The SPX on Friday ended the week 2.1% lower amid renewed fears of the economy sinking into a recession next year as major central banks may not ease up on rate hikes just yet. The benchmark index posted losses in three out of five sessions, with hopes of a Santa rally this year quickly fading. The major indexes posted a second consecutive week of losses with the Dow down 1.7% and the Nasdaq off 2.7%. The week featured the Federal Reserve, European Central Bank and Bank of England all turn more hawkish as inflation remains stubbornly high. Of note, San Francisco Fed President Mary Daly said the Fed still has a "long way to go" to get inflation down to 2%. Trading was especially volatile on Friday with $2.6T worth of options expiring as part of triple witching day.
Chart: SPX daily
SPX daily looks very negative so far. Last Tuesday, the cooler-than-expected Consumer Price Index ( CPI ) for November; set the stock market up for another upbeat session. However,the market couldn't get positive support from the FED and Powell's hawkish talking made the short-term capital sell to put money back into their pocket. It causes SPX to break down its short term support, but it also breaks its short uptrend line support as well. (A bit extension so far)
Week Ahead:
A relatively quiet week is ahead for investors with the event and conference schedule thin. Earnings from FedEx (
FDX
), Nike (
NKE
), General Mills (
GIS
), and Micron (
MU
) will provide some of the bigger talking points along with a slew of housing data reports, including the December home builder survey, housing starts update, existing home sales release and new home sales report. B. Riley Financial Chief Market Strategist thinks the focus on housing could help traders remember that the calculation for CPI is a lagging indicators. He noted the real data next week is likely to show housing is coming down much faster than what shows up in the inflation reports.
Chart: QQQ daily
Since there's nothing big happening this week, the market will tend to move along the way it should. QQQ still looks better than SPX, it still holds its short uptrend line support with a little bit extension. Therefore, I am expecting QQQ to move within 273-287 range.
Please feel free to express your ideas and thoughts in the comment section.
SPX daily looks very negative so far. Last Tuesday, the cooler-than-expected Consumer Price Index ( CPI ) for November; set the stock market up for another upbeat session. However,the market couldn't get positive support from the FED and Powell's hawkish talking made the short-term capital sell to put money back into their pocket. It causes SPX to break down its short term support, but it also breaks its short uptrend line support as well. (A bit extension so far)
Week Ahead:
A relatively quiet week is ahead for investors with the event and conference schedule thin. Earnings from FedEx (
FDX
), Nike (
NKE
), General Mills (
GIS
), and Micron (
MU
) will provide some of the bigger talking points along with a slew of housing data reports, including the December home builder survey, housing starts update, existing home sales release and new home sales report. B. Riley Financial Chief Market Strategist thinks the focus on housing could help traders remember that the calculation for CPI is a lagging indicators. He noted the real data next week is likely to show housing is coming down much faster than what shows up in the inflation reports.
Since there's nothing big happening this week, the market will tend to move along the way it should. QQQ still looks better than SPX, it still holds its short uptrend line support with a little bit extension. Therefore, I am expecting QQQ to move within 273-287 range.
Please feel free to express your ideas and thoughts in the comment section.