If we do take off to the upside, then it’s possible we could go as high as 4200, but it would take a lot of momentum to make that happen. Quite frankly, we would need yet another catalyst.
- The S&P 500 has gone back and forth during the trading session on Tuesday, as we continue to see a lot of noisy behavior to say the least.
- Ultimately, this is a market that is going to continue to see noisy behavior as we try to figure out the overall direction.
- Yes, it’s been very bullish as of late but quite frankly reaching the 200-Day EMA will have a certain amount of profit-taking and of course selling.
- It is a widely followed technical indicator for algorithms and technical traders, to begin with. Beyond that, we have gotten so overstretch that one would think that there are quite a few people out there willing to take a profit.
During the session, it was reported that a Russian rocket landed in Poland, killing 2 people. There are still questions as to what exactly happened, but it does not appear intentional, so the initial fear that jumped into the market seems to have disappeared a bit. Because of this, I think you continue to see a lot of back-and-forths, with perhaps more pressure to the downside now that we have had such a massive turnaround.
Indecision Takes Over the Market
I do believe that eventually, traders will have to focus on the fact that the Federal Reserve possibly keeping things tighter for longer than they had anticipated. If that comes to fruition and people begin to realize that we are miles away from the Federal Reserve turning around, it’s very likely that the stock market will take it on the chin. Having said that, we have had a couple of speakers from the Federal Reserve recently suggest that they are at least thinking about slowing down sooner or later, so that has more hope built into the rally.
If we do take off to the upside, then it’s possible we could go as high as 4200, but it would take a lot of momentum to make that happen. Quite frankly, we would need yet another catalyst. There are some people out there calling for a “Christmas rally”, but that is probably going to continue to be difficult anyway, because there are so many different things out there that could come into the picture to cause dismay. The candlestick shows a significant amount of indecision, suggesting that perhaps the buyers are having second thoughts.
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