The S&P 500 has broken down significantly during the week as we reached towards the 50 week EMA. At this point, the 2800 level underneath looks to be massive support, just as the 61.8% Fibonacci retracement level has offered support near the 2840 handle. At this point, the market looks very likely to continue to be conflicted and noisy, and one thing that should be kept in the back of your mind is that we have seen an extreme amount of volatility. There are a lot of major issues going on right now that will continue to affect stock markets, not the least of which would be the US/China trade relations, the Brexit, and of course fears of recession.
S&P 500 Video 19.08.19
For me, the play going forward is to look for short-term buying opportunities towards the bottom of these couple of candlesticks, but I also recognize that if we were to break down below the hammer from the previous week, then the market could unwind quite drastically. That would be a major breach of support, and have me aggressively short towards the 2700 level, and then down to the 2600 level.
While there will be plenty of volatility in this market, I do think that it’s only a matter of time before we have to make some type of longer-term decision. Overall, if we can break out of the range of the hammer from the previous week, then we could get a bit of momentum. Until then, I suspect it’s going to be more or less the short-term choppy variety with a slightly upward tilt due to the support that we have seen.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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