27 Mar 2022 SPX Weekly - Resistance?

Accuracy: 12/16 (75%)

SPX above 4300 - Correct

Last Week

Market did slow down in the bullish momentum but continues to inch slightly higher.

The main action last week lies around 4500, which is also an area of consolidation previously. SPX eventually broke upwards and close at 4543.05. Looking back all the way to Sept 2021, this is almost exactly where it resisted before.

On the 30 minute candle chart, we see a clear slowdown in the bullish momentum and the uptrend gets less steep. But we still get a high close on Friday.

Upcoming Week

After drawing several potential support and resistance area and putting the scenarios on both bullish and bearish. We see that either way we should see smaller range of movements. After 2 entire week of bulls, although I'd follow the bullish trend as trend is your friend, I still lean towards a slower uptrend. Maybe a slight correction first, maybe consolidation.

As we should already know, market don't go in one direction. Market waves up and waves down for a reason and in most cases it's because of market manipulation by the big market players. After big runs, there's always a need to have a correction to cover their position along the run. Although we don't know when is that gonna happen, as in we don't know the exact details of how they are manipulating the market. We can only put some guess based on past experience.

With that, I would put next week's range to 4600 on the upside and 4480 on the down side.

Economic Calendar

On the economic calendar, we have several important but 'not so important' event coming. I say not so important in relative to events like FOMC where big swing can happen.

Consumer confidence, jobless claims and nonfarm payrolls are all announcements that has relation to how it will affect interest rates. But with the Feds give their speech recently and also hinted a possible 50 basis points increase in interest rate. Despite that, market still make a strong run.

Personally, I do feel the 50 basis points increase is not fully factored into the market yet. Maybe next week's results release of those few events may remind people about inflation and interest rates. Maybe the news will start to stir on this to manipulate the market for a slight correction. After all that's one of the ways market are being manipulated.

Earnings Coming

Just to make a mention on this topic. We are once again approaching the earnings season. But not yet the mega cap earnings which are those that can move the market more. In the upcoming week, we start to have many small-mid market cap companies announcement earnings and maybe a few large cap ones.

Although these smaller market cap companies earnings will not move the market that much but they do give a hint on how's this quarters earning will be like. How these companies do their forecast due to current market context etc. We should see some smaller market cap earnings news and somehow market moves slightly due to that because it creates news.

For example if a certain smaller cap company of a particular industry says their earnings and forecast are not that good, more likely people are expecting the mega cap of the same industry gonna say similar. Although it might not be true, that's just how the market moves irrationally. So do keep a look out on this.

Prediction

To be honest, after writing all the above I do feel I have some bias in the market resisting. Probably at the key level of 4600. But I also don't want to go against the trend. So I'll put my prediction on the more conservative side.

SPX above 4417

Additional Notes

I checked my IBKR Options chain, 4415 put strike is at 12 delta. Doing this check is to keep my prediction realistic. No point if I put super far prediction that are not realistic and always correct. I think 12 delta seems fair. Also this SPX weekly prediction is for me to practice my market analysis and probably do some short term trade setup on SPX when I get more confident and have a strategy to it.

Slowly I'll add in some options related reference as well. As previously when I attempt to do some trade prediction, by Monday premarket the market already moved to a point where the prediction don't quite make sense. So I'm also thinking to make plans instead of make trades setup.

Means have a trade plan that says, if SPX test this support/resistance, enter this trade setup. If 'something', enter 'this setup'. Which is more of a trade plan. Together with that would come with some kind of strategy and management. Anyway, still figuring out. No rush.