The S&P 500 rallied a bit during the trading session on Monday, slamming into the 50 day EMA by the time traders started to settle into their desks. The question now is whether or not we can continue from here, because the 50 day EMA has attracted a lot of selling pressure over the last several sessions, just as the 200 day EMA continues to attract a lot of buying pressure. I think at this point though, we need to see is a break above the 2950 level to feel a little bit more confident about going long of this market.
S&P 500 Video 20.08.19
While we have good news of sensitively from the US/China trade relations, the reality is that the market participants are reacting to each and every headline, and ultimately it’ll be interesting to see whether or not the US backing off some of its rhetoric will help for the longer-term. I suspect it won’t, simply because it hasn’t in the past.
Ultimately, this is a market that continues to chop around and cause a lot of problems but it’s worth noting that eventually we will get some type of resolution. If and when we get that resolution, it should be an explosive longer-term move. Above the 2950 handle, we will more than likely go towards the 3000 level next. A break above there opens up the door to the recent highs, and then perhaps an even bigger move later. Ultimately, if we break down below the 2800 level or even just get a daily close solidly below the 200 day EMA, that could lead to a vicious selloff towards the 2725 handle.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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