ridethepig
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ridethepig | The Great Recession

CME_MINI:NQ1!   NASDAQ 100 E-mini Futures
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.

Comments

As last year, we are waiting for December. That month is 'make or break for the markets'.
+3 Reply
ridethepig Antonio_trader
Agree @Antonio_trader all cards will be face up by then, 2020 setting up for a very good year for trading.
+1 Reply
Hello. I like your overview. Iam Crypto enthusiast. Do you believe crypto and Bitcoin can be safe heaven for this recession? Thank you for your work and time.
+2 Reply
How about long on VIX?
+2 Reply
You are right to mention the Vix @jrichens ...explosive move in vol looks imminent
Reply
NuramLee ridethepig
@ridethepig, thanks for the chart was looking for this. VIX getting crushed today, glad you're still bullish!
Reply
Thanks @NuramLee ... we finally got the answer in VIX!
Reply
I agree with your analysis in NASDAQ, just that have a higher target of 8800 which i think is your upper target in the charts. I think it will take longer for this top to be achieved, maybe during the elections next year.
Reply
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