6 Nov 2022 SPX Weekly - CPI

Accuracy: 38/44 (86.36%)

SPX above 3750 - Correct

Last Week

SPX bounce off the support I drew around 3750 and closed 3770 on Friday. I'll take that. It falls into the bearish scenario I anticipated in last week's post. Let's have a quick recap.

To be specific, it did break slightly below and get near 3700 before bouncing but support are always like that. It's often an 'area' rather than an absolute price point.

Let's see what we have now.

Starting with the daily candle, Friday's rejection does show some strength in this support. Not the strongest but pretty decent. It still seems that we're on a short term uptrend dip.

Another notable area is 3900, it rejected that area off so nicely too. Once again it's interesting to see these support and resistance area played out and 'events' actually coincides with these areas.

Zooming in to 30 minute chart, the green line is what I drew last week which is close to the Friday close. the 2 yellow line I drew in addition to show this slightly lower area is has quite a few past areas to reference too.

Next Week

So I just draw all the 3 scenario I can think of, just for next 5 trading days.

• Red - if it goes down, it should find 3640 area as the support.
• Orange - Some more uncertainty coming back to current 3750 area.
• Green - Strong signs of breaking upwards finds 3900 as the target.

All 3 are possible so then the question, which one do I lean more towards.

Personally I'm kind of leaning towards the bullish scenario, because of the recent macroeconomics. Last week's bearishness is due to FOMC hawkishness despite seeing inflation numbers getting better.

Next week is the moment of truth, which leads to next section on Economic Calendar.

Economic Calendar

Yes once again - CPI.

All eyes on this CPI after the FOMC last week, this is like a monthly cycle now. There seems to be quite some anticipation of these since the last month's update. Which is why we're seeing market supporting and no longer going down as fast.

From all the recent events and numbers released, it does seems inflation is getting better. As a matter of fact, inflation WILL eventually get better as long as there's no continuity of bad events that impacts inflation further. It's just a matter of time.

I'm actually thinking the time is coming soon, if its not this month it's within next 3 months. Not that I'm expecting big bullish moves all the way but at least it's going to slowly go up or in a volatile way.

Prediction

SPX above  3630