S&P 500 Futures Stuck Between Two Major Moving Averages

S&P 500 Technical Analysis

The S&P 500 futures market initially tried to rally during the session on Thursday, but the 50 Day EMA has offered enough resistance to turn the market right back around. The fact that the market is between the 50 Day EMA and the 200 Day EMA suggests that we are building up a bit of inertia to make the next big move. With this being the case, the market is likely to see a bigger move sooner or later, but the question will be directionality as per usual.

If we were to break down below the inverted hammer from two sessions ago, the market then opens up the possibility of a move down to the 4300 level, and then perhaps even the 4200 level after that. On the other hand, if we were to break above that inverted hammer, and by extension the 50 Day EMA, the market will challenge the 4500 level. At that point, we have to start to take into account the possibility of forming an inverted head and shoulders. If that were the case, it would be a very bullish sign, and a break above the 4600 level would confirm it. By doing so, it could kick off a major move to the upside.

As things stand right now, it is a bit of a stretch to think that Wall Street can look past all of the negatives, but really at this point I think it is a situation where we are looking at a recession coming down the road, and it is going to come down to whether or not Wall Street chooses to price that in.

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