Market Outlook Week 11

Last week overview - Selling pressure continued across the board with geo-political tensions and fed overhang. Commodities soared and risk off was the continuation theme. All sectors were negative with Consumer Cyclical and Technology taking the biggest brunt of selling. Nasdaq is nearing its bear market correction of 20% again. Nasdaq looks like it could break Fed 24th lows.

SPX              -2.88%

Comp           - 3.53%

DOW           - 1.99%

Russ             -.97%

YTD

SPX             -13.71%

Comp          -19.89%

Dow             -11.76%

Russ            -14.82%

Sector Performance

Energy                     -.19%

Utilities                    -.65%

Financial                  - 1.55%

Industrial                  -1.8%

Basic Materials        -184%

Real Estate               -1.87%

Healthcare                -2.27%

Comm Svcs              -2.8%

Tech                           -3.89%

Consumer Cyclical    -4.48%

Consumer Defensive    -5.08%

                        

        

Dow (Weekly) - Continued price weakness. Below lower KC and below weekly 5. Getting to feel like extended but could go down more.

Dow (Daily) - Price broke support of 33514 which was a major support zone. Price retested these levels on ?Friday and got rejected. Forming a nice tight wedge formation. 5th wave complete could be below 32000 level which could mark a temporary bottom and bounce.

Dow Hourly: Weak close on Friday could lead to further declines into Fed meeting next week. We could even see prices hold up till Fed meeting and then probably have a sell off. 33000 seems like a resistance where price could be rejected to retest back to 32000 level. If price breaks above 33543 then this bearish thesis will be invlidated.

SPX Monthly: Monthly 21EMA test at 4078. Solid support trendline below 4000 level. A flush below to 3950-4000 could see a nice oversold bounce.

SPX Weekly: Price closed lower for the week and below lower KC. Support comes in around 4050 level at the lower wedge. Price could see a nice bounce attempt at these levels and retrace close to 4500 before price will revisit the major support zone of 3900 levels.

SPX Daily: 50ma about to cross 200dma a death cross. Daily could fall another 150 points from here to test support levels and then have a nice bounce. Market sentiment is getting extremely bearish which will warrant a bounce from oversold conditions.

SPX hourly: Any bounce to 4210 level could be shorted. Prices will likely break Feb 24th lows to test the daily wedge/support levels of 4050-4090

Nasdaq Weekly: Weekly lower close and below KC. Close to support zone 12927. Major support between 12418 and 12927. MACD at -683 close to the extreme of -730 during covid sell off in Feb 2020. 

Nasdaq Daily: Lower lows and Lower highs still in play. Price could test 12600-12800 level and see a bounce to break the wedge to upper KC.

Russell Weekly: Slightly down week. So far holding up well than other indicies. Reason being less exposure to geo political risks. Approaching support zone around 1890 level.

Russell Daily: Weak close on Friday as high to low close. Should see the lows of Friday to break and test the 1898 support level.

VIX Weekly: Holding weekly 5ma and seem to want to go higher with geo political tensions. Resistance at 42ish level. Could see any panic headlines to drive us to 42 level.

Vix Daily: Still higher highs and higher lows in place. Could see vix spike on any negative news and that could probably mark the interim bottom in the market. 42 seems like a good area to short vix or buy markets. That should coincide with the next 2-4% drop in the markets.

Crude Daily: Crude had it first weekly decline after testing 130 level. Think the highs in crude could have already made unless we take 130 level out. Crude should see a rally into 118-120 level and then reverse down below 100.

Natural Gas Daily: After having two wide range reversal days on Monday and Tuesday, price managed to close abov daily 5ma on counter rallies from Thursday and Friday. Price is right at the resistance level and a 50% retracement from Monday's decline. A break below Fridays low could be shorted to test $4. Side ways chop zone otherwise.

Bonds 30Yr Daily: Still holding the gap as prices test 21dma. Sideways action for now. A rally into 155 and failure to hold abov 156 could see prices come down to test 150 level.

Cocoa: Sideways action with no tradeable pattern.

Coffee Daily: Bearish price action as prices testing 221 support. Price could test 213 level. Any trade to 225 would be a short.

Gold Weekly: Price came close to 2020 ATH at 2087 but failed to take out that level. Price reversed sharply from those  highs. Still in a uptrend and a break above 2087 could see it go to 2220 level.

Gold Daily: Gold low of 1964 held and price reversed. This could see a continuation pattern to retest ATH.

Copper Weekly: Failed breakout as prices reversed almost all of the prior week rally. With copper a proxy for economic growth, this suggests an expectation of weaker economic growth Any bounce to 4.69 can be shorted as prices will retest 4.04 level.

Copper Daily: Confirmed bearish action. Any bounce to 4.65 level is shortable with stops above 4.7

could test below 4.4.

Aussie Daily: 5 wave complete and abc correction underway. With commodities probably pulling back, Aud could test .72 level. 

USD Weekly: Bit extended after 5 weeks of gains. Right at resistance level.

USD Daily:Still looks bullish. Expecting to see a double top at 99 level. Any reversal on those prior highs could be a great short entry.

Outlook for next week: With headline driven geo political tensions and fed interest rate hike next week, markets will be very volatile. Expectation is for fed to raise 25 basis points but more attention will be given to their extreme hawkishness or less hawkishness. And also any news on not reducing balance sheet until end of year will be viewed as positive by market. Think Fed wil be bit accomodative given the geo-political tensions and will reassure public they are here to backstop any liquidity issues.

Any flush down to  4080 levels in SPx would be a buyable dip and expect prices to retest 4300-4500 levels. Markets have priced in Russia taking Ukraine unless there are market altering events that catches everyone by surprise. Barring any news, markets are poised for a nice post fed rally.