S&P 500 Struggling With 50 Day EMA

The S&P 500 has rallied a bit during the course of the trading session on Wednesday to reach towards the 50 day EMA, but at this point in time the market has pulled back midday at the 50 day EMA, and if we can break down below the 3500 level, we could see an acceleration to the downside. Nonetheless, the market certainly looks as if it is starting to slow down, then it is possible that we could go looking towards the 200 day EMA. We had recently broken down rather significantly, and at this point in time we have pulled back about half of the distance.

S&P 500 Video 03.02.22

On the other hand, if we break above the 50 day EMA on a daily close, then it is possible that we could go looking higher to reach the previous uptrend line, where we would anticipate seeing selling pressure as well. All things been equal, this is a market that will continue to see a lot of volatility due to the fact that we have the jobs number coming on Friday, and of course people are starting to worry about whether or not inflation is going to get out of hand.

The Federal Reserve is looking to tighten monetary policy, so a lot of people will be worried about stocks in that scenario anyway. At this point, I think the market continues to see a lot of noisy behavior, but I think we probably have a little bit more to hear from the bearish traders out there. In general, you need to be very cautious about the position size as well.

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