The S&P 500 tried to rally during the trading session on Wednesday but continue to find sellers at the 2750 handle. This is simply a repeat of the Tuesday session.
The S&P 500 continues to struggle at the 2750 handle, and it looks as if we are going to continue to go lower. To the 2700 level is the initial target for me, with the 2650 level after that being targeted. Ultimately, I do think that we go down to test the lows at the 2600 level, which have been so important. If those levels give way, then the next stop will be 2500. I think there are so many problems with global growth right now that it makes perfect sense that the S&P 500 continues to struggle. Rallies at this point continue to be sold, and it’s not until we get a daily close above the 50 day EMA that I would be interested in buying. Even then, I would be a bit cautious, because quite frankly this market could turnaround at any moment.
Eventually, we will find value hunters coming back into the market, but we have been so parabolic over the last several years and we are finally getting a Federal Reserve that isn’t looking to loosen monetary policy, now stocks have to swim on their own. Obviously, they haven’t had to do that for a decade now, so this is a completely different scenario.
I think that people are waiting for the so-called “Santa Claus rally” for the end of the year, but they may not get it at the way things are going. Really at this point, the only way that does happen as if we can stay above the 2600 level.
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.