Stock Markets Continue to Get Hammered

Technical Analysis of the S&P 500

During Tuesday's trading session, the S&P 500 attempted to rise a little at first before turning around and falling considerably. The market then began to weaken and broke down below the 3800 level. The 3750 level was then challenged, which has served as support over the last several days. However, I believe it will likely not take long for the price to break down from here and continue to decline. I believe it will only be a matter of time until we test and perhaps even break past the 3700 level since it is a strong area of support.

The 3950 level may act as barrier if we do reverse course and rally, as it did in recent weeks. The 50 Day EMA, the 3993 level, and falling come next. In the end, I believe that this market will continue to see a great deal of negative, therefore I'm watching for signals of tiredness to sell, similar to what we saw in the futures market early on Tuesday.

Both the Federal Reserve's continued tightening of monetary policy and the need for companies across the S&P 500 to write down results will work vehemently against this index. Because of this, I am not interested in investing in this market until a fundamental shift takes place, which I just don't believe will happen soon. Longer-term investors could see this as a chance to "pick up value," but I would exercise caution since there are so many factors now pushing against the stock market.