Well, well. It looks like we are going to stay trading within our downward channel. We tested the resistance point on the 1st December 2022 after the previous bar on the 30th November was a wide range up bar with volume high, which looking back now was a sign of weakness.
The next bar closed nearly at the same point, but most importantly there was no follow through from the previous day, so this is weakness. This week we saw the S&P 500 rebound of resistance and continue its journey within the trend channel.
The news early this week was doom and gloom, the jobs data on the 2nd December was positive which created cause for concern that the Fed is going to contnue pushing up interest rates.
Having a closer look at this weeks pricing action, Monday’s bar was a wide spread down bar closing near the lows of the day and the volume was average. The downward movement continued on Tuesday, but what’s interesting is price drop to the area where tests occured on the 17th & 21st November. This area is our support level and it was an area of resistance back on the 28th October.
For the rest of the week, the S&P 500 progressed sideways around our support level. Now we are at a critical point, anymore doom and gloom annoucnements about raising interest rates, we are likely to break through the support level and likely to test the area of high volume between 3700 and 3600. The trend on the daily chart is begining to change. The trend channel is moving sideways and a break through support, the trend will be down.
The weekly chart shows that price is consolidating around the 4000 points and that the trend is still up. From now through to the holiday break, should be interesting to see what is going to happen to the markets. Normally this time of the year, we are witnessing the santa rally. This year I don’t think this will be the case. As you are well aware that anything can happen in the markets.