The S&P 500 has fallen again during the course of the trading session on Tuesday to show further damage to the marketplace. At this point, we are simply waiting to see what the Federal Reserve says on Wednesday.
The S&P 500 has fallen during the course of the trading session on Tuesday to show signs of weakness yet again. All things been equal, the market has reached towards the 4300 level, which is a significant area of support going back towards the month of October. That being said, the market is likely to see a lot of volatility going forward, especially as we look at the Wednesday session being a FOMC meeting, statement, and of course press conference. Traders are concerned that the Federal Reserve is going to continue to be hawkish, and that has caused a lot of headaches for the market. That being said, the market is more likely than not going to be very noisy during the press conference, as so many traders are basing their next position on the Federal Reserve itself.
That being said, I would be very cautious, and I do think that if we do get a “less hawkish” or even perhaps slightly dovish Federal Reserve, then you should have plenty of time to get long again. On the other hand, if we break down below the 4200 level, that could spell even more pain for this market. I would be very cautious, but at this point in time I am waiting for the Wednesday close to put money to work. Looking at the overall markets, the next 24 hours will be very decisive as to where we go over the next couple of weeks. In general, this is a market that continues to see volatility on a day-to-day basis.
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Chris is a proprietary trader with more than 20 years of experience across various markets, including currencies, indices and commodities. As a senior analyst at FXEmpire since the website’s early days, he offers readers advanced market perspectives to navigate today’s financial landscape with confidence.