22 Jan 2023 SPX Weekly - Lunar New Year

First of all, its Chinese New Year today! Happy Chinese New Year to everyone and usually on this day we always wish everyone "huat" which means get rich. Here I'll also wish whoever reads my blog HUAT for 2023!

Accuracy: 46/51 (90.20%)

SPX above 3875 - Correct

Paper Trade Review

SPX close below 4100, quite far from the profit hump on the iron butterfly. SPX basically got rejected by the downtrend line once again. We still keep the credit of ~$110 which is still a win.

Last Week

Looking at last week's action, we started off with very small consolidation right at the resistance area follow by big red candes pushing down pretty hard.

On the 30 min chart, we see price comsolidated around 3900 and 4000 showing good indication of support and resistance area. On Friday, something interesting and different happened. Instead of continuing the rejection and move down, SPX had a strong rally back towards the downtrend resistance trendline.

After a year long of downtrend, the hope to see a reversal gets more and more each day.

Economic Events

As for economic events, seems pretty minor next week with the usual initial jobless claims that might be of more anticipation. GDP might also be something to lookout for and Friday's PCE together with Michigan Consumer Expectation and Sentiments might cause a bit more volatility. The bigger catalyst should be on Earnings.

Earnings

Next week is the start of mega cap earnings which is going to be the biggest catalyst for the market. Everyone is waiting to see what these mega cap companies will say and how have they perform whether they meet expectation or not.

Monday we finish off some of the smaller banking and funance sectors in yeloow as they are usually the first wave of earnings.

Then we have the biggest anticipation on mega tech Microsoft and Tesla together with Mastercard and Visa (In Green). These will probably be the biggest movers for the week.

Not to be missed, we have quite a few semiconductor sector (blue) which is often impactful to the market as well.

And some mega healthcare sectors like Johnson and Johnson.

Almost everyday there could be big catalyst, its going to be hard to determine where it could go next week with that many uncertainties.

Next Week

As usual, draw the 3 scenario on technical perspective then see which one is more likely.

Green - bullish case we hope to see it break above 4000 but I still see 4100 as a potential strong resistance.

Yellow - Consolidation around this trendline resistance.

Red - Bearish case where we crash downwards but still find 3800 as a good resistance.

Prediction

Among the 3 case, obviously I don't lean towards neutral here because of the mega earnings. Its either a make or break week but we might have one event breaking upwards while another crashing back to the same area, not exactly consolidating but a mire volatile move up and down.

Direction wise, I kinda lean the bullish side with some hope of market eventually reversing. Also following trend still with higher lows now and moving up.

SPX above 3800

Skip Paper Trade for this week. No ideas no trade. Don't need to force a trade I guess.