Price action, post CPI release –
Thursday 13 October 2022 was quite an odd for most investors/traders out there. CPI went bad – 8.2% YoY, 0.4% more than previous month, above expectations; markets indeed reacted accordingly, however then an amazing reversal took place, right when everyone braced for capitulation –
The story behind it
As usual it’s not certain at this stage, however the broad perception now is that algos might hit an important fib level for the S&P 500. The 3505 level was a 50% retracement from Covid-19 bottom (March 2020) lows of about 2200 and Jan high of about 4800 – Credit for Katie Stockton and ‘The Maverick of Wall Street’ on this finding.
Looking closely at those fib levels
Looking closely at those fib levels from March 2020 low till Jan 2021 high, we can see that they function as strong support-resistance during the past time since then –
One can use a momentum indicator (MACD in the screenshot) to identity a confirmed breakout of the fib levels – and we’re definitely not on such a situation right now, thus according to TA (not fundamentals!) a breakout from current fib level soon is unlikely.