S&P 500 Forecast: Gets Hammered

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(MENAFN– Daily Forex) The E-mini contract has gotten hammered during the trading session on Wednesday, as we had initially tried to break above the 3900 level, only to get squashed. The 3900 level has been important for quite some time, and you can see that it has in fact offered a bit of a ceiling at this point.

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Add to that the fact that we have the announcement during the day, and it was set up perfectly for a selling opportunity. Initially, traders tried to get as bullish as possible after the Federal Reserve had a slight change in its statement from the last meeting. However, the press conference got everybody rethinking the entire situation, and it was clear that Jerome Powell was willing to keep interest rates higher than a lot of people thought, thereby making money tight for the Wall Street traders. This is something they don’t like, and you can see that they have in fact voted with their feet. At this point, the S&P 500 looks like it’s ready to crumble, perhaps going down to the 3600 level. See Rallies as Selling Opportunities

    Speaking of the 3600 level, that’s an area that has been important for some time, and I think you must keep that in the back of your mind as the market has been very attracted to that level in the past. I believe now, the market is going to see plenty of reasons to go lower, so therefore the fact that we are closing at the bottom of the range for the day is not a huge surprise either. Interest rates being tighter in the United States means that we are going to see less in the way of exports, and of course it looks like the market is almost certainly going to have to deal with the idea of a recession.

Rallies at this point will continue to be selling opportunities, as the market has been crushed. If we can break down below the 3600 level, then it’s likely that we could go down to the 3500 level. The 3500 level being broken to the downside could open the floodgates.

For some reason, if we were to break above the 3900 level, then it’s possible that we could go to the 4000 level or even the 200-Day , but that seems like a pipe dream at this point.

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