27 Feb 2022 SPX Weekly - Back to Inflation

Accuracy: 10/12 (83.3%)

SPX below 4450 - Correct

Last Week

SPX pretty much got overwhelmed by all the Russia invading Ukraine news throughout the week as I also mentioned in last week's prediction that Russia will launch their invasion after China's Olympic ended.

Starting with the daily candle chart of SPX. On the first half of the week when we have more and more news on Russia going to start the invasion, the market sells off all these rumours and fear.

The moment the invasion starts and Joe Biden said that he will be sanctioning Russia and he will not be sending troops to fight, the market started to rebound. It even took out the lows in January.

This could also be read as the market makers taking out the swing trades stop loss of those who entered in January for the bounce. The whole war news is just a fear factor  reason for the market makers to move the market.

On the 30 minute chart, we see that the last 2 days of bullish rebound not only breaks up previous support resistance around 4363, it also breaks out of a downtrend resistance line.

If this momentum continues, we will see it targeting the next potential resistance at 4470 area.

On the 5 minute chart, we see the reversal action after a double bottom near 4100. Followed by a strong bullish uptrend line. Since this is the most recent action, we should watch for this trend line if it get tested before moving higher.

Upcoming Week

For upcoming week, after identifying the nearby support and resistance we see several support on the downside and the next upside resistance around 4470. So going down, we actually sees more potential support areas while upside seems to have a clearer path.

Another thing to note this time is on the weekly chart, we see a very prominent bullish pinbar. One that forms right after the previous bullish pinbar in January which makes it looks like a double bottom that takes out the previous low.

So in the upcoming week, I kind of lean on the bullish side with potential resistance at 4470 area.

Economic Calendar

Looking at the economic events next week. Biden speaking in the middle of the week is something that could be volatile in the current context where he keep making appearance to talk about the Russia Ukraine situation and has been actively pushing more sanctions on Russia. Definitely need to watch how the market react to what he's gonna say.

Next, we're back to inflation again. Not forgetting before the war events, we're still in a situation about Feds dealing with inflation. Although the invasion took the spotlight for awhile, having these events upcoming will remind the market about inflation once again.

Especially with Fed Chair Powell testifies, this is going to move the market according to what he's gonna say with regards to the inflation, interest rates, tapering topics.

What's in addition now is how the Feds will factor in the war that's happening and the sanction US is pushing on Russia. If Feds were to consider all these overlaying activities, there might be new surprises from the Feds that cause new uncertainties and result in another sell off.

Prediction

On technical, it suggest we goes up continuing the momentum. On events, we might see some key activities that decides the direction of the market. Which leads me to imagine some up move for the start of the week follow by some resistance.

SPX above 4270