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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Here we go. Semiconductors posted good numbers, and everyone was rushing in. The market broke above 200-day MA and a significant resistance at the 4,000 level. It retreated a bit later during the day but retook the levels back. We are now approaching the last hurdle – the downward-sloping trend line. We need to break that one, too (see the thick blue line).

The Ichimoku chart improved extremely well. The price is above the blue line and the cloud, the green lagging line is above the price, and the blue line is above the red. All is good. We now need the cloud to change to green and start sloping higher (still somewhat sideways).

The forecast is down, but if the momentum picks, we may be actually going higher instead unless we see profit taking. The signals are bullish but still not strong enough to be 100% positive. It still may change. I would give it 80% bullish with a 20% possibility of failure. That is for tomorrow’s trend. The medium-term trend (2 to 3 months) is bullish. The long term is definitely bullish as I do not think we will see a hard landing and recession. At least not yet (it still may change, but it hasn’t changed yet).

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The market continued selling as I expected that to happen. We only had a bright moment when the market reversed and rallied to erase all losses. It would have been a great sign indicating that what we have seen was just a pullback at the significant 4,000 resistance.

But unfortunately, the rally didn’t last long, and the market reversed again and sold off. Although the Ichimoku chart still looks good, the price is deteriorating fast:

That is not a good sign for the market. However, we were selling over old news and old fears, so technically, we are seeing a knee-jerk reaction from spooked investors. I still think next week’s inflation data will propel this market higher. Tomorrow, I would expect some recovery (hoping the 3,900 support will hold); if it will, expect the market to go higher tomorrow and into next week. Some initial selling at the opening is possible. Then we should recover it. If not, look below.

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The weakness in the market prevailed today. After not-so-good economic data and hawkish talks from the FED heads (there are still a bunch of the FED directors that want to raise rates more than the FED itself as a whole, I guess they are bearish) along with enormous put-buying that the market makers need to hedge sent the market down by more than 1% today.

The market participants had a lot of puts expiring this Friday. Normally, market makers would have to reduce their hedges after expiration, which would send the market up. But with today’s put buying, it is probably not gonna happen. The market still struggles with 4,000 resistance, but I think the 3,900 support will hold. Right now, we will sit tight and wait. Patience is a virtue.

The Ichimoku chart indicates that we broke the support at the red line making this trend vulnerable again. Ideally, we need the price to stay above the blue and red lines, the blue line cross above the red, and it would be even better if the price stays above the cloud. That is not the case, so this trend is weak and failing until it changes. Next Friday, we will receive a new core CPI report. That will show inflation cooling off more, and that could be a catalyst for a renewed uptrend.

The trend forecast failed today. The market is news driven, and that changed the narrative as spooked fragile investors freaked out again about old news. That will eventually dissipate as these fragile people eventually run out of money or shares to sell. The rest of us need to wait them out before stepping back in. The trend indicates sharp selling tomorrow morning with some recovery during the day. I do not expect a positive market outcome tomorrow. The market needs to settle down and spooked investors to calm down before the trend changes again. More selling tomorrow.
 

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