22 May 22 SPX Weekly - More FOMC Speeches

Accuracy: 18/22 (81.81%)

Last week I didn't make any prediction due to late post, accuracy remains 81.81%.

Last Week

Starting with the daily candle chart again, we see clear down trend. With the regression trend tool (blue/red lines) on trading view, we can see several obvious downtrend channels. On the bigger channel it does seems like we are at the bottom area of the channel.

Going into the 30 minute chart, which we have the smaller regression trendline. The channel is tested pretty nicely and we're somewhat at the center of the channel. Some might take it as a double bottom formation which potentially is a reversal point of this downtrend but unless there's clear signs of reversal I'll still remain bias on the downtrend.

Some possible clear signs would be price making higher highs than previous significant resistance area. But then again in the current volatile market, there's too much uncertainty. So don't read the market and assume a single scenario. So far it always seem to be faking us out more often than usual.

One thing to note is on Friday we have a big down move followed by quite a bit of recovery within that intraday trading hours. Rejecting the 3810 area. Although this formed a new low but it's something to take note in the next few days on this area with such huge volatile action.

Upcoming Week

For upcoming week, I'll just use the 30 minute chart zoomed in further. Since we are at the middle of this most recent channel, we remain our downtrend preference. There's 2 scenarios to look at.

1. Double bottom and strong rejection off 3800-3850 area
2. Continuation of downtrend with such big movements

To me both scenario remains equally possible. In the current market, it seems like we're just waiting for a bottom. And this bottom is kind of waiting for certain change in the economics of bigger picture. Be it inflation, war, supply chain, everything that everyone talks about that affects the current market. Which are mainly led by the regular update of numbers on CPI, GDP etc. Which are the key topics the Feds often talk about and watch on.

One mindset on the current market to start to adapt to, is to not expect a sudden bullish momentum in a short timeframe. Even if things starts to get better, it will take time to recover and gain momentum. Meaning it might consolidate a little before going for strong up moves.

Economic Calendar

Next week continues to have more Fed speeches together with GDP and Core PCE which will probably be the key events that influence the market.

One more thing though, although we have the economic calendar to see what's upcoming. There're also unexpected events that often move the market even more. So there's only so much we can rely on and increase our probability in trading.

Prediction

With that, although there's a potential reversal scenario. I remain bearish until obvious indication of reversal confirmation. At most I will only be wrong once, or wrong less than right. Follow the trend, don't go against it.

SPX below 4100

Quick recap, 4100 area is the previous support turn resistance. If this area is broken, we have a first sign of higher high in the nearest timeframe. That's why I take this 4100 resistance as my prediction.

Trade / Invest

Didn't take a trade last week in the end as I see big movements from FOMC and Fed speeches. Also trying to do lesser trades in this unpredictable market. Will start to try some small trades using BWB.

Investment wise, the same advise remains. It's a long term thing. The market will eventually find a bottom and goes up. We're talking about 2-5-10 yrs perspective. That makes investment much easier. Just DCA monthly, especially in this kind of correction times where market is down. It's even more attractive to add more holdings. But don't go all in, break your cash into few portion and add monthly like a regular savings plan.