- Indices are trading near 2022 lows
- Technical analysis on NQ, Gold & CL
- What we can expect from 2023
What We Can Expect From 2023
2022 saw the majority of markets take a free fall. NQ dropped over 32%, ES ended the year down 18%, and Gold, traditionally a safe haven ended flat on the year. With indices trading near 2022 lows, a break below those key levels could signal a further drop in equity markets is on the cards for the first half of 2023. Let’s take a look at some of the longer-term charts:
DAILY NQ CHART
- NQ is only trading 4.8% away from the most recent low at $10,490.
- The Down channel remains intact from our previous technical article.
- Fibonacci retracements point toward a potential bounce up to $11,640 in the near term.
- Lower highs coupled with horizontal support point toward bearish dominance for now.
DAILY GC CHART
- The Gold price has rallied 14% from the lows made in October.
- The RSI is showing decent bullish strength.
- GC is currently trading within the 0.382 & 0.5 Fib level
DAILY CL CHART
- CL ends 2022 practically flat but with volatile swings of over 70%
- The parabolic channel remains intact as Oil sits between a wide range between $75 & $90
- Fibonacci retracement 0.236 level at $85 could be the area for bears to initiate shorts
Forward-Looking
As markets gear up for the year ahead, there are expectations of a recession just around the corner. In fact, Michael Burry from the big short says that the US is already in a recession by any definition. With this in mind, we need to be skeptical of long-only strategies.
If we learned anything from last year it was to make the trend your friend. When it comes to indices, I suspect further downside for the first half of the year due to the fundamentals in the marketplace at the moment. Crude Oil and Gold may enjoy a rally however as the Fed slows down on rate increases. With that said, the Fed wants to see 2% inflation which is still a way away from where we currently are at 7.1%.
Keep in mind too that the start of a new year is generally a time that traders, investors, and large institutions re-balance portfolios so expect some volatility in the weeks ahead.
As I mentioned in the final article of 2022, it’s important to set goals and know exactly what you want the markets to provide you with. Read the piece here if you have not already.
