1 Jan 2023 SPX Weekly - New Year!

Accuracy: 43/48 (89.58%)

SPX below 4000 - Correct

Last Week

Like I said last week, quieter and shorter week. SPX consolidated at the current area to end of the year.  Daily candle chart wise its still pretty much same are as past 2 weeks. Nothing much has changed although intraday moves are still wild which could be seen in the hourly chart below.

On the hourly chart, we see that last week formed a very nice symmetrical triangle. Symmetrical triangles are neutral pattern formation with some slight preference towards trend continuation. On Friday, we closed pretty bullish though. Need to see where this leads to in the first week of 2023.

Next Week

With the consolidation and symmetrical triangle, we're still in an area where we're unsure where the market wants to go.

The expected scenarios are gonna be pretty similar to past 2 weeks as things haven't really moved much. We're all anticipating a break out.

My personal take here is actually more of the yellow case where it will break this triangle but remains within 3750-3900 area. Friday's ending momentum makes me lean more towards the green side testing 3900. I don't foresee any big breakout or breakdown through any direction for this coming week, I'll explain in the economic calendar below.

Some early note, earning seasons gonna start near the end of Jan 2023.

Economic Calendar

Putting up next 2 weeks economic calendar because the bigger event is on the subsequent week so it kind of ties my story together. For next week, we got few important but smaller events like Nonfarm, Jobless Claim, Jobs etc. The following week, once again the big CPI numbers.

So next week these smaller pushes will break out from the current symmetrical triangle but remain within 3750-3900 area. Not forgetting it's a short week with Monday holiday.

Then the CPI week will be the direction deciding one, either break up or down through the key support and resistance area.

Unless there's some sudden bigger news or events, I think it likely it'd play out that way.

Prediction

For consecutive 3 weeks, same prediction same expectation. 4000 remains the key downtrend resistance and momentum still lean on the downtrend.

SPX below 4000

Thoughts on trading this SPX Weekly analysis

I've always been thinking how to put a trade onto this prediction, so far it's really more for my regular read on the market. Not so much making a trade out of this. Sometimes my prediction comes true for the week but a simple directional credit spread would probably not sustain the move which a stoploss on the trade will probably be triggered.  

Maybe a debit play, like putting 2 debit butterfly on both support and resistance area. See below for the example setup.

Only thing about debit butterfly is it's more like a jackpot play. Getting it pinned within the butterfly on expiry is hard and the profit only comes in when the trade reaches the final few hours. Anyway I'll not be putting this trade, it's just exploration of ideas.

Would be interested to hear if anyone got ideas to discuss this, either comment here, email me or find me on Speaking Greek Discord. Not my discord server, I'm just active there.