SPY making lower low before higher high

2022년 6월 4일

The fact that we touched SPY $380 intraday on May 20 seems like a distant memory by now. We have made it out of the bottom, reached a local high, and I think next, we are about to make a local low such that we get a first higher low in this uptrend.

I think we will edge down to $403-$405 in the next few days and start to go up again after Friday's CPI data. Because there is no good news to move up the market in the very short term and we are due for a slight pullback.

We are in a mild recession already, companies are starting to laying off people (TSLA laying off 10%). The gas price is still sky high, folks will be doing less summer vacation trips and spending less.

One example: virtual summer camps are becoming popular, not because of COVID concern, but because of lower cost. The operations of virtual learning has been vastly improved during the last 2 years and folks have more confidence in it.

CPI peaked in March, started to taper off in April. As with this kind of number, once it start to reverse trend, it is hard to change direction quickly. Therefore I think the May CPI number coming out on June 10 8:30 AM will be lower than 8.3%.

There might be FED speeches in between softer on rate hikes to fuel the uptrend.

Technically speaking, SPY has a need to test the 20 day moving average support at around $403-$405. If the support holds, we are moving higher.

I see this uptrend continue until the next wave of ERs coming out. Notice JPM ER is coming out on July 14, I have set the uptrend target at around $439-$440 by July 13 for now.