S&P 500 Continues to Look Uneasy

Technical Analysis of the S&P 500

As we continue to witness a lot of volatility, the S&P 500 has climbed a little bit throughout the trading session on Wednesday. The market is likely to remain volatile for the foreseeable being, but I believe it will only be a matter of time until the sellers return to the market and begin shorting.

The 3700 level has held, but right now, investors are expecting the Federal Reserve to become more active in combating inflation, which would be beneficial in the near run. That said, it'll only be a matter of time until we're short again, therefore I'm searching for a source of weariness in which we may participate.

Because the economy is slowing, I don't have a scenario in which I'd be prepared to purchase the S&P 500 at this time. We aren't seeing a pace of change that favors growth, and the stock market will suffer in the long run until that happens. Yes, there may be large bad market rallies from time to time, but I believe this will eventually be a good chance to short it again.

It's possible that we'll break out to the outside if we can break above the 50-Day EMA. The 4200 level is a significant barrier, and a break over it might signal a significant trend shift. We're a long way from there right now, and I believe the worst is still ahead of us. A strong short-term rise makes sense, but I believe the underlying trend will continue given enough time.