The S&P 500 has initially tried to rally during the trading session on Wednesday but ran into a buzz saw of resistance at the 50 day EMA. By doing so, we have broken below the 2900 level, and it does suggest that we could continue to see a lot of negativity. The 200 day EMA which is blue is massive support underneath, and I think that would be the target if we could continue to go lower. Ultimately, I think that the market continues to bounce around between these moving averages, but if we can break above the 50 day EMA that would probably be a bullish sign. That would be just as true as a break down below the 200 day EMA being a negative sign.
S&P 500 Video 13.08.19
At this point, I believe that the market is trying to figure out where to go next, and quite frankly there is a lot of confusion and fear out there. I can make an argument for both sides of the equation, so having said that it’s likely that we will continue to see a lot of volatility and choppiness. At this point, the market looks likely to be very confused and erratic, but if you are a short-term range bound trader, you could use these two indicators as an opportunity to play back and forth. Ultimately, this is a market that I think probably favors small position size is at best. However, once we break out of this range it should become more of a longer-term trade.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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