Jazzi Young's avatar
$10.3m follower assets
TA Opinion: The Macro Hits Keep Coming
It's been another challenging week with the S&P 500 index down 2.6% for the week. We fell below the psychological 4,000 level as the macro numbers continue to show inflation remains persistently high. This market is in true "fight the Fed" mode. The last time I remember this term being used prominently in the headlines was when I first started investing back in the late 80s.

Looking at the chart, we unfortunately we blew below the 50-Day SMA. The index bounced off the all important 200-Day SMA which mew looks to be the key battlefield level. Drop below this level and all bets are off. We're clearly in a short-term down leg, but from a technical analysis perspective it's still too early to conclude we're heading back to test our 3,500 bear market lows. If the macro hits keep coming and we do end up dropping below the 200-Day SMA, the next key level to watch will be 3,800.

The only good news today is we bounced off the 200-Day SMA support level during the late morning. The daily candle's long shadow/tail shows buyers were willing to come in and stem the selling pressure. However, this is a choppy market and every day is a new day with a new narrative. Most trend traders don't try to predict direction when the markets are this choppy. They'll wait to see if there's a convincing breach below the 200-Day SMA, or conversely, a recovery to higher levels before placing small directional bets to test their hypothesis. Few experienced trend traders make big bets when the market teeters directionally like this.

Image upload
Now is the time to be patient. If you're a directional trader, wait to see what transpires. These aren't fun times, but they're the best times to gain market experience.
No comments yetBe the first to add your insight!



Already have an account?