S&P 500 Technical Analysis 
SPX500USD
The S&P 500 price yesterday broke the resistance downtrend line to the upside.
This happened following the release of the US CPI inflation data that increased less than expected (7.7% vs. 8% expected).
Wall Street celebrated. Stocks jumped higher. The S&P 500 Index closed up yesterday at almost 6%. The Nasdaq Index jumped over 7.7%. The Dow Jones Index rose over 4%.
Both stocks and cryptos jumped higher yesterday because investors believe that inflation might have peaked and the FED will slow down the pace of rate hikes in the coming months.
This is still not confirmed and I think the FED will keep increasing the interest rates as the inflation is still very high, so I remain cautious for the time being.
On the technical side, the breakdown is a strong bullish signal, for the short term.
However, we should wait for confirmation of the new uptrend, which could be a retest of an old resistance line and a confirmation that has flipped to a support line.
The price also broke above the 21-day MA (blue moving average) and above the 50-day MA (red moving average). This is also bullish.
So, we can summarize that in the short term the trend flipped bullish, but long term (months), the trend is still bearish.
In fact, the price is still trading below the 200-day MA (green moving average), which is the key moving average that separates a bullish trend from a bearish trend.
That will be the real key level to watch.
So, if the bullish trend can continue, we could expect a retest of the 200-day MA in the upcoming days (about 4068).
Otherwise, a failed retest of support lines (3900 and 3820), would push prices lower.
The RSI is in Bullish mode: 60
Today the price looks flat. Is not making a significant move. We will probably close today (and this week) around the current level.
Market Sentiment
The market sentiment is now in the "Greed" mode.
As mentioned, investors believe that the worst is over, inflation peaked and the FED will pivot soon.
They were just expecting good news to start buying again.
If the sentiment remains high, we can expect higher prices in the upcoming days.
In my opinion, we should be careful. I think we haven't reached the bottom of the market yet.
FedWatch Tool
80.6% of investors are expecting the FED to increase the interest rates by 0.50% in the next meeting.
The remaining 19.4% are expecting a 0.75% rate increase.
No other options are considered at this stage.
The next FED meeting is on 14 December 2022.
Portfolio Update
Overall, the majority of my positions are bullish (LONG). I have a few short positions opened recently that I am monitoring and waiting for the right time to close or I could add more shorts if the price reverts to the downside.
Right now I am neutral on the stock market, as the price can go in any direction in the short term.
SPX500USDThe S&P 500 price yesterday broke the resistance downtrend line to the upside.
This happened following the release of the US CPI inflation data that increased less than expected (7.7% vs. 8% expected).
Wall Street celebrated. Stocks jumped higher. The S&P 500 Index closed up yesterday at almost 6%. The Nasdaq Index jumped over 7.7%. The Dow Jones Index rose over 4%.
Both stocks and cryptos jumped higher yesterday because investors believe that inflation might have peaked and the FED will slow down the pace of rate hikes in the coming months.
This is still not confirmed and I think the FED will keep increasing the interest rates as the inflation is still very high, so I remain cautious for the time being.
On the technical side, the breakdown is a strong bullish signal, for the short term.
However, we should wait for confirmation of the new uptrend, which could be a retest of an old resistance line and a confirmation that has flipped to a support line.
The price also broke above the 21-day MA (blue moving average) and above the 50-day MA (red moving average). This is also bullish.
So, we can summarize that in the short term the trend flipped bullish, but long term (months), the trend is still bearish.
In fact, the price is still trading below the 200-day MA (green moving average), which is the key moving average that separates a bullish trend from a bearish trend.
That will be the real key level to watch.
So, if the bullish trend can continue, we could expect a retest of the 200-day MA in the upcoming days (about 4068).
Otherwise, a failed retest of support lines (3900 and 3820), would push prices lower.
The RSI is in Bullish mode: 60
Today the price looks flat. Is not making a significant move. We will probably close today (and this week) around the current level.
Market Sentiment
The market sentiment is now in the "Greed" mode.
As mentioned, investors believe that the worst is over, inflation peaked and the FED will pivot soon.
They were just expecting good news to start buying again.
If the sentiment remains high, we can expect higher prices in the upcoming days.
In my opinion, we should be careful. I think we haven't reached the bottom of the market yet.
FedWatch Tool
80.6% of investors are expecting the FED to increase the interest rates by 0.50% in the next meeting.
The remaining 19.4% are expecting a 0.75% rate increase.
No other options are considered at this stage.
The next FED meeting is on 14 December 2022.
Portfolio Update
Overall, the majority of my positions are bullish (LONG). I have a few short positions opened recently that I am monitoring and waiting for the right time to close or I could add more shorts if the price reverts to the downside.
Right now I am neutral on the stock market, as the price can go in any direction in the short term.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.