(MENAFN- Daily Forex)
The s&p 500 has rallied a bit during the trading session on Tuesday to show signs of life as we continue to consolidate overall. The 200-Day ema above could continue to offer significant resistance, not to mention the fact that it is near the 4000 level. With that being the case, I would not be surprised at all to see a little bit of a pullback, especially as the FOMC Meeting Minutes come out later during the day on Wednesday. That will be the last announcement before we go into the Thanksgiving holiday, which of course will have the underlying index closed for Thursday.
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Friday will be a shortened trading session, so quite frankly it's probably something that's best avoided, although there is still a lot that we can infer from the charts themselves. We are currently between the 50 and the 200-Day EMA, which means that we might be during a bit of a squeeze. If we do break out of this area, then I would anticipate seeing a bit of a push in one direction or the other. If we can break the 200-Day EMA, we could very well see the S&P 500 run toward the 4100 level. On the other hand, if we break down below the 50-Day EMA, we could start falling toward the lows again, meaning we could drop as much as the 3600 level.Selloff Ahead
Because of this, I think you have a situation where we are going to have volatility pick up sooner or later, and even though we've had a nice run higher, we have seen a correction like this previously this year, which runs quite along with the narrative of bear market bounces. Yes, there is almost always some type of bullish narrative out there, but just because Wall Street desperately needs the Federal Reserve to start loosening monetary policy does not mean it's going to happen.
After all, the underlying economy is suffering from massive inflation , and that is a much bigger concern to the Federal Reserve than stock prices. In fact, they want to drive down the idea of wealth, meaning that they have no problems whatsoever with the destruction of asset prices. With this being the case, I think it's all a matter of time before we get some type of selloff, but it's obviously not happening right now.
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