(MENAFN- Daily Forex) The has fallen a bit during the trading session on Wednesday as we await to see what happens with the CPI figure early Thursday morning.
It's very likely that we will continue to see volatility, as numbers have not exactly been coming down as quickly as the Federal Reserve would like. Because of this, it does make a certain amount of sense that we continue to struggle to go higher in the S&P 500, although we recently had made a little bit of a move to the upside.
The 50-Day has offered a bit of resistance as well, so it's worth noting that we have fallen below. If we break down below the 3700 level, it's likely that we could go down to the 3600 level. Keep in mind that the 3600 level is an area that had been supported quite nicely previously, so therefore it does make for a nice target, and then of course people will look at that to see whether it's going to offer support. If we were to break down below there, then it's likely we could go much lower, perhaps down to the 3500 level.Looking to Fade Rallies
It does take a significant amount of negativity to have that market go down to that area, but we are in a downtrend, so I do think that continues to be a major factor in this market, so I think it makes much more sense that you are looking at this as a“fade the rally” type of situation. This will be especially true if the market were to see the US dollar strengthened because it will threaten the idea of corporate profits.
We are heading toward a global recession, so it's difficult to imagine how the major multinational corporations will do good in this environment. In fact, I just am a bit surprised how many times people have gone out there and looked for some type of bullish narrative to get people excited about buying stocks, although it must be admitted that the entire job of Wall Street is to sell you stocks. You need to pay attention to what is, not what random story people were telling on the news that given day. It's clear that the economy is not healthy.
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