NQ - Large Funds were Friday's Sellers / Macro Context
8 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.
"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.