12 Jun 2022 SPX Weekly - Roller Coaster

Accuracy: 20/25 (80%)

SPX Below 4300 - Correct

Last Week

Things pretty much falls into my expectation, except that it breaks down instead of up. But it's expected that the break out is due to the CPI data towards the end of the week.

This time the reaction to CPI data is much more volatile than the previous months with SPX closing at 3900 that seems like a previous lowest close area. The previous time it comes here the rejection to go lower was pretty strong. But with the CPI data freshly affecting the market, we might potentially see it go lower.

30 min chart looks pretty straight forward, we were in a range as I mentioned last week. Towards the end of the week, specifically Thursday, it broke downwards. Not sure if its due to anticipation of CPI data, or the big market players got insider news.

Next Week

Since we broke downwards, I'll definitely be keeping my trend following towards the bear side. From the chart, it seems to move from the previous range to this new lower range around 3900 - 4080 with a possible lower support of 3810.

And now that we seems to be in the middle of this range finding 3900 as a support. Next week seems pretty clear to me we will stay within this range unless some bigger news or event come up. Which leads us to look at economic calendar.

Economic Calendar

It seems to me every day there's some significant activity going on, with Thursday being the most crucial day. All these will also be led by the CPI data that was released last Friday. So we pretty much expect the same bearish sentiments since CPI data is telling us inflation is not slowing down 'yet'.

Now the market is just grinding lower due to all the things that affects inflation, be it interest rates, balance sheet, ongoing war in Ukraine that leads to rise in commodity prices, supply chain issues around the world especially China, etc etc.

Even with all these negative things happening, I still believe the market will eventually go higher. It's just a matter of time till we find a bottom, which I think a lot of long term investors are looking at the same perspective.

As it continues to go down, I'm adding more shares on the few strong companies monthly for a longer term investment. More towards the 5-10 years outlook.

Prediction

But for prediction, it's just about next 5 trading days. With the break of range downwards, that support that's broken will be my area of resistance.

SPX below 4080