Stock Markets Quiet on Friday

The S&P 500 has gone back and forth during the trading session on Friday, as we are hanging about the 4500 level. Quite frankly, the markets look a little exhausted and confused, as the narrative shifts back and forth as to whether or not the Federal Reserve will be aggressive about its interest rate hikes. Adding more fuel to the fire, the Federal Reserve has an emergency meeting on Monday. That does suggest that perhaps they will do of 50 basis points hike rather quickly, but it still a little early to see how that plays out.

S&P 500 Video 14.02.22

If we do break above the top of the candlestick, we could go looking towards the 4575 region where we topped out at during the course of the week, but if we were to turn around a break down below the lows of the candlestick on Friday, then it is possible we could go looking towards the 200 day EMA which is down at the 4400 level. We are currently stuck between the 50 day EMA and the 200 day EMA, and therefore it does make a certain amount of sense that there is noisy behavior in this area and therefore indecisiveness.

If we can move beyond one of these moving averages, then it could open up the possibility of a much bigger move. Until we break out of this tightening range between the two EMA indicators, I think we will continue to see plenty of volatility in a situation that looks like it simply searching for some type of answer. That being said, you should keep your position size rather small.

For a look at all of today’s economic events, check out our economic calendar.