The S&P 500 initially pulled back during the trading session on Thursday but then rallied towards the 50 day EMA to pull back. The 50% Fibonacci retracement level is also right there as well, so I think there is a whole host of reasons to think that perhaps the S&P 500 could struggle here. That being said though, there has been an extraordinarily strong push to the upside during the day and a close well above the 2800 level could open up the door to the 2850 level, followed by the 200 day EMA which is nearly 2950 level.
S&P 500 Video 10.04.20
Looking at this chart, the pullback makes quite a bit of sense, but at this point it’s difficult to imagine that trading is going to be easy one way or the other. At this point, the market looks very likely to see noisy actions, and therefore you should keep your position size relatively small as its trouble just waiting to happen. Overall, the markets do look as if they’re trying to find an excuse to go higher, but quite frankly we are still only at the 50% Fibonacci retracement level, so it’s going to be difficult to see how we simply just slice through the upside. Quite frankly, with the noise out there, you can expect a lot of troubles out there in order to cause headaches for everybody trading. That being said, the weekly close will be scrutinized and could give us hints as to where we go for the next couple hundred pips.
This article was originally posted on FX Empire
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