S&P test of 200 day and 2022 down channelYou can see that over the last two days that the S&P is jumped above the 200 day on Wednesday huge rally, which also broke above the April 2021 gap. However, today saw a rejection of the resistance of the down channel that started Jan 2022 ATH. This channel has rejected price solidly 2x times now.
The most probable thing would be to see a rejection and to head lower, likely testing the 370 level.
However, the market is fickle that way. Zag when you expect a Zig. Lot of talk about a Xmas rally. I think there is still some room to run up to the blue trend line, which is parallel to the other blue line connecting the major lows this year. That would be around 425 at the turn of the new year, but still a lower high.
IMO, market feeling super irrational like most bear market rallies. Somehow everything is better now that the expectation is a 0.5 instead of 0.75 rate hike, and inflation is only 7% instead of 10%. All things that would be market killers any other year. The Fed still expects to raise rates to 5% or more, so still several hikes to go. And the expectation is the next round of earnings in the new year will be down. I have a hard time seeing a truly sustained rally back to the ATH or higher. I personally did some light buying in October and hoping for some profits for xmas. I am not super enthused to buy for what looks like a small, but risky gain. Day traders may be happy for the next few weeks, but longer term still feels pretty bearish to me.
