SPX Daily cautiously bearish. Recommended ratio: 10% SPX, 90% Cash. *Gains from yesterday's FOMC announcement about a 75 bp rate hike were all but given back today in what was an apparent Bull Trap. With June's PMI report coming 06/23 and July's CPI report coming 07/13, it's hard to imagine that the inflation situation is going to get better when SNB just raised their policy rate for the first time since 2007, the BOE sees domestic inflation hitting 11% in October and still only raised their bank rate by 25 bp (albeit for a fifth consecutive time the BOE bank rate sits at only 1.25%) today, the ECB has somehow managed to keep their bank rate at -0.50 amidst all of this (it has remained unchanged since 2019) and will meet 07/21 to announce a planned 25 bp bank rate increase, and the BOJ is set to announce (in approx 5 hours) whether or not they will slow down QE and begin hiking their policy rates too. All that said, a global recession is very much so on the table and it currently seems as if that's what it will take for equity and crypto markets to bottom (financial markets usually rise and fall before the economy does due to their futures dependency).* Price is currently trending down at $3666 and is still technically testing $3706 support. Volume remains Moderate (High) and after favoring sellers in today's session has no favored sellers in eight of the past ten sessions. Parabolic SAR flips bullish at $4105, this margin is mildly bullish. RSI is currently testing the uptrend line from 01/27/22, as well as the uptrend line from August 2015, at ~30. Stochastic is currently crossing over bullish at 6.50 but is trending down slightly and may regress to a bearish crossover in tomorrow's session if it cannot find buying momentum; the next resistance is at 18.32 and support at max bottom. MACD remains bearish and is currently trending down at 95 with no signs of trough formation as it is quickly breaking away from -76.22 minor support. ADX is currently trending up at 25 as Price continues to fall, this is bearish. If Price is able bounce here at $3706 minor support then it will likely aim to retest the lower trendline of the descending channel from August 2021 at ~$3900 as resistance. However, if Price continues to break down here, it will likely retest $3508 minor support for the first time since November 2020. Mental Stop Loss: (two consecutive closes above) $3706.
Note
Correction: "...after favoring seller's in today's session has now* favored sellers in eight of the past ten sessions."
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.