The S&P 500 has initially pulled back during the day on Friday, but then bounced enough to reach towards the 2600 level. That’s an area of course that has been supported in the past, so it could very well be resistance going forward. I think at this point you are probably better served to stay on the sidelines as the future direction is in going to be as clear. The 50 day EMA is just above the 2600 level, so I think it’s likely that we will see some technical selling sooner rather than later.
S&P 500 Video 14.01.19
However, if we can break above the 50 day EMA, it’s likely that the market will then go to the 2700 level after that. Overall, if we turn around and break down below the 20 day EMA, that would be a bit of negative momentum that is necessary to send this market lower. At that point I would be a seller. I think that as long as we are caught between the two moving averages and of course the large, round, psychologically significant figure, you are better off waiting for some type of explosive move to take advantage of.
I believe that the market is going to be paying attention to a lot of moving pieces, not the least of which will be the US/China trade relations, the upcoming earnings season, and a whole plethora of things including the Federal Reserve. There is a significant amount of confusion out there, so be cautious, but the market should make its intentions known rather soon.
This article was originally posted on FX Empire
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