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SPX (S&P 500 Index)

Trading Plan for Wednesday, March 27th, 2024Trading Plan for Wednesday, March 27th, 2024 Market Sentiment: Cautious Weekly Volatility Risk: High Supports to Watch: Immediate Supports: 5266 (major), 5258, 5247 (major), 5242, 5233-36 (major), 5221, 5213, 5206-10 (major), 5198, 5188-91 (major), 5181, 5172, 5167-69 (major), 5162, 5153-55 (major), 5146, 5137, 5126 (major), 5119 (major), 5109 Resistances to Monitor: Key Resistances: 5274 (major), 5281, 5286-88 (major), 5293, 5299 (major), 5305 (major), 5311, 5315, 5318-20 (major), 5328, 5336-38 (major), 5345 (major), 5354, 5365 (major), 5372, 5380 (major), 5392, 5399 (major), 5408 (major), 5416 (major), 5425, 5432, 5440-44 (major), 5448, 5457 (major) Trading Strategy: Support & Resistance: Watch for potential bounces on support levels 5266, 5247 (triangle backtest), or a deeper pullback to 5242. For shorts, look higher towards 5286-88 or the 5299 zone after a strong move up. Long Opportunities: Consider longs only on strong reactions to support levels, ideally with confirmed failed breakdowns for added safety. Short Opportunities: If considering shorts, strong moves up followed by signs of weakness near resistance zones could be potential areas. Focus on Reactions: Be adaptable – volatility can create opportunities and traps with equal measure. Bull Case Support Holds: As long as supports like 5266, then particularly the triangle backtest at 5247 hold, bulls maintain short-term control. Breakout potential: A decisive breakout above the flag pattern's resistance around the 5300 zone could lead to a surge towards 5318-20 and potentially new highs. Bear Case Breakdown Signals: Breakdown below 5266 followed by continued selling could trigger a move downwards. Look for potential shorting opportunities on failed breakdowns or bounces with extremely tight stops due to FOMC volatility. . News: Top Stories for March 27th, 2024 Regulatory Response to Bank Runs: Federal Reserve and regulatory officials prepare to announce new rules designed to prevent future bank crises, addressing lessons learned from last year's turmoil. Economic Outlook: Recent CPI data, comments from industry leaders and analysts provide insights into inflation trends, monetary policy expectations, and the global economic outlook. Market Performance and Expectations: A cautious outlook for 2024 due to various factors including geopolitical risks and monetary headwinds. Corporate News: Updates on legal settlements, management changes, and stock market debuts affecting companies like Visa, Mastercard, Boeing, and Truth Social. Legal Issues in Crypto: U.S. prosecutors file criminal charges against KuCoin exchange and its founders. Currency and Interest Rates: Tracking movements in the Japanese Yen and potential actions by the Swedish Riksbank.
CME_MINI:ESM2024
by spytradingpro
End-of-Quarter sell-off effectAccording to ChatGPT: Yes, end-of-quarter sell-offs are a phenomenon observed in the stock market where investors may sell off their holdings toward the end of a financial quarter. There are several reasons why such sell-offs occur: Portfolio Rebalancing: Institutional investors, such as mutual funds and pension funds, often rebalance their portfolios at the end of each quarter to maintain their desired asset allocation. If certain stocks have performed well and become overweighted in the portfolio, they may sell some of those stocks to bring the allocation back in line with their strategy. Window Dressing: Fund managers may engage in window dressing at the end of each quarter. This involves buying or selling securities to improve the appearance of their portfolio holdings in reports to clients or shareholders. Quarterly Earnings Reports: Companies typically release their quarterly earnings reports shortly after the end of each quarter. If these reports are disappointing or if there are concerns about future earnings growth, investors may sell off their holdings in those companies. Tax Considerations: Individual investors may engage in tax-loss harvesting toward the end of the quarter to realize losses for tax purposes. This could lead to increased selling pressure on certain stocks. These are just a few reasons why end-of-quarter sell-offs may occur in the stock market. However, it's important to note that not every quarter sees significant sell-offs, and market behavior can vary depending on a wide range of factors including economic conditions, geopolitical events, and investor sentiment.
SP:SPX
by citsvar
Trading Plan for Tuesday, March 26th, 2024Trading Plan for Tuesday, March 26th, 2024 Market Sentiment: Cautious, consolidation after rally Weekly Volatility Risk: High Supports to Watch: Immediate Supports: 5274-76 (major), 5267, 5263 (major), 5257, 5247-51 (major), 5243, 5235, 5228 (major), 5221, 5217, 5212, 5200-03 (major), 5194, 5190 (major), 5179, 5171, 5167 (major), 5163, 5152-55 (major), 5147, 5137, 5126 (major), 5115 (major). Resistances to Monitor: Key Resistances: 5281, 5288 (major), 5292, 5299-5303 (major), 5307, 5311, 5316 (major), 5320, 5329, 5337 (major), 5346, 5351, 5356 (major), 5364, 5371, 5380, 5386 (Major), 5392, 5408 (major), 5416, 5426, 5434-37 (major), 5443-5446 (major). Trading Strategy: Tight Range: Be prepared for continued choppy trading within the range defined by the multi-day flag structure. Trade with caution and focus on range-bound strategies or consider sitting out. Flag Structure: Observe the bull flag structure with support around 5274-76 and resistance near 5288 and the 5300 zone. A decisive breakout or breakdown could provide a clearer directional signal. Long Opportunities: Look for potential long entries at 5274-76, particularly after a retest and reclaim. If this level fails, be extremely cautious about longs and consider bids only at major support levels like 5263 and 5247-51 (triangle back-test). Watch for failed breakdowns for added confirmation. Short Opportunities: Counter-trend shorting on strength carries significant risk, particularly within the flag structure. Use extreme caution if considering shorts near 5288 or the 5300 zone. Watch for signs of a breakdown or retracement for better risk/reward entries. Focus on Reactions: Don't force trades, be patient, and react to price action. Let price discovery unfold within this consolidation pattern. Bull Case Flag Breakout: A breakout above the bull flag resistance around 5288 and further above 5300 could signal a continuation of the uptrend, targeting 5316, 5338, and ultimately 5350+. Support Holds: As long as 5274-76 holds, the bulls remain in short-term control. Look for potential add-on points if a breakout occurs, preferably after acceptance or a failed breakdown. Bear Case Breakdown Signals: Breakdown below 5274-76 could trigger selling pressure. Watch for shorting opportunities on failed breakdowns or bounces. Exercise patience as these setups often involve traps. News: Top Stories for March 26th, 2024 GameStop Earnings: Focus on the GameStop earnings report and its potential impact on the stock market and meme stock sentiment. Federal Reserve Updates: Stay informed about the Federal Reserve's interest rate plans and their impact on market sentiment, particularly concerns about a potential market crash. Global Economic Developments: Monitor updates on economic conditions in Germany, the U.S. housing market, and the China-U.S. trade dispute. U.S. Economy: Analysis of the U.S. economy's resilience, and the implications for the Fed's possible rate cut plans. Stock Market Performance: Track stock market movements, including updates on the Sensex, the Nifty, and the impact of new home sales data in the U.S. Banking and Regulations: Examine the impact of Basel III regulations on the APAC banking sector and the outlook for emerging markets. U.S. Fiscal Policy: Consider the CBO's warnings about rising U.S. federal debt and the increasing cost of debt servicing. Remember: The market is consolidating after a strong rally. Be adaptable, manage risk, prioritize capital preservation, and always prioritize reacting to price action over any predictions.
CME_MINI:ESM2024
by spytradingpro
SPX 5300 NEXT ?REASONS WHY !! The S&P 500 (SPX) has been a barometer of the U.S. economy and a benchmark for global equity markets. Here are some reasons why we believe it could reach the 5300 mark: Economic Recovery: The U.S. economy is showing signs of robust recovery from the pandemic-induced recession. This recovery is expected to drive corporate earnings growth, which is a key driver of stock prices. Monetary Policy: The Federal Reserve’s accommodative monetary policy, including low interest rates, is likely to continue supporting the equity market. Low interest rates make stocks more attractive compared to other assets like bonds. Fiscal Stimulus: Government spending and fiscal stimulus measures aimed at reviving the economy could provide a significant boost to various sectors, driving their stock prices up. Technological Advancements: Companies in the technology sector, which have a significant weight in the S&P 500, continue to innovate and grow. This growth can have a positive impact on the overall index. Vaccine Rollout: The successful rollout of COVID-19 vaccines is expected to lead to a strong economic rebound, as businesses reopen and consumers start spending again. Inflation Expectations: Moderate inflation can be good for stocks. It often leads to higher prices for goods and services, which can translate into higher corporate profits.
SP:SPXLong
by NYRUNSGLOBAL
S&P500: Sell opportunity on the 4H timeframe.The S&P500 is highly overbought on the 1W technical outlook (RSI = 77.490, MACD = 202.930, ADX = 73.429) and hasn't provided the slightest correction under the key 1D MA50 trendline since November 3rd 2023. In spite of that, the index can keep rising without providing such a correction, let alone enable us to time it. Its structure of this nonstop rise since January 31st is the Channel Up you see on this chart. We are on the 4H timeframe which filters out the overbought technical indicators on the higher timeframes and is the only chart capable of trading with a high success rate at the moment. As you can see, the strongest signal inside this pattern has been a Buy when the 4H MACD makes a Bullish Cross and a Sell when it makes a Bearish Cross. At the moment it is after a Bearish Cross, so the short term trend is a Sell. All recent pullbacks have hit at least the 1D MA50 and the latest one even the 1D MA100 on the lower magnitude so far of -1.58%. Consequently, we are targeting the 1D MA100 on -1.58% from the top (TP = 5,180). ## If you like our free content follow our profile to get more daily ideas. ## ## Comments and likes are greatly appreciated. ##
CAPITALCOM:US500Short
by InvestingScope
1
Trading Plan for Monday, March 25th, 2024Trading Plan for Monday, March 25th, 2024 Market Sentiment: Cautious, watching key support levels after the rally Weekly Volatility Risk: High Supports to Watch: Immediate Supports: 5284-88 (major), 5276, 5259 (major), 5245-48 (major), 5236, 5230, 5219-21 (major), 5213, 5208, 5200-5197 (major), 5191, 5186, 5177, 5168-71 (major), 5163, 5155, 5145 (major) Resistances to Monitor: Key Resistances: 5295, 5302 (major), 5307 (major), 5313, 5320, 5328 (major), 5338, 5348 (major), 5355, 5363-66 (major), 5380, 5389, 5396-5400 (major), 5412, 5428 (major), 5438-42 (major), 5450, 5460-63 (major) Trading Strategy: Choppy Range: Be prepared for potential choppiness within the 5302-5288 range. Trade with caution and focus on range-bound strategies if this pattern persists. Flag Structure: Observe the bull flag structure that has formed since Thursday. A decisive breakout or breakdown could provide a clearer directional signal. Long Opportunities: Look for potential long entries at 5284-88, particularly after a retest and reclaim. If this level fails, be extremely cautious about longs and consider bids only at major support levels like 5259 and 5245-48 (triangle back-test). Short Opportunities: Counter-trend shorting on strong up moves carries significant risk. Use extreme caution if considering shorts near major resistances. Watch for signs of a breakdown or retracement, and focus on 5307 and potentially 5348 if we get that far. Focus on Reactions: Don't force trades, be patient, and react to price action. Let price discovery unfold after the rally. Bull Case Flag Breakout: A breakout above the bull flag resistance around 5307 could signal a continuation of the uptrend, targeting 5320, 5338, then 5348. Support Holds: As long as 5284-88 holds as support, the bulls remain in short-term control. Look for potential add-on points if 5307 breaks out, preferably after acceptance or a failed breakdown. Bear Case Breakdown Signals: Breakdown below 5284 could trigger selling pressure. Watch for shorting opportunities on failed breakdowns or bounces. Exercise patience as these setups often involve traps. News: Top Stories for March 25th, 2024 Federal Reserve Updates: Analysis of the Fed's latest interest rate decision, economic projections, and implications for future monetary policy. Focus on how market expectations for rate cuts in 2024 may have shifted, and the continued focus on inflation data. Inflation and Economic Data: Discussion of the latest CPI figures, job market data, and their potential impact on the Fed's approach to managing inflation. Market Reactions: Examine how global markets have reacted to the Fed's decisions, including equity indices, treasury yields, and the dollar's performance. Global Economic Outlook: Updates from Vanguard on economic expectations, contrasting the U.S. with trends in the Eurozone and U.K. Lessons from Bank Failures: Reflect on the lessons learned from recent stress in regional banks and discuss implications for the financial system's overall stability. Energy Transition: Analysis of the challenges and opportunities in the electrification of energy markets. Stock Market Sentiment: Review market sentiment after the Fed decision and the potential for near-term changes. Remember: The market might be consolidating after a strong rally. Be adaptable, manage risk, prioritize capital preservation, and always prioritize reacting to price action over any predictions.
CME_MINI:ESM2024
by spytradingpro
$RTX Ready for Flat Base Breakout?NYSE:RTX Well Fargo upgraded RTX yesterday and give it a $120 price target. I used this morning’s early pullback to get an early start on this one. It will not be a technical breakout until it moves over 92.81. My plan is to build an oversized position after it breaks out of this flat base. I will be patient but have a stop of no more than 3% loss. On another note, in the first 20 minutes of trading the volume was already 28% of the daily average. See notes on the chart for more detail. The chart I am using is the All-In-One LevelUp tool available here on TV. Check it out. Ideas, not investing / trading advice. Comments always welcome. Thanks for looking.
NYSE:RTXLong
by jaxdog
S&P500 Top formed on the 19 month Channel Up. Correction to 4950The S&P500 index hit yesterday the top of the 19 month Channel Up. That was the first time since it started trading. This is a strong sell signal and considering that the MA50 (1d) has been intact since the November 3rd 2023 bullish break out, we expect to cross under it now. Trading Plan: 1. Sell on the current market price. Targets: 1. 4950 (-6.00%, 0.618 Fib and Support A). Tips: 1. The RSI (1w) is posting the same sequence just under the Rising Resistance that it did during the July 27th 2023 High. An additional sell signal. Please like, follow and comment!! Notes: Past trading plan:
CAPITALCOM:US500Short
by TradingBrokersView
1
$OKTA PEG (Power Earnings Gap) CandidateNASDAQ:OKTA jumped over 22% at the open from earnings reported on February 29th. It had a wide range of trading that day and closed just under the open about midway through the candle. It has been digesting that big move on lower volume for sixteen “trading” days (3 weeks). I went long this yesterday on the break of the downtrend line (blue). It pulled back by the end of the day but has not triggered my stop which is under the low of March 19th (103.61). It is recovering today but it really needs to get up and over yesterday’s high before I would now consider it a breakout. I do have a one-half size position and if it can get up and over 107.30, I plan to bring it up to a full-sized position. As mentioned above, I do have a stop in place just in case it continues to the downside. The chart I am using is the All-In-One LevelUp tool available here on TV. Check it out. Ideas, not investing / trading advice. Comments always welcome. Thanks for looking.
NASDAQ:OKTALong
by jaxdog
$GTLS PEG (Power Earnings Gap) CandidateNYSE:GTLS is in the energy space as an equipment manufacturer. One that may not come on your radar. The average price target on this is $197.68. USB just gave it a new “BUY” rating and a price target of $170. At the current price that implies a 16% move. At the average price target the implied move would be over 34%. Now the technical that I trade. This had over an 11% Gap move on earnings. It has been digesting that for fifteen trading days now. I have an alert set just over today’s high of 150.50. Should that trigger, I will look to go long with a stop on a decisive close under the 10 DMA (Bluish) which would be a nice risk reward trade. All TBD. The chart I am using is the All-In-One LevelUp tool available here on TV. Check it out. Ideas, not investing / trading advice. Comments always welcome. Thanks for looking. Chart Industries, Inc. is a leading independent global manufacturer of highly engineered equipment servicing multiple market applications in Energy and Industrial Gas. Our unique product portfolio is used throughout the liquid gas supply chain in the production, storage, distribution and end-use of atmospheric, hydrocarbon, and industrial gases. Chart has domestic operations located across the United States and an international presence in Asia, Australia, Europe and Latin America.
NYSE:GTLSLong
by jaxdog
Trading Plan for Friday, March 22nd, 2024Trading Plan for Friday, March 22nd, 2024 Market Sentiment: Cautious, watching key support levels Weekly Volatility Risk: High Supports to Watch: Immediate Supports: 5302 (major), 5298, 5286, 5282-79 (major), 5275, 5257, 5246-49 (major), 5236 (major), 5231, 5225, 5218 (major), 5212, 5208 (major), 5203, 5191-94 (major), 5179, 5169-71 (major), 5162, 5153-55 (major), 5147, 5136 (major), 5123-26 (major), 5115, 5108 (major), 5102, 5092, 5077-82 (major) Resistances to Monitor: Key Resistances: 5308, 5320 (major), 5331, 5337-39 (major), 5347, 5350-5354 (major), 5362, 5374, 5381, 5385-90 (major), 5400, 5413, 5425-30 (major) Trading Strategy: Support Testing: The market is likely to test key support levels after the rally. Prioritize capital preservation and be watchful for potential bounce plays. Long Opportunities: Look for potential long entries at 5302 (after retest and reclaim), 5282-79, or the triangle backtest at 5246-49. Avoid aggressive longs if the triangle backtest fails. Short Opportunities: Counter-trend shorting on strong up moves carries significant risk. Use extreme caution if considering shorts near major resistances. Watch for signs of a breakdown or retracement for better risk/reward entries. Focus on Reactions: Don't force trades, be patient, and react to price action. Let price discovery unfold after the rally. Bull Case Triangle Backtest Hold: Bulls maintain control as long as the 5246-49 triangle backtest holds. A bounce here, particularly if it extends to the 5282-79 zone, provides a strong entry for a move back towards the 5320 resistance. Basing and Building: Bulls could base above 5302 after a retracement, creating the potential for further upside moves. Watch for flagging in this zone for potential upside. Bear Case Breakdown Signals: Breakdown below 5302 and especially below the 5251-47 triangle backtest could trigger selling pressure. Watch for shorting opportunities on failed breakdowns or bounces. Exercise patience as these setups often involve traps. News: Top Stories for March 22nd, 2024 Global Economic Developments: Labor market developments in Germany, housing market indicators in the U.S., the Panama Canal's financial performance, and the global semiconductor industry. Federal Reserve Updates: The impact of the Fed's latest interest rate decision and economic forecasts. Inflation and Jobs: Analysis of the latest job market data and inflation trends, and their implications for the Federal Reserve's future monetary policy actions. International Markets: Updates on foreign direct investment in China, German business sentiment, inflation in Japan, and the Australian economy's response to interest rate pressures. Legislative Updates (U.S.): Developments regarding the U.S. spending bill and geopolitical concerns surrounding the CHIPS grant in Arizona. Indian Equity Markets: Analysis of recent movements in the Indian markets, including IT, auto sector news, and performance of the Sensex and Nifty. Corporate News: Stock market reactions to company announcements, such as news from Larsen and Toubro and IDFC FIRST Bank. Outlook on Accenture and other tech stocks. IPO and Stock Market Updates: Discussion of how Reddit's IPO performance may impact the overall market sentiment and encourage other companies to go public. Remember: The market is likely in a price discovery phase. Be adaptable, manage risk, and react to price action rather than predicting.
CME_MINI:ESM2024Long
by spytradingpro
$ARKK - VCP (Volatility Contraction Pattern)AMEX:ARKK Mark Minervini made famous the VCP as a set-up. It is also simply a wedging pattern that can break either way. However, where there was a previous uptrend, like in this chart, the direction of the break is usually to the upside. The path of least resistance is a continuation of the previous trend. ARKK had a move of over 60% from the Oct 30th low to the Dec 27th high. It pulled back about 18% from that high and has been digesting since and is now down less than 8% from that most recent high. As in life there are no guarantees on this. But here is my plan, I have an alert set on the upper downtrend line. Should that trigger, I will look to go long with a stop either below that day’s low or a close below the 20 EMA (White). All TBD. Ideas, not investing / trading advice. Comments always welcome. Thanks for looking.
AMEX:ARKKLong
by jaxdog
Bullish But Wait Until Feb 27th to go Big LongThe black arrow/path is my near-term forecast, I expect price to trade along this trajectory. As the title indicates, the market is near-term bullish but don't enter long or add until Feb 27th for the following reasons: 1) chart perspective : The structure is setting up for a sustained break of 5039 to make a final leg higher to complete a smaller degree wave 5 (I didn't draw the Elliot Wave Count in my chart, just trust me that we just completed a smaller degree wave 4 and are looking for confirmation that 5 has begun). Price will continue slightly higher for the next 1-3 days (2/22-2/26) and then consolidate - likely forming a w fractal - through Feb 28th (next Wednesday). After that it will make the sustained break higher and run through early March before topping. 2) logical perspective : new bulls (especially retail) is going to chase this gap up in SPY tomorrow (extra FOMO due to the NVDA jump) and they'll buy ignorant Feb 23 - Mar 1 OTM calls that are designed to expire worthless. If you're not already in you're late, its all good I'm not in yet. Simultaneously the perma-bears will pile in thinking its "over-extended" ... everybody playing loses temporarily. Waiting until 2/27 will also give this enough tome to confirm long, a break back below 5000 is a warning sign for bulls and a break back below 4969 is Bearish. The play is to wait until the implied volatility on calls for Mar 15 expiry or later cools off while price consolidates around 5039 (SPY 501). Buy SPY 505.00 calls on Feb 27 to prepare for the bigger move staring on Feb 28 (earliest expiration you should be eying is Mar 15, but I'm going to go out to April). ---------------------------------------------------------------------------------------------------------------- BREAKDOWN of Key Levels and Path to Target: - Breakout level = 5039.20 - Initial target range = 5050-5058, with point target 5074 -The upside continuation to this range will happen fast by 2/22-2/26, then it will consolidate between 5017 and 5088 as it prepares to make a sustained break of 5039. Don't FOMO. - SPX and general market will make its main run from 2/28 to 3/15/2024. Goal Target = 5153 , but it can go as high as 5208 before consolidating again or pulling back. - Once you follow these directions and enter long (unless I post an update saying "cancel that"), the trailing stop loss will be the dotted black upsloping line. ~Good Luck This is the word of the Lord .
OANDA:SPX500USD
by JerryManders
26
S&P: Bearish signals mount but buyers still have controlLast week began with a display of strong conviction from buyers, propelling price upwards towards the previous high (516.5). They managed to surpass it by a small margin, establishing a new historical high at 517.1. Unfortunately, bulls were unable to sustain momentum and build a new value zone, allowing bears to regain control and push price back towards the previous low. All these developments signal daily uptrend exhaustion. Trend is close to reversal, but it is not there yet. Sellers must prove their strength by taking down the last week low (506,9). Until then it is still bulls market and buyers have control. The outlook for the next week is neutral. Long term Buyers should refrain from increasing position and consider (partial) profit taking. Sellers can try shorting the market but remember that odds are still slightly in favor of the opposite side. Wednesday (20th) is an important day for the market as FED will announce interest rate decision. P.S. for some reason weekly high on the daily chart doesn’t match weekly high on the weekly chart. I have reported this issue to TV support Disclaimer I don't give trading or investing advice, just sharing my thoughts.
AMEX:SPY
by hermes_trisme
#SPX - 22 MarchSPX was much sideways yesterday after the rally on FOMC the day earlier. SPX opened and moved up to first resistance before pulling back, but did not touch the bottom level. Some weakness towards the end of day as it is unable to go higher. Still SPX closed green. I said I will scalp for the pullback. It was not easy as there were "strange" rotations between strength of DJIA and NDX, though eventually there was a pullback. What's for today? I would say, not easy to say, so trade using the levels. Highs is definitely not in yet; just whether we will get a pullback before further up. And even if one gets a pullback do you trade this pullback. Price is at the PZ now; sure it can go up from here; and if it breaks, 5243 double level support is there which is another bounceable level. I would go for a move down to 5225 before the bounce though. This would be based on SPX breaking 5253 and NDX breaking 371 for the move lower.
OANDA:SPX500USD
by FadeMeIfYouCan
NIKE BULL AFTER EARNINGS 120Nike’s stock looks bullish over the longer-term after breaking up from a falling channel pattern on the daily chart1. If Nike receives a bullish reaction to its earnings print and remains above the 50-day SMA, the eight-day EMA will cross above the 21-day EMA, which would be bullish1. Wells Fargo analyst Ike Boruchow added Nike to his top picks list, stating, "We simply believe the recovery characteristics and self-help story now beginning at make for a more compelling long idea into 2024
NYSE:NKE
by NYRUNSGLOBAL
The FOMC meeting, rising wedge, and VIX dropYesterday’s FOMC meeting ended as widely anticipated, with no change to monetary policy. During the press conference, the FED’s chairman reiterated the central bank’s commitment to bringing inflation under control and outlined a strong economy and tight labor market. Jerome Powell also described inflation as being on a downward trajectory and explained the need to stay attentive to inflation rates. In addition to that, he acknowledged the emergence of some negative effects of high interest rates on the economy. Markets reacted positively to Jerome Powell’s statements and rallied across the board. The SPX broke above $5,200 and established a new all-time high at $5,226. Simultaneously, the VIX experienced a significant drop that led to the distortion of its broadening structure on the daily chart. While the SPX remains over-extended above the upward-sloping channel, this drop could foreshadow the SPX’s move slightly higher, in the area between $5,300 and $5,350. Particular things to watch out for in the following days include the next developments with the VIX, the rejection/success of RSI breaking above 70 points (on the daily time frame), the support at $5,180, and the pattern resembling a rising wedge (on the 4-hour time frame). Illustration 1.01 Illustration 1.01 displays the VIX’s daily graph. The yellow arrow indicates a breakout below the lower trendline, distorting the structure with higher peaks and higher troughs. Illustration 1.02 The picture above shows the 4-hour chart of the SPX. Yellow dashed lines highlight the pattern resembling a rising wedge formation. Here are some of the most important statements from Jerome Powell’s speech: “Inflation has eased substantially while the labor market has remained strong, and that is very good news. But inflation is still too high, ongoing progress in bringing it down is not assured, and the path forward is uncertain. We are fully committed to returning inflation to our 2 percent goal.” “Our restrictive stance of monetary policy has been putting downward pressure on economic activity and inflation. As labor market tightness has eased and progress on inflation has continued, the risks to achieving our employment and inflation goals are moving into better balance.” “Activity in the housing sector was subdued over the past year, largely reflecting high mortgage rates. High interest rates also appear to have weighed on business fixed investment. In our Summary of Economic Projections, Committee participants generally expect GDP growth to slow from last year’s pace, with a median projection of 2.1 percent this year and 2 percent over the next two years.” “Over the past three months, payroll job gains averaged 265 thousand jobs per month. The unemployment rate has edged up but remains low, at 3.9 percent. Strong job creation has been accompanied by an increase in the supply of workers, reflecting increases in participation among individuals aged 25 to 54 years and a continued strong pace of immigration” “We believe that our policy rate is likely at its peak for this tightening cycle and that, if the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year. The economic outlook is uncertain, however, and we remain highly attentive to inflation risks. We are prepared to maintain the current target range for the federal funds rate for longer, if appropriate.” “We know that reducing policy restraint too soon or too much could result in a reversal of the progress we have seen on inflation and ultimately require even tighter policy to get inflation back to 2 percent.” “ If the economy evolves as projected, the median participant projects that the appropriate level of the federal funds rate will be 4.6 percent at the end of this year, 3.9 percent at the end of 2025, and 3.1 percent at the end of 2026—still above the median longer-term funds rate.” “Turning to our balance sheet, our securities holdings have declined by nearly $1.5 trillion since the Committee began reducing our portfolio.” Technical analysis gauge Daily time frame = Bullish Weekly time frame = Bullish *The gauge does not necessarily indicate where the market will head. Instead, it reflects the constellation of RSI, MACD, Stochastic, DM+-, ADX, and moving averages. Please feel free to express your ideas and thoughts in the comment section. DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor or any other entity. Therefore, your own due diligence is highly advised before entering a trade.
SP:SPXLong
by Tradersweekly