S&P 500 Technical Analysis
The S&P 500 has gone back and forth during the trading session on Friday as we continue to see a lot of lackluster performance in this market. Ultimately, I think this is a market that goes lower, perhaps trying to test the 3700 level. I would not be looking to get involved in the stock market right now, despite the fact that some people will have you buying into the idea of “rebalancing”.
The reality is that the Federal Reserve is going to do nothing to help the stock market, and we are just now starting to see Wall Street come to terms with that. After all, Wall Street has relied on cheap money forever, and now it looks like we are finally starting to see what the financial conditions are truly like in the United States.
Rallies at this point are to be sold into at the first signs of exhaustion, and I believe that it’s not till we break above the 4000 level that you can take a rally as being serious. If we were to break above that level, we would not only overcome a large, round, psychologically significant figure, but we would also take out the 50 Day EMA. That would be bullish, perhaps sending the market to the 4200 level. Break above the 4200 level obviously is a very strong sign as well, and at that point I could consider buying. Until then, the market needs to prove itself to me, or the Federal Reserve needs to change its monetary policy.
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This article was originally posted on FX Empire
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