As chart 1.1 shows, holiday-shortened trading week normally sees lighter trading volume , so even breakup or breakdown can not be legit, it is more like price correction, sideway movements.
Only biggest news was FED minutes on Wednesday.
FED MINUTES: PARTICIPANTS AGREED THAT A SLOWER PACE OF RATE HIKES WOULD ALLOW THE FOMC TO BETTER ASSESS PROGRESS TOWARD ITS GOALS "GIVEN THE UNCERTAIN LAGS" ASSOCIATED WITH MONETARY POLICY.
1) Most officials believe that the pace of rate hikes is expected to slow down "soon" (this is a piece of news that has been hyped several times);
Many analysts believe that this might affected the market, but its really misleading. This sentence has been heard for more than a month, and the market has already priced it.
2. Several Fed officials expect higher peak interest rates (not the first time I've heard this);
That is the biggest concern for traders. How the Fed views the relationship between recent inflation data and the end point rate is crucial for investors. Futures pricing shows that the market expects the policy rate to peak around 5 per cent around the middle of next year.
3. Economists within the Federal Reserve told members at the meeting that the probability of a recession next year has risen to about 50%.
That is the key to influencing the market, the first such warning since the Fed began raising interest rates in March. Because the Fed "warned of a recession" for the first time, the market was expecting a rate cut. In other words, the reason for affecting the market is that "bad news becomes good news", not the Fed becoming dovish.
4. Several Fed officials noted that a slower pace of rate hikes would allow officials to gauge how far they have come toward their goals.
One reason such assessments are important is the uncertainty about the lagged effects and magnitude of the effects of Monetary Policy actions on economic activity and inflation.
5. Some officials believe there is a higher risk that the Fed will tighten policy more than necessary (start discussing the risk of tightening policy).
6. Policymakers at the meeting observed that the Treasury market has been operating in an orderly manner despite increased interest rate volatility and signs of tight liquidity conditions (if the bond market gets into trouble, the Fed may have to act, which now appears to be fine).
7. Several Fed officials said there was a lot of uncertainty about the end rate needed to achieve the target (the Fed shifted its focus from a single rate hike to trying to accurately estimate the end rate).
Overall, the message from the meeting notes is consistent with the Fed's announcement in November that it would raise rates at least a little more, and that the end-point rate is higher than previously expected.
Back to our trade, since today is only half trading day, and from the SPX futures it will likely that market open up high , but the gap will be likely to get filled. The market closing level from Wednesday will be a tricky place, some buyers possibly will try there, but not very trustable. 2h support around 8Ema from daily chart is somewhere worth trying.
Please feel free to express your ideas and thoughts in the comment section.