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I last wrote about the SPX in my 2021 Market Wrap-Up and 2022 Forecast on Jan. 1.
The SPX closed (around 20 points below the 50-day moving average) at 4662.85 last Friday, as shown on the following daily chart. The 200-day moving average is well below at 4420.84, which is slightly above the yearly Pivot Point for 2022 of 4412.61 (identified in my above-mentioned post). Both moving averages are still in uptrend.
The SPX uptrend is wavering and price is caught in a large and tightly bunched-up consolidation range.
It's a warning signal that weakness has crept into the SPX and we may see it pull back or correct soon. A 10% drop would send it down to 4200, while a 20% drop would take it to 3730. Alternatively, it may be a bear trap.
These two scenarios should become more clearly defined after the next Fed meeting on Jan. 26.
In the meantime, trading will likely remain volatile and whippy...especially below 4700.
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