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01.25.2023 – WEDNESDAY MARKET OUTLOOK

Market Outlook
 

And here we go again. Investors cannot make up their minds. One day they were frantically buying because semiconductors were reporting good numbers. Today, they were scared because Microsoft reported terrible numbers, and tomorrow, they will be optimistic again because other companies like TSLA reported good numbers. But this is typical. What was good yesterday is not good today, but it will be good tomorrow. We need to find trading out of this frantic range, or we get whipped out. In the morning, we sold off hard. As good earnings news was coming in, the market recovered all losses; well, almost all losses.

 
Market Outlook
 

That is good for the market trend, though. But we still have a big resistance in front of us. We still have the downward-sloping trendline we are about to break if we break it. It can be an extreme resistance to break. It sits in the 4,055 area. And then, ultimately, in the 4,107 level (the previous high from October’s lows). The Ichimoku chart is still the same. It is bullish but confirms that we are facing some possible weaknesses. The price can continue to increase (the best way), but there is currently a large gap. In a solid bullish market, this wouldn’t be a concern. But we have an emotional, weak trend with many investors freaking out about the recession. So there is a good possibility that the market would go lower to close the gap. Then, it may bounce on the top of the cloud and continue higher (the better way), or if fear and recession prevail, it will smash through the cloud and head lower (the worst way).

 
Market Outlook
 

This time, I think the trend forecasting will be accurate tomorrow. Today, the market sold off but recovered (it was not supposed to happen). Tomorrow, we will probably rally from the get-go (as investors are optimistic about Microsoft and Tesla, but we have too many outs out there (the fear is still more prominent than the good news), so in the end, we may see some selling before the PCE report coming out on Friday. I expect the market to go to the 4,050 – 4,100 level and then retreat again. It may evolve tomorrow and on Friday or next week as the market is still sideways moving.

 
Market Outlook
 

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