Weekly technical analysis of the S&P 500
The S&P 500 fell sharply during the week’s trading in the futures market to fall as low as the 3858 level before reversing and rebounding. The resulting candlestick is a bit of a hammer, but I also see that there is a lot of resistance just above in the 4100 area. The area directly above also offers quite a bit of resistance. In other words, any rally at this point will most likely find many sellers. In fact, from a longer-term standpoint, I would need to see the inverted hammer highs from the previous week being taken out to the upside. That essentially means 4300.
If we break below the bottom of the candlestick this week, it will open up a much deeper move, perhaps down to the 3600 level. We’ve certainly broken through significant support, so one has to wonder if we’re just going to bounce around this area to test resistance? I suspect the answer will be obvious in the next few days. At this point the market looks threatened but one has to wonder how much worse this would have gotten had we not had the weekend. The market was essentially a bit of a head and shoulders as well.
The only thing you can count on at this point is high volatility and hence you need to be careful about sizing your position. Volatility will only get worse at this point, so be careful.
S&P 500 forecast video 05/16/22
For an overview of all of today’s economic events, check out our economic calendar.