SPY (bonus nasdaq) outlook
If you went into todays fomc saying you were confident that Jpow was gonna play the same tune as he has for the last 2 years you are naive… a couple of takes from todays FOMC that i think is what made the market really negatively react.
The market was not happy that they didnt do more with interest rates. The market (when i say market i mean analysts too) were not happy that with what many described as a under reaction to inflation and too laid back of an approach. Markets and analysts wanted some clear cut gjidance on EXACTLY what fed was gonna do to fight inflation and make the stock market continue its bull run. It did not deliver that. i have not listened live to many of jpows talks but he seemed nervous and seemed like he himself wasnt sure what he was gonna do to fix this or when and the markets didnt like that. JPOW also numerous times to different people reiterated that the fed was NOT going to continue the same monetary policy as the past. Everytime he said that live the market literally dropped 🤣. The other thing i wanna touch on before moving forward was his take on inflation. He stated in many different ways and numerous times that inflation was much WORSE than anticipated. However he tried to ensure the market just as much that they believed they would see it over by end of year. Something id like other people’s take on is what he was referring to about saying the labor market was near max. It sounded like to me he clearly stated that there were plenty of openings and more openings than unemployed but the labor market was at its max. Anyone got clarification there?
What were your take on the meeting?
(Skip to the end if you want nasdaq TA)
Okay to the market TA. Today my suspicion all day was the market was pricing in good news for jpow and was expecting excellent news and pumped itself to that level accordingly. Only to dip (notably not as bad as i thought) after the real reaction was seen.
Some things im keeping at eye on is the bearish channel we have formed and are trading within since January 3rd. https://i.imgur.com/kolsfRd.jpeg
Todays initial positive reaction took us to the resistance line of the channel near 444. This was a key rejection in my opinion as it was not only a rejection at the 30 min 200 EMA, but it was also now our third rejection at this bearish channels upper resistance line. Thats a big deal in my opinion and is solidifying the bearish channel and further downside. https://i.imgur.com/e5lZ1Bf.jpeg https://i.imgur.com/DbXvpt4.jpeg
So where are we headed next?
I think today we saw a clear rejection of a potential bullish breakout, we saw the fed is NOT gonna prop the market up and that we are going to see some bear market times ahead.
In my experience its not the day of good or bad news but the NEXT day where we truly see the reaction. Currently we are about to close after-hours and SPY/ futures are barely green. Though i dont suspect to see much movement till pre market. (As i wrote this we just sold off to finish red after market).
Tomorrow and into next week my anticipation is we will see yet another sell off with a final resting place near 408 before we see any upside.
Intraday supports/ resistance for tomorrow: S- 428.7 –> 420.76 (previous low) –> 408 (bottom of lower dotted channel). S- -1%= 429.04 –> -2%= 424.7 –> -3%= 420.4 –>-4%= 416.1
R- 435.1 –> 438.5 –> 444 (upper limit of dotted channel) R- +1%= 437.7 –> +2%= 442.1 –> +3%= 446.4 –> +4%= 450.7
Looking at the supports and resistance lines for tomorrow i like us finishings around that 420 tomorrow for a retest of support there.
Long term for SPY if we look way back to 2018/2019 and their “bull run” and project that forward to current day we could see our final resting place near 360. For me this is my mental price target for the “bottom”. I will look to start buying some longer 3-6 months DTEs around this area… this would give us a total correction of exactly 25% from highs if we hit 360. https://i.imgur.com/2SUKox1.jpeg https://i.imgur.com/WDYwesp.jpeg
Now nasdaq i have just as bearish outlook for this. To me i see a similiar projection using 2019 “bull run” that puts this near a low of 12.3k. Nasdaq is also trading in a very clear downward channel too (blue dotted lines). 12.3k gives nasdaq a correction of 25% also. I Truly believe this is where we are headed next. https://i.imgur.com/EUCHVFE.jpeg https://i.imgur.com/adMCbLY.jpeg
Submitted January 27, 2022 at 02:11AM by DaddyDersch
via reddit https://ift.tt/3AE3nDU