SPX Short and Long Term Trend Analysis 2023
Summary: Short term Bull Trap and Long Term Bear Trap. Prices may move up or sideways for about a week but over the next month prices will move down to a previous support level. Investors are reallocating their profiles and they will also be digesting negative earnings report outlooks that consider the employment costs from higher interest rates in 2023. Unemployment indicators will be key over the next quarter much like CPI was last quarter. My time horizon for retirement is 30+ years so I will be Dollar Cost Averaging into cheap beaten down stocks like tech and auto, selling covered calls on overpriced stocks I own like energy, and hedging recession capitulation risk with puts.
Best Case: Recession canceled, SPX breaks it's long term 2022 downward trend similar to the DOW. Earnings and unemployment numbers remain decent in 2023. SPX breaks through the double top pattern at the January 2022 highs and makes new highs.
Positive Case: A bullish triangle pattern forms next week and the SPX continues up to form a long term double top pattern with the January 2022 highs and then trades sideways in 2023. Max SPX $4800.
Negative case: Earnings reports from major institutions and unemployment show how bad the economy is getting and the market sells off to continue SPX's downward trend. SPX forms another shoulder to an inverse head and shoulders reversal pattern seen on the Monthly Chart and trades sideways in 2023. Min SPX $3700.
Worst Case: The unemployment data and earnings reports trigger a financial crisis like 2008. The much anticipated capitulation Wall street is waiting for associated with 8 out of 10 recessions causes SPX to drop below March of 2020 lows.
Short Term Technical Indicators (Daily):
1. Volume profile shows more people willing to buy SPX at lower price levels then higher ones.
2. SPX is at the top of it's long term price channel trend from 2022.
3. SMA's indicate negative price movement.
4. MACD indicates positive price movement.
5. RSI indicates the SPX is overbought.
Long Term Technical Indicators (Monthly):
1. Volume profile shows more people willing to buy SPX at lower price levels then higher ones.
2. SPX is well above it's true mean logarithmic growth rate for a recession.
3. SMA's indicate negative price movement.
4. MACD indicates a return to normal bullish levels but is still quite positive from past recessions.
5. RSI indicates the SPX is oversold.
Fundamentals:
1. Consumer and investor sentiment has turned positive.
2. Inflation data is telling us that inflation has peaked and the Federal Reserve may pivot soon.
3. Earnings reports from large financial institutions who are all predicting recession in 2023 come out this week (Wildcard).
4. Unemployment may start to increase due to rising employment costs.
Best Case: Recession canceled, SPX breaks it's long term 2022 downward trend similar to the DOW. Earnings and unemployment numbers remain decent in 2023. SPX breaks through the double top pattern at the January 2022 highs and makes new highs.
Positive Case: A bullish triangle pattern forms next week and the SPX continues up to form a long term double top pattern with the January 2022 highs and then trades sideways in 2023. Max SPX $4800.
Negative case: Earnings reports from major institutions and unemployment show how bad the economy is getting and the market sells off to continue SPX's downward trend. SPX forms another shoulder to an inverse head and shoulders reversal pattern seen on the Monthly Chart and trades sideways in 2023. Min SPX $3700.
Worst Case: The unemployment data and earnings reports trigger a financial crisis like 2008. The much anticipated capitulation Wall street is waiting for associated with 8 out of 10 recessions causes SPX to drop below March of 2020 lows.
Short Term Technical Indicators (Daily):
1. Volume profile shows more people willing to buy SPX at lower price levels then higher ones.
2. SPX is at the top of it's long term price channel trend from 2022.
3. SMA's indicate negative price movement.
4. MACD indicates positive price movement.
5. RSI indicates the SPX is overbought.
Long Term Technical Indicators (Monthly):
1. Volume profile shows more people willing to buy SPX at lower price levels then higher ones.
2. SPX is well above it's true mean logarithmic growth rate for a recession.
3. SMA's indicate negative price movement.
4. MACD indicates a return to normal bullish levels but is still quite positive from past recessions.
5. RSI indicates the SPX is oversold.
Fundamentals:
1. Consumer and investor sentiment has turned positive.
2. Inflation data is telling us that inflation has peaked and the Federal Reserve may pivot soon.
3. Earnings reports from large financial institutions who are all predicting recession in 2023 come out this week (Wildcard).
4. Unemployment may start to increase due to rising employment costs.
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