14 Aug 2022 SPX Weekly - Reversal Bull

Accuracy: 28/33 (84.85%)

SPX above 4000 - Correct

Last Week

Market basically waited for CPI and as I predicted there will be more good news around the inflation. Market reacted very bullish once CPI data is released as it showed inflation is coming down even faster than analyst forecast.

We had an instant spiked up on CPI release followed by a slight pullback on Thursday but market sentiment was so bullish, Friday we had some consistent grind up and closing at a good high of day keeping the momentum strong.

Taking one step back to look at the daily chart, it seems this bullish run broke out of the downtrend regression like but still approaching the downtrend trendline from the 2 previous highs. This is definitely showing some obvious signs of market bottomed and reversing.

Next Week

On the daily chart, I drew the Fib from the previous high and the current price is right around the 61.8% area. This also coincide with a previous area of potential resistance together with the downtrend resistance line. These few nearby resistance kind of tell me we will have some struggle in this area.

Then looking at the downside, we have 4080 as the support area of the very recently consolidated area. The only scenario consideration is that with such strong run up, there are huge gaps to be filled along the way. Market makers will want to pull it back before pushing higher. Just keep this in mind too.

Overall I think I'm still slightly bullish for next week with upside resistance around 4400 and downside around 4080.

Economic Calendar

Once again this 4 letter FOMC word starts to appear on economic calendar. The biggest highlight is probably the meeting minutes here. All eyes (including algo bots) will be scanning on the FOMC meeting minutes for potential content that lead to speculation of subsequent interest rate decision.

Together with several FOMC member speaking, how I would interpret these is with the CPI data so good there should be more good news coming out from the Feds. Potential discussion (in the minutes) of being less hawkish to the interest rate decision etc.

Another scenario to also keep in mind is the market short term movement is after all manipulated, so some unintended interpretation of the FOMC minutes might be used to cause market volatility so the market makers can push down the market with such events.

Prediction

Despite all that, overall I think I'm still slightly bullish. Follow the trend, follow the market sentiment.

SPX above 4080