S&P 500 Drifts Lower Again

The S&P 500 has fallen a bit during the trading session on Thursday as we continue to see negative pressure around the world. The massive green candlestick from the previous session was a bit of a shot across the bow, but really at the end of the day there is no real reason for the S&P 500 to climb at this point. The 50 day EMA is starting to reach towards the 200 day EMA, forming the so-called “death cross.” With this in mind, longer-term traders will start to jump in as well, so I think it is going to be difficult for the S&P 500 to rally for a significant amount of time.

S&P 500 Video 11.03.22

On the downside, I see the 4100 level as a natural target but if we break down below there then the most obvious target after that is going to be the 4000 handle. On the upside, if we break above the top of the candlestick for the trading session on Wednesday, that could open up a possible move towards the 200 day EMA. However, this is a market that I think will remain very choppy and volatile and of course, headline-driven.

There are a lot of concerns about global growth, tightening monetary policy, and of course the war in Ukraine. Ultimately, I think this is a market that has much further to go because the Federal Reserve will more than likely continue to be very hawkish. Keep in mind that there is an FOMC meeting next week where we are anticipating a 25 bps hike. If they are more aggressive with their statement or at least day just as aggressive, that might send Wall Street much lower.

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