40 Bar Cycle Chart - S&P 500 SPY SPX Q - Updated 010323

3 Jan 2023

After a sloppy last few weeks of trading to wrap up the year-end 22', SPY closed right around the (Q4/22') SPX JPM J.P. Morgan Quarterly Collar sitting right at $3,830.

Looking ahead to the month of January, we have lots of upcoming data including December Inflation CPI, Jobs Report(s)/Unemployment Data (UNRATE), Producer Price Index (PPIACO), Leading Economic Data such as the OECD Composite Indicators (USALOLITONOSTSAM), Upcoming Q4/22' Earnings Releases, etc., of which is seems markets are staying relatively "pinned" for the time being until this data starts hitting the markets & investors come back from the extended holiday season.

Per our "40-Bar Cycle" chart, while I expect that this next down-leg in SPY SPX will likely play out as shown in the in the charts. However, do keep in mind that there are some seasonal tailwinds & also some tailwinds for markets regarding mid-term election cycles.

Here is what history tells us about pre-presidential election mid-term seasonality: 🇺🇸🗳🗓

“Third year pre-presidential election is the strongest.” (Up Double Digits, Historically)

• Dow = 19.3% (Since 1949) Dow Jones Industrial Average
  
• S&P 500 = 20% (Since 1949) SPY SPX ES1!
  
• Nasdaq = 29.3% (Since 1971) QQQ NQ1!
  
  
  Election Cycle Data 📊: twitter.com/macrodailyco/status/1598478131781947393?s=20&t=K4BSn2Oy1wwoDg1BIwewnw
  
  Election Cycle Data 📊: twitter.com/macrodailyco/status/1610009011142672385?s=20&t=K4BSn2Oy1wwoDg1BIwewnw
  
  Election Cycle Data 📊: twitter.com/macrodailyco/status/1610009293633294336?s=20&t=K4BSn2Oy1wwoDg1BIwewnw
  
  Election Cycles Data Explained via Twitter Space 🔊: twitter.com/kylemusserco/status/1553053926219546626?s=20&t=K4BSn2Oy1wwoDg1BIwewnw
  
  SPY Daily Chart Template
  
  tradingview.com/chart/5jxKmP...Which camp are you in on the short-term (Q1/23') direction of markets?
  
  • *Camp A: We are likely we headed for new lows in Q1/23 (Lowering, But High Inflation [4-5% YoY] aka Stagflation + Persistent Price/Wage Pressures + Hawkish FED + Downward Earnings Revisions/Misses).
    
    *Camp B: We are likely to break the downtrend into Q1/23', as mid-term election/pre-presidential cycle seasonality kicks in & also as the economy proves more "strong" than many are discounting (Peak Inflation + Light Deflationary Forces + Dovish FED via Pending 'Pause' + Nominal Earnings "Resiliency").
  Let me know your prediction in the comments below! 👇🏼
  

3 Jan 2023

Catatan

Here is the Daily SPX 40-Bar Chart:

3 Jan 2023

Catatan

Here is the 4-Hour SPX 40-Bar Chart:

*Note: See a potential uptrend forming on the regression line, which could be signaling a short-term rally*

3 Jan 2023

Catatan

Here is the 4-Hour SPY 40-Bar Chart:

*Note: See a potential uptrend forming on the regression line, which could be signaling a short-term rally*

3 Jan 2023

Catatan

Here is the Daily SPY 40-Bar Chart w/ MACD Indicator:

*Note: We could be setting up for a Daily MACD Buy Signal*

3 Jan 2023

Catatan

Here is the Daily SPX 40-Bar Chart w/ MACD Indicator:

*Note: We could be setting up for a Daily MACD Buy Signal*