- The S&P 500 has fallen a bit during the trading session on Friday as we continue to see a lot of “risk off” type of situation.
- Ultimately, this is a market that has now broken below the 3600 level slightly at the end of the session, so it’s only a matter of time before we go lower.
- The E-mini contract of course is going to lead the index higher or lower, but right now it certainly looks as if it is going to drop lower.
The S&P 500 is going to have to deal with geopolitical concerns, and of course the fact that the global economy is starting to drift lower as far as momentum is concerned as well. I have no interest in buying this market, and I do think that it is only a matter of time before we see sellers jump into this market on rallies. I do think that relief rallies eventually come back into the market, but I think that if we see some type of exhaustion, people will start to see reasons to short this market.
Markets Waiting for Volatility
Interest rates continue to climb, and that of course works against the value of stocks and of course risk appetite. Risk appetite is dwindling, and in that area is not going to change anytime soon and was there no real reasons to see this market railing. The 3800 level above is a significant resistance area just waiting to happen as it had been previous support. The 50-Day EMA is sitting near the 3950 level and dropping. Ultimately, I don’t have an interest in buying this market and I do think that signs of exhaustion continue to offer opportunities, but if we simply open on Monday and start falling, then I think we go to the 3500 level.
The last week has been very noisy, and that choppiness suggests that we are trying to work off some of the froth to the downside, but at the same time we also must keep in mind that the fact that the market is breaking to a fresh low suggests that we are starting to pick up downward momentum yet again. Expect volatility, but you need to be very cautious about position sizing, because bear market rallies can be quite vicious at times.
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