S&P 500 Takes Beating on Tuesday

The S&P 500 has sold off a bit during the trading session on Tuesday as we are threatening an uptrend line and the 4600 level as I record this. That being said, a lot of traders out there are freaking out about the idea of the Federal Reserve raising interest rates. In fact, the only thing that anybody seems to be talking about, so at this point in time I think this is a story that is eventually going to run out of steam. Ultimately, even though the Federal Reserve is tapering and theory, the reality is they may not be able to do so, at least as things stand right now.

S&P 500 Video 19.01.22

The equity markets are likely to be extraordinarily volatile for the next couple of months, so most traders are going to need to be very cautious with jumping in and most certainly will have to pay close attention to the position sizing aspect of the market itself. If this keeps up, we will probably get some type of wicked selloff, followed by the mother of all buying opportunities. 4500 level underneath is essentially the absolute bottom of the market right now, and as we are worried about the Fed tightening cycle, it is very possible we could get a lot of sideways choppiness over the next couple of weeks, if not months.

We are in the midst of the “blackout” for the Federal Reserve, meaning that we are just a couple of weeks away from a meeting and therefore they will not be speaking publicly. This could lead to a lot of sideways and choppy behavior as well.

For a look at all of today’s economic events, check out our economic calendar.