S&P 500 Continued the Beat Down
The S&P 500 has broken down rather significantly after initially gapping lower. That being said, the market continues to see a lot of noisy behavior, and as a result it does make a certain amount of sense that people are simply stepping away. We are sitting just above the 200 day EMA, and that of course has a certain amount of influence. That being said, if we break down below the 200 day EMA it is likely that we would see some type of algorithmic selloff at that point, perhaps pushing things even lower.
S&P 500 Video 24.01.22
We could get a little bit of a bounce here, but at this point in time I am not going to try to be a hero. We would need at least a couple of days of green candlestick then things could change, and of course the fundamental situation would have to be different as well. Ultimately, the 4500 level is worth paying close attention to, so it does make a certain amount of sense that a breakout above there would be really good.
If we break down below the 200 day EMA, it is likely that we could go looking towards the 4250 handle. After that could come the 4000 level. Obviously, it is going to come down to whether or not the interest rate situation out there is going to have a major influence on this market as well, so if they continue to rise, that could be very toxic for the S&P 500 and stocks in general. As long as we continue to see that correlation play out, it is almost impossible to get overly bullish of the markets. At this point, it makes quite a bit of sense that we would see more volatility than anything else. You have to keep in mind that if the VIX continues to rise, that also will cause major issues.
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