S&P 500 Attempts to Stabilize

Technical Analysis of the S&P 500

The S&P 500 originally fell during Monday's trading session, but subsequently rallied to reclaim the 3700 level in the futures market. The market may be slightly oversold at this moment, but I believe any rise at this point will be viewed as a shorting opportunity at the first signs of weariness. Rallies are still being viewed with distrust by the market, as they should be. The Federal Reserve will do everything it can to tighten monetary policy, and as a result, prices are expected to fall much more.

The 50-day exponential moving average (EMA) is slightly below 4100 and is declining from there. At this time, it appears that it will swiftly approach the 4000 level, which is the enormous, round, psychologically significant number that many traders are watching. However, given the Federal Reserve's current monetary policy tightening, we're going to see a lot more downward pressure.

Furthermore, profit projections must be written down, something the majority of companies have yet to accomplish.

Finally, we are a little oversold, but that oversold position should provide a wonderful selling opportunity above, so I believe symptoms of fatigue are what you should look for following short-term gains. It's also worth paying close attention to the US dollar, as it will have a significant impact on where we go next, and so I believe the US Dollar Index is probably worth paying close attention to.

Finally, I feel that volatility will continue to be a factor that you should be aware of.