S&P 500 Technical Analysis
The S&P 500 initially rallied a little in the futures market on Friday but was then slammed at the 4300 level. reduced the market gap. We tried to recover, but filling the void only attracted more sellers. As you can see, the market continues to consolidate overall, and the 41-50 level is an area that it looks like we will be testing again. The 4100 level after that would be an area where we could get a bit of a “double bottom”, so it will be interesting to see if the market holds there or not.
If we don’t go below the 4100 level, then we are likely to go much lower. For what it’s worth, the 50-day EMA appears to be trying to break below the 200-day EMA, kicking off the “death cross” that some traders will be paying close attention to. At this point, I think it continues to be a situation where the market fades at the first signs of exhaustion. In the end, pay close attention to the US Dollar, as the US Dollar of course sometimes has a negative correlation with the S&P 500.
Additionally, yields continue to rise in the United States, making it much more enjoyable to own a bond that offers real returns instead of taking on the risk in the stock market. That being said, the market should continue to exhibit choppy and noisy behavior.
Video of the US stock market forecast from 02.05.22
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