This week marked the first week of 2024 and the market experienced its first weekly red candle after a 9-week bullish streak. Despite the downturn in the early part of the week, Friday saw a bounce back, primarily due to the exhaustion of sellers. Notably, the price dipped below the Market Maker Move of 4717, prompting hedging by professionals at this level. Interestingly, there was an absence of professional sellers, and retail participants maintained a bullish outlook, typically lagging behind the market's movements.
Focusing on the technical indicators, the Fazdane crossover for the week remained positive, and the MACD did not cross lower. These indicators suggest a continued positive trend. Although the week ended on a bearish note, there was no confirmed sell signal. However, if the selling trend continues into the next week, it could evolve into a confirmed sell signal. For those following mechanical weekly signals for long-term investments, it's important to note that a confirmed sell signal has not yet been established.
Divergence and Psychology of Retail ParticipationA divergence has been observed between the price movements and the price oscillator since November 27th. The oscillator indicates a slowdown in price movements, while the price action shows a gradual increase. This suggests a waning of participation in the price action. Typically, this divergence resolves downwards, often catching retail participants, who join late due to FOMO (Fear Of Missing Out), off-guard. This can lead to 'ageda' – a term for the anxiety-induced discomfort experienced by these late participants.
Weekly Price Analysis of SPX
The Weekly Point of Control (POC) for the S&P 500 (SPX) stands at 4142, with the current price being 555 points above this level. The major volume participation range for the SPX is between 4447 and 3920. Analyzing the weekly range, the immediate downside risk is approximately 200 points, with a potential reconciliation towards the POC. The immediate upside risk is pegged at around 4786, about 90 points higher. Despite the lack of a confirmed sell signal in the weekly technical indicators, the downside risk currently outweighs the potential upside.
3-Month Daily Chart AnalysisThe 3-month daily chart reveals a confirmation in both the moving average crossover and the MACD, even though the trend remains upward to sideways. In the near term (10 days), the price trend is sideways, with the price on the lower side of the standard deviation. This suggests potential sideways movement and a decline if more sellers enter the market. The total expected range is around 90-100 points. Volatility for the upcoming week is projected at 13%, with an anticipated movement of 60-65 points either up or down.
Market Makers' Range PredictionFor the next week, Market Makers predict a range with an upside at 4754 and a downside at 4640. Market Makers' Move is an estimate of the expected price range of a stock or index based on the options market.
Upcoming Week's Key Economic Events
The upcoming week is set to be eventful, with significant economic data releases scheduled. Key events include Consumer Price Index (CPI) and Retail Sales data on Monday, Unemployment data on Tuesday, Industrial Production figures on Wednesday, Jobless Claims on Thursday, and Producer Price Index (PPI) on Friday. These data releases could significantly impact market movements.
ConclusionIn summary, the market's current state necessitates close monitoring of price actions and responsive strategizing. With various economic indicators and technical signals presenting a mixed outlook, traders and investors should remain vigilant and adaptable to changing market conditions.