6 Mar 2022 SPX Weekly - CPI

Accuracy: 11/13 (84.6%)

SPX above 4270 - Correct

Last Week

Although SPX did not carry on the bullish momentum, it also had a hard time going lower. The whole week basically was going side ways, with the downside support around 4280.

The 2 main drivers for last weeks consolidation is basically the continuation of the war news and Feds J.Powell speech. The continuous updates on war keeps adding more fear, specifically the nuclear plant attack. While on the Fed side, Powell saying he's incline to propose 25 basis points rate increase which is a slightly bullish update for now.

Zooming into 30 minute chart, we see a clear range for last week. With the upside around 4400, downside around 4300.

Let's go in deeper, at the 5 minute chart. We see the mid point around 4350 also forms a decent support turn resistance area. Although ranging, we are still seeing slightly higher lows. With Friday ending a red pin bar on daily candle closing towards the middle of the range.

Upcoming Week

Looking ahead, for the upcoming week we should expect price to approach to test  either the upside resistance around 4400 or downside support around 4280.

Since we had a higher low last Friday at the bottom of the range, I'd expect it to bounce off here and move towards the upside.

We still want to bring back the daily candle chart because there's still a downtrend going on, with lower highs and lower lows.

From a technical perspective, this upcoming week should expect some breakout on one of the sides and this can be triggered by the ongoing news update on war and inflation.

Personally, I kind of lean on the bullish side if it ever breaks out the 4400 resistance area but with the context that it will still continue to consolidate.

Economic Events

Next week on economic calendar is all eyes focused on the CPI data. Although Powell already said he's inclined on 25 bps increase, if there's too much of a surprise in CPI data more speculation and uncertainties will arise again and cause more fear.

If there's not much surprise on the CPI data, it would be more of a confirmation of what Powell said. We should at least see a little green action going.

War

The ongoing Russia invasion continues to create all sorts of fear and uncertainties to the stock market as there are too many factors involved. From a current situation perspective, we are already in the middle of the war. Attacks are happening even as I'm writing this post, ongoing daily. The situation now is already bad.

I would ask myself, what could worsen the situation further that can drag down the market once again. We did had some hints in the past weeks. When the word 'nuclear' start to appear in the news, market start to see more fear. We definitely hope the war doesn't lead to anything related with nuclear, that'll be the worse case ever for everything.

The ongoing attacks didn't push SPX much further down, compared to the initial fear when everything is starting. It may seem many of these are already priced in.

All these news and events would lead me to think, if bad news are not driving it lower, good news will have more strength to drive it up. If we ever have any little good news in the upcoming week, we might see a break upwards.

Prediction

So with all that and SPX currently at 4328, I'll put the bottom of the range as support with a 50 points buffer.

SPX above 4230