The S&P 500 futures fell somewhat hard during the trading session on Thursday, reaching two levels below the 3900 level before recovering.
The S&P 500 futures market fell somewhat hard during the trading session on Thursday, breaking below the 3900 level. The market looks as if it is ready to continue plunging lower, but we may need a little bit of a bounce first. That makes sense. We cannot go in one direction forever because, quite frankly, people will eventually stop panicking. However, the overall fundamental picture for the S&P 500 looks miserable, so I would not take this as an opportunity to get long of the market.
Short-term rallies will more likely end up being selling opportunities, as we have seen multiple times as of late. Looking at this chart, I think it is probably a situation where the 4100 level above is a massive resistance barrier that we will not overcome, at least not anytime soon. The Federal Reserve will have to come out and save the market, but it is not ready yet. Quite frankly, the inflationary picture in America is far too detrimental to worry about Wall Street at the moment. Interestingly, most traders on Wall Street have never lived through a scenario where the Federal Reserve did not bail them out.
This will be fun to watch, but that does not mean that it has to be expensive. Keep your position size reasonable, recognize that the trend is most certainly to the downside, and do not “try to be a hero” at these low levels. A little bit of patience and money management should go a long way in this market over several weeks. Remember the volatility can work for or against you, so be cautious is the one thing that I would tell everyone.
For a look at all of today’s economic events, check out our economic calendar.
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.