Index Continues to Bounce Around

I look at rallies as selling opportunities but this might be a trait for next week.

The S&P 500 has gone back and forth during the trading session on the trading session for Thursday, as we continue to see the markets flow back and forth. Ultimately, the 3700 level underneath has offered significant support that we can show as a continue to go back and forth. Ultimately, the S&P 500 continues to see the market as one that is going to bounce back and forth and show a lot of noise. The 3900 level above is currently the top of the short-term trading range.

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When you are looking at the chart, it’s difficult to forget the fact that the 50 Day EMA sits just above the 3900 level. The market has been noisy over the last couple weeks, as we are trying to determine whether or not the Federal Reserve is going to drive the US economy into a recession. Here’s a hint: it is. However, there are plenty of people out there that are willing to blindly ignore what’s going on, and that’s what we see in the charts. It’s worth noting that J.P. Morgan stated during its earnings call that they had “never seen an economic situation this bad.”

I do think that we probably have a little bit of a bounce in the short-term, but the bounce will more likely than not be sold into, especially at the first signs of exhaustion. With rates going higher, and inflation still ripping higher, it’s difficult to imagine that profits are going to be something that companies see. That being said, it’s not until we break above the 4200 level that the trend could change. Ultimately, I don’t see this being a likely situation, but if that were to happen, you cannot argue with price.

Ultimately, as we head into the weekend, I think a lot of people will probably choose not to put a lot of money into the market, and therefore it’s going to continue to stay in this range. However, we do have the Michigan Consumer Sentiment figures coming out, and that might be something worth watching as while Wall Street thinks the US economy is perfectly fine, those of us who live in the real world and west of the East River recognize that it’s a very different situation. I look at rallies as selling opportunities but this might be a trait for next week. Ready to trade our S&P 500 daily forecast? Here are the best CFD brokers to choose from.