S&P 500 Has Wild Week

The S&P 500 has fallen initially during the trading week, only to see buyers come back in and pick it back up. That being said, the 50 week EMA is worth paying attention to and it is obviously recognizing that the 4200 level is offering a little bit of support. All things been equal, this is a market that I think will struggle going forward, as we continue to see a lot of concerns around the US economy and inflation, not to mention the Federal Reserve.

S&P 500 Video 31.01.22

The Federal Reserve has reiterated its desire to raise interest rates and work off the balance sheet, which of course is what the markets have lived on for 13 years. That being said, if we break down below the candlestick from the trading week, then it is likely that we go much lower. At that point, I think we go looking towards the 4000 level, which is very likely the way we have been behaving. However, if we can hold this hammer for the last five sessions, then it is possible we could go looking towards the 4500 level.

The 4500 level course is a large, round, psychologically significant figure, and a lot of people will be paying close attention to it. If we could somehow break above there, then we may have an opportunity to recover, but at this point in time I think the markets are still very much in “danger mode”, and that means that we could very well see selling on rallies going forward as volatility continues to be an issue.

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