The market started Monday’s session in a strong mode and rallied. Unfortunately, before the end of the day, it lost all gains and finished flat.
The entire three-day rally was not sparked by any news or any changes to underlying fundamentals. If the underlying fundamentals were bad as bears are telling us, they are still bad. If they are good as the bulls hope, they are still good. This trading is purely sentimental driven by emotions and irrational fear. And the wave of bearishness made this bounce inevitable.
As we can see on the daily Ichimoku chart, the price action improved significantly and the price of the index follows the cloud. That is good. It is also going to recapture the red line. If this continues, the case for the bull market will continue with it. This is also improving the weekly chart. We are once again attacking the cloud and soon, we will enter inside. It makes no significance until the market closes above it.
The market traded as expected, except for the closing price action. That sucked. Tomorrow, as we await Powell’s testimony, the market is poised for an uptrend, but it will be a very choppy move. Unless Powell says something unexpected or something the markets will not like, we should go up.
This is a delayed outlook. If you want to learn more about our SPX weekly analysis, subscribe to our weekly newsletter.
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