Stock Markets Confused for the Week

The S&P 500 initially gapped lower to kick off the trading week, shot higher after that, and then turned right back around to end up forming a less than impressive candlestick. That being said, it is resistive in nature, after forming a very supportive weekly candlestick. This leads me to believe that perhaps the market is trying to figure itself out right now, and that does make a certain amount of sense considering how many moving pieces there are currently. After all, we have the war in Ukraine, interest rates that are almost certainly going to go much higher, and of course a slowdown. None of this is good but it is all fluid and therefore people are betting on differing things.

S&P 500 Video 07.03.22

Some are betting on the fact that the earnings will come in weaker than anticipated, as the economy slows down. Some are betting on the Federal Reserve coming in and bailing everybody out, thereby offering liquidity. Some other people are betting on the damage that award does. Quite frankly, it is all bit exhausting, but it is very possible that we see this market continue to be extraordinarily volatile. From a longer-term standpoint, I think it is difficult to trade with any type of science because quite frankly the latest headline could move the market quite drastically. Because of this, I think that the conflicting candlesticks sum up exactly what we are going to see, more choppy and sideways consolidation with no real clarity at all for the next couple of weeks.

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