Happy Sunday, everyone. Nasdaq pulled back in the Asian trading session(trend line worked) on Friday before taking off to create new historic high in the US session.
The momentum is still very strong with no bearish sign yet. However, the upcoming debt limit might cause a little trouble for the financial market. I think lawmakers will agree to raise the debt ceiling. Any negative words from 'big mouth' might give us a buy opportunity against the backdrop of US economic recover. As we know, the US GDP growth expected to be over 8% in Q2 will be gradually reversed to the mean around the normal 2% it used to be. The fading of the 'low base' effect combined with withdraw of fiscal support, rising inflation might weigh the financial market in late Q3 or Q1. Currently, any correction is still a good buy chance.
I recalled the Debt Ceiling Crisis happened in Aug. 2011 caused NQ an over 10% drop. The failure of reaching a deal among the lawmakers triggered the removal of US triple A rate, which created a chaos in the financial market. As the universal USD fund cost is based on the rate. The downgrade will affect the borrow cost of US entities.
You can refer to the monthly chart of NQ. I highlighted in yellow color.
This reminds me of something funny. I read the disclaimer of financial products everyday 'the past performance does not guarantee the future return' . That's true. But looking back on what happened can help us do the scenario analysis and prepare for what might happen in the future. That's the reflection of 'plan the trade'.
Hopefully, the post help you to construct your investment or trade plan.
Stay safe and enjoy your weekend.
The momentum is still very strong with no bearish sign yet. However, the upcoming debt limit might cause a little trouble for the financial market. I think lawmakers will agree to raise the debt ceiling. Any negative words from 'big mouth' might give us a buy opportunity against the backdrop of US economic recover. As we know, the US GDP growth expected to be over 8% in Q2 will be gradually reversed to the mean around the normal 2% it used to be. The fading of the 'low base' effect combined with withdraw of fiscal support, rising inflation might weigh the financial market in late Q3 or Q1. Currently, any correction is still a good buy chance.
I recalled the Debt Ceiling Crisis happened in Aug. 2011 caused NQ an over 10% drop. The failure of reaching a deal among the lawmakers triggered the removal of US triple A rate, which created a chaos in the financial market. As the universal USD fund cost is based on the rate. The downgrade will affect the borrow cost of US entities.
You can refer to the monthly chart of NQ. I highlighted in yellow color.
This reminds me of something funny. I read the disclaimer of financial products everyday 'the past performance does not guarantee the future return' . That's true. But looking back on what happened can help us do the scenario analysis and prepare for what might happen in the future. That's the reflection of 'plan the trade'.
Hopefully, the post help you to construct your investment or trade plan.
Stay safe and enjoy your weekend.
plan your trade and trade your plan
