Stock Market Forms Shooting Star for the Week

S&P 500 Weekly Technical Analysis

The S&P 500 has initially rallied during the week and even broke above a major double top before turning around and showing signs of hesitation. By forming the shooting star as we have, it does suggest that perhaps the S&P 500 is ready to start falling again. If it does, then the 4200 level could be a target based upon the fact that it had previously offered a bit of support.

Keep in mind that the stock market has nothing to do with anything other than liquidity, and with what the Federal Reserve is going to do next. We have not focused on the economy for so long that it is difficult to remember what it was like to trade based on earnings or growth. With that in mind, we are going to have to wait to see what the Fed funds futures rate does because if it continues to skyrocket or stay elevated, that will be bad for stocks. There are concerns about whether or not the Federal Reserve will continue to tighten, based on the inflationary headwinds. At the end of the day, that is the only thing Wall Street will be caring about, cheap money.

If we were to turn around and break above the top of the shooting star, that could open up the possibility of reaching the 4800 level. A break above there then becomes more of a “buy-and-hold” scenario, probably shortly after the Federal Reserve capitulates to Wall Street. I do believe that volatility is probably about the only thing you can count on.

S&P 500 Forecast Video 04.04.22

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