31 Jul 2022 SPX Weekly - What Goes Up Must Come Down
Accuracy: 26/31 (83.87%)
SPX above 3740 - Correct
Last Week
Market basically moved according to my storyline, correct down to around 3920 and went bullish from good tech earnings forecast despite most of the giant tech not beating expectation.
After the 3 big bullish daily candle, SPX is now at an area of resistance as seen on the green line. Not only it's on a downtrend regression line, it's also in an area that had consolidation and past support turn resistance. So from here we can expect some form of resistance and there must be a reason to break out higher.
Drawing out the support and resistance on the 30 minute chart for the past few days, we see very nice technical areas being respected. Past resistance turns support, break out retest going higher.
These are areas that we want to take note moving forward.
Next Week
From here, I kinda expect the bullish run will have to have a slight pullback before continuing the bullish wave up. That's just the natural and common behavior of the market. Not that it doesn't have times where it can be super bullish or bearish for many days but most of the time without any specific reason, it just has to do its wave up wave down pattern.
There are studies behind this too, if interested, its called the smart money concepts. Which are commonly taught in the forex trading methodology.
Also, we already had the big catalysts in the past 2 weeks. FOMC, mega cap companies earnings. The hype is pretty settled. Another point to note is, July ended. Next week is a new trading month August. Might also be related to the smart money concepts, just need to be aware that these things exists.
Earnings
Giants earnings are over, but earnings season is not over yet. Next week we continue to have many large cap companies releasing their earnings.
Not that it matters as much as the giant companies but they can sometimes give surprises to the market. In another perspective, the market manipulators often use such announcement to find reasons to drive up/down the market. Can be simple and unintended things that the companies says but interpreted in a very speculative way to be reported by news, which is one of the means market makers use to manipulate sentiments.
Basically its like if I'm the market makers, I want market to go down. I will be spotting little information released by these companies that are of negative sentiments. Then magnify it and write it into an analyst report for the news to pick up. Just an example.
Economic Events
We do have a few 3 star events but at current situation after CPI and FOMC, these has much smaller impact compared to before. Maybe Thursday and Friday jobless claims and nonfarm payroll may have some influence. Other than that, there shouldn't be any big movements from the economic events.
Prediction
I have to say I learn towards a pullback next few days or at least consolidation in the current area.
Although we're currently on an uptrend, I just don't see any reason or catalyst for pushing higher in a very strong manner like last week where we have giant companies earnings. I'll put my prediction on the next resistance around 4300.
SPX below 4300