Broad Market Levels: September 15, 2022
September 16, 2022
In this week’s broad market levels update, Knox explores potential bear market scenarios. With the help of basic trend analysis, he hopes viewers will be able to filter their emotions, so they can be on the right side of trend changes. Knox also covers September 16th's quadruple witching event, he details what supporting markets contributed to this bear market and ends the technical analysis by discussing the market impact of a potential recession in 2023.
Broad Market Levels Timestamps:
00:00 - Analyzing the Current Market with Trend Lines
06:49 - Key Levels: 3900 and 4120, and Different Scenarios
12:45 - Quadruple Witching - September 16, 2022
14:05 - Supporting Markets - Interest Rates
18:12 - Supporting Markets - Oil and Energy
19:55 - Recession Analysis
Basic Trend Analysis in Bear Markets
Basic trend analysis can point out high probability moments in each bear market that can signal a major reversal is underway. Emotions tend to be quite negative when this happens, which is why it’s crucial to identify these pivots and have a plan in place. Knox goes over the key pivots that would mark the end of the 2022 bear market.
Key Levels to Pay Attention to in a Bear Market
Despite the market’s uncertainty, Knox puts the market’s major thresholds at 3,900 and 4,120. Should it drop below 3,900, it could find a new low at 3,705 or 3,685. On the other hand, if it breaks through 4,120, it could signal a healthy CPI as well as market pricing in various factors – good and bad.
Quadruple Witching - September 16, 2022 - Large Trading Volume Predicted
Knox believes that this inflection point is right around the corner. Aside from the upcoming Fed meeting, there is also the Quadruple Witching on September 16, which is expected to lead to one of the biggest volumes day since quadruple witching only happens four times a year. This is when stock options and futures as well as stock index options and futures expire on the same day. The last time this event happened was at the June low in 2022.
Supporting Markets: Interest Rates, Oil and Energy
Finally, Knox reviews the various supporting markets: Bonds, Oil, and Energy. He notes that the market is in a strange situation right now in the sense that although the economy is officially in recession. Jobs, industrial production, as well as manufacturing and services, are still expanding, though, at a slower rate.
Knox offers several reasons for this. Low oil prices, for example, is reducing inflation, which in turn is helping equities. Further, he expects that the dollar may be weakening soon (a positive for equities), and there is also the possibility of good news coming from the Fed meeting. Supporting markets aside, though, Knox reminds investors to focus on the 3,900 and 4120 and to wait until the market completes a fifth wave.
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Catch up on previous Broad Market Levels
Why the Next Two Weeks Could Determine the Rest of 2022
In this week's broad market video update, Knox explains why the next two weeks could determine the rest of 2022. Read his full technical analysis here. Taken from a 1-hour premium webinar, Knox shares his view on where the market may be headed in the coming weeks. While examining the current structure, Knox discusses whether or not the first leg of a larger bear market will last until 2023 or if there's something else going on. The broad market update also includes an overview of three scenarios that will be likely going forward and takes a look at the supporting markets such as crude oil and the U.S. dollar.
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Knox Ridley began consulting on portfolios in 2007 and is an experienced growth investor in both bull and bear markets, which is hard to find these days. As the portfolio manager of the I/O Fund, he beat the top-performing funds on Wall Street in both 2020 and in 2021. His real-time trade notifications to premium subscribers have garnered 27 entries with over 100% gains in the last two years. Knox began his career as an ETF wholesaler in 2007 before becoming a portfolio consultant for large RIAs, FAs, and Institutional accounts. He is very keen on macro trends and is trained in Fibonacci Trading, Elliott Wave theory, as well as Gann Cycles. He also uses classical technical analysis to manage risk and identify great risk/reward setups. Knox is known for increasing and decreasing allocations for record-breaking returns.
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