The market sells into the weekend

The market sells off into the weekend

Overnight, both the Nasdaq and S&P 500 futures continued to sell, sending the market lower before the cash session open.

This gap down brought the S&P 500 futures down to the mini psychological level of 3750. This level was prefaced in Thursday’s article, and the price target was quickly hit. 

After the session opened, Wall Street wasted no time continuing the selling that started in the overnight session. The weakness was apparent, and the bearish sentiment sent the market tumbling towards 3,700.

Following the theme from the past week, the big psychological levels will continue to be the line in the sand. 

For now, 3,700 holds the same significance that 3,800 and 3,900 once held. 

The previous times the market has been at these psychological levels, it has struggled to get back above them.

Is a new low of the year coming?

Looking forward and into next week, the market’s interactions at 3,700 should be noted and viewed as the same as previous articles treated 3,800 and 3,900. 

The psychological level of 3,700 is the baseline for the next move in the market.

If the market can hold 3,700 over the weekend and early next week, the psychological targets of 3,750 and 3,800 are attainable above.

On the downside, the support levels of 3,650 and 3,600 are still looming.

The psychological level of 3,600 would bring the stock market to new lows of the year. That said, the current low of the year is at 3,639. These are all the levels the traders here at Simpler Trading will look for next week.

The week ahead

Next week is also the last week of the month and quarter. 

With new lows on the year looming, it will be interesting to see how the big players on Wall Street position themselves ahead of the new quarter. 

The market was able to finish the week by making a solid push to the upside today after a long day of selling but could not complete the day in positive territory.

Next week, Federal Reserve (Fed) Chairman Jerome Powell is set to speak twice. The first time is Tuesday at 7:30 a.m. Eastern on digital finance, and again on Wednesday at 10:15 a.m. Eastern as he delivers some opening remarks.

Although these are not highly anticipated speeches, the market always listens to Powell and will try to gauge his tone. Any time Powell takes the mic, there is a possibility to shake the market up. 

When Powell delivers his opening remarks on Thursday, the mic will end up in the hands of Chicago Fed President Charles Evans. The last time Evans took the stage, there were statements that the market reacted negatively to, so it will be essential to be aware of his speech at 2 p.m. Eastern.