20 Mar 2022 SPX Weekly - Reversal

Accuracy: 11/15 (73.33%)

SPX below 4370 - Wrong

Last Week

SPX closed far above my prediction of 4370, almost touching 4470 in fact. It's interesting that the week before I actually expected this scenario but instead it played me out and hit me 2 consecutive week of wrong prediction.

Anyway, as I also mentioned last week. We will only change our stance only when we sees confirmation of trend change. And last week we had a clear break out from the down trend resistance line.

On the daily candle chart, we see a very clear break of that down trend resistance line. Not only closing above it but further pushing higher on Friday with a pretty high close.

Zooming in to 30 minute chart, we don't see anything interesting. Since Monday dip, it almost had a straight bull line upwards. Only on Wednesday we had some struggle on FOMC announcement but it eventually caught up with the uptrend and go all the way to the end of the week.

One of the reason is similar to what I mentioned 2 weeks ago, when we're in so much bad news the little good news will cause a rebound. The biggest factor is definitely due to the ongoing war and interest rates.

Which the main impact of the war affects oil prices, in the beginning of the week we see oil prices come down a little and see some progress in the Russia Ukraine talks. Then FOMC announce the much expected interest rate which there's no surprise. Once these uncertainties are cleared, market will see some green.

Upcoming Week

For upcoming week, I'll go back to daily candle chart since the lower timeframe for the entire week is almost one straight line up. We can't get much out from the lower timeframe.

On the daily timeframe, we see several past support and resistance right above the Friday close price. Although the momentum is so strong, I believe it needs a breather. Price does not go up in a straight line for so long. It'll probably slow down or even have a small correction before moving higher.

So it's either like the green arrows, it starts to consolidate in the higher area or like the yellow arrow, it comes back down slightly to find a support.

Economic Calendar

Next week's economic calendar is pretty interesting. The Feds are coming out to talk everyday. Different members are talking, specifically Powell speaks on Monday and Wednesday.

As much as they are trying to be transparent, the things they say sometimes can move the market. Be it intentional or unintentional. But since the main FOMC announcement is over, I believe these will not have as big a move compared to last week.

Prediction

Unless any big event happen, we shouldn't be seeing big moves and since we're seeing reversing of trend. I'll change my perspective to be slightly bullish. But with what happened last week, I lean towards a slow down in momentum.

SPX above 4300