S&P 500 Technical Analysis
The S&P 500 had tried to rally early during the Monday session in the futures market but has run into a little bit of a brick wall as we continue to see a lot of noisy behavior. Because of this, the market is more likely than not going to continue to see a hesitation, and perhaps a pullback. After all, we are very much in a downtrend, despite the fact that the Friday session was so explosive. You could probably make a little bit of an argument for portfolio rebalancing being the culprit on Friday, or quite frankly just short-covering heading into the weekend.
Regardless, the 50 Day EMA is racing toward the 4000 level, so I think it has something to say as well. I have been looking for an opportunity to short this market on signs of exhaustion, and I may be getting it right now. I have no interest in buying the S&P 500, at least not until we break above the 4200 level. In the meantime, it’s about being patient and picking your spots. I will start with a small position, and then add if it starts to move in my direction. Short selling is a little bit of an art form, and not something that is easily quantified all of the time. It’s about sentiment, it’s about fear, and it’s about risk management.
It should be noted that anytime I short a stock or an index, I always do it with about half the risk that I would be buying it. The reason being is that they are not designed to fall for long periods of time.
US Stock Market Forecast Video for 28.06.22
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