Building Last Swing High Before Bearish Trend
By
Luke Miller
The S&P 500 (SPX) is chopping around near its recent high, however, little has changed, as SPX works on building out its last swing high in Q1 2023 before what Bayesian Probabilities (BPs) expect to be a bearish trend into mid-year. I continue to caution members from chasing any rally, and instead view it as an opportunity to raise cash. If the odds change, then this perspective will change as well. Support on SPY: 400. Resistance: 415-420.
As for the GDX (Gold Miners ETF), I do believe a multi-month top is in, but there could be another run at those highs over the next month, before metals grind around in 2023 or even get as bearish as TTM lows. Support: 30. Resistance: 31-33s.
The USO is looking more and more likely a multi-month bottom is already in, as bullish BPs sneak up. It’s becoming a BTD environment. Support: 69. Resistance: 71-73s. From before: "Sneaky odds and price action that lean neutral to bullish. I wouldn’t be surprised that the lows are already in for 2023. A good test of that would be OML in this current range (i.e. a scary drop) that doesn’t do multi-week damage, but instead provides the 'entry' we are looking for on the long side for 2023."
DXY: No real changes here: This “should” be the low for a long time. Support: UUP 27s. Resistance: UUP 29s. I wrote the following over a month ago and it still applies…and has come to fruition: "The reaction from here is key to how things shake out in early-2023: DXY is working on OML into January 2023, before what will most likely be another advance to 12-month highs in Q1-Q2 2023."
