Technical analysis of the S&P 500
The S&P 500 futures market initially tried to rally during Thursday’s session, but the 50-day EMA offered enough resistance to reverse the market. The fact that the market is between the 50-day EMA and the 200-day EMA suggests that we are building some inertia to take the next big step. If this is the case, the market will likely see a bigger move sooner or later, but the question, as usual, will be direction.
If we break below the inverted hammer 2 sessions ago, the market will open up the possibility of a move down to the 4300 level and maybe even the 4200 level thereafter. On the other hand, if we break above this inverted hammer and hence the 50-day EMA , the market will challenge the 4500 mark. At this point we need to start considering the possibility of forming an inverted head and shoulders. If so, it would be a very bullish sign and a break above 4600 would confirm it. By doing so, it could initiate a large move higher.
As things are right now, it’s a bit of a stretch to think that Wall Street can see past all the negative things, but I think at this point it’s really a situation where we’re looking at a recession, that’s coming, and it will depend on whether Wall Street is pricing it in or not.
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