[ad_1]
It is worth noting that the market is rather neutral, which is interesting considering just how bullish it was the previous three days.
The S&P 500 has been rather messy as of late, as Jerome Powell has been summoned by Joe Biden for a conversation. At this point, the reading of the market is that “Uncle Jerome” is going to come and save everybody. That being said, it is more likely that Pres. Biden will tell Powell to become increasingly hawkish, as inflation is going to decimate the Democratic lead in all seats of government.
That being said, hope burns eternal on Wall Street and there is always a narrative to push the markets around. I think that’s most of what’s going on, and of course a bit of short covering. That being said, the 50-day EMA sits at the 4200 level and should offer a bit of resistance. The market breaking down below the bottom of the candlestick for the trading session would be a negative turn of events, as it would show just how negative this market is, and how resistive this area continues to be.
Even if we break above the 4200 level, it’s not really into would break above the 4300 level that it would show a significant amount of momentum to make people pile in this market, as it has been so beaten up, and there are plenty of economic reasons to think that stocks should be lower. In fact, the Federal Reserve has even had several members explicitly say that they need stock prices lower. We need wealth destruction in order to fight inflation because it destroys demand. I do believe that it’s only a matter of time before stock traders get hugely disappointed, but right now it looks like the latest rumor and speculation have fueled a little bit of a recovery.
It is worth noting that the market is rather neutral, which is interesting considering just how bullish it was the previous three days. This is exactly where you would expect to run into trouble, so that is worth noting as well. The area below current trading is very noisy, so I don’t necessarily think that we will slice right through it and go to the 3900 level easily, but I do recognize that it’s a very real possibility given enough time. All things being equal, I remain rather bearish of this market as I think nothing has truly changed.
[ad_2]