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Wednesday’s daily close in the S&P 500 above 1710 in the wake of the Federal Reserve’s decision to not taper its asset purchase program puts the index in a very positive cyclical position. A weekly close over 1710 would be further evidence that index has more upside in the weeks and months ahead. In the short-term, however, the index looks a bit spent. On Wednesday’s push to new all-time highs a 1500 NYSE tick was seen, which is historically a clear sign of exhaustion and especially so following a 100 point move in three weeks. Our cycle analysis suggests the next day or so is a clear turn window where the index is prone to a minor turn. In the longer-term scheme of things we will be looking to buy into this dip if it develops. In the short-term, however, we like getting short the index near current levels as the risk to reward profile is exceptional.
S&P 500 Daily Chart: September19, 2013
Charts Created using Marketscope – Prepared by Kristian Kerr
Key Event Risks in Coming Sessions:
LEVELS TO WATCH
Resistance: 1732(Fibonacci), 1740 (Gann)
Support: 1710 (Gann), 1692(Fibonacci)
Strategy: Sell SPX
Entry: Sell SPX at 1730
Stop: 1-day close above 1735
--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com
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To contact Kristian, e-mail email@example.com. Follow me on Twitter at@KKerrFX.
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