Weekly Technical Analysis of the S&P 500

The S&P 500 had another tough week, falling to the 4387 mark. The market is expected to continue to view the 50-week exponential moving average as a possible short-term support level. Finally, this is a market that I believe will continue to face significant downward pressure, maybe pushing the market toward the 4100 level.

Bear in mind that the market is undergoing a number of changes at the moment, not the least of which will be rising interest rates. As a result of this, and the fact that Wall Street traders are attempting to ascertain whether they will be bailed out by the Fed, I believe we will continue to see a great deal of loud behavior. At this stage, rallies still appear suspect, and at that point, I would view symptoms of tiredness as an opportunity to go short again. However, you should definitely pay more attention to short-term charts than to longer-term ones, as there will be a lot of noise. Nonetheless, it appears as though we will struggle to find a rationale to extend.

According to this chart, if we break below the 4100 level, we are likely to hunt for support at the 4000 level, possibly even breaking below it. Not that we have broken through a significant uptrend line, which is something that many longer-term traders will be watching closely as well. At this moment, the situation appears precarious to say the least.