Support Is Being Tested In the S&P 500

S&P 500 Technical Analysis

The S&P 500 has slightly declined during Wednesday's trading session to test the 3900 level, which is obviously a big, round, psychologically important number. Although falling below that level is a very bad indicator, there is so much turbulence below it that it would not surprise me in the slightest if the market were to rebound from that point. Even if we are a little oversold, I wouldn't use that rebound as justification to become too positive. In fact, at this stage, any rally should ultimately result in a good selling opportunity at the first indications of tiredness.

The 50-Day EMA is now falling and is at a level of 4055; it is expected to eventually display symptoms of dynamic resistance. Ultimately, I enjoy the notion of waning indications of tiredness someplace close by, but there isn't much evidence to suggest that getting there will be simple. In other words, the market's decline may have simply been caused by a bad headline that appeared in the media. The US dollar should also be closely watched since it has the destructive power of a wrecking ball when it comes to risky assets like the S&P 500.

Nevertheless, there is always someone prepared to purchase, leading one to believe that a rebound is nearly certain. The market can turn toward the 200-Day EMA, which is located at the 4168 level, if we do break above the 50-Day EMA. In any case, I don't see a situation where I'd be eager to start purchasing anytime soon.