The S&P 500 has initially pulled back during the trading session on Friday but has found support yet again as we have shown a resiliency in this market that has been quite impressive. That being said, we are still far from making a “higher high”, and we most certainly made a “lower low.” With the 200 day EMA sitting just above, that could cause a certain amount of resistance, so if we see exhaustion on Monday, I would more than likely start shorting again.
S&P 500 Video 28.02.22
However, it is worth noting that the last couple of days have been very strong, and of course it looks as if the war in Ukraine is not going to expand into the rest of Europe, so that has a little bit of a “relief rally” going in most risk assets. Beyond that, it is probably worth noting that Friday would have seen a significant amount of short covering, as nobody wants to be caught on the wrong side of the trade through the weekend. With that in mind, it does look like a very bullish attempt to stabilize and rally, but it is still not technically a signal to start buying.
The S&P 500 of course has to deal with the idea of inflation and the war drums beating in Ukraine, but perhaps one of the most difficult things over, is the yearly comps for most stocks. Last year at this time we had seen so much in the way of stimulus that corporate profits began to soar. The S&P 500 of course will eventually have to deal with the idea of the Federal Reserve and its tightening, which some people are starting to say that the Federal Reserve will not tighten due to concerns out of Ukraine. There has been absolutely no talk of pulling back by important Federal Reserve governors.
For a look at all of today’s economic events, check out our economic calendar.