Stock Indices Recover on Tuesday

S&P 500 Technical Analysis

Early on Tuesday, the S&P 500 dropped below the 200 Day EMA, and the futures market showed hints of falling down again, but we have since turned around and slammed into the 50 Day EMA. Because this is a highly watched signal, it's not surprising that we're bouncing about here. If we can break over the 4500 mark, the S&P 500 futures might attempt to reclaim the critical 4600 level.

When you look at the chart, it seems to be in a wonderful position to rebound, but the key issue is how will we react after the bounce? I believe that, at this time, we are more likely than not to see sellers return to the market, particularly if inflation continues to rise. As a result, I'm not particularly enthusiastic about purchasing S&P 500 futures, but I do know that a short-term rebound is more likely than not the result of the previous few days.

Keep your position size minimal since we're trading on the recent panic or freak out, which always makes trading harder. The topic of whether or not the Federal Reserve would bail out Wall Street is still on everyone's mind, so it will be fascinating to watch how things play out in the coming weeks.

Unfortunately, this implies that volatility will increase rather than decrease. At the present, this is a highly risky market to be engaged in.