SPX short to resume downtrend to 3400 area.
As the weekly chart here shows, previous CCI peaks near/at/slightly above the 0 (neutral) level coincide with peaks in price within the dominant (down)trend: we are now in the 'filter' zone between the two parallel channels, therefore this is where I am looking for price to turn and resume the downtrend.
The 3400 level is a strong level that we have encountered before, namely the pre-pandemic high (which is around 3390), therefore it is a very important one from a past-price history perspective. Rejection at 4000 seems to be holding as there are no more news items through which price can be pushed higher, while the fundamental backdrop is highly unfavourable to stocks as Fed rates, QT implementation, and recessionary headwinds with a possible fallout/spill-over from the FTX/crypto avalanche, all conspire to take the
PX down by quite a stretch before the year's end.
The 3400 level is a strong level that we have encountered before, namely the pre-pandemic high (which is around 3390), therefore it is a very important one from a past-price history perspective. Rejection at 4000 seems to be holding as there are no more news items through which price can be pushed higher, while the fundamental backdrop is highly unfavourable to stocks as Fed rates, QT implementation, and recessionary headwinds with a possible fallout/spill-over from the FTX/crypto avalanche, all conspire to take the
PX down by quite a stretch before the year's end.
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