SPX - The index is headed to 2022 lows
Updated
In tandem with our previous thoughts, we continue to be bearish on SPX. Our reasoning is based upon fundamental and technical factors we reiterated multiple times over the past few months; and indeed, we would argue that these factors are set to worsen even more after the latest rate hike by the Federal Reserve of the United States. Because of that, we stick to our price target of 3500 USD.
At the moment, we will pay close attention to volume and price action. Ideally, we would like to see SPX take out the support level at 3721 USD to confirm our bearish thesis further. After that, we will pay close attention to the support level at 2022 lows. We will update our thoughts as the trend progresses forward.
Illustration 1.01
Illustration 1.01 displays the daily chart of SPX and two simple moving averages. The yellow arrow points to the strong correction of the downtrend represented by the price retracement toward the 50-week SMA.
Technical analysis - daily time frame
RSI, MACD, Stochastic, DM+, and DM- are bearish. Overall, the daily time frame is bearish.
Illustration 1.02
Illustration 1.02 shows the monthly chart of SPX, 20-month SMA, and 50-month SMA. These moving averages are still in a bullish position; however, they are lagging indicators and therefore lagging behind the market. The 50-month SMA is a significant support area, coinciding with our price target below it.
Technical analysis - weekly time frame
RSI, MACD, Stochastic, DM+, and DM- are all bearish. Overall, the weekly time frame is bearish.
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
At the moment, we will pay close attention to volume and price action. Ideally, we would like to see SPX take out the support level at 3721 USD to confirm our bearish thesis further. After that, we will pay close attention to the support level at 2022 lows. We will update our thoughts as the trend progresses forward.
Illustration 1.01
Illustration 1.01 displays the daily chart of SPX and two simple moving averages. The yellow arrow points to the strong correction of the downtrend represented by the price retracement toward the 50-week SMA.
Technical analysis - daily time frame
RSI, MACD, Stochastic, DM+, and DM- are bearish. Overall, the daily time frame is bearish.
Illustration 1.02
Illustration 1.02 shows the monthly chart of SPX, 20-month SMA, and 50-month SMA. These moving averages are still in a bullish position; however, they are lagging indicators and therefore lagging behind the market. The 50-month SMA is a significant support area, coinciding with our price target below it.
Technical analysis - weekly time frame
RSI, MACD, Stochastic, DM+, and DM- are all bearish. Overall, the weekly time frame is bearish.
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
Trade closed: target reached
Our price target of 3 500 USD was taken out.
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