Stock Markets Jittery on Ukraine Tensions

The S&P 500 initially tried to rally during the trading session on Wednesday but has given back quite a bit of the gains in order to form a slightly negative candlestick. We are sitting above the 200 day EMA which in and of itself probably will attract a certain amount of attention, but it is worth noting that the stock market looks tenuous at best. Ultimately, we need to get some type of resolution on a whole host of issues, not just the Russia/Ukraine tensions.

S&P 500 Video 17.02.22

Inflationary concerns abound, and with a retail sales figure much hotter than anticipated in the United States, it does suggest that perhaps inflation will be fought even harder by the Federal Reserve. Professional traders are starting to note that the rate of change in retail sales is declining, although it did beat expectations. In other words, the economy is slowing down, just not as bad as some forecasters had predicted. While that could be thought of as a particularly good sign, or at least a “less bad sign”, the reality is that the market is highly overvalued at the moment, and therefore still needs to be worked off.

If we were to break down below the hammer from the Monday session, that opens up the floodgates to go looking towards 4250. A breakdown below the 4200 level could really get this market moving much lower. As far as buying is concerned, I would need to see this market take out the 4600 level to get remotely confident at this point in time. Why do not necessarily sell the index outright, I will be a buyer of puts.

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