Market Outlook for the Week of 2/21/23

Welcome everyone to the Traders Market Intelligence Report, brought to you by WealthBuildersHQ.com. This update is for Tuesday, not Monday. Monday’s a market holiday. Tuesday, February 21st, 2023. Hope You’all having a great day, man. It was an interesting one that it’s for sure. We’re gonna check out the market in just a minute. Wanna look at the VIX first? What happened? We got a gap up on the VIX and a nice pullback, right? So the, the s and p will check in a second now, but overall we’re still in a really solid place on the VIX. 19.92. But, but, but, but, but, but you need to look at this, okay? I feel like – it seems like the VIX correlation to the market is off. It’s broken. Something’s not right. And what I mean by that is right now you’ll see the market going up and the VIX go up market going down, and the VIX go down. There’s no correlation, which should be an inverse relationship, and it’s off, right? So yesterday we had this huge spike to the upside. We’re down on the S&P today, and yet we’re down on the VIX, right? So overall, we’re in a very good place, VIX wise. Now, options pricing still seems higher to me than it should be, and I know that, but when I look at covered calls, when do cover call Explorer and diagonal spreads, diagonal put spreads are insane as far as the cost to enter that credit spread they’re ridiculous, right?

So let’s go take a look at the S&P 500 and see where the S&P is right now and how we finish up for the day. Okay, so again, we had this overall bigger overall bearish downtrend taking place. We are out of that pattern right now. We broke out here quickly back in December, and January – actually both December we broke out here in January and we pushed up to the 4181. We failed and we’re back. Now as we really, really hone in on what’s going on there, folks, we had a push up to the 4181 close right near it. We stretch a little bit higher, right to the, where that fib line is drawn from. Of course, the nice pullback to the .236. There is our hesitation level. We get a strong bounce, but when we put in a slightly lower high in there. We put in a low here af before that bounce, and we put in a lower low here. We put in another high, but it’s lower high. And yesterday, Thursday, we come down below the 8 moving average. We close, right between the 8 and the 21. There’s a lot of concern as we sit there as when I say concern, traders are looking at this saying, all right, is this the pivot point right now. We gap down today to the 21 moving average, which was what I had said yesterday in an update I did for one of our advanced groups that we, we teach, that we train here wealth builders, and we looked at this and said, okay, we are in a very critical position. If we can maintain above the 21, we’re okay if we violate the 21 and or put in a lower low. The violator, the 21 was on the close. We, if we did, we barely got below it today. Let’s see, 4079.11 is closing price on the S&P. And we’re looking at 4077.36. Now, we’re, we are slightly above that 21 moving average. And if I really stretch this chart out. You could see that we, we closed above, right? I’m only doing that. So you can look at today’s candle just because it’s such a small bodied candle. So we closed above the 21, but our wick broke down and gave us a lower low. So now it looks like we’re putting in that bearish trending pattern to the downside, right?Taking the train baby straight down. So I don’t know if we’re going down or not from here. You know, we could get a balance and we put a new highs again, and that’s great, but we are closed in a barely, barely bullish neutral bias on the S&P 500. Everything is pushing to the downside. There’s concern now with the economic numbers between CPI, PPI, retail sales, all going the wrong direction for what the Fed should be looking at, right?

We’ll see where it all straightens out and where it goes and, and how it all lays down. But for right now, what I’m looking at next week on the S&P is this: if we can maintain above that 21, I’m gonna…which is the green line, the green moving average, I’m looking up to the eight, the pink moving average, right? We’ve gotta get above there to get any kind of bullishness back in. If we break that 21 and start to push down, we’re looking at that next fib level as our next stopping point, which is 4031 right down in here, right? So there you have it, there are your marching orders. Alright, so here’s what I want to say, right? Focus on the chart. Do not step away and think that, well, this is bearish now, or it’s just short term, it’s gonna come back. Don’t make that decision. Let the chart make the decision for you. Let the chart be your guide as to where it goes with that. Make it a profitable day. Stay focused on the quest of becoming a great trader. Keep crushing it and remember, you’re just one trade away. Take care everybody. Have a great weekend and I will see you back on Tuesday. Bye for now.