The S&P 500 went back and forth during the trading session on Monday to kick off the week, as we continue to have conflicting headlines coming out of the US/China trade situation. At this point, a pullback makes quite a bit of sense and quite frankly would be a value proposition. The initial level would be the 3100 level to offer support, but if we can break down below there, we could then go even lower. The 3030 level underneath there would be massive support and obviously the 3000 level would be. Not to be forgotten, the 50 day EMA is in the midst of those two levels, so as it continues to go higher it will more than likely bring the “market floor” right up there with it.
S&P 500 Video 19.11.19
The alternate scenario of course is that we simply ignore gravity and continue to go higher. If that’s going to be the case then we will have broken above the top of the bullish channel, leading to an impulsive rally. An impulsive rally at this point would more than likely get overextended, and then sell off just as rapidly. Keep in mind that I have no interest in shorting this market, it’s far too strong. Even if you told me it was going to drop 20 points tomorrow, I would not be short as I recognize it is futile to try to trade against moves like this. Overall, this is a market that continues to see buyers every time it dips.
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This article was originally posted on FX Empire
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