Yesterday’s session finished out the first quarter of 2022 and what an interesting three months it has been, exclaims Ian Murphy of

The Russian invasion of Ukraine totally transformed the political landscape, while markets are grappling with the economic fallout and runaway inflation.

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The quarter was characterized by a 14.6% decline in the S&P 500 (SPX) followed by a reaction bounce which gained 11.5% from the lowest point. At this stage, a pause for breath would not be unexpected. This may be what we are seeing in the weekly price bar (left chart) which pierced above the resistance level previously highlighted but then reversed, leaving a long tail poking through the line.

The fact that this weekly price bar failed to break through the resistance line and close above the 1ATR line may also be an indication we are forming a first lower high on the S&P 500. It’s too early to say for sure, and there is another session today before the bar finishes out, but these two overhead lines must be breached if the bull market is to resume. If not, then the path of least resistance from here is down.

Make sure protective stops on long positions are in place.

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