S&P 500 Sluggish at Big Figure

It looks as if the S&P 500 is dealing with a little bit of “market memory” early in the session as the 4500 level continues to be important. After all, this was a major support previously, so the question now is whether or not we are seen a little bit of “market memory” coming back into the mix? That would make a certain amount of sense, especially as the 50 day EMA is approaching the same general vicinity. Because of this, I think we probably continue to see a lot of noisy behavior, but quite frankly I would not be surprised at all to see a little bit of a pullback. This rally has been explosive over the last couple of days, so a certain amount of momentum probably is being lost.

S&P 500 Video 02.02.22

Having said all of that, if we turn around and take out the 50 day EMA to the upside, that would obviously be a very bullish turn of events and could have buyers scrambling back into the market in a bit of a panic bid. I think there are a lot of questions out there still and it does make a certain amount of sense that we pulled back to the 200 day EMA at the very least in order to build up the necessary inertia to turn things around. That being said, my default position is going to be one of hesitation and caution. I do not think the selling is over due to the fact that there are a lot of people underwater still, and looking to get out at anything close to their entry price.

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