The market reversed yesterday’s and today’s losses as the economic data showed weakness. Consumer confidence also dropped. We are in an environment where bad data are good news. This gave investors hope that the FED will not be aggressive anymore and raises the rates by 0.25 points as is widely expected. In the end, the markets finished up 1.46%

This is good for this new bull market. It continues improving providing more and more bullish odds to the market’s narrative. The Ichimoku chart below is full-blown bullish now. We still may see a pullback as the cloud is narrow (we want it wide, and we want the market ideally to hug it, not run away from it).

The market pretty much acted as forecasted. We went down and then recovered (as forecasted). The only difference was that the recovery was stronger than expected. But that is not that important. What matters is the trend so we can position our trades accordingly. And this trend is improving so far.
Tomorrow, we will have the FOMC interest rate hike announcement, and after that Powell will be speaking. That will provide a lot of volatility to the markets. It is a wild card so far. Generally, I expect that Powell will do as expected and the markets will go higher.

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Abysmal day at Wall Street today. The markets started selling off before even opening and there was only a small attempt to recover in the middle of the day, but then we sold off again. But the markets do not go straight up. It goes in waves and after last week’s strong rally, we ran into significant resistance. It was obvious that we will pull back. One day of selling is not a deal breaker. It would be if it continues.

The longer-term outlook is bullish (by a longer-term I mean a bit longer than a mid-term but not as long as long-term… I know…silly). This means we will most likely continue trying to break above the resistance and rally a bit before we see a bigger pullback or even another 50% retracement. But if this outlook fails (for example the FED screws the markets up again this week, we will fall like a rock instead).

The Ichimoku chart improved better than it was last week. We now have all three bullish checkboxes marked. That means, if we clear the hurdles in front of us, we may expect a nice bullish move.
Today’s move didn’t follow the pattern, so let’s see if tomorrow will be any better. Tomorrow, we should see selling continue, but we may see some early bounce to recover the losses from today. We may also see the beginning of the FED meeting rally when investors will be rushing into the market prior to the FED’s announcement and selling afterward. We could go up to the POC of the weekly volume profile and bounce down from there. The price is below VWAP so I would expect selling to continue.

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Another day of investors chasing stocks they were selling just a few days ago and that they will probably start rapidly selling as soon as someone like the FED spooks them again. We rallied toward the target price at 4,050 (we reached 4,061), and now we are near the upper-level target at 4,100. There is still a possibility of a retreat unless the traders get crazy, as they did in 2021.

We are currently sitting at the downward sloping trend, so we have work to do. And be careful; we are also creating a double top (near-term). So we are at a resistance, possibly double top… a lot of hurdles to overcome.

No changes in the Ichimoku chart. Same view, the same possible issues.
The forecast predicts the market going higher. The only caveat could be tomorrow’s PCE report which may send the market deep down, but I do not expect it. I think the PCE will indicate prices cooling off, and the investors may take it as a potential for the FED to pivot.

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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.

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).

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.

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After a big jump on Monday, the market acted as expected and retreated back closer to the 4,000 level. Futures are already down and below that level. There was very little to no news for the pop-up on Monday, so it could be expected that today, the market will retreat. But there was no news for this retreat either, so it was purely technical (and possibly emotional) trading.

We may expect this to continue tomorrow, too, that the market will go lower, but if there are no catalysts, the market will tend to go higher overall. The ichimoku chart below is still looking good but showing weakness again. The size and shape of the cloud are concerning. It may drag the market lower (which, so far, the trend forecasting indicates to happen) if it spooks enough of the fragile investors. The futures are already dragging the market down. Will it be a blip or a reversal?

Tomorrow, the trend will be lower if the forecast plays out. The black dash line is 2022 year major point of volume, so it is quite natural that the markets may struggle here, and prices will be bouncing around this level for a while until either bulls or bears take full control.

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