S&P 500 Forecast: Gaps Lower To Kick Off Thursday Selling

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(MENAFN– Daily Forex)

    The gap lowered to kick off the Thursday session, and then continued to fall. However, by mid-day, we started to see buyers come back in and try to stabilize everything. But frankly, I think the only thing that kept the ceiling from being out of control is the fact that the market had sold off so much the previous day, and of course, the fact that we are getting the next jobs figure on Friday.

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After all, the Non-Farm Payroll announcement causes quite a bit of volatility in the stock market, and even though the Federal Reserve made it abundantly clear as to what they are doing next, the reality is that the market will still try to extrapolate some type of good news out of whatever number comes out of America. In fact, you can say that it is now a“bad news is good news” market yet again. After all, if the jobs number is horribly anemic, people will start to get excited that the may come to bail them out by loosening monetary policy. Resistance Ahead

I have a hard time believing that just one number would do that, so I’m looking at it as a market that if it does bounce, I will start shorting one to start showing signs of exhaustion again. I believe that the 3900 level above is going to cause a lot of resistance, so if we were to break above there it would obviously be a very bullish sign . It would take one hell of a move from here to make that happen, so therefore I think more likely than not, if we do rally, there should be plenty of sellers above that will get involved and start shorting.

On the line, maybe we break down below the bottom of the for the Thursday session right away, which opens a move to the 3600 level. The 3600-level underneath is significant support and should remain so. Ultimately, if we do break down below there then it opens the floodgates for even further selling pressure, possibly sending this market down to the 3500-level next. Keep in mind that the Federal Reserve wants to see lower stock pricing, just to bring down the wealth effect and to help slow down inflation.

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