The S&P 500 has fallen a bit during the course of the trading session on Friday to reach down towards the 4600 level. The 4600 level of course is a large, round, psychologically significant figure, which does offer a certain amount of support. After that, the 4500 level offers support from a psychology standpoint, and of course the fact that it is an area that we have seen buyers at previously. If we break down below that level, then I might be a buyer of puts, but I do not short this market regardless of what happens due to the fact that the Federal Reserve will step in sooner or later.
S&P 500 Video 17.01.22
Speaking of the Federal Reserve, the market is likely trying to price in those four interest-rate hikes, that a lot of people have been spooked by. This obviously has heard a lot of the technology highflyers, but the S&P 500 is full of more than just tech. Because of this, it is probably going to outperform other indices such as the NASDAQ, but at this point in time it is likely that we will see a lot of back and forth chopping behavior, but as long as we can hang onto the uptrend line, it is very likely that we will continue to find buyers.
The market is likely to continue to struggle to go higher, but I do not necessarily see some type of meltdown as being imminent. Because of this, position sizing will be crucial, but it is more than likely going to continue to be a situation where buyers will return on dips in the short term at the very least.
For a look at all of today’s economic events, check out our economic calendar.