Will This Be The Next Bearish Catalyst?
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Both levels we had on watch for the S&P 500 were reached. We first saw a shooting star formation on the daily timeframe, which for those who pay close attention to candlesticks, could have been a bearish signal on a higher timeframe. That was reached and SPX held under that level for the rest of the day yesterday.
Now, we are still holding at or just above our other price target of 3980. This levels is the next level we would like to see break if we were going to see the market fall any further. Don’t forget to keep this level highlighted on your screens…
Technology Select Sector SPDR ETF (XLK)
As for a trade idea, if we think we may have seen the highs of the latest “rally,” then looking at the high risk areas of the market may be our best bet.
Since Powell also reiterated that the Fed is prepared to begin more aggressive rate hikes once again, we will put the Tech sector on watch. The Fed is important to consider here because, for better or worse, Fed Chair Powell can move the market. Economic data is also something to be on the look out as the latest inflation numbers are set to be announced on Tuesday.
If inflation comes in higher than expected then the market could be in for a nosedive, given Powell’s aggressive comments. If this ends up being the case, we will be watching a Tech sector ETF like the XLK.
Be sure to watch my full video breakdown for more…
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