S&P 500 Continues to Look Uneasy

S&P 500 Technical Analysis

The S&P 500 has rallied a bit during the trading session on Wednesday as we continue to see a lot of volatility. At this point, the market is likely to continue seeing a lot of volatility, but I think it is only a matter of time before the seller steps back into this market and starts shorting.

The 3700 level has held, but right now people are looking for the Federal Reserve to get aggressive against inflation, which for the short term at least, is a bullish thing. That being said, it is only a matter of time before we get short again, so I’m looking for some type of exhaustion with that we can get involved.

I don’t really have a scenario in which I’m willing to buy the S&P 500 at the moment, because the economy is heading into a slowdown. We are not seeing a rate of change that favors growth, and until then the stock market will suffer over the long term. Yes, we will get significant bear market rallies from time to time, but ultimately, I think this is going to end up being a nice opportunity to get short of it again.

If we can break above the 50-Day EMA, then it’s likely that we could break out to the outside. The 4200 level is an area that is a massive barrier and breaking above there could be a major sign of a trend change. We are lifetimes away from there right now, and I do think that we have further to go to the downside. A nice short-term rally makes sense, but I think given enough time we will continue the overall trend.

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