The S&P 500 initially tried to rally during the trading session on Friday, but then turned around a break below the 3300 level. At this point, the market should continue to go much lower, reaching towards the uptrend line underneath. We have been in an uptrend and channel and might be a bit overextended anyway. Regardless, even if the channel was to get broken the 50 day EMA is breaking above the 3200 level. There is also the possibility that the 3250 level will also offer support.
S&P 500 Video 27.01.20
The candlestick for Friday is very negative looking and it suggests that perhaps we are going to see a little bit of negative follow-through but given enough time the value hunters will return as the markets are celebrating loose and cheap monetary policy. At this point, there is always no way to short this market, even if you didn’t know it was going to fall over the next couple of days because there are so many minor support levels between here and the 50 day EMA.
If we did turn around a bounce from here, then it’s likely that we will consolidate between the 3300 level and the 3330 level. This is the other possibility, not that we get a break down or a pullback, but perhaps more of a sideways walk in order to take some of the steam out of the move to the upside. This allows some of the inertia to the upside to be absorbed, and that Newt traders can come in and push even further. At this point, the market should continue higher eventually, it’s only a matter of whether or not we can do from here or if we need to pull back a bit.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
More From FXEMPIRE:
- USD/JPY Price Forecast – US Dollar Sluggish Against Yen
- Natural Gas Price Prediction – Prices Fall and Drop 5.7% for the Week
- Gold Price Forecast – Gold Markets Rally Again
- S&P 500 Weekly Price Forecast – Stock Markets Stall For The Week
- E-mini S&P 500 Index (ES) Futures Technical Analysis – Headed into 3259.25 to 3240.75 Retracement Zone
- Crude Oil Price Forecast – Crude Oil Markets