Congress is considering eliminating curbs on Chinese investments in technology as part of its latest NDAA (National Defense Authorization Act) legislation. It makes one wonder what happened at the Asia-Pacific summit in San Francisco a few days back. Have our political elites truly sold out to the PRC? Only time will tell.
Let’s get back to the charts for now.
It appears that overnight, the sentiment that the casino money will flow via future Fed interest rate cuts and that this morning’s U.S. GDP data will show a cooling in the economy inspired Europeans to buy into MNQZ23. I adjusted the Fibonacci scales to reflect that reality.
As long as MNQZ23 can remain above 16049.75, then, given this morning’s action, it is likely that it will also remain above the previous swing high of 16086.50, and, if the GDP numbers look a bit muted, could rally to 16125 and perhaps even to 16174 by Thursday. If not, or if the GDP numbers are strong, you could see a retreat below the 16086.50 back to the 16049.75 VWAP line back to somewhere around 15981.50, and if that support fails, there could be a retreat back to the 15945 swing low. Depending on how aggressive the selling is, it could fall back to 15906.50 and even 15857.50 by Thursday. I have no idea what will happen, as I do not have a crystal ball. Any of those scenarios is possible given the bipolar nature of MNQZ23.
I broke dead even yesterday, catching a breakdown in volume after a long breakout failed, and capturing another 12 NQ point long in a better breakout before I had to call time on trading. About 40 minutes after that, there was a final bullish thrust that continued for the day. All in all, it was a good day as I protected capital, the #1 job of a trader.
That is all I have for today. My subscriber base has expanded by 30% in the last 45 days. I greatly appreciate the support. As the new year begins, I will have more pressure on my time, but I will find a way to improve this Substack. I may ask for pledges at some point so that I can do more data purchasing for other markets. The only reason I can do that is that you continue to read. I will do my best with the time I have to bring a little more to the table. Have an incredible Wednesday everyone!
Today’s Economic Data Courtesy of Trading Economics dot com. Be sure to refresh the date at the top left.
