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.
If you want to learn more about our SPX weekly analysis, subscribe to our weekly newsletter.
Leave a Reply