12 Dec 2021 SPX Weekly

This SPX Weekly update is purely of my own analysis and perspective of how I feel the market will be moving. This is not any financial advice or recommendation to trade. It's just my own journaling and guessing to try to predict what's going to happen next week.

Since I'm going to do this weekly, I shall just track how 'accurate' my predictions are, starting from last week being the first post.

Accuracy: 1/1 (100%)

Review on last week's prediction

So last week I wrote about SPX on a short term downtrend channel in the 30 minute chart and I lean towards breaking out the up side.

So SPX indeed broke out of that downward channel after forming a double bottom.

Last Week's Technical Analysis

Let's start with looking at more details of what happened last week.

After breaking out from that channel, SPX did a strong bull run within 1-2 days towards the recent All Time High (ATH) and started to resist.

Zooming in to look at the details after resisting at the previous ATH, we can see that there's also a small downward channel as well which eventually breaks out too.

You can see my resistance line drawn, this resistance line is drawn from the highest close at 4709.8 as shown below. The reason I drew it this way is because I want to know whether SPX did close above previous ATH later. That's why I didn't use the highs but used the close instead.

So from the daily candle, you can already spot a bullish engulfing on the last 2 candles. Not only that, we also closed above the ATH resistance line. To me this is a bullish sign unless it develops into a false breakout on the coming Monday.

So from a technical perspective, I'm bullish on SPX for next week.

Next Week's Economic Events

Next, we want to be aware what are the major events in the economic calendar next week.

From the key economic events next week, we see Tues-Thurs have quite a number of high volatility events. Specifically, the Fed Interest Rate topics on Thursday.

There are many analysts speculating on the Fed's interest rate topic as well. Not going to go in depth here. Just to touch on what I came across that Powell said inflation is not transitory and its his mistake. Such updates are already giving a heads up to investors even before the FOMC next week. Means investors are already pricing in that inflation is more than what the Feds thought, tapering may happen faster and interest rates will go up faster than expected.

So if there's no surprise from the FOMC, there may be higher volatility but I still lean towards a slightly bullish next week.

Prediction

I'll lean slightly bullish on SPX next week, to at least close above the broken resistance of 4710.