DJI/ SPX - expect near term volatility

31 окт. 2022 г.

With FOMC uncertainty coming up this week, and the indices hitting into near term trendline resistence, some volatility will not be surprising in the next few days.

Among the 3 indices, DJI has been the strongest of late.

On the monthly timeframe, we can see a few rather bullish signs:
1. a "tweezer bottoms"
2. bullish engulfing candlestick
3. bullish divergence between price and RSI playing out. However, divergences usually translate into just a short term reversal (lasting 1-3 candlesticks) and may not be a longer term trend reversal. Still, when seen on a monthly chart, this could mean 1-3 months of "upside").

A pullback at this junction is not unexpected but what is important is to watch for the amount of pullback. Any pullback that within 50% fibonacci retracement of it's recent strong upswing AB is within "acceptable" limits.
However, anything is possible. Let's see how it will play out this week especially after FOMC this Wednesday.

Disclaimer: Just my 2 cents and not a trade advice. Kindly do your own due diligence and trade according to your own risk tolerance and don't forget that money management is important! Take care and Good Luck!

6 нояб. 2022 г.

Заметка

SPX - will near term support @ 3700 hold?

SPX broke above the mini inverse H&S neckline @ 3810 on 25 Oct but alas this the breakup has failed after market disappoints on FED's continued hawish tone last Wednesday.

The index appeared to have found immediate support @ 3700 which is a confluence of:
1. 50% fib retracement of the recent AC upswing and
2 76.8% fib retracement of the mini BC upswing

With the major tech stocks continued weakness, the odds of SPX re-testing 3500 has increased.
That said, we are still seeing higher hi's and higher lo's since the SPX rebounded from it's low on 13 Oct and with the FAANG's earnings out of the way, I suspect we could see subdued direction in the index until CPI report come Thurday.

p/s overall market will not be bullish until we can see Nasdaq as the leader among the 3 indices (followed by SPX and lastly DJI). Right now we have the inverse.

Let's see what happens after Thursday (CPI report).

10 нояб. 2022 г.

Заметка

after a weaker than expected CPI and employment report, the market is now rebounding strongly. Nasdaq is leading SPX which in turn is leading DJI today, near term target of 4100 is in sight now.

22 нояб. 2022 г.

Заметка

the indices have been forming a bull flag in the past 9 days. SPX retraced only 38.2% of it's recent AB upswing with near term support @ 3900 holding. Clearly the bulls' conviction is higher right now. Tomorrow's PMI report will let us know if the bulls are right this time.