The S&P500 ($SPX) rose 3.6% last week, finding support near 3900 (the late May early July support/resistance area) for a second week. The SPX even managed to reclaim the 50-day moving average on Friday.
2022-09-11-SPX Trendline Analysis - Daily
Also on Friday, the ADX directional indicators flipped to bullish. Even with the move above the 50-day moving average, the price/volume signal only shifts to mixed. Friday's move came on lower and below-average trading volume, and the distribution day count is elevated at 6.
2022-09-11- SPX Elliott Wave Analysis - Daily - Primary Y
The Elliott Wave shows a completed first wave for the new downtrend, so the counter-trend rally isn't unexpected.
Tricky week ahead with three market moving events on tap, so I fully expect more chop as traders adjust their portfolios and hedges.
The latest CPI numbers are released on Tuesday, followed by PPI numbers on Wednesday. It's hard to know how stocks will react, so I'll be watching the yield curve to see the expected impact, if any, to Fed policy. Friday is a quadruple witching day, with quarterly, monthly, weekly options and futures contracts expiring.
Best To Your Week!
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Sources: Bloomberg, CNBC, Hedgeye, U.S. Bureau of Labor Statistics
Charts provided courtesy of stockcharts.com.
Once a year, I review the market outlook signals as if they were a mechanical trading system, while pointing out issues and making adjustments. The goal is to give you to give you an example of how to analyze and continuously improve your own systems.
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