S&P 500 Gives up Majority Again

The S&P 500 has shot higher during the course of the week but gave back quite a bit of the gains as interest rates have shot higher. That of course is a very negative sign and has put risk appetite on the back foot. By giving back the gains the way we have, it shows you just how much trouble we might be in as far as risk appetite is concerned. However, you should also keep in mind that the hammer from the previous week in the shooting star from this week suggests a lot of noisy consolidation. If you are a longer-term trader, you may have trouble hanging on to a position.

S&P 500 Video 07.02.22

One of the biggest drivers obviously will be interest rates, but I will also point out that if we were to break down below the hammer from the previous week, that would be an extraordinarily negative turn of events, causing a bit of a “flush” down towards the 4000 handle. On the other hand, if we were to turn around and take out the top of the candlestick from this week, that would be a bullish sign and provide more “risk on” type of behavior.

If you are a longer-term trader, you will probably do well to wait to see which direction we break out of. Otherwise, we more than likely will continue to see a lot of confusion and you may be stuck with the idea of trading short-term charts in a range bound type of market. Ultimately, we will make a break and it will more than likely be rather sharp.

For a look at all of today’s economic events, check out our economic calendar.