S&P 500 Trying to Hang On for The Week

The S&P 500 has gone back and forth during the course of the week as we continue to hang on to a major uptrend line. The uptrend line of course is something that a lot of traders will be paying attention to, and it is obvious that we have bounced from there during the course of the week. The neutral candlestick that we have formed, with a slightly negative body, does not necessarily mean anything one way or the other at the moment. Having said that, the market looks as if it is trying to continue grinding higher, and as long as we can stay above that uptrend line it is very likely that we will eventually go looking towards the highs. The 4800 level above has been significant resistance.

S&P 500 Video 17.01.22

A breakdown below the bottom of the weekly candlestick would of course be very negative, and that could open up fresh selling to reach down towards the 4500 level. That being said, the market is likely to continue to see a lot of volatility, as traders are trying to assess whether or not the Federal Reserve tightening monetary policy is going to continue to cause problems. At this point, it looks like we are hanging on by our bigger nails, so there is at least hope at this point in time. I would not be surprised to see more consolidation than anything else over the next couple of weeks, as we try to figure out what it is we are going to do. If we do break down, I would be a buyer of puts but I would not get aggressively short of this market. I would also probably pay close attention to the 4500 level.

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