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S&P 500 Has Another Tough Outing

By:
Christopher Lewis
Published: Feb 4, 2022, 18:08 UTC

The S&P 500 has fallen a bit during the course of the trading session on Friday as we continue to see a lot of negativity when it comes to equities.

S&P 500 Has Another Tough Outing

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The S&P 500 fell rather hard during the trading session on Friday as the jobs number came out much hotter than anticipated. That being said, the interest rates in America spiked as a result, and that of course works against the value of the stock market, as it is a long running correlation. That being said, the market has continued to see noisy behavior going forward, as the Federal Reserve tightening interest rates of course will have people freaking out. At this point, it still looks very much like a “sell on the rallies” type of situation.

S&P 500 Video 07.02.22

That being said, the 50 day EMA above is at the 4570 level, so if we were to break above there then the market could go looking towards much higher levels. We had recently broken down significantly and then bounced to test the 61.8% Fibonacci retracement level. Falling from there does make a certain amount of sense based upon Fibonacci retraining, but at this point in time if we are going to continue seeing a lot of questions about growth and central banks, I just do not see a situation where the market has the ability to go much higher. At the very least, you should look at this through the prism of being stuck between the 200 day EMA on the bottom, with the 50 day EMA above.

That typically will “squeeze Price”, and as a result expect a lot of noisy moves intraday. Longer-term, we have a lot of questions asked about interest rates and central banks right along with inflation. Buckle up, things are going to get worse from a volatility standpoint.

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

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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