- The S&P 500 Index had a wild ride Friday as the interest rate in the United States spiked.
- This is due to a hotter than anticipated jobs number coming out of the United States, which should keep the Federal Reserve relatively tight.
- Looking at this chart, you can see that we dipped quite significantly only to turn around and show signs of life.
- The only thing you can take into account with any certainty is the fact that we are going to have a lot of volatility.
The 4200 level is an area that I think will continue to see a lot of resistance, so you need to pay close attention to what happens in that area if we do rally. If we break above there, then it opens up the possibility of the market going to the 4300 level. The 4300 level is an area that has been rather massive resistance, so I think if we were to break above there then it opens up quite a bit of upward momentum and obviously changes as the overall trend.
That being said, I think it’s going to be very difficult to see that happen anytime soon. Breaking down below the 4100 level, it opens up the possibility of a drop-down to the 4000 level, possibly even the 3900 level which is where the 50-day EMA hangs about.
Wait for an Impulsive Candlestick
The only thing I think you can count on is that it’s going to be very erratic in this market, due to the fact that the market has a lot of crosswinds at the moment. There of course is the idea of higher rates, but there are also concerns about the economy slowing down, as we enter into what could be thought of as “stagflation.” It’s difficult to really get a grip on where we’re going next, but the one thing that I think you can see is that we are at a very important level on the longer-term charts, and we need to pay attention to the next impulsive candlestick because it could give us a bit of a hint as to where we could go later, and for a bigger move. Either way, I think we have a lot of questions to ask this market still.
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