S&P 500 Has Tough Week Again

The S&P 500 has rallied a bit during the course of the trading week, but then turned around to show signs of exhaustion. The 4500 level has offered a bit of a brick wall, and it does look like we are ready to go lower. We are sitting at the 50 week EMA, and likely to go revisit in the 4250 handle. Geopolitical tensions on the Ukrainian border will continue to drive markets lower, but more importantly we have the inflation situation in the United States that is going to continue to see slowing growth. All things been equal, if we can break down below that hammer from a couple of weeks ago, that could open up fresh selling.

S&P 500 Video 21.02.22

Until the Federal Reserve comes into the situation and rescues Wall Street, it is very difficult to imagine a scenario where the S&P 500 has a sustainable run to the upside. While it has been rather negative over the last couple of months, when you look at the longer-term chart you can see just how little in the way of damage we have done so far. In other words, we could go much lower, and I think you should keep that in the back of your mind.

The markets will continue to be very volatile, so you should keep that in mind. If you do try to get involved, you should always keep in mind that there are wicked bear market rallies along the way if we are going lower, but one way to fight that potential minefield is using smaller positions.

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