S&P 500 Continues to Show Choppy Behavior

The S&P 500 has initially fallen during the trading session on Friday as we continue to see plenty of concerns out there. That being said, the market has turned around to show signs of life, and after that it is likely that we will continue to see sellers later. In general, the market is simply trying to figure out where to go as the Federal Reserve has decided to freak everybody out with the idea of monetary tightening. Furthermore, if we do have interest rate hikes, that will in theory dampen the economy and slow it down.

S&P 500 Video 31.01.22

Looking forward, we could get a little bit of a bounce, but I think that will probably be sold into. The markets will continue to look at this through the prism of fear, but the 4200 level giving way to selling pressure opens up the possibility of a move towards the 4000 level. The 4000 level of course will attract a lot of attention and have a lot of options expiring in that general vicinity, so it does make a certain amount of sense that we would see volatility and reckless behavior, and result it is likely that the volatility will continue to be a major issue, and therefore you need to be cautious about your position size.

As a general rule for the last week or so, I have been trading in smaller positions than usual, due to the fact that you simply cannot hang on to a position with any type of conviction in the short term. Longer-term, we will of course set things straight, but right now it is a mess.

For a look at all of today’s economic events, check out our economic calendar.