S&P 500 Stabilizes During Powell Testimony

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The S&P 500 has stabilized a bit during the trading session on Tuesday as Chairman Jerome Powell spoke in front of the United States Senate. From a technical analysis standpoint, the 50 day EMA is sitting right here as well, so that does make a certain amount of sense that we would stabilize as technical traders probably stepped in to pick up value. That being said, but at the end of the day I believe that we are very much in an uptrend and that has not changed. Quite frankly, the S&P 500 has been hugging a major trendline for quite some time, and therefore I think it is probably only a matter of time before we see buyers come back into this market and pick things up. In fact, one could make a serious argument on Friday being the beginning of that.

S&P 500 Video 12.01.22

To the upside, I believe the 4800 level is the target, as it has been a bit of a “brick wall”, and therefore it does make a nice target. If we can break above there, then obviously the markets can go much higher. That being said, I do believe that this is a marketplace that will eventually try to take out the upside because the Federal Reserve, although tightening monetary policy, is still very accommodated from a historical standpoint. With that in mind, I like the idea of buying dips, but I also recognize that you cannot get aggressive at this point in time due to the fact that there is so much fear out there currently. With this, I like the idea of adding to positions that work out, but I would do so very slowly.