Asset Watch
Tuesday, December 27, 2022
For example, the December sell-off has created immense technical damage, as the S&P 500 has lost its 20, 50 and 100-day moving averages. Likewise, the 50-day MA (the black line) is now resistance, as the index could only hold the key level for a short period on Dec. 21.
Therefore, for a Santa Clause rally to materialize, the index needs to hold above 3,886. Thereafter, next-level resistance is the 100-day MA (3,915) and then the 20-day MA (3,943). Furthermore, the left and middle areas of the chart show that the 100-day MA (the red line) marked the intraday bottoms on Nov. 17, and from Dec. 6 to Dec. 12, so it may cap the S&P 500’s potential upside.
Thus, are ~75% odds worthwhile, or should you proceed with caution?