12/16/2022 | by Jason Krutzky

Market Update Into December 19th: CPI And JPow Send Markets Lower

BlogPrepare for the Trading WeekMarket Update Into December 19th: CPI And JPow Send Markets Lower

Last week, we noted that the rally across indices seemed to be losing steam. With such important data coming out this week (FOMC, CPI, and December OPEX), we knew to expect some serious volatility and that’s exactly what we got! Strength came in early in the week a cooler-than-expected CPI print but quickly sold off. Then, Jerome Powell tempered bulls’ expectations further with his speech on Wednesday and it’s been a continuation downhill since. The volume on this week’s candle is worth noting, as it quite trumps the recent weekly volume readings. Of note, also, is the sheer amount of previous weekly lows that have been taken out by the price action this week. Will the ‘Santa Rally’ come this year, or will we all be left with coal in our stockings? We’ll find out soon enough, but let’s dig into the individual names below.

Weekly Analysis

This week, the SPY ETF closed at $383.27 (-2.55%), continuing its decline from last week. Bulls will be looking to the gap on the daily time frame that was filled on Friday and the 50% Fibonacci retracement of the current swing low-to-high as potential levels for this index to find some support. However, the weekly candle with its above-average volume is not overly encouraging looking for a near-term reversal.

This is a daily and weekly chart of the SPY index.

This week, the QQQ ETF closed at $274.25 (-2.76%), finding resistance at the downward-sloping trendline from ATHs. Much like SPY, this index is looking for a freshly filled gap and Fibonacci retracement level to act as support on the daily time frame. That said, the weekly candle this week is far from encouraging, showing above-average volume while taking out the previous month of lows.

This is a daily and weekly chart of the QQQ index.

This week, the IWM ETF closed at $174.37 (-2.38%), making it the strongest performer of the group. That show of strength, however, is eclipsed by a weekly candle that stalled right at the AVWAP from the Covid lows and the downward-sloping trendline from ATHs before taking out the past month and a half of lows.