Basing for a Bigger Move Up? – 12/29/22

Extraordinary high Put/Call reading  may have indicated an important bottom.

Today 12/29/22 one trading day after a very high Put/Call ratio, the S&P 500 (SPX) rallied close to 2%.

The hourly SPX chart courtesy of Trading View illustrates a potential base that began on 12/21/22.

The SPX moved above  maximum Fibonacci leeway at 3,850, noted in the 12/28/22 blog. The next important area  the bulls need to overcome is  chart resistance at 3,889.82.  Just above that level is  the Fibonacci .382 retracement of the decline from 4,100.96 to 3,764.49. at SPX 3,896.02.  The closeness of these two points indicates  powerful resistance.

Important support is  at the 12/28/22 bottom of 3,764.49, a break below this level could trigger a multi- week decline. 

The final trading day of 2022  is  12/30/22, it’s a good guess  many  traders  will take the day off – making  for a narrow trading day.

There could be a big  move on the first trading day of 2023 – 01/03/23.  If the SPX breaks strongly to the upside, it could be the start of an unhappy  New Year for the bears.  

Published by Mark Rivest

Independent investment advisor, trader, and writer. Articles have appeared on Technical Analysis of Stocks and Commodities , Traders.com Advantage, Futuresmag.com, and Finance Magnates.

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