Stock Markets React to 7% Inflation

The S&P 500 has rallied significantly early during the trading session on Wednesday but has given back quite a bit of the gains. At this point, the question is whether or not we can continue to bring momentum to the market? The $4800 level above is an area that has caused quite a bit of resistance and therefore I think it makes quite a bit of sense it will more than likely be a target over the longer term. That being said, we did give back quite a bit of the gains and that of course suggests that perhaps it is not clear sailing.

S&P 500 Video 13.01.22

That being said, when you look at the chart overall, it is worth noting that we had formed a couple of hammers in a row right at the 50 day EMA which does suggest that there is a certain amount of support here. Because of this, I think the market probably finds reasons to go higher one way or another, so therefore I think we are going to continue to see more of a “buy on the dips” attitude, as we have seen for what seems like an entire lifetime. Quite frankly, a lot of traders these days do not really know what a longer-term bear market looks like, so quite frankly they probably do not even think about it.

If we can break above the $4800 level, then it is likely that the market goes looking towards the $5000 level over the longer term, and quite frankly I think Wall Street already knows what to expect from the Federal Reserve, so they are not overly concerned.

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