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Confirmation of a Breakout ?
Nov. 25, 2022 – This was a short week with very light holiday volume, so I’ll get to the point. Note the chart below of the NASDAQ Composite Index. I’ve drawn in a linear regression line with a +/- 2 standard deviation channel. The linear regression line is basically the graphical average between the last peak in mid-August and the last low in early October; half of the “area” (time & price) is above and half is below. Think of +/- 2 standard deviation channel as an “expected move” within that time frame of “typical”.
The blue ellipse shows a breakout from that “expected move” and thus a possible change in character / trend. But . . .we haven’t seen that follow through yet.
All eyes will be on economic news in the coming 2 weeks: 12-1: the PCE report (Personal Consumption & Expenditures)
12-13: the CPI report (Consumer Price Index) 12-14: the FOMC / Fed meeting
For those trying to front run the economy, interest rates and inflation, these are the ones to possibly show a change in behavior. Until then the strength / weakness in the US Dollar and Treasury Bonds will provide some indications of where the money is wagered. Nuff said. Have a good week. ………… Tom …………..
Price chart by MetaStock. Used with permission.