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$SPX market expectation for Wednesday, May 27th

(05/26/2015 HS) – Market took a hit today. Quite large one, compared to the non-moves we have seen in previous days. The S&P 500 lost 1% today. It could have been more, but at the last hour the market rallied and erased some losses. Should we be worried?

Hard to answer that question. The market lost on renewed fear of FED rising interest rates. It all has been here already. We have all seen this. This is nothing new and yet investors are freaking about it.

Does the economy justify interest hike? I do not think so. But I am not an economist and I can’t say. I just use common sense to make this judgement. But common sense is no longer used and desired in today’s Wall Street game or the economic books cooking.

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We are seeing FED applying all sorts of monetary hocus-pocus, kicking the can down the street and yet we see us floating. They do things even a financially irresponsible person wouldn’t dare doing and it flies by. Well, maybe we will see consequences later on.

Is the selling, we experienced, good for the market? Will it continue? No one knows. What troubles me with this market though is the pattern I am seeing. When the market goes higher, it is usually on a low volume, but when it sells off, the volume spikes up. This is troublesome.

Analysts are expecting this market going higher. But who are they? These are people from Goldman Sachs or Merrill Lynch, for example. Is their prediction meant to be good for all or are they just pumping this market up so they can get out?

Today’s selling provided a lot of technical damage. Many of my indicators I watch turned down. But nothing is lost yet. We still may see a bounce and recovery. We may see a bouncy market.

The market is quite oversold now (note, I am looking at a short period of time now at a daily frame) and we may see a bounce. It may not be a big one, however. The good thing was that bulls stepped in at the end of the trading session and pushed the market higher. They may have some more power left and recover this market.

Unfortunately, I do not think this will happen tomorrow. We may see some buying in the morning, but the rest of the day will belong to bears and I expect this market to go DOWN.

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