Market uncertainty spreads

9 thg 10, 2023

In the previous article about SPX, we discussed how the market conditions were changing and that a prolonged period of selling could be upon us (just like in 2022). Then, on Friday, we articulated our worries that the market was reaching oversold territory in the short term, making a case for a brief rebound (up to Resistance 1 and potentially slightly below Resistance 2). Subsequently, we saw the market rise slightly and almost reach Resistance 1. But over the weekend, a war broke out in the Middle East after the terrorist organization Hamas attacked Israel, which caused the U.S. indices to drop after the futures market opened (though we still have not seen a very significant move to the upside after a month of selling, which might be one thing to consider). A further escalation of this conflict risks sending oil prices much higher, which will cause inflationary pressures around the globe (including the U.S.) As a result, this may threaten FED’s attempts to tame inflation and avoid a recession. Besides that, this conflict also risks spiraling into a broader war, with the United States getting involved (especially as media outlets report U.S. citizens among casualties or those taken hostage). That has negative implications for market forecasting visibility in the very short term. Therefore, it might be proper to get out of the market and wait on the sidelines until the picture becomes more clear again.

Technical analysis gauge
Daily time frame = Bearish (but the trend is weakening)
Weekly time frame = Bearish
*The gauge does not necessarily indicate where the market will head. Instead, it reflects the constellation of RSI, MACD, Stochastic, DM+-, ADX, and moving averages.

Please feel free to express your ideas and thoughts in the comment section.

DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.