S&P 500 Forecast: Choppy After NFP

The S&P 500 has been experiencing back-and-forth movement during the trading session on Friday, with mixed results from the jobs report. 

  • The S&P 500 experienced some back and forth during the trading session on Friday, indicating that the market is still experiencing a lot of noisy behavior overall.
  • The jobs report had mixed results, with the overall employment figures hotter than anticipated, but the wage inflation and pressure dropping slightly.
  • However, the intentions of the Federal Reserve are clear, with Jerome Powell stating on Tuesday that he intends to raise interest rates and may even raise them higher and quicker than previously anticipated.
  • This could put upward pressure on the US dollar, potentially putting negative pressure on equities and other risk-appetite markets.

The 200-Day EMA and the 50-Day EMA are both flat and above the candlesticks of the last few days, which typically indicates that the market is trying to figure out its next move. If the market breaks down below the bottom of Friday's candlestick, the S&P 500 could go looking for support at the 3800 level, which was the scene of a major swing low. Any further declines could result in a significant amount of selling pressure and be negative for the S&P 500.

Volatility Could Lead to Lower Prices

On the other hand, if the market breaks above the moving averages, it could make a run toward the 4100 level and possibly even the 4200 level if enough momentum builds up. However, the big question here is whether or not the momentum can pick up enough to really get things moving. Currently, the market is characterized by a lot of volatility, and as a general rule, volatility can lead to lower prices over the longer term as traders become spooked out of their positions. The biggest way to avoid this is to make sure that your position size is not overly large, as we will almost certainly see a lot of back and forth in the short term.

The S&P 500 has been experiencing back-and-forth movement during the trading session on Friday, with mixed results from the jobs report. The intentions of the Federal Reserve are clear, and the market is trying to figure out its next move. If the market breaks down, the S&P 500 could look for support at the 3800 level, while breaking above the moving averages could lead to a potential run toward the 4100 and 4200 levels. Overall, the market is characterized by volatility, which could lead to lower prices over the longer term.

S&P 500

Christopher Lewis

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.