After successfully predicting the bounce following new lows and then warning about the subsequent drop, we are back to provide more thoughts on the market. In the big scheme of things, not much has changed. Merely the market confirmed our bearish bias, which we have continued to nourish throughout 2022.
Despite many calling it the spreading of fear and uncertainty, we can not ignore macroeconomic factors driving the market. Because of that, we continue to think that the bear market is not done. Quite the contrary, we believe the market conditions are set to dramatically worsen with the FED rising interest rates later next month.
In tandem with that assessment, we think the market is due to start slowly progressing from the second stage of the bear market into the third stage in 2023 (after weak earnings reinforce our notion of the 2nd stage of the bear market). Therefore, we believe that the market has not hit bottom yet. Accordingly, we stick to our price target of 3500 USD.
Illustration 1.01
Illustration 1.01 shows the hourly chart of ES1! continuous futures. An opening gap occurred on Monday, and the price retraced it later. Therefore, we will pay close attention to whether the price manages to hold above the gap; the inability of the price to do so will be bearish.
Technical analysis - daily time frame
RSI, Stochastic, and MACD turned bearish on Friday. DM+ and DM- continue to be bearish. Overall, the daily time frame is bearish.
Technical analysis - weekly time frame
RSI, MACD, Stochastic, DM+, and DM- are all bearish. Overall, the weekly time frame is bearish.
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.
Despite many calling it the spreading of fear and uncertainty, we can not ignore macroeconomic factors driving the market. Because of that, we continue to think that the bear market is not done. Quite the contrary, we believe the market conditions are set to dramatically worsen with the FED rising interest rates later next month.
In tandem with that assessment, we think the market is due to start slowly progressing from the second stage of the bear market into the third stage in 2023 (after weak earnings reinforce our notion of the 2nd stage of the bear market). Therefore, we believe that the market has not hit bottom yet. Accordingly, we stick to our price target of 3500 USD.
Illustration 1.01
Technical analysis - daily time frame
RSI, Stochastic, and MACD turned bearish on Friday. DM+ and DM- continue to be bearish. Overall, the daily time frame is bearish.
Technical analysis - weekly time frame
RSI, MACD, Stochastic, DM+, and DM- are all bearish. Overall, the weekly time frame is bearish.
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.
Trade active:
This article was updated in the following post:
Trade closed: target reached:
Our price target of 3 500 USD was taken out.
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