US Stock Markets Have a Tough Friday Session

S&P 500 Technical Analysis

The S&P 500 rallied a bit initially in the futures market on Friday, but then got slammed at the 4300 level. This was kicked off due to poor earnings from Amazon before the futures markets opened, and then allow the market gap lower. We did try to recover, but filling the gap only brought in more sellers. As you can see, the market continues to consolidate overall, and the 4150 level is an area that it looks like we will test again. The 4100 level after that would be an area where we could get a bit of a “double bottom”, so it will be interesting to see whether or not the market holds there.

If we do not break down below the 4100 level, then it is likely that we go much lower. For what it is worth, the 50 Day EMA looks as if it is trying to break down below the 200 Day EMA, kicking off the “death cross” that some traders will pay close attention to. At this point, I think this continues to be a situation where the market fades any rallies at the first signs of exhaustion. Ultimately, pay close attention to the US dollar, because the US dollar of course has a negative correlation to the S&P 500 at times.

Furthermore, yields continue to rise in the United States, making it much more palatable to own a bond offering real yields instead of taking the risk in the stock market. That being said, the market is likely to continue to see choppy and noisy behavior.

US Stock Market Forecast Video for 02.05.22

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