Moment of Truth

Good Morning:

• The stock market survived the CPI Inflation Report yesterday but looks weak this morning on projected 4th Quarter bank earnings.
• We remain in our first projected reversal window for 2023. That makes holding yesterday’s low at 3954 critical today, or the reversal will take hold.
• We also remain in our 10/13 Navigator Swing Buy signal. Yesterday, we added to our position near the lows and lightened up again near the highs. We still carry a runner.
• The Moment of Truth has its genesis in a resistance cluster, which includes the down trendline from the January 2022 peak and the 200-day line. Either the market breaks the zone higher – potentially giving price a shot at ending the bear on the October lows – or price rolls over into the next down leg.
• Support is at yesterday’s low (3954), 3905, and 3855.
• Resistance lies at 4025, then 4090.
• We have lightened up considerably until we confirm that price can travel over the snow-covered pass. Our work indicates that price will fail to end the bear – but we will keep an open mind.
• The early February Fed Meeting will slowly come into view in the next few weeks, and price is expected to bump and grind on earnings reports.
• Will the price fall into the meeting or continue to rally? We will know more next week, but the next intermediate low is scheduled to coincide with the Fed announcement.
• Don’t forget that Monday is a holiday and markets will be closed.

Have a great weekend.

A.F. Thornton