Is the bull market back? Technical levels to watch

Mixed results for Wall Street yesterday

On Thursday, at the end of the market session, we had the following results:

S&P 500 closed slightly negative -0.09%, as well as Dow Jones, which has lost -0.56% but the technological Nasdaq, closed in green with a gain of +0.13%.

Yesterday, Wall Street saw a decline after the previous stock rally driven by the speech of Jerome Powell, the Federal Reserve Chairman, who said that there will be a slow in the pace of the interest rate hikes in December.

Investors are focused on today’s Bureau of Labor Statistics data release, which will include the average hourly earnings, non-farm employment change, and unemployment rate.

The data will be released today at 13:30 GMT and markets will react accordingly.

S&P 500 Technical Analysis – Daily Chart

The S&P 500 price has broken the 200-day MA (green moving average) on Wednesday, following the Federal reserve’s chairman’s speech about a soft landing.

This breakout is a very bullish signal.

Yesterday we saw an apparent retest of the 200-day moving average as support, which should confirm that a new bullish trend is started.

If the index price can remain above this key level for some time, we should see higher prices in the upcoming days.

However, for that to happen, the S&P price has to break also above 2 major resistance levels: the horizontal line and the trendline at around 4100.

If the price gets rejected at resistance, the potential support levels are the 200-day MA, then the 21-day MA (blue moving average) and then the horizontal support line at around 3900.

The RSI moved higher to 62, indicating a Bullish trend.

Is there going to be enough buying power to push stocks higher and break out above resistance levels, leading to a longer rally?

Or is the index price going to be rejected and generate another drop in price as it happened a few months ago from August to October?

We will find out in the upcoming days.

Fear & Greed Index

The market sentiment is at 65  in the “Greed” mode following the level of 69 registered yesterday.

FedWatch Tool – FED rates probabilities

 

79.4% of investors are expecting the FED to increase the interest rates by 0.50% in the next meeting.

The remaining 20.6% are expecting a 0.75% rate increase.

The data show us that the number of investors expecting an increase of 0.50% is getting higher.

No other options are considered at this stage.

The next FED meeting is on 14 December 2022.

Portfolio Update

Overall, the majority of my positions are bullish (LONG).

I have a few short positions opened recently that I am monitoring and waiting for the right time to close or I could add more shorts if the price reverts to the downside.

Right now I am neutral on the stock market, as the price can go in any direction in the short term.

I am keeping my risk score low and I have some cash available on balance to use for new trades.

If you are already copying my portfolio, please keep the copy open.

If you are thinking of copying me, now could be the right time, if you can invest for the long term (years).

Remember to copy the open trades to optimize the copy.

Remember to set the stop loss on the copy at the minimum level, so you don’t get stopped if there is a correction.

Thank you, everyone. Have a nice day!

Steps to follow to copy my portfolio automatically:

1. Create an eToro account here: https://federicamontella.com/go/etoro/

2. Verify your account and make a deposit of at least 200 USD (you can deposit in any currency, like GBP and EUR)

3. Go to my profile page: https://federicamontella.com/go/etoro-passionforprofit/

4. Start the copy (copy open trades and set the lowest stop loss possible, to allow some movement)

5. Enjoy, it’s all automatic. You will make passive income 24/7

Let me know if you have any questions.

 

Federica Montella

eToro Popular Investor

 

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Author: Federica Montella
eToro Popular Investor, food lover and blogger. Stock trader and Popular Investor at eToro. I am on a mission to find the best restaurants and food to eat.