(MENAFN- Daily Forex) The S&P 500 emitted a contract dropped a bit during the trading session on Thursday, as we continue to see a lot of noisy behavior. However, we are seeing a lot of support in this general vicinity, as we had previously. The 3700 area has been significant support in the past, so it would not be a huge surprise to see it offer support again. If we break down below there, it would obviously be a very negative turn of events, and then perhaps plunge towards the lows that we made back in June.
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Rallies now should continue to offer shorting opportunities, as we are in a very strong downturn. I have no interest whatsoever in buying this market, least not if the Federal Reserve remains as tight as it is. In fact, it is expected to raise interest rates by at least 125 basis points between now and the end of the year. The markets are more likely than not going to continue to be very choppy and therefore what I am looking for is a sign of exhaustion that we could start selling again.Market Likely to Continue Dropping
- The canister for the day is a bit of a hammer, but I think anytime we get a rally, there will be plenty of reasons to think the trouble comes back into the picture.
- This is a market that will continue to see plenty of reasons to drop and seems to be running out of bullish traders.
- After all, even if we do see a bounce, it will more likely than not end up being on low volume, which is never a good sign either.
The 50-Day EMA breaking below the 4000 level of course is a sign of weakness as well, and we are continuing to see a drop. I think that will be difficult to break above, so it's very unlikely that the market will be able to. If it did, that would be a lot out there to come to grips with, and at that point in time I would have to see whether the fundamental picture has changed as far as monetary policy is concerned, which seems very unlikely. After all, Jerome Powell has reiterated numerous times that he is going to fight inflation tooth and nail.
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