S&P 500 Index (Bring In The Bad News, We Are Ready)

11 déc. 2022

The S&P 500 Index (SPX) is preparing for a drop and we have both fundamentals and technicals factors supporting this view.

I hate to be the bringer of bad news but knowing beforehand can help to soften the blow.

Let's start with the fundamentals.

As I mentioned in my latest Bitcoin article we have the CPI and Fed funding rate hikes.
Both numbers coming in 13-14 December and we know how the market behave already since we've been on this for a while now, almost a year of continued inflation and crashing markets.

For the technicals, this is the weekly SPX chart and last week closed full red.
A full bearish candle is never good.

This red candle comes right after reaching EMA50. So we have a strong rejection.

We have a clear downtrend since January 2022.
We see lower highs and thus we can expect a lower low.

We are talking about 3650 first.
3500 Strong support. If this level breaks the low 3,000s come into play.

It is bad but we've been expecting this for years now; the sooner the market crashes the faster the recovery will come.

We've been through so many hard and painful situations in life that sometimes you just want to give up. Or the moment is so extreme that you think you won't be able to make it but as I write this and you read it, it is clear that life goes on.

Once the event/life changing moment is over, we learn from it and use it for growth.
Years into the future we look back joyfully at another stepping stone.

It might be really hard now but there is light at the end of the tunnel.
Stay strong.

Namaste.