Watch the Gap, 22 Mar 2023

🖼 Daily Technical Picture 📈

➤ Another positive day in equity markets and I'm sensing some kind of pattern. Small cap caught up a bit with the main indices.

➤ Today (Wednesday) is the main event. It's the US Fed interest rate decision day. There's no doubt everyone has an eye or ear on the announcement.

➤ Before you ask, I have no clue on the outcome per se and I don't particularly care. I don't have skin in the game so I'm not gonna be losing any sleep over it. BUT I'm of course interested in the price action post data release. I'm hoping the price action isn't too messy and ruin a good potential trade set-up.

➤ In terms of likely movement, there is an open price gap in the SPY due to Tuesday trade. Price can easily close that gap. The sequence of events would be interesting. Will the gap be closed immediately with a downward spike or will it be closed after a failure of an initial bullish phase? I again have no idea.

➤ Conclusion: Price action so far points to a bullish bias. We saw a similar set-up in Sept 2022. That time, price reversed immediately. Take care.

EQUITY TREND:

⦿ Short-term (weeks) - DOWN
⦿ Medium-term (< 6 months) - UP
⦿ Long-term (>6 months) - DOWN