Nov 24, 2022 16:36
Prior to the FOMC Meeting Minutes being released late on Wednesday and the Thanksgiving break on Thursday, the S&P 500 E-mini contract has been rather quiet. The underlying index will be closed, but there will be some electronic trading on the futures markets, but it will be considerably limited. It is tough to conceive that this market will genuinely take off unless the FOMC Meeting Minutes contain something unusually dovish and it sits just over the 200-Day EMA. Even if it does, resistance can also appear in the form of the downtrend line just above it.
The 3900 level, which was formerly resistance, is now serving as support beneath. The 50-Day EMA could be cut if we break down below that level, which would be a highly unfavorable development. Despite the trendline above, there is a case to be made for a slight rally because at this time of year, money managers frequently enter the market and begin purchasing securities to boost prices because they must disclose to their clients what they own and whether or not they made any gains for the year.
Having said that, there is a small amount of herd mentality surrounding the "Santa Claus rally." It doesn't necessarily mean that it will stick and it doesn't necessarily imply that it must occur, but history tends to support that kind of action. However, I do believe that ultimately we will fall due of the excessive number of economic obstacles.
Nov 23, 2022 16:24