Attention to Nancy Pelosi's Taiwan visit headline

Summer of 2022, reminiscent of slipping back to the 1990s, Nancy Pelosi (honorifics omitted) is stirring the media in the summer of 2022.
On the 2nd, headlines spreading on social media claimed Pelosi would visit Taiwan.
There has been no reliable report as of now, but it is Pelosi after all.
At 82 years old, she is a figure who keeps you guessing until the last moment.
In the past, two years after the 1989 Tiananmen Square events—an historical moment in the democratization movement—Nancy Pelosi, then visiting Beijing as part of a congressional delegation, ignored the formal schedule and made a lightning visit to Tiananmen Square, raising a banner in English and Chinese that saluted “the people who sacrificed for China” in front of television cameras. (If you’re interested, it’s on Wikipedia.)
This remarkable woman has a strong focus on human rights issues and makes China hardline a political creed.
One can surmise she has long been displeased by the repeated Chinese military actions in the Taiwan Strait in recent times.
Setting aside her own actions, what about the reactions of those around her? Even President Biden would likely raise an eyebrow at this performance.
From the administration’s perspective, it is “one unnecessary move,” and presumably no one besides Pelosi wants this (regardless of feelings, given the current unbalanced U.S.-China relations, it’s not something to do).
Reliable reports would probably come at the last moment or after arrival.
A free spirit who would slip out of an official visit would not be bound by a strict schedule.
Having traveled around Asia, she is in a region where destinations are within a few hours’ reach, and she seems prepared to visit on a whim.

Meanwhile, military tensions are escalating.
For the protection of government dignitaries, while there is no confirmed report, the Ronald Reagan carrier strike group is sailing toward the Taiwan Strait.
Special forces transport aircraft are also moving toward Taiwan.
This could cause a commotion enough to quell a minor terrorist incident.
Rather than heightening military tension, any accidental incident due to a troublesome visit would push the U.S. to adopt a tough stance as a preventive measure.
Again, it is a nuisance.

The White House has called on China in a statement to avoid escalating the tension surrounding the visit to Taiwan.
Pelosi, traveling by military aircraft, makes it unclear until the last moment what will happen, but if she departs, a statement from the U.S. government will likely follow.

Markets are expected to react with risk-off sentiment.
Asian markets tend to see the yen strengthen, and the impact will likely exceed the difference in interest rates between the U.S. and other regions.
The stock market is currently showing no clear reaction, but the VIX is slowly rising, so if reliable reports emerge, a roughly 1% drop could occur as if drawn by breathing.
Given ongoing short-cover rallies and short-term traders buying, the technically favorable level for long profit-taking would likely appear, and a chain reaction could occur in combination with a Fed official statement tonight.
However, the visit to Taiwan would be as early as the night in Japan time, and it’s unclear when headlines would surface, so there may be little else to do but stay alert.
If an unusual drop begins, jumping on it could be intriguing.
I also wish that a Fed comment would come first, butit depends on Pelosi.

Whatever the consensus forecast, indicators in various countries have deteriorated month over month.
PMI, ISM releases in China, Europe, and the U.S. have shown global economic indices worsening.
Amid this, crude oil prices have fallen, briefly dipping into the low 90s, marking about an 8% drop.
As mentioned in yesterday’s article,"Bad News" is "Good News" developing.
U.S. interest rates have fallen, stock markets are flat but holding firm.

In U.S. newspaper media, stock highs increasingly appear unfavorable to the Fed’s policies (though quite late).
As noted here many times, looking at August market outlook, compared with July, inflation indicators and employment indicators pose downward risks to the current stock market.
Regardless of the headlines, core CPI excluding energy and food will likely show little slowdown, and employment will likely remain tight.
At some point, there is a high likelihood of re-anchoring tightening, but what the market will be sure of—whether it is the Fed or the indicators—is uncertain.
This August may see a lackluster trading environment with selling in the quiet.
There may be price movements, but one should carefully consider whether it is worth taking a risk.

Moderate adjustment to the mid-term trendline.
Change the upper resistance around 33,200 dollars.

No change to the main scenario.
Timing is uncertain, but the ceiling is expected between the Fed remarks and the employment statistics.
There are many downside risks, so which trigger will occur is honestly unknown.
Institutional investors may react strongly if they are still trading, but unfortunately it is the summer vacation period.
However, this level is technically a viable range to trade, and conversely, once either side breaks through, taking a position becomes very difficult.
From a elimination perspective, one may have to aim for short positions.

NASDAQ’s chart looks clean, but the back is tricky.
Over 13,000 dollars has been hit and pushed back.
From trendline regression, there is a gap up to about 13,500 dollars, nearly 4%.
To push higher in this interval carries risk, so a Dow Theory breakdown in the short term would be awaited.
In the short term, if it falls below 12,800 dollars, selling may become easier.

The dollar/yen, with a rough pattern, has reached the 131.5 yen support.
At least a turning point would occur after New York time, so by Tokyo morning this level is less favorable for longs.
Pelosi-related risk tends to trigger yen buying in a risk-off manner, and that would take priority over the Federal Reserve’s guidance.
If one trades without considering fundamentals, placing a stop around 131.2 with a risk of 3-40 pips aiming for around 134 yen could work.
The risk-reward is not bad.

Gold, with Fibonacci acting as resistance, may see a short-term technical reversal around 1787 dollars.
Personally, even at the current level, Pelosi’s actions are an impediment.
This rise began because pricing anticipated a rate cut in early 2023, and it is expected to peel away, so selling would be the strategy.
The level is getting close, but given sudden risk-off, leverage requires caution.

Today there are no notable economic indicators.
Around 23:00, Fed President Evans
Around 26:00, Fed President Mester
Early morning after 7:30, Fed President Bullard is scheduled to speak.