S&P 500 Technical Analysis
The S&P 500 E-mini contract has pulled back just a bit during the trading session on Monday, as we continue to wait for the Federal Reserve announcement on Wednesday, and a lot of people are guessing as to what Jerome Powell might say. The reality is we are likely to see a lot of noisy behavior, but short-term back-and-forth as everybody is getting ready for the potential volatility late Wednesday. After all, a lot of people are starting to think that the Federal Reserve is going to continue to see the need to keep monetary policy a bit looser than anticipated, quite frankly with all of the inflation out there, even though it’s dropping, is still far well above the target for the Federal Reserve. There’s even talk out there that perhaps they may raise their target and settle for 3% inflation. This is nonsense.
The question now is what the market reaction to the next announcement will be. At this point, I think if we do get a move ahead of time, it is more likely to be negative than positive, but I don’t necessarily think that we would break down below the 200-Day EMA between now and then. Not only is it a technical indicator that a lot of people will pay attention to, it’s also right around the psychologically important 4000 level. If we were to break above the top of the shooting star from the session on Friday, it opens up the possibility of a move to the 4200 level over the longer term. Ultimately, this is a situation that breeds more volatility.
For a look at all of today’s economic events, check out our economic calendar.