Investing: The market is preparing for a further decline

10 November 2022 130
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Source: Investing

Authors: Michael Kramer

ArticleOriginal article

Publication date: Thursday, November 10, 2022


Yesterday, stocks fell sharply, dropping the S&P 500 Index by about 2%. The market sell-off accelerated after the 10-year U.S. bond auction. The market sell-off accelerated after the 10-year U.S. bond auction. The auction didn't go well with a price of 4.14% compared to the yield at the time of the issue of 4.106%.


Today we are waiting for the release of the Consumer Price Index, which will play an important role in the S&P index dynamics. As a result of the increasing volatility of the VIX, the VVIX has risen slightly over the last couple of days. The rise in the VVIX can sometimes be an indicator of a rise in the VIX and a fall in the S&P. I believe the market should be preparing for a higher-than-expected Consumer Price Index report, and traders should look for hedging funds after the Consumer Price Index is released.

VIX Daily Chart

Meanwhile, the S&P has fallen out of a diamond-shaped reversal pattern. The first support level should be 3,640 points on the index.

Hourly chart of S&P futures



An exit from the technical diamond pattern coupled with potentially weak inflation data could contribute to further declines in the S&P index. Therefore, there is an opportunity for opening short positions on the index, the first target of this movement is 3640 points.

This content is for informational purposes only and is not intended to be investing advice.

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