SPY the Bulls Are Back In Town...

19 mar 2022

Hello Traders,

I hope you all are doing well. I just wanted to shoot a quick update for anyone a little shaken by the market or confused as to what's going on.

TLDR: Yes, there are still geopolitical concerns, but at the moment it's not important to the market, because we've already seen the response of the world and it has strengthened relations of NATO and basically blocked off Russia from World Trade and Financially. The Market's prefer hikes over inflation, and technical trading signals are still nearly perfect (as seen in above and below charts).

So we have our answer as to who's economy is really likely to crash.
Although the US would like to help more, there are limitations as to what we (the US) and other countries can do without sparking a Cold War or WW3, so the markets are pretty content that everyone is threading that needle.

Now, why did the market bounce off the fed announcements?
Many people without context assume that tapering and rate hikes are a bad thing for the markets; their thought process is that it makes valuations less attractive, due to more difficult borrowing for companies and consumers...
This idea isn't wrong, it's just that they're missing a few pieces of information in that logic.

• First, the markets like policy that are good for the overall economy. Tapering and hikes will help fight inflation; monetary tightening is a signal that the Fed believes the economy is on firm footing. That is a good thing. The market easily prefers hikes over inflation worries.
  
• Second, historically, while stocks tend to fall the month following rate hikes, they typically end the year up around 5%.
  
• Lastly, there is progress on the geopolitical front. The World has condemned Russia's leader's actions; as we see a constructive movement in negotiations between Ukraine and Russia, signs from China that it will roll back its broad regulatory crackdown and play a little nicer with the rest of the world.
  

We do also predict gas prices to continue in a downward spiral and fall substantially in the coming months due to the panic buying subsiding, along with other geopolitical and psychological factors, which need not go into too much detail on.
(It's important to note for those unfamiliar, the US is the #1 producer of crude oil, with about 20% of global supply, Saudis at around 12%, Russia 11%, and Canada at 6%). As such, the US is not reliant on Russia for oil; unfortunately, some of our allies are, to some extent.

The Chart
As a technical trader, that was a lot of fundamental analysis. Sometimes it's good to have both, especially when catalysts are often the driver on big movers. As I mentioned in my previous posts, technical trading has been on-point. Almost to the penny.
On Weds, March 16th, SPY gapped up, perhaps on the positive geopolitical news mentioned. Now we're sitting on a trend reversal and (yet again) a retest of the 200MA. Honestly, I think we will hang around the 200MA even if we do break to the upside, at least for a month or two as I had predicted back in January (see below).

Please see for references.

January.

If you appreciated this please: Like, support, share, follow.

Sincerely,
Mike

(UPRIGHT Trading)

22 mar 2022

Uwaga

For clarification: If my boxes aren't clear, I personally think we're in a Ranging Market right now. Unlike a Bullish or a Bearish Market, the Price Action is sideways and range-bound. Happy trading