ridethepig | The Great Recession
Here we are tracking the ending of a 5th wave in a multi-decade sequence. Those with a background in waves will know the criteria has been fulfilled for a top and turn.
Let's start by reviewing the previous Monthly NQ chart:
We outguessed that the 161.8% extension at 8,231 would be reached before profit taking and covering began. The clashing forces from politics and monetary policy has been enough to keep the theme grinding higher and this chapter is finally coming to an end.
The next chart I am pointing you towards is the 2's 5's curve, alarm bells are ringing louder than usual and we know from history a few lessons;
(1) Every other time this happened it ended badly for the global economy.
(2) A Fed that lags will only add fuel to the flames .. "it's different this time"...
(3) The longer the delayed reaction from Fed, the worst the blow in Equity markets. Assuming Fed moves in July (even with a more aggressive cutting profile e.g 50bps) it is still the 3rd longest delay over this time period. A 25bps is a 'done-deal' so should the Fed buckle and not move (very unlikely) it will mean that markets look at September which would then make this monetary policy 'delay' just marginally quicker than 2000/2001.
Gold is also starting to find key support right on time as investors position for a slide in the global economy, the next target area is 1600.
Dollar devaluation in FX is no exception. The theme markets are starting to embrace is dollar devaluation which looks to have a lot more room to run:
Cyclical stocks are outperforming defensives but far from 2018 levels:
Yields are struggling to breakout, as readings from the US show.
Best of luck all those in NQ for the next chapter in the economic cycle, a large leg cooking towards 5,000 targets. Jump in to the comments with your ideas and views and we can open the discussion further for all to benefit from.
Let's start by reviewing the previous Monthly NQ chart:
We outguessed that the 161.8% extension at 8,231 would be reached before profit taking and covering began. The clashing forces from politics and monetary policy has been enough to keep the theme grinding higher and this chapter is finally coming to an end.
The next chart I am pointing you towards is the 2's 5's curve, alarm bells are ringing louder than usual and we know from history a few lessons;
(1) Every other time this happened it ended badly for the global economy.
(2) A Fed that lags will only add fuel to the flames .. "it's different this time"...
(3) The longer the delayed reaction from Fed, the worst the blow in Equity markets. Assuming Fed moves in July (even with a more aggressive cutting profile e.g 50bps) it is still the 3rd longest delay over this time period. A 25bps is a 'done-deal' so should the Fed buckle and not move (very unlikely) it will mean that markets look at September which would then make this monetary policy 'delay' just marginally quicker than 2000/2001.
Gold is also starting to find key support right on time as investors position for a slide in the global economy, the next target area is 1600.
Dollar devaluation in FX is no exception. The theme markets are starting to embrace is dollar devaluation which looks to have a lot more room to run:
Cyclical stocks are outperforming defensives but far from 2018 levels:
Yields are struggling to breakout, as readings from the US show.
Best of luck all those in NQ for the next chapter in the economic cycle, a large leg cooking towards 5,000 targets. Jump in to the comments with your ideas and views and we can open the discussion further for all to benefit from.
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