Clearly, the stock market hangs by a thread most of the time, as it seems like it takes less time to bring it down than it takes to bring it up.
The S&P 500 initially attempted to rally during Thursday’s trading session, but was absolutely hammered later in the afternoon. In doing so, the 200-day EMA is threatened, and a break below there then opens up the possibility of threatening Monday’s session lows and then sending this market much lower. That would be a huge reversal, and a market that, quite frankly, lives on borrowed time, as it seems.
You can make a case for a bearish flag to be informed, but we haven’t broken through the bottom of it, so it’s not necessarily a signal to go short right away. However, falling below this Monday candlestick would most definitely be considered a sell signal and could open a move towards the 4300 level, possibly even the 4100 level in the longer term. This could be quite quick, as there seems to be a lot of worry, which usually leads to massive and vicious downward moves.
It is obvious at this point that the 4500 level continues to cause major headaches, and therefore the market breaking above there would be a very bullish turn of events, not only because it would be a big number broken above above, but it would also be a major reversal of the overall downward move of a tearing day.
The only thing I think you can count on at this point will be a lot of volatility, but frankly that will be the case with most markets, not just the S&P 500. Futures markets will of course follow suit. risk appetite in Europe and Asia, but the real question will be how will the underlying index perform? It’s obvious that Americans are paying close attention to the so-called “Fed Speech” because many Federal Reserve officials are giving speeches. Curiously, Wall Street does not believe that the Federal Reserve will tighten very quickly, while the Federal Reserve opposes it. This sets up an ugly turn of events, but it’s clear that the stock market is hanging by a thread most of the time, as it seems to take less to push lower than to push it higher.