6 Jun 2022 SPX Weekly - CPI Again

Accuracy: 19/24 (79.16%)

SPX Above 3990 - Correct

Last Week

SPX pretty much struggled in a range after the breaking upwards easily staying above 3990 which is my predicted support area. It didn't went close though, so there might be more potential downside.

On the daily time frame, we see the current struggle is in the middle of the channel. This range also forms at several past resistance and support area.

Looking back this downtrend channel, SPX tends to struggle whenever it comes to the center of the range before deciding to head the upper resistance or lower support.

Going into the 30 minute chart, we see clearly some of the previous support and resistance for the current range.

This range is pretty tight, it only ranges from 4075 - 4170. Barely 100 points. So the upcoming week we should expect an easy break out on either side. As for which side, lets see what's happening next week.

Next Week

More accurately, it's 'this week' since I'm late on the post. With the current range so clearly defined with valid past support and resistance, I think it's just to answer whether it will break upwards or downwards.

So on the upside, we have 4300 as the next resistance. On the downside, we continue to use the Fibonacci retracement tool which gives us 3989 and 3946 for the 50% and 61.8%.

From a 'follow the trend' perspective, 2 weeks ago we broke upwards from the short downtrend. But we still remain in the bigger downtrend that has yet to invalidate itself. Last week however, we formed a small double top at 4165 area. Double top is often a signal of reversal too. So on the nearest timeframe, I do feel the next move is slightly down.

Economic Calendar

Next week's economic events are lighter, all eyes on CPI data once again. So breaking up or down seems to depend on this too I guess, unless there's news earlier than that which moves the market.

With the past week economic data starting to show inflation starting to see signs of peaking and coming down, I do see potential that this will break upwards with a lowered CPI.

Prediction

So that leads to a dilemma, chart wise I kind of lean towards going down first. Event wise I lean towards going up. Feels like choosing a side. Since the market now remains highly volatile, I'll take the bear side.

SPX below 4300