- The S&P 500 E-mini contract began the overnight trading session on Tuesday with negative momentum and has failed to show much positivity since then.
- Despite this, the contract is experiencing a lot of volatility, with negative pressure beginning to build.
- It's important to note that both the 50-Day EMA and the 200-Day EMA are relatively flat and located just below the current price level, which indicates a lack of momentum in either direction.
Earnings Season Affecting S&P 500 Moves
This consolidation could result in a support level in the area of the EMAs, which is located just above the psychologically important 4000 level. It's worth keeping in mind that we're currently in the middle of earnings season, and any positive or negative news from major companies could significantly affect the market's movement.
In the event that the market breaks below the EMAs and the 4000 level, it could lead to a significant drop in both the futures market and the index itself. This could lead to a potential move back down to the 3900 level, which has previously seen buying pressure. If the market were to continue to fall, then the 3800 level, a key structural and psychological support level, could come into play, and it will attract a lot of attention from investors.
On the other hand, if the market were to bounce back, it could attempt to make a move towards the 4200 level, although the last couple of candlesticks have been negative, which could have some momentum built up against such an attempt.
Furthermore, the Federal Open Market Committee Meeting Minutes, which will be released on Wednesday, will give traders an idea of the discussion among the Federal Reserve members in the meeting. This will help determine whether there is a hawkish attitude, or if there are any cracks in the ice that could affect the market's movement.
In conclusion, the S&P 500 E-mini contract is currently in a consolidation phase with no clear direction. The current situation could lead to a support level in the area of the EMAs, while any negative news could lead to a drop below the EMAs and the 4000 level, which would have significant consequences. Investors should pay close attention to earnings season and the Federal Reserve Meeting Minutes for clues on the market's direction. The next 24 hours could be very volatile.
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