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SP500 - Recap 2022

Updated: Apr 13, 2023

2022 turned out to be one of the most difficult years on the markets which saw practically all the asset classes clearly suffering in the face of a complex geopolitical situation which is still struggling today to show signs of turning point.


While the bond market has been hammered, rates have climbed inexorably.

Not surprisingly, only gold is saved, which opens and closes the year in the 1830 points area.

It was in fact the worst year since the 2008 subprime crisis with the "ES" index losing up to 27% from the highs of 2021 and closing 2022 at -19%.


Volume-based analysis:

2022 saw a fairly balanced distribution of traded volumes.

The profile of the distribution bell is in fact in the shape of a "D" and sees an annual VPOC at 3960, delimited by VAH at 4235 and VAL at 3630. This is the area with the greatest exchange of the year.

We observe two main nodes with low volumes at 4740 and 3530 which saw prices break down and unleash the panic selling at the beginning of the year and then rebound in mid-October reaching the lows of 2022.

On the other hand, the high volume nodes (4140 and 3900) acted as a magnet and then as a resistance during the bullish impulses observed over the year. (prices that moved according to the "back to value and acceptance" principle)

The structure that has been established is to all intents and purposes a descending channel outlined by a well-defined bearish trendline that has been successfully tested several times.



Analysis based on key ranges and pivot points:

The reaction of prices on the highs of 2021 is immediately evident. The level is rejected and the test movement starts up to midpoint 2021.

The area in question resists the first attack and determines the first key range of the year (4808 - 4227).

Prices develop a trading range that tests the Camarilla Pivot L4 secondly, a level that immediately acts as excellent support by invalidating a potential extension of the range in question. The range is broken on 09.05.22 after a strong gap down opening which triggers the definitive expansion. However, let's first observe a textbook retest of midpoint/L4 and then the bearish impulse that takes us up to the test of the lows of 2021, another important level to keep an eye on.

We therefore witnessed the rejection of the highs and a test of the lows 2021 (17.06.22).

This impulse move extends the key range by precisely 100%.

The 2021 lows prove to be very sensitive and the index immediately finds the rebound that retake prices at the umpteenth midpoint retest (16.08.22).

The movement during the last quarter of the year mostly sees laterality delimited by the lows of last year and the midpoint area of 2021 with reactions on resistances strengthened by confluences between pivot points and the high-volume nodes shown above.

The index finally closes at about halfway between the low and the midpoint of 2021.



Conclusions:

We have witnessed a very volatile year where the final range is essentially defined by the highs and lows of 2021. The double minimum and the subsequent bullish impulses still denote an excellent bullish defense of the lows around the 3600 point area.

The final calculated range is 1306 points, well above the 10-year average (748 points).

It is the second ranked extended year since 1997.



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