Market Overview

The correction of the summer rally (which I wrote about in 2022 Bear Market Rally Analysis) seems to be finished now and we are in the next wave up. Where do we get from here?

ticker

• CCJ
  
  Please visit it here
• LABU
  
• LTHM
  
• RUN
  

 SPX bounced from the obvious trend line connecting the recent lows. It is now on its way up to 4150, where it will face resistance formed by the 30WMA and this years’ Volume Profile’s POC [Point of Control] (more about Volume Profile on TradingView). Down from recent low at 3883 up to projected 4150 would be 6.5% – not an impossible move for the index taking into consideration its recent volatility. We are “only” 1.9% away from there. Can we extend higher?

While watching the Tape the last two weeks I noticed a significant accumulation in numerous stocks, which may hint to substantial institutional buying. There might be three reasons for this to move to be the beginning of a larger leg up:

• lower CPI reading released on Tuesday – considering the declining prices of crude – very likely
• significant improvements in Ukraine
• a lot of money on the sidelines.

IMHO we will get to 4150 where we stall for a week or two and then commence our way up to 4450-4500, the level of High Volume Node, with minor corrections along the way around the 200DMA. It may take 2-3 months for us to get there.

On the other hand – after looking at the charts of all stocks I’m watching, I see a high chance of a larger pullback. Or a chop festival.