Stock Market Approaching Convergence of Technical Indicators

The S&P 500 has pulled back just a bit during the trading session on Thursday, only to turn around and recover again. That being said, the 200 Day EMA is sitting just above, with the 50 Day EMA is slumping down towards it, threatening to make the so-called “death cross” happen. This is a technical indicator that longer-term traders tend to pay attention to, and the fact that it sits right at the 4400 level also makes a certain amount of sense that there will be sellers there as we have seen resistance there previously.

S&P 500 Video 18.03.22

On the downside, the bottom of the candlestick for the Thursday being broken could open up the possibility of a move down to the 4200 level. We are in a downtrend, and I do not know that it changes in the short term. Yes, we have had a nice bounce after the FOMC meeting, but quite frankly a lot of the time these things get turned around to show a lot of ugliness.

If we were to break above the 4400 level on a daily close, then the next major barrier is going to be in the neighborhood of the 4500 level, which has quite a bit of psychology attached to it as well. All things being equal, I am looking for signs of exhaustion above in order to start shorting, because quite frankly this is a market that looks like death. A slowing global economy is not going to help the picture either, but regardless of how bad things may or may not be, markets do not move in one direction forever.

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