Fed Chair Powell has ignited a “risk-on” rally in his post-lunch speech just now. Our Current Market Outlook is being upgraded to “Market in Confirmed Uptrend” with a green light (SPX @ 4,006.77) as of 2pm today. Currently our “Core Four” (see top of page) has 3 green and 1 red light.
Two days ago we wrote, “The chart set-ups on the main indexes are still constructive but any further advance in the recent bull rally will be dependent upon good data coming later this week. The market is at a serious crossroad, a flash point, and it is just as possible that our signal could be green one week from now as it could be red.” Indeed, the flashpoint appears to have happened today with his speech. Perhaps this bullish response by investors will officially usher in a year-end rally. Let’s see how the S&P 500 handles the 200-day mav about 1% above the 2pm index level.
Volume levels today should have an easy comparison with the light volume pullback of the past few days. Again, the technical chart set-ups on the main indexes are not bad.
Powell appears to have given the market participants what they wanted, and early for Christmas! The key PCE data comes tomorrow and employment data on Friday. It would be very discouraging to see the market do an about face by the end of the week. Conversely, it would be greatly encouraging to see the market build on today’s rally attempt and add to it into the close on Friday.
Will the “tailwind” persist for more than a few hours/days? That, my friend, will be “data dependent.”
Game plan: Prepare for bullish price movements ahead if the data is good. Expect that the S&P 500 will move over and hold above its 200-day mav quickly and sharply. Do not cease to employ risk management tactics. If the data is seen as negative on Thursday or Friday, the market could reverse and have a violent 2 – 3 day drop towards the S&P 500’s flattening 50-day mav.
Note: You can learn more about The Triumphant Core Four risk management system by clicking here.
Have a Triumphant day! ®
The information in this article is based on data obtained from recognized services and sources and is believed to be reliable. Any opinions, projections or recommendations in this report are subject to change without notice and are not intended as individual investment advice. Not to be used as legal or tax advice. ©2022 Triumphant Portfolio Management, LLC.
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