S&P 500 Pulled Back to the 50 Day EMA

S&P 500 Technical Analysis

The S&P 500 has pulled back significantly during the trading session on Wednesday to reach the 50 Day EMA. The 50 Day EMA attracts a lot of attention, so is not a huge surprise to see that there is a little bit of a fight going on at the moment. Ultimately, the market is also testing the bottom of a bullish flag, and therefore it will be interesting to see how this plays out. If we do recover from this area, it is still a possibility that we see bullish pressure, but it is also obvious that we are seeing a lot of concern at the moment, and therefore it is worth noticing that this flag needs to be validated at the bottom to make things turn around.

The size of the candlestick so far is rather negative, but if we break it down below the 50 Day EMA, the market then could go looking toward the 200 Day EMA after that. A breakdown below the 200 Day EMA would be a major negative sign, and then the market could go looking to reach the 4200 level. On the other hand, if we turn around and rally from here the bullish flag is still very much intact and could attract a lot of attention. If we can break above the top of the flag, then the market is likely to go much higher, but this is going to come down to liquidity more than anything else. Pay close attention to the Federal Reserve, because the more hawkish it sounds, the more Wall Street will throw a tantrum.

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