- The S&P 500 initially did try to rally during the trading session on Wednesday but has turned around to fall towards the 5,880 level again.
- This is an area that has previously been resistant and now offers as support.
- This is a market that I think continues to be very noisy. As we are in the midst of earning season, it does make a certain amount of sense that we would see a bit of choppiness.
This is a market that has been in an uptrend for a while, and I think that probably continues to be the case. The 50-day EMA sits right around the 5,800 level, which is a large round psychologically significant number, but it's not necessarily a particularly important one. So, I think if we were to break down to that area that and the 50 day EMA might be enough to turn the market around. But even if we broke down below there, we could see the market go looking to the $5,670 level. To the upside, we have a market that is trying to get to the 6,000 level, but really that was an area that was very difficult to overcome.
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Interest Rates Continue to be an Issue
Keep in mind also that interest rates in America continue to shoot straight up in the air in the bond markets at times. So that has a negative influence as well. That being said, in an environment where people really don't know what to do with their money, America ends up being one of the first places they run to. I think that will continue to put a bit of a boost into the S&P 500 for the time being.
I don't have any interest in trying to get short of this S&P 500 market because quite frankly you're swimming upstream at that point. That doesn't mean we can't pull back, but I think a pullback only offers more value that people will be more than willing to take advantage of.
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