S&P 500
The S&P 500 had a volatile day as we broke through the crucial 2600 level during the early hours but turned around of form a hammer. Because of this, it looks as if we are going to continue to consolidate in this range, and that buyers will probably jump in today. With that being the case, I think we will probably go looking towards at least the 50 day EMA, but we need good news. If we break down below the bottom that hammer, that is an extraordinarily negative sign and could send this market down to 2500 rather quickly. All things being equal though, this looks like we are ready to continue the overall consolidation, and therefore I think more back and forth is ahead for us. Doesn’t mean it’s going to be easy, just that we are choppy.
NASDAQ 100
The NASDAQ 100 also felt towards major support at the 6500 level but turned around enough to show signs of life again. I think at this point it’s likely that we continue to look at this as a recovery back into consolidation, so we could go as high as the downtrend line that I have marked on the chart, perhaps the 50 day EMA. However, longer-term we still have issues between the United States and China so I look at this as a short-term buying opportunity at best. I also anticipate somewhere near the 50 day EMA we will see sellers jump back in and push this market lower again. It’s not until we get some type of calming down of the situation between the Americans and the Chinese that the NASDAQ 100 will have true momentum to the upside.
