- The S&P 500 was fairly quiet in the early hours on Thursday and as we continue to try to sort out where we are going next.
- After all, we've recently had a roughly 6.5% pullback and now traders are trying to figure out whether or not it is a buying opportunity or the beginning of something bigger.
At this point it's pretty much a tossup, but having said that, we are still very much in an uptrend, so you still want to at least be on the side of caution and think more up than down. Underneath we have the 5000 level and the 4950 level, both offering support. Just as above, we have the 50 day EMA and the 5100 level offer and resistance.
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The 5100 Level
If the S&P 500 do break above the 5100 level, then it allows the market to continue its uptrend and I think at that point in time, we will probably focus on 5300 above where we had recently been repelled from. That being said, there are a lot of questions about what the Federal Reserve is going to do. Are they going to cut between now and the end of the year?
Nobody really knows but at this point in time, it's obvious that there are a lot less cards coming out of the Federal Reserve than once believed. If we were to break down below the recent swing low, it does open up a move down to the 200 day EMA, which is sitting right around 4750, which coincidentally is right where we had clustered before Christmas of last year.
So, there would be a bit of market memory there and I do think that the path forward is clear, we just have to pick a lane right now. I think we're just trying to get through earnings season, which means there will be some sideways action. In this situation, we could see a lot of choppiness, but at the end of the day, it is likely that we will continue to see plenty of support underneath the current trading area.
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