Stock Markets Give Up Gains for the Week
The S&P 500 has rallied initially during the course of the week, but then turned around to show signs of weakness. By forming a bit of a shooting star, it suggests that we have further to go to the downside. If we break down below the bottom of the candlestick is very likely that we will go looking towards the hammer underneath. The hammer underneath of course would be a supportive level, and I think we are going to have to retest it. If we were to break down below the bottom of the hammer, then the market could fall apart, perhaps reaching down to the 4000 level.
S&P 500 Video 14.02.22
If we break out above the top of the last two candlesticks, then it is likely that we could go looking towards the 4700 level. The previous trendline looks as if it is going to hold resistance so far, and therefore it will be interesting to see if we do in fact continue to react to the threat of interest rate hikes and of course the Federal Reserve meeting on Monday that was just announced. In general, I think this is a market that will continue to be very noisy and cautious, so I do favor the downside for the short term. Longer-term, we will have to see how this plays out because the 4000 level would of course attract a lot of attention. The Federal Reserve is not necessarily supposed to worry about the stock markets, but we all know that they do. With this being the case, expect volatility more than anything else.
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