S&P 500 Technical Analysis

The S&P 500 has pulled back a bit during the course of the trading session on Friday, breaking below the 4100 level. By turning around to show signs of support, we are trying to form a bit of a hammer. If we break down below the bottom of the hammer, then it is likely that we could go much lower. However, if we break above the top of the hammer, then it is likely that the market could go to the 4300 level above. There is a lot of noise just above, but it would make a certain amount of sense that we would go back and forth and try to consolidate even further.

At this point, the market looks as if it is trying to decide whether it is going to break down even further, but I think a rally at this point will more than likely show signs of exhaustion that we can start shorting again. However, if we were to break above the 4300 level, then we could go looking to reach the 4400 level.

At this juncture, I think the market is simply trying to figure out what to do next, as we have a tight Federal Reserve, but we also have a lot of inflation as well as an economic slowdown. In other words, it is a huge mess at the moment, and is likely that we would see a lot of noisy behavior that could continue to whip the market around. We are essentially in a range-bound situation, and therefore it should be traded as such.

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