Stock Markets Continue to Defy Gravity

Technical Analysis of the S&P 500

As we keep a careful eye on the 4300 level, the S&P 500 has fluctuated throughout Tuesday's generally tight trade. It seems likely that this offer would continue to give traders some trouble since the 4300 level has historically been a strong region of resistance. The market is expected to rise significantly if we can close above there on a daily candlestick. Despite this, there are several reasons to be worried, not the least of which being the fact that earnings season is already underway and has the potential to make a lot of noise.

Wall Street continues to hold the view that the Federal Reserve is not serious about tightening even if it is shouting from the sidelines about it. It will be fascinating to see how the volatility develops as long as that condition persists since a tighter Federal Reserve normally works against the value of equities. We could see a huge meltdown if Wall Street starts to trust them all of a sudden. However, if the Federal Reserve were to give in, it may push stocks a little higher. In complete candor, I also stated that last week. At this point, I believe Wall Street has gotten a little ahead of itself.

If we can break down below the 200 Day EMA, which should act as support, then it's probable that we will descend to the 50 Day EMA. On the other hand, the 4450 level may be in view if we do break out to the upside.