25 Dec 2022 SPX Weekly - Merry Christmas

Accuracy: 42/48 (87.5%)

SPX below 4000 - Correct

Bonus Prediction

Argentina Won World Cup!

Last Week

SPX pretty much moved like my green/yellow scenario drawn in last week SPX weekly.

It almost wanted to rally upwards but got rejected even before reaching 3900. We did test the 3800 and also rejected from it. Basically consolidating within 3800-3900.

On the 30 minute chart, we see the first 3 days basically following the downtrend momentum until Wed it starts to rally. Most likely driven by the economic events on Wed- Consumer Confidence, Existing Home Sales.

Then Initial Jobless Claims, GDP on Thursday somehow send the market diving like nobody business, total free fall until later on that day it pulled back a bit. Then Friday's PCE and Michigan Consumer Expectations sends the market sideways not knowing where exactly it wants to go after the past few days of mixed sentiments.

Next Week

So from here, we know the market now is in somewhat a mixed state consolitating around the current 3800-3900 area.

The current SPX position is pretty much similar to last weeks. Scenarios would more or less remains similar too.

Green - 4000 still remains as the key resistance downtrend line to challenge, also the 2nd line of defense. 3900 will be the immediate defense line to get back to the previous range above 3900.

Yellow - Pretty much remains consolidating within 3800-3900. Pretty short week, so this is quite likely to me.

Red - If we break below 3800, 3700 would be the next defense line.

Currently we're pretty much right smack in the middle of 3700 and 4000.

Economic Calendar

Don't have much, just Pending Home Sales and Initial Jobless Claims that might be of influence to the current market. Unsure whether last week's market free fall is related to jobless claims, this might be something to watch for.

Santa Rally?

On top of all that, everyone also hoping for some Santa Rally but it doesn't seems to be coming. Not sure if the final week will give us some run up.

I also went to have a read here - https://www.investopedia.com/terms/s/santaclauseffect.asp

My main takeaway seems to be the final week of the year would more likely be quieter or flat. So add that to the potential scenarios.

Prediction

I'll follow the short term downtrend still, since it hasn't really shown any obvious higher highs yet. Probably a quieter and shorter week ahead.

SPX below 4000