In today’s post, we’ll go over the SP 500 forecast for the time being, the technical analysis of the SP 500 Renko charts, covered call strategy and important support and resistance levels on multiple timeframes.
SP 500 Forecast and Charts
A number of different algorithms are used to carry out the calculations. In addition to historical S&P 500 values over the previous five years, this forecast takes into account other variables such as stock market indices and economic data to arrive at its forecast.
December 20, 2021
Incorporating today’s closing price of the $SPX, which was 4,568, into the forecast model keeps the prognosis on par with the forecasts provided by the previous forecast models. The upward trend has continued to be observed.
According to the model’s predictions on December 1, the index was expected to rise sharply in December and be near the 4,900 mark. That appeared to be a little too aggressive. As of right now, it is still expected to close in the vicinity of 4,800. At this point, it appears highly unlikely, given the current situation. However, we cannot eliminate the possibility that the SP 500 will reach 4,800 in the coming 11 days because anything is entirely feasible. Among the many things that continue to stand out is the forecast model’s stalling near the 5,000 mark, which is one of the most significant. It will be fascinating to see how things progress over the next few months.
Prior SP 500 Forecast
December 9, 2021
By factoring in today’s closing price of the $SPX, which was 4,667, into the forecast model, the prognosis stays comparable to the forecasts provided by the following models. The trend continues to be upward. However, one thing that continues to stand out is the halt near the 5,000 mark in the index. It will be interesting to observe how things develop over the next few months.
December 1, 2021
The forecast for today is based on the closing price of the SP 500 for November, which was 4,567. As can be seen on the chart, it continued to show signs of a sharp upward move in December before beginning to stall near the 5,000 level.
Month Forecast Dec-21 4,902 Jan-22 4,941 Feb-22 5,009 Mar-22 5,009 Apr-22 5,318 May-22 5,356 Jun-22 5,453 Jul-22 5,569 Aug-22 5,697 Sep-22 5,429 Oct-22 5,601 Nov-22 5,690
November 15, 2021
The first S&P 500 forecast was completed in early November, immediately following the previous month’s close. It is anticipated that the $SPX will continue its upward trend in the foreseeable future, according to the forecast model depicted below. However, it appears that there is only a limited amount of room for upward movement left, and that the trend will begin to plateau in the coming months. It represented an upward movement that was followed by a retracement.
At that point in time, we have no way of knowing when the retracement will take place or how severe the ramifications will be. However, the fact remains that it is sending a message to investors, advising them to proceed with caution in the meantime.
Month Forecast Nov-21 4,775 Dec-21 4,838 Jan-22 4,812 Feb-22 4,762 Mar-22 4,677 Apr-22 4,892 May-22 4,851 Jun-22 4,896 Jul-22 4,987 Aug-22 5,116 Sep-22 4,912 Oct-22 5,080
SP 500 Forecast and Renko Charts Technical Analysis
As a result of the COVID Omicron fiasco, the SPX was able to regain its footing at the 4,500 level and stage a remarkable comeback. It soared more than 200 points and came dangerously close to reaching an all-time high before reversing course. On the basis of today’s SP 500 trading patterns and prognosis on the Renko chart, it appears that the $SPX may be headed down into the 4,500 area and re-testing the strength of the support there. In light of the recent strong bearish momentum and the fact that the uptrend trend line from 4,302 to 4,518 has been broken, it is expected that the $SPX will target the 4,500 area in the coming days if the support around the 4,542 zone does not hold.
Writing Covered Calls
Covered call writing can be quite useful when the market is directionless. It’s a great way to protect your portfolio’s equities against losses. Writing covered calls may reduce your investment’s cost basis, improving your chances of profit. Writing out-of-the-money calls can be profitable if you believe in the underlying stock. If you are uncertain about the stock’s future performance, you can profit by selling calls at or near the strike price.
Remember that in a downtrending market, in-the-money calls offer significantly more protection than out-of-the-money calls. For further information on how to include a covered call strategy into your investment portfolio, please see this post, which goes into detail about how to use in-the-money (ITM), at-the-money (ATM), and out-of-the-money (OTM) covered calls in a variety of market environments.
- The traditional 6-point brick size is used in the Renko chart.
- On the upside, the 4,600 region serves as an immediate resistance level, followed by 4,650.
- On the downside, 4,542 is the first level of support, followed by 4,500, and subsequently 4,464.
Renko Charts Technical Analysis
Daily Renko Chart
In the short term, the $SPX is very close to the psychologically important level of 4,500. It has dropped precipitously since making a significant 200-point comeback a few weeks ago. The 4,700 barrier, on the other hand, has proven to be a particularly difficult hurdle to clear. Given the fact that the ascending trend line extending from 4,302 to 4,518 has been broken, it is expected that the $SPX will retest the support near the 4,500 level in the coming days. Even if it can recoup some of its losses at this level, reaching 4,650 will be somewhat difficult due to the ascending trend line acting as a strong resistance.
5-Minute Renko Chart
On the 5-minute chart, it is clear that the support area between 4,542 and 4,500 is of particular importance, as evidenced by the pattern. Whether the rapid decline will come to an end at this level or whether it will continue on its downward trajectory until it reaches the 4,500 level is now in question. If it falls below 4,500, it will have gloomy implications for the market. As a result, it will take more time for the bullish momentum to regain its strength. On the upside, 4,600 appears to be a significant resistance level, followed by 4,650. The S&P 500 will almost certainly retest the level of support near 4,500 to see if it can recover from there.