S&P 500 Technical Analysis

The S&P 500 has gapped lower in the futures market to kick off trading on the back foot for the week, and then simply continued to fall from there. Because of this, the market looks as if it is ready to completely fall apart, but we do have the psychologically important level of 4000 to deal with. The 4000 level will cause a little bit of support, but if we were to break down below there, then the market is likely to go much further to the downside.

In the meantime, we could get a bit of a rally, but that bounce is almost certainly going to be something that people sell into, and therefore I am looking for rallies that show signs of exhaustion that I can take advantage of. I have no interest in buying this market, at least not until the Federal Reserve changes its overall stance. That does not look likely to be the case anytime soon, so as things stand it is worth waiting for opportunities to get short again. If we were to break down below the 4000 level, that will more likely than not open up even more selling, with acceleration to the downside.

The market would have to break above the 4300 level for me to be interested in buying, which is something that we are nowhere near done, and the Monday candlestick has made that even less likely than it was before. As long as we continue to worry about inflation and a lack of growth in general, the S&P 500 is going to struggle. Furthermore, the Federal Reserve is tightening monetary policy, which is the only thing that Wall Street has cared about for well over a decade.

US Stock Market Forecast Video for 10.05.22

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