Here we go. Semiconductors posted good numbers, and everyone was rushing in. The market broke above 200-day MA and a significant resistance at the 4,000 level. It retreated a bit later during the day but retook the levels back. We are now approaching the last hurdle – the downward-sloping trend line. We need to break that one, too (see the thick blue line).

The Ichimoku chart improved extremely well. The price is above the blue line and the cloud, the green lagging line is above the price, and the blue line is above the red. All is good. We now need the cloud to change to green and start sloping higher (still somewhat sideways).

The forecast is down, but if the momentum picks, we may be actually going higher instead unless we see profit taking. The signals are bullish but still not strong enough to be 100% positive. It still may change. I would give it 80% bullish with a 20% possibility of failure. That is for tomorrow’s trend. The medium-term trend (2 to 3 months) is bullish. The long term is definitely bullish as I do not think we will see a hard landing and recession. At least not yet (it still may change, but it hasn’t changed yet).

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The market continued selling as I expected that to happen. We only had a bright moment when the market reversed and rallied to erase all losses. It would have been a great sign indicating that what we have seen was just a pullback at the significant 4,000 resistance.

But unfortunately, the rally didn’t last long, and the market reversed again and sold off. Although the Ichimoku chart still looks good, the price is deteriorating fast:

That is not a good sign for the market. However, we were selling over old news and old fears, so technically, we are seeing a knee-jerk reaction from spooked investors. I still think next week’s inflation data will propel this market higher. Tomorrow, I would expect some recovery (hoping the 3,900 support will hold); if it will, expect the market to go higher tomorrow and into next week. Some initial selling at the opening is possible. Then we should recover it. If not, look below.

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The weakness in the market prevailed today. After not-so-good economic data and hawkish talks from the FED heads (there are still a bunch of the FED directors that want to raise rates more than the FED itself as a whole, I guess they are bearish) along with enormous put-buying that the market makers need to hedge sent the market down by more than 1% today.

The market participants had a lot of puts expiring this Friday. Normally, market makers would have to reduce their hedges after expiration, which would send the market up. But with today’s put buying, it is probably not gonna happen. The market still struggles with 4,000 resistance, but I think the 3,900 support will hold. Right now, we will sit tight and wait. Patience is a virtue.

The Ichimoku chart indicates that we broke the support at the red line making this trend vulnerable again. Ideally, we need the price to stay above the blue and red lines, the blue line cross above the red, and it would be even better if the price stays above the cloud. That is not the case, so this trend is weak and failing until it changes. Next Friday, we will receive a new core CPI report. That will show inflation cooling off more, and that could be a catalyst for a renewed uptrend.

The trend forecast failed today. The market is news driven, and that changed the narrative as spooked fragile investors freaked out again about old news. That will eventually dissipate as these fragile people eventually run out of money or shares to sell. The rest of us need to wait them out before stepping back in. The trend indicates sharp selling tomorrow morning with some recovery during the day. I do not expect a positive market outcome tomorrow. The market needs to settle down and spooked investors to calm down before the trend changes again. More selling tomorrow.
 

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The market was dull and weak today. It almost seems like it is rolling over and getting ready to fall.

The Ichimoku chart is still positive but also starting to display weakness.

The trend should be positive tomorrow. If so, it would be positive for the entire market and its trend. If it fails, we may see another leg down, possibly to 50-day MA (if not lower).

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Today, the market was closed for the Martin Luther King holiday, but futures continued trading abroad. And it was muted with a slight downward trend. Will we see a renewed rally tomorrow, or is the rally over, and the markets roll back down, failing to hold the new breakout? The price is still above the resistances that may act as supports, but the momentum is failing. Last week the rally was unstoppable, and now it seems it was just a fart.

There is not much to say about the Ichimoku chart below. It is positive, but we need renewed optimism, and from the futures trading, that optimism isn’t there yet.

The trend forecasting is slightly negative for tomorrow, but let’s wait to see what tone the market sets tomorrow. Right now, it is a toss. The price may slip early in the morning, but the losses may get erased by the EOD. Let’s wait and see.

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As expected, the market continued higher, although at a slower pace than expected, given the good news about inflation. The CPI came out and indicated slowing inflation. It rocked the market a bit, but then it went higher. The buy rumors and sell the news didn’t happen, although it may happen tomorrow. The market broke above both resistances (the 3,966 level and 200-day MA) and closed above it:

The market still has a lot of work to do, but at least we are bouncing above critical levels. Now we need to stay there. The next target is at 4,100, which we need to break to confirm the new bull market. I expect it to happen because inflation will continue subsiding, and FED will no longer have any reason for raising the rates. Despite all the gloom and doom panickers out there, the economy is still strong (despite slowing it, it can be just a standard economic cycle), so if we see inflation slowing more, the FED pausing the rate hikes, the economy will pick up again. And if inflation stays lower after the economy picks up, we will see a new bull market. And FOMO will follow, so brace for investors that are now overly bearish rushing out of their bearish positions and buying stocks they were overly selling just a few days ago.

The price moved above the cloud and if it stays there, we can expect the bullish trend to continue. The red cloud is also changing back to the green one, and the price is also above the light green lagging line. All that we see on that chart is positive and bullish. It may change, but it hasn’t changed yet and the chances of it not changing any time soon are good.

As I said in my previous outlooks, the forecasting is skewed by past performance and thus must be confirmed by other indicators and charts. Although the chart above indicated a down market, the charts and indicators were not confirming it, and I expected a muted upside trading. The same can be said about tomorrow’s trading expectations, although the trend is shifting to the upside already. I expect sideways trading, a bit choppy, with the last-hour rush into the market.
 

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The market participants are now full of optimism and bidding the prices up in expectation of mild inflation data coming out tomorrow morning.

On the chart above, we reached two major resistance levels – the 200-day MA and a long-term resistance at the 3966 level (that is almost 3 years old, so significant). The question is will the bulls be optimistic enough to break above it, and what is even more important, move the index higher and sustain the trend?

The ichimoku lines were already broken so we are at an important inflection point. However, despite the market shifting towards a bullish trend, I suspect that what we might see is “buy the rumors, sell the news.” Tomorrow, we might move higher after the report shows declining inflation and then selling. Or if the data will not be good enough, we may see selling right from the start. Trend forecasting indicates selling tomorrow but this market is not momentum driven (when forecasting would work a lot better) but sentiment and news-driven and anything can happen tomorrow. We can see a FOMO-style rally right off the bat or a crash.

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The market seems to be improving. Powell had his remarks in Sweden and briefly spoke about the apolitical role of the FED avoiding any hints about the monetary policy. Investors seem to take it as the FED is trying to stay neutral advertising possible pauses in hikes. It seems, he didn’t want to say “we will hike and bring the pain” and then don’t do it and vice versa. After the initial sideways move the market spiked up:

The improvement is also visible in the Ichimoku chart as the market is trying to approach the resistance again. And the more times it tries to knock that resistance, the more likely it will break above it.

However, we are still expecting inflation data this week, and that may shake the market. My expectations below are based on the past behavior of the market, and then I use the trend forecasting technique. But that can be skewed by the past data, though. Today, the market went in the completely opposite direction. Tomorrow, we expect another up day. If that happens, that could mean a market’s paradigm shift and potential new bull market, mainly if the expected selling at the end of the day doesn’t happen. As of now, the market is bullish (until it isn’t).

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