The S&P 500 rallied a bit during the Friday session, gaining over 0.5% during the day. The market has found support at 2750, which of course is a large, round, psychologically significant figure.
The S&P 500 rallied during the day, gaining half a percent by the time I recorded this video. The 2750 level has offered support, and we have made a “higher low” on the hourly chart. This is a good sign, and I think that the market could continue to go higher mainly because of this technical signal and the fact that we have seen a longer-term uptrend anyway. However, if we turn around and break down below the 2745 handle, then I think the market making a “lower low” would signal that the market may roll over again, perhaps reaching to the 2700 level underneath which I think is the bottom of the uptrend.
I expect see a lot of noise in this market, because quite frankly that the noise surrounding trade tariffs will continue to be an issue that people struggle with. I think that the markets are going to continue to be erratic because of this, and of course the fact that we may be a little bit ahead of ourselves in general. I also recognize that the 2800 level above is massive resistance, so therefore it might be a bit difficult to break above there, but once we do it’s very likely that we could go much higher. If we break above that level, I would anticipate that eventually we go to the 2900 level, and that eventually my longer-term target of 3000.
At this point though, much of what is driving the market is emotionally based and therefore it is very difficult to trade this market. I would be cautiously optimistic at this point and keep Mike trading position small.
Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.