S&P 500 Futures Sitting on 50 Day EMA

S&P 500 Technical Analysis

The S&P 500 has initially tried to rally during the trading session on Thursday but then gave back gains to show signs of exhaustion. The 50 Day EMA sits at the bottom of both the Wednesday and Thursday candlesticks, at least as I record now. If we break down through the 50 Day EMA indicator, then it could open up a move down to the 200 Day EMA at the 4400 level.

All things being equal, we are still hanging on by our fingertips to a bullish flag, and if we break down then the recent pullback will perhaps open up quite a bit of selling. If we turn around and take out the highs of both the Thursday and Wednesday candlestick, it is likely that we could go higher. At this point, the market is likely to continue to see a lot of external influence, not the least of which would be the idea of the Federal Reserve becoming much more hawkish, which of course is very damaging to stocks.

We have seen the FOMC Meeting Minutes come out, and they were much more hawkish than people had anticipated. Because of this, we have seen the S&P 500 selloff recently. That being said, the market is likely to continue to be very erratic and nervous, because quite frankly there is a huge fight between whether or not the Federal Reserve can get hawkish, or if they will come to save Wall Street. It starting to look like Wall Street may be on the outside finally, as inflation has gotten far too out of hand. Expect choppy behavior, but it still looks as if the sellers are starting to flex their muscles.

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