S&P 500 IndexUpdated Decision time for the S&P 500...
Hellow Tradingview friends!
A small analysis based on trend based fib extensions and the levels I'm watching currently in the S&P500.
Next week will be a big week from:
1. A technical perspective as the S&P is about to test:
- A key fib resistance level
- Possibly the 200DMA
- Possibly the downtrend resistance line
Quite some hurdles to take and the volume pattern compared to H1 so far is not as convincing. Price action however will tell us wether there is some conviction left for this rally.
2. Additional catalysts for a move up or down from what I expect Walmart and Lowe earnings (is the consumer still able to pay?)
3. The inflation reduction act gets signed into office
What do we have to make of that... some economics 101
Key question is, will this act really reduce inflation? It seems to me that business tax hikes might result in wage cuts & layoffs, increasing consumer prices and investment cuts in what was a growing economy. Wouldn't that be the perfect catalyst for demand destruction the FED needs to:
- Slow down the economy (tap out the consumer, increase unemployment and force recession to end inflation)
- Have the consumer pay for it as much as possible in the meanwhile, after all infation is also tax
- Delay the real pain until after midterms
- Prevent raising rates into oblivion... and therewith bankrupting the US?
More interest on even more debt that cannot be covered by enough taxing income, wouldn't that force the FED to issue more treasury to absorb that debt, by eventually printing more $ to buy them. Which in turn is QE instead of QT?
The stock market for sure seems fueled by disbelief the FED is going to keep it up, expecting more dovishness as earnings multiples for sure ain't the catalyst. The bond market however, is not so sure as the US02Y retraced most of the yield loss during last week and basically not budged during the rally. These are conflicting signal, historically though the bond market has been been a good precursor for things to come.
Of course all of the above are just my personal observations, opinions and the pinches of salt I apply to the media headlines & government narratives. Thanks for reading or leave like / comment. Happy to hear your thoughs on current events and the stock market.
Trade safely and at your own risk!
A small analysis based on trend based fib extensions and the levels I'm watching currently in the S&P500.
Next week will be a big week from:
1. A technical perspective as the S&P is about to test:
- A key fib resistance level
- Possibly the 200DMA
- Possibly the downtrend resistance line
Quite some hurdles to take and the volume pattern compared to H1 so far is not as convincing. Price action however will tell us wether there is some conviction left for this rally.
2. Additional catalysts for a move up or down from what I expect Walmart and Lowe earnings (is the consumer still able to pay?)
3. The inflation reduction act gets signed into office
What do we have to make of that... some economics 101
Key question is, will this act really reduce inflation? It seems to me that business tax hikes might result in wage cuts & layoffs, increasing consumer prices and investment cuts in what was a growing economy. Wouldn't that be the perfect catalyst for demand destruction the FED needs to:
- Slow down the economy (tap out the consumer, increase unemployment and force recession to end inflation)
- Have the consumer pay for it as much as possible in the meanwhile, after all infation is also tax
- Delay the real pain until after midterms
- Prevent raising rates into oblivion... and therewith bankrupting the US?
More interest on even more debt that cannot be covered by enough taxing income, wouldn't that force the FED to issue more treasury to absorb that debt, by eventually printing more $ to buy them. Which in turn is QE instead of QT?
The stock market for sure seems fueled by disbelief the FED is going to keep it up, expecting more dovishness as earnings multiples for sure ain't the catalyst. The bond market however, is not so sure as the US02Y retraced most of the yield loss during last week and basically not budged during the rally. These are conflicting signal, historically though the bond market has been been a good precursor for things to come.
Of course all of the above are just my personal observations, opinions and the pinches of salt I apply to the media headlines & government narratives. Thanks for reading or leave like / comment. Happy to hear your thoughs on current events and the stock market.
Trade safely and at your own risk!
Note
Hugged DMA 200 @431,58 briefly for a few minutes today and inmmediately got sold off, bulls still don't seem finished though. WMA 50 sitting @ 433.
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