We received a new CPI report today showing that inflation continues moderating and gliding lower although because of the media hysteria, it may have not looked like it. Yes, the pace slowed down significantly compared to the second half of 2022 but still, we are easing down a bit. The headline and core CPI rose 6.4% y/y and 56% respectively, down from 6.5% and 5.7% in December. The market reacted to the numbers with a rally followed by a selloff and zig-zag moves. In the end, it ended almost flat.

If you look at the chart above carefully, you will see that the market is forming a flag pattern. That is a quite strong bullish continuation pattern, usually followed by many investors if they recognize it:

Thus we can safely assume, that the trend will continue at some point in the future. How exactly long we stay in this pattern and when we break up is unknown. But we may expect it to happen. Unless the FED comes out with bad news and turns this all down to the abyss.
The Ichimoku chart shows a strong bullish pattern too:

If we switch to the weekly Ichimoku we will see that the market is trying to improve too. There is still a lot of work to be done but the most important and enlightening price action is that the price is trying to get above the cloud. This would definitely confirm this new bull market.

The market followed the forecasted pattern almost to the tee, today. We rallied, then pulled back, and rallied again to recover. The only difference was that at the end of the trading session, the market sold off again. Tomorrow, I expect the market possibly sell again but rally by the end of the day.

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

The markets rallied ahead of the CPI expectations. Now all technicals are out of the window because the price is driven by emotions and the news from the FED and economic data. That can change everything. If however, the report comes better than expected, or even as expected, we may see a rally all the way up to $4,200 or even $4,300. If the report will be bad, a slump to $4,000 or even below is possible.

The deteriorating trend was somewhat repaired today. We are still in a sideways channel and need to wait for the market to tell us what direction it wants to go. The Ichimoku chart below also improved.

Trend forecasting suggests that we would see a rally, but as I said above, tomorrow’s market will be news driven so the chart below may not happen at all.

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

As expected, we had a zig-zag day. Sort of. The market went up until about noon, then after the bond auction the yields bumped up and investors sold off their shares. It still baffles me how irrational the markets are. Maybe I should stop rationalizing it. An example is Google. The investors sold off the stock after a bad presentation of their AI chatbot. News media posted that investors lost $100 billion yesterday after the debacle. But if investors were dumping shares just because of that, then they are idiots and deserve the losses. I was buying and I will be buying more Google shares.

The trend is deteriorating as can be visible on all charts. It’s not the end of the world, overall we are still in a bullish trend, though it is weak. The chart above is indicating that we may be re-testing the downward-sloping support line (previously the bear market downtrend line). The Ichimoku chart is still bullish though deteriorating too. We are still good as long as all the bullish odds are in place. But caution is needed. We can slip more.

Trend forecasting suggests that we should see a bullish trend tomorrow. But that suggestion is not supported by other charts anymore and I expect this trend will not happen. It will likely be another zig-zag day or a straight downtrend tomorrow.

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

I was traveling the last couple of days and unable to write my regular market outlooks. I am back to the standard routine and here is my view on the market.

The market started trading in a very narrow range on the top of the rally. We see rejection at the 4,150-ish level. The market participants are skittish – freak on, freak off. One day they cheer Powell on his remarks about the “disinflation process” the other day they are again worried about FED. Heck, I am tired of their mood. But if we stay in this range, we should be OK.

Exhaustion is visible on the Ichimoku chart as well. It could be just a slowdown after a strong rally or consolidation of the gains, or it could be the beginning of trouble. Since I do not see any bad news, as of yet, on the wall, I tend to say this is just a consolidation and time to not worry. If it changes, we will change our stance too.

Today, we were supposed to see a recovery at the end of the day but it didn’t happen. But the markets never move the way we want. The forecasting is just a series of trend calculations. It doesn’t and cannot take into account moody investors with their poopy or cheering pants.
So tomorrow? What to expect? Anything. Possibly another zig-zag day. If they will be scared more than usual we may break below 4,100 or resume a rally.

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

The markets continued higher again with a selloff at the end of the day (as expected). Bears are hastily becoming bulls but we have to start being careful as we are way overextended to the upside. The skittish investors can turn bearish quickly. They are now greedy and piling up into worthless stocks like Carvana (CVNA) or Bath and Beyond (BBBY) and when the mood changes, they will get burned and sell everything again. We are definitely now in stage #2 of the trend.

The Ichimoku chart is very bullish and extends to the upside. We need to watch it carefully for any changes in the chart to unload our trades. Until then we can stay bullish.

My expectation for tomorrow is bullish. I think investors will continue piling into stocks, so Friday will end up higher. There is no news that could turn it down, and with no news, the market tends to go higher. Expect a strong rally tomorrow.

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

The bears keep getting it wrong. They are in unison convincing themselves on social media that this market is just a bear market rally and they refuse to accept that the market already adapted to the new FED policy. That is why the markets have big selloffs but reluctant rallies. Investors become bearish and skittish very fast and they sell everything very quickly. But they refuse to believe that the market has changed and they still believe in the bearish narrative. I must admit, I fall into the opposite category. I am a perma-bull (thanks to my long-term view) so admitting that the market has changed is difficult for me too. But I still see this bull market intact and this bear market was just a small cyclical bear within a secular bull market.

Today, we got the news from the FED. They raised the rates by 0.25 points as expected. The market sold off in the morning in a knee-jerk reaction which turned violently bullish after news reporters pressed Powell on being too aggressive after which he admitted that the disinflationary process has begun and is improving. As soon as he said that, the markets skyrocketed. All the bears became suddenly bulls.

The Ichimoku chart clearly shows a very strong bullish trend (which is now due for a pullback, so if it happens, be prepared for all the bears coming out of their holes). The market was volatile, exactly as expected. Tomorrow, I expect a zig-zag move. I think the market will sell today’s rally but it will probably recover it by the end of the day.

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

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.

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

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.

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