S&P 500 Forecast: Choppy Rally Within Consolidation

One of the things that I do think is probably ignored by far too many retail traders is that lately there’s been a game played as far as trying to push the market around to trigger options.

• The S&P 500 has rallied slightly during the trading session on Wednesday, as we continue to see volatility more than anything else.
• That being the case, it should probably come as no surprise that we are still in the range that we have been in for a while.
• Because of this, I think you have more choppy behavior than anything else that you’re going to see, and that probably continues to be the case as we are going through the earnings season, and quite frankly there’s just no real rhyme or reason to any of the moves as of late.

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One of the things that I do think is probably ignored by far too many retail traders is that lately there’s been a game played as far as trying to push the market around to trigger options. The options market will cause a lot of noise, and I think that is essentially something that you are going to have to deal with. From an economic standpoint, we got more inflationary numbers coming out of the United States, and the market probably ignored it. That is the game we have been playing for a while, and I do think that eventually, they are going to break something. Momentum is all that drives the market anymore, so we need to pay close attention to the idea of simply following as we take off.

Intraday Chop Continues

The 50-Day EMA underneath looks as if it is going to break above the 200-Day EMA, and therefore it’s likely that the so-called “golden cross” comes into the picture, and a lot of technical traders will look at it as a reason to get involved. I don’t necessarily think that this is a situation where you have a lot of clarity, but we will eventually get an impulsive candlestick that makes people follow along.

 That’s all he can do in this environment, and with the 4200 level above offering resistance, I think breaking above there certainly gets the market going to the upside. On the downside, if we were to break down below the moving average, which by extension is the 4000 level, it’s likely that we fall towards the 3900 level, possibly even the 3800 level. Intraday chop continues to be the main attraction here.

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