The S&P 500 has pulled back a bit during the trading session on Wednesday, but then turned around to recapture some of the losses as the market has reached towards the highs again. This is at the same time we are watching the Americans and the Chinese signing a trade deal, so that is another “risk on” type of situation. If we can break above the 3300 level, then it’s likely that the market goes looking towards the 3350 level, and then possibly the 3400 level.
S&P 500 Video 16.01.20
At this point, even if we do get a pullback, I think there are plenty of reasons to think that the market will continue to go higher, as the 50 day EMA is starting to reach towards the 3200 level. All things being equal, I believe that there is no way to short this market although we may get a bit of a “sell the news” type of reaction to the China trade deal, but overall it’s likely that the markets will continue to look at pullbacks as an opportunity to pick up value.
If the market was to break down below the 3200 level, then it’s likely that the market could go down to the 3100 level which of course is a large, round, psychologically significant figure. That being said, that only offers more value, and will attract more attention. The reaction that we continue to have though is one that buyers are willing to jump in, and as it is the beginning of the year people are facilitating new positions for the year.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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