After a sloppy last few weeks of trading to wrap up the year-end 22', SPY closed right around the (Q4/22') SPX JPM J.P. Morgan Quarterly Collar sitting right at $3,830.
Looking ahead to the month of January, we have lots of upcoming data including December Inflation CPI, Jobs Report(s)/Unemployment Data (UNRATE), Producer Price Index (PPIACO), Leading Economic Data such as the OECD Composite Indicators (USALOLITONOSTSAM), Upcoming Q4/22' Earnings Releases, etc., of which is seems markets are staying relatively "pinned" for the time being until this data starts hitting the markets & investors come back from the extended holiday season.
Per our "40-Bar Cycle" chart, while I expect that this next down-leg in SPY SPX will likely play out as shown in the in the charts. However, do keep in mind that there are some seasonal tailwinds & also some tailwinds for markets regarding mid-term election cycles.
Here is what history tells us about pre-presidential election mid-term seasonality: 🇺🇸🗳🗓
“Third year pre-presidential election is the strongest.” (Up Double Digits, Historically)
Dow = 19.3% (Since 1949) Dow Jones Industrial Average
*Camp A: We are likely we headed for new lows in Q1/23 (Lowering, But High Inflation [4-5% YoY] aka Stagflation + Persistent Price/Wage Pressures + Hawkish FED + Downward Earnings Revisions/Misses).
*Camp B: We are likely to break the downtrend into Q1/23', as mid-term election/pre-presidential cycle seasonality kicks in & also as the economy proves more "strong" than many are discounting (Peak Inflation + Light Deflationary Forces + Dovish FED via Pending 'Pause' + Nominal Earnings "Resiliency").
Let me know your prediction in the comments below! 👇🏼
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Here is the Daily SPX 40-Bar Chart:
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Here is the 4-Hour SPX 40-Bar Chart:
*Note: See a potential uptrend forming on the regression line, which could be signaling a short-term rally*
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Here is the 4-Hour SPY 40-Bar Chart:
*Note: See a potential uptrend forming on the regression line, which could be signaling a short-term rally*
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Here is the Daily SPY 40-Bar Chart w/ MACD Indicator:
*Note: We could be setting up for a Daily MACD Buy Signal*
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Here is the Daily SPX 40-Bar Chart w/ MACD Indicator:
*Note: We could be setting up for a Daily MACD Buy Signal*
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