Stock markets confused for the week

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The S&P 500 first fell to kick off the trading week, then spiked higher, then reversed to eventually form a less than impressive candlestick. That being said, it is resistive in nature, having formed a very favorable weekly candlestick. This leads me to believe that the market may be trying to figure itself out right now, and that makes some sense given how many moving parts there are right now. After all, we have the war in Ukraine, interest rates that will almost certainly go much higher, and of course a slowdown. None of this is good but it’s all fluid and so people are betting on different things.

S&P 500 Video 07.03.22

Some are betting that earnings will be weaker than expected as the economy slows. Some are betting on the arrival of the Federal Reserve and bailing out everyone, thus providing liquidity. Other people bet on the damage caused by this reward. Frankly, it’s a bit exhausting, but it’s very possible that we’ll see this market continue to be extraordinarily volatile. From a longer term perspective, I think it’s hard to trade with any kind of science, because quite frankly, the latest headline could move the market quite drastically. For this reason, I think the contradictory candlesticks sum up exactly what we are going to see, a more choppy, sideways consolidation with no real clarity at all for the next two weeks.

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