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The S&P 500 has drifted a little bit lower during the Martin Luther King Jr. holiday in the United States, but we are currently hanging about the 50 day EMA, and therefore it makes quite a bit of sense that we do not have anywhere to be. Furthermore, the volume would have been almost nonexistent, so really at this point in time I would not read too much into the daily candlestick. However, I would read quite a bit into the Friday candlestick which suggests that we will continue to have buyers come back into this market.
S&P 500 Video 18.01.22
With all that being said, there are a lot of concerns about the Federal Reserve and what they will end up doing, but at the end of the day it is not a big deal and I think that we simply continue to trade higher based upon the fact that although the Federal Reserve is going to be tightening, the reality is that this is not going to happen overnight, and there are a significant amount of people out there that believe that the Federal Reserve will not be able to tighten as much as people are saying. If that is going to be the case, then a lot of traders are trying to get ahead of the curve and jump in to take advantage of this.
If we broke down below the 4600 level, then it is possible that we could drop to the 4500 level, but there is a bit of an uptrend line in that general vicinity, so I do think that it will hold things up.
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This article was originally posted on FX Empire