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Nq!

NQ - Large Funds were Friday's Sellers / Macro Context8 Minutes and 49 Seconds: "The Federal Open Market Committee's (FOMC) overarching focus right now is to bring inflation back down to our 2 percent goal." "Restoring price stability will take some time and requires using our tools forcefully to bring demand and supply into better balance." "While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses." __________________________________________________________________________ $3 Trillion in Equity Complex losses, the result. __________________________________________________________________________ After a slow build, FOMO took hold as the Financial Media began its Pivot dialogue. On 34 separate occasions, Fed Members attempted to extinguish the narrative which appeared to self reinforce - every time a Board of Governor member spoke. A bizarre and high velocity move higher to the day of reckoning which took participants by surprise. Their overarching thesis had been reduced to a puddle in 8 minutes. __________________________________________________________________________ A slow-motion waterfall of 4.5% for the NQ, blowing through the .618 or Negative .382 of the entire move off the lows to very recent highs. A powerful message to Market Participants, which became self-reinforcing as the Afternoon progressed. Internals collapsed as Large Funds began liquidating Tech. If you have followed recent commentary, you understand why. Markets were simply a ticking bomb, hot potato, and overreach of extraoridnary guile as Meme's went ballistic only to give it all up and likely much more in the coming weeks. Bonds, the Dollar, Energy, and Soft Commodities are all at Pivotal junctures. __________________________________________________________________________ "The historical record cautions strongly against prematurely loosening policy." - began to cycle through mindshare across Trading Desks as the PM Session unfolded. An important admission by a Fed Chair. One that I have repeatedly hammered home here on Trading View through Multiple commentaries with a multitude of examples. Without exception - every one of the 9 events where inflation crossed 5%: 1945 1948 1953 1969 1973 1980 1981 1990 2007 Recession followed. 2022 is somehow different... according to some, new, All Time Highs will arrive. It is absolutely, not different. "The historical record cautions strongly against prematurely loosening policy." It does indeed, although the results this time will be extraordinarily different as the foundations are crumbling along with future arrangements. During recessions, the Lows formed After the Fed began to reduce rates - within 1 to 3 months the bottom formed. In sum, this is in no way similar to the prior 9 Recessions, and the Federal Reserve knows this very well. __________________________________________________________________________ We are facing extreme Volatility once again, I see no signs of it letting up. Mid-Term Elections are outliers, we will see how the Admin attempts to Politicize the the new reality - "Inflation is Zero" will not do. The DX breaking 110 will create panic.
CME_MINI:NQ1!
by HK_L61
SPY - Daily / The Largest Reversal Bar since the LowsFriday was rough for Traders' offsides. I'm reluctant to even state the obvious at this point as it is self-evident. If you were on the incorrect side, feel for you as it was an insidious trap. In conversations with Traders, the large majority were Buyers for Friday. My bias was lower and a Negative close as SPX buyers had positioned for the Kill. The Falcon and the snowed-men, it happens, unfortunately, some must lose in order for others to win. Wall Street is very unforgiving at critical junctures, taking Retail's Capital. Powell provided the color in 8 very direct minutes - to the point, no stammering, no wavering. _____________________________________________________________________________________ I had intimated the 2YY was providing some serious indications, the Dollar, even more, SPX positioning was downright nasty for the Sell and once again made Max Pain irrelevant. QT utterances would have been a total disaster, but Powell sidestepped the worsening case there. More importantly, for months I've discussed the deteriorating Global Economy and Terminal Sentiment. Fundamentals are quite often ignored as the Financial Media will pander to Multiple Expansions, Recessions out the Curve, Yield Curve inversions as "questionable events," Liquidity Dislocations... all of these are obvious indications - and yet they are muted via Financial Media's messed up message track. It did suck to watch frankly - Cronyism at work and play. Again, if you were beaten, my condolences. _____________________________________________________________________________________ After another very odd 5 Wave move into the Highs at Resistance, Once again lower Resistance was run only to see the Sell begin a very large decline, exceeding 4% on the NQ an event which 18/18 times has led to Lower Lows. Lower Lows are indeed ahead. A continuation of the powerful Sell is now assured, how it unfolds will be quite telling. The rising Lower Trend will be an important test. I am, however anticipating another 8 to 11% Downside, perhaps far more. It is too early to make that determination as we need a great deal more information. Let's see if Black Monday we've indicated - arrives. Good Luck, Trade Safe.
AMEX:SPY
by HK_L61
15
QQQ new STAGE 1 or Stage 4 markdown coming?Another study on market cycles! Starting this study from COVID bottom, we look at the bigger cycle using the 200ma and the intermediate cycles with the 40ma. Currently - I see an intermediate stage 1 base which is both a diamond and range box breakout. stage 2 identified with a 40ma cross. Downward broadening channel break with another upward extended broadening thats being corrected right now putting it back under the channel. Now we have to see if this marks a small intermediate top (consolidation) of a stage 3 going downtrend into stage 4 or not. Watch the 40ma! Big picture STAGE 1? Still under that 200ma, it barely crossed so it would take a big move up if that were to happen. If it crosses we could assume the big diamond bottom and range box could have been a new STAGE 1. or If the intermediate stage 4 markdown forms from here... Higher low/ double bottom/or lower low to previous stage 1 will show if this will be a much wider stage 1 base or still in an extended stage 4 markdown under the 40ma and 200ma.
NASDAQ:QQQ
by kenloi
SPY - Volumes fell off on Decline Many Sellers (Bears) missed the Selloff, and many Buyers (Bulls) failed to take profits at the 199 EMA tap. Frustration abounds and will remain leading to many emotional trades being placed for both sides. Indices traded into the Lows of their ranges and held for 3 days. Buyers need a TOSS to get things going to the upside for 420+. Buyers need to not hear Powell so much as mention QT. This needs to be avoided with Rates the primary focus. Should he deviate into Quantitative Tightening - all bets are off. We see the rounded lows in the 1 Hour Chart and the Couuntertrend channel - now we simply see if the throw over short squeeze (TOSS) holds on GDP. ___________________________________________________________________________________________ After yesterday's -1175 NYSE Tick @ 12:15 PM EST - doubts began to arise once again. The SPX dragged everything lower in several minutes. Volatility intra-day spiked and created further uncertainty. 4164 was the Key Pivot for the ES - the front run 4162. During Globex, it crushed this level by 21 Handles. NQ Pivoted over the Ghost Level @ 13013 during Globex. Tesla crossed the $300 Level with New POs for 2022 $333 to $425 issued by Investment Banks. NVDA had issued enough forward warnings to be mildly impacted after issuing its EPS / Guidance. Debt Forgiveness in an Election Cycle is purely Political theatre. Powell is due to provide clarity on his position through September tomorrow beginning at 10 AM EST during a day of very heavy Macro Data. Fundamentally - it will be an extraordinary day for trading, so best of trading in advance. ___________________________________________________________________________________________ Of Concern: 2YY - 2 YEar Yield Futures are approaching 3.5% - for now and again this is the power of Now - The Effective Federal Funds Rate is 2.53%. The 2 Year is getting close to pricing in a 100 Basis point Hike. DX/DXY remain in a structurally sound uptrend, pullbacks are quite normal. Until the EU issues its next rate decision on September 15th - the DX is free to roam about. It is important to acknowledge the prior Highs were bested... this is important as it implies the 112s will be arriving in the near future. Although the 10 Year is being permitted to lift in assisting the Yield Curve's reduced inversion, it's frankly not a material concern as Yields continue to rise across the Curve. FX Traders took the 6E (Euro) downtown below Par due to Economic conditions and not Rate Parities. The NatGas to Crude correlations are disturbing - $410 - yesterday the Media upped it from $520 to $1000. ____________________________________________________________________________________________ Patience into Powell will be the best Trade imho. Good Luck, the Bigger setup is 25 hours away ;)
AMEX:SPY
by HK_L61
5
SPY - 2 Hour / Buyers & Sellers prefer Higher How often does the Market reward both when they are aligned? Not often. Rare to see both seeking Prices to move higher, and potentially why Wall Street will shake things up with a few surprises. Volumes declined significantly yesterday. NVDA reports today. ________________________________________________________ In all probability, they will attempt to entice both Lower and create a chase into new Lows. GDP Revisions may have the desired impact on Thursday. Friday will be the Maximum Mix day with intense volatility. It's what I would do, were it my job to frustrate as many market participants as possible. Areas of interest below for the SPY - 407.35 / 408.11 / 409.88 with the Pivot at 410.2. For Friday's Expiry, the Range is 410 to 416 for Retail, the SPX will lead once again, the possibility of a large but unapparent disconnect is why we see Max Pain fail time and again. Large Traders have been ranging the SPX with a larger sell-side favor intraday as well as into September, on balance they are quite heavily positioned for further downside. _________________________________________________________ What stood from yesterday: The VIX Barely budged, the DX pulled back .88% at one point, while 2YY and TNX stayed within range. News out of the Eurozone was negative in the extreme, with Natgas correlated to Crude indicating - $410 to $500/bbl was fair value. A trap or set expectations, longer term we are very bullish crude, but are positioned for fills between 62 & 77. OIL is showing continued strength as it approaches 95 this morning. I exited my longs this morning. GOLD, not so much - 1687 remains open. Noise, for now, but as long as Crude is moving higher on OPEC's production cuts impending, the SPY SPX ES NQ YM RTY will struggle. Energy is having a marked impact on Price since the 200 EMA touch. __________________________________________________________ Apple appears to be looking at the 164 fill, with the Markets coiling up the break in either direction will be quick and dirty. Crypto looks quite weak, BTC may revisit the 19K level shortly. With the expectations of Markets ranging into Jackson Hole and Powell's 10 AM EST Speech on Friday - Friday is a simply massive Macro Data Day. 8:30 am PCE price index monthly 8:30 am Core PCE price index monthly 8:30 am PCE price index year-over-year 8:30 am Core PCE price index year-over-year 8:30 am Real disposable incomes 8:30 am Real consumer spending 8:30 am Nominal personal incomes 8:30 am Nominal consumer spending 8:30 am Trade in goods, advance 10 am Fed Chair Jerome Powell speaks at Jackson Hole retreat 10 am UMich consumer sentiment index (final) 10 am UMich 5-year inflation expectations (final) __________________________________________________________ Financial Media flipped to Seasonal Volatility and a return to questioning the longevity and validity of the move off June's lows - too fast, too much. Fear / Greed Index remains relatively Neutral - tinyurl.com The Federal Reserve has reduced The Balance Sheet by $115.755 Billion. Inflation will remain high for 1 to 2 years according to Goldman Sachs. Trade Safe, patience wins this week as Friday's OPEX will be a criminal affair.
AMEX:SPY
by HK_L61
6
90 Day Macro View Increasingly, competitive crosscurrents are creating notional Equity Directional disturbances. A large number of Investors/Traders have convinced themselves the Federal Reserve was attempting to Bluff the Markets. Running Indexes up off the Mid-June at the greatest rate of change in history once the SloMo began to move through its varying psychological attributes. Momo gave way to Fomo which quickly reversed off Resistance overhead. Normal behavior, so far. ______________________________________________________________________________________________ The underlying Malfunction is beginning to see signs of light in the tunnel of love. Powell's recent admission will not repeat Arthur Burns's misdeeds of the past provided an interesting tell. _______________________________________________________________________________________________ We can expect to see broader Market Ranges in the coming 90 Days as confusions abound and will be resolved. Permit me to explain. The FOMC Minutes were Negative as FOMC Participants observed Inflation remains unacceptably high. Reduction of Treasury and Agency Debt was re-affirmed. EFF vs IR @ 2.53 versus 8.5%+ - 600 Basis Points and 237% Divergence while the Objective remains 2%. If we were to factor in the BLS Basis adjustment (Jan. 1, 2022) - it is easily Double. Although they indicated the potential for a pause may be within their purview... the catch is they remain Data-dependent. A nebulous and arbitrary hedge. Aggressive EFF Increases with a pause somewhere on the Horizon was my takeaway. The additional admission of a weakening Consumer provided the coup de gras for Data Dependence. Building a better box for further confusion and delay. EFF vs 2YY @ 2.53 vs. 3.28 does indicate a 75 BPS Hike for September, not 50 BPS - at present with the Yield Curve Inverted out to the 7's. _______________________________________________________________________________________________ Where is the FED indicating they need to bring EFF... 3.5 to 4%. I've paid close attention to the QT Schedule - which has remained rather jiggy. Prior to June 15th, we observed the Fed begin the largest reduction in some time. Effectively reducing the Balance Sheet by $81B while $90B was to have been removed by August 15th. Remember, on September 15th they stated reductions were to increase to $60B / Month. A significant increase over notional distributions since June 15th. Measures of Liquidity have come down significantly, clearly, the FED is concerned about a dislocation now. MBS Markets have seized up. M2 Velocity is at its lowest reading, many Mortage lenders are on the verge of Insolvency, M2 is in its 5th month of contraction - all of this has been roundly ignored by Invertors / Speculators. Quantitative Tightening has tread ever so lightly with the specter of a looming 100% increase in the Balance Sheet reductions per month. The FED is moving at a glacial pace as Economic Conditions have weakened precipitously. For context, it is important to remember - Assets on the FED's balance sheet were $4.16Trillion prior to Covid. MBS requires 90 Days to settle, The FED was buying up until June 15th knowing they had time to square into September 15th, this trick escapes Retail attention, understandably so as the FED never discloses these nuances. For Treasuries, maturity is reached on the 15t and 30th/31st of each month, hence the rally off June 16th, there are no accidents. Mid-Month usually generates Liquidity issues around pivotal dates for Time, squaring occurs closer to Months end. _______________________________________________________________________________________________ By the time we get to the first week of October, the Fed's roll-off will become extremely evident. _______________________________________________________________________________________________ Investors have focused solely on Rates, one-half of the real FED Agenda. QT is more important at this point, far more. I indicated the effective break rate for the Indices would be 3.5% for the 10 Year Yield. We saw the results of this level for the Indexes. It is important to remember the Bulk of prior Funding from 2002 onward was done below 30 months on the curve, increasing the refunding needs exponentially. Thank Timothy Bitsberger from Goldman for this, as it was an intentional and extremely devious plan to collapse Debt over time. QT will have an extreme effect on Liquidity at a time where Liquidity itself is coming under immense duress Globally. _______________________________________________________________________________________________ The November FOMC may see a pause due to the Mid-Terms, we will see - Apolitical appearances and all. They will not pause QT, it will remain ongoing as a background operation of vital importance. _______________________________________________________________________________________________ Investors survived the first wave of FED Adjustments, they will not be imbued with the same again. _______________________________________________________________________________________________ The most important communique from Jackson Hole will be how it directs Monetary Tightening to take effect as Rates take a backseat to a further Liquidity Squeeze via QT. Bulls want to believe the FED will back away - I'm leaning towards Economic Activity and its attendant Depression remain pervasive. Sentiment will begin to worsen. The New Congress will not be seated until April 2023. Any hope for Stimmy direct to Citizens/Consumers is DOA until then. Global Economic conditions are rather Dire.
CME_MINI:ES1!
by HK_L61
4