SPX/USD Daily bearish. *Inflation produced a higher high (.60% increase in CPI growth from April-May compared to March-April) at .83% FFR which essentially means that the Fed will probably consider ramping up rate increases by more than 50bp (75bp likely) in their meeting next week (06/14-06/15) to stay true to their "do whatever it takes to ring in inflation" promise. This is bearish for equities and cryptos as we will likely start to see more significant layoffs in corporations and less liquidity in capital markets.* Recommended ratio: 5% SPX, 95% Cash. Price is currently forming a Bearish Engulfing pattern as it trends down at 3900; it is still technically retesting $3938 minor support after breaking down below the lower trendline of the descending channel from August 2021 at $3981. Volume remains Moderate (high) and has favored sellers for three consecutive sessions (and seven of the last ten sessions). Parabolic SAR flips bullish at $4175 resistance, this margin is neutral at the moment. RSI is currently trending down and retesting 38.06 support; if it breaks below this level then it will likely retest both the uptrend line from August 2015 and the uptrend line from 01/26/22 at ~31. Stochastic remains bearish and is currently trending down at 40, the next support is at 18.32. MACD remains bullish and is currently on the verge of a bearish crossover as it trends down at -32; it would complete the crossover if it falls below -34. ADX formed a trough at 17 and is currently trending up at 19 as Price breaks down, this is mildly bearish. If Price is able to defend $3938 minor support then it will have to recapture the lower trendline of the descending channel from August 2020 at $3981 if it is to resist a steeper downfall. However, if Price continues to break down here, it will likely retest $3706.52 minor support for the first time since January 2021. Mental Stop Loss: (two consecutive closes above) $3981.
Comment:
*Watch for a potential Short Squeeze to start the week*