S&P 500: Speculative & Nervous Conditions Shadow Major Index

Robert Petrucci

After achieving another all-time high on the 22nd of November, many speculators prepared for more days of wine and roses via the S&P 500 Index. The record value of nearly 4755.0 looked strong even as skeptics continued to be heard saying the major equity index was due for some negative momentum. One week later, as December trading gets underway, another reminder that reality can change frequently for traders has occurred.

Yesterday witnessed a negative day of trading as concerns regarding Omicron sparked additional nervous conditions. Before going into the weekend and one day after Thanksgiving, the S&P 500 suffered its worst day of trading during the calendar year. Monday’s trading, however, produced positive action when investors seemed to become calm regarding the frenzy of news flow regarding the newest variant of coronavirus. Choppy trading conditions should continue to be expected near term as financial institutions make their way through the storm of developing coronavirus sagas coupled with implications for economic outlooks.

Short-term technical traders have a difficult task in front of them as they ponder what has been a long-term one way avenue upwards for US equities on the major indices. The S&P 500 accomplished new heights only one week ago, but the shadows now hovering over the market certainly have changed the landscape temporarily. And the key word may prove to be temporarily. In early trading today via the S&P 500 futures the index has moved slightly higher.

Traders should be conservative regarding their speculative wagers with the S&P 500 via the amount of leverage they use. Present conditions because of the rather nervous results generated the past three days of trading also highlight that patience might be needed if a position doesn’t go in the chosen direction immediately. Speculative bulls may look at the 4610.0 support level as important and want to wager that upside momentum may continue to be demonstrated today and bring the S&P 500 back to resistance levels which will be challenged.

Speculators who dare to step in front of the long-term trend and sell the index based on the nervous conditions which exist cannot be faulted, but they should certainly use stop loss orders in case buying turns strong again. The S&P 500 is clearly a trade which can expect plenty of volatility near term, and traders who decide to remain optimistic and pursue upside potential with reasonable targets near current resistance levels may find profitable wagers.

S&P 500 Short-Term Outlook

Current Resistance: 4627.0

Current Support: 4597.0

High Target: 4652.0

Low Target: 4561.0

S&P 500 Index

Robert Petrucci
Robert Petrucci has worked in the Forex, commodity, and financial profession since 1993. Important aspects of his work involve risk analysis and advisory services. As an advisor in a Family Office he maintains a conservative approach for wealth management and investments. Robert also works in private finance with investors and companies delivering financial and management services.

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