13 Feb 2022 SPX Weekly - War

Accuracy: 8/10 (80%)

Last Week

SPX stayed below 4650 as predicted.

The fibonacci level of 61.8% at 4600 indeed resisted. Basically before CPI announce, market was pretty bullish. Things starts to turn bearish after CPI announced. Followed by Fed James Bullard making some comment about interest rate in a Bloomberg interview. Then we have a sudden update from White House about the Russia invading Ukraine news on Friday causing a big red candle.

The market is indeed very happening now. Inflation and interests rates are not enough, war is joining in the fun.

Upcoming Week

Looking at how the current SPX daily chart develops, we had the upside trendline resistance false break and went downwards. With Friday's war news update so fresh, that sentiment would probably lead into next week causing more volatility. Specifically, the Russia invasion seem to suggest that its scheduled in the coming week. This means more news is going to surface on this and more volatility will come.

From the chart and the current context, it seems to me we will go down towards the previous low area around 4300.

Economic Events

To make things even more exciting, look at how many 3 star volatility we have next week. All these are continuing the ongoing inflation interests rates situation we were in, now with the war news it's like a multiplication of volatility.

Prediction

It's interesting that there's much less to analyse when there are actually more things happening. This is because I'm not predicting the outcome of these events.

As explained before, I merely take them as volatility events. And it's higher probability that volatility event will cause bearish sentiments than bullish. In layman, volatility to me means big moves with more lean towards down side. Especially when market is getting more and more sensitive, any small thing can be interpreted in a magnified way. Which somehow keeps my analysis simpler.

Since we have a double top on the 4600 area, which is the fibonacci 61.8%.

SPX to stay below 4600 by end of next week.