Relief Rally?

Relief Rally?

In our last update we touched on the support areas in the equity futures markets and this time we will flip it around. Our focus becomes the current resistance areas in particular the 15200 are in the Nasdaq futures. Yes we know the trend in equities long term is higher and buying beneath the 100eMA has proven very beneficial. Was this time different, know, obviously, ok no brainer. However we have to be mindful that everyone’s time frames are different and as much as HFT algos like to think the game is nanoseconds, in reality its always going to be a long term game of attrition. In the current case, we feel that the overall trend is higher, but for now, sideways to lower seems to make sense especially in front of the November FED tapering as highlighted in their minutes this week. So with that said, let’s look at the Nasdaq:

15200 is the bulls hurdle and the bears level to reset shorts. Sideways action seems likely as the battle ensues and we would suspect this area to hold initially.

In regards to the bond market calling the FEDs usually bluff of tapering, well why would anyone suspect yields to rise, especially in the longer end? They wouldn’t because what ever expectation of any bond cut back, the market has already front run, just like its doing now, calling the FEDs bluff and saying, “you can try to taper, but we know it won’t last:

Finally, the Silver chart, we highlighted last time the importance of the $22 area and we suppose others felt the same as buyers have now defended and have driven it above the downward trend trajectory. We believe the bulls to be in control and any close below $22 would be disastrous for the bulls case:

We wish we had any other significant news, yet the reality is, we are still stuck in this covid economy by which the Biden administration seems to be hamstrung. Basically they want trillion dollar stimulus with zero cost, well reality doesn’t work that way and when you want to dictate to millions on how to live, what to do, where you can go and what’s best for you, well there is a real cost. This isn’t a knock on the administration, its not a knock on the Democrats, because Republicans are just as complicit, we have $29 Trillion in US debt and counting and all sides are to blame. Inflation is a boom for asset holders but a destroyer to common folk budgets and that’s an issue many pundits truly avoid and for good reason. Why? Because in the real there are no free lunches.

By the way if you missed the recent Joe Rogan podcast, we highly suggest you subscribe or at least get the clips on the JRExperience on Youtube. Anyway check it out if you can, he and CNNs Dr. G have quite a conversation. Here is a quick link for you to start, Joe Rogan Experience

Till next time.

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