|Day's range||7,827.49 - 7,912.33|
|52-week range||5,895.12 - 7,969.79|
Williams finished by saying that when faced with low rates and slowing growth, the best strategy is to “take swift action” and “keep interest rates lower for longer.”
“Take swift action” and “keep interest rates lower for longer” may mean to some that a 25-basis point rate cut is a done deal, but to others it means “be aggressive”. Therefore, I have to conclude that the chances of a half-a-point rate cut may increase over the near-term, which could be supportive for gold prices.
On the day the U.S. released better than expected retail sales data, and just days after the release of stronger than expected consumer inflation data, President Trump made comments and China made a move that supported Powell’s case for “uncertainties” driving interest rates lower.
With earnings data starting to hit the markets and recent news that China’s economic activity levels shrank to levels not seen in nearly 30 years, we believe our proprietary Fibonacci price modeling system is showing us a target level in the NASDAQ (NQ) that will likely be reached within the next 7 to 10 days.
Is Powell about to bring an end to the FED’s independence? There’s more than sustaining stock values in Wednesday’s testimony…
Positive news from the G20 Summit got the week off to a positive start, with a jump in nonfarm payrolls wrapping things up on Friday… There was plenty in between, however.
For nearly two months, a series of escalations to the on-going trade spat between the United States and China had held the financial markets hostage, nearly forcing a change in U.S. monetary policy, while threatening to drive the global economy into recession.
The main trend is up according to the daily swing chart. However, momentum has been drifting lower since June 20. Taking out 7821.00 will signal a resumption of the uptrend. The main trend will change to down on a trade through 7446.25. Although the index is lower on Friday, the low volume and volatility and the inside move indicate a lack of conviction.
Based on the early price action, the direction of the September E-mini NASDAQ-100 Index into the close is likely to be determined by trader reaction to the short-term 50% level at 7633.50.
The US-China deal has been perhaps one of the most discussed topics in recent weeks. However, only a few days before the decisive meeting (which, it seems, will fail to solve anything), markets received the comments of US Treasury Secretary Steven Mnuchin.
Based on the early price action, the direction of the September E-mini NASDAQ-100 Index on Tuesday is likely to be determined by trader reaction to the downtrending Gann angle at 7742.75.
It looks as if inflation levels and the labor market will have the biggest influence on policymakers. This puts the emphasis on Friday’s PCE deflator, a major inflation indicator for the Fed, and the July 5 U.S. Non-Farm Payrolls report. Essentially, the decision to cut rates comes down to whether policymakers feel the need for insurance against an economic downturn, or the need to stimulate the economy.
This is not a panic situation so the Fed’s decision will still be data dependent. If labor market, manufacturing and inflation data continue to come in weak, then they’ll cut in July. If it stays steady or improves, then they won’t. That’s the risk of being “all in” at current price levels.
Based on last week’s price action and the close at 7504.75, the direction of the September E-mini NASDAQ-100 Index this week is likely to be determined by trader reaction to the Fibonacci level at 7551.00.
As of today, the NQ has already moved upward by over 400 points since the end of May. This price advance equaling our expected data range would suggest that the upward price move in the NQ may be very close to ending.
One result is predicting an upward price bias over the next 2 to 4 months whereas the second result is predicting a sideways price result over the same period of time.
Based on Thursday’s action, the direction of the June E-mini NASDAQ-100 Index early Friday is likely to be determined by trader reaction to the main Fibonacci level at 7521.00.
This means that investors aren’t likely to take the markets much higher until they see the Fed’s rate projections following next week’s meeting. In other words, the next leg up in the stock market hinges upon whether the Fed hints at 2 or 3 rate cuts later this year.