- The S&P 500 Index fell during the trading session on Monday, as it looks like the 200-Day EMA could come into the picture and will possibly offer resistance.
- The 200-Day EMA is sitting just above the 4000 level, but there is also support underneath sitting at the 3900 level.
- The 50-Day EMA sits underneath the 3900 level and is rising, so it could offer a little bit of support.
Jobs Number Coming Out On Friday
One of the things that I think you should be paying attention to is the fact that we are between the 200-Day EMA, and the 50-Day EMA. This typically causes some type of squeeze in one direction or the other, and we most certainly have plenty of things out there during the trading week that could come into the picture and move this market. The first one is Core PCE, as it is the Federal Reserve’s favorite inflation metric, and they will be paying close attention to it. Furthermore, we also have the jobs number coming out on Friday, which obviously has a major influence on risk appetite and assets in general.
If we break to the downside, if we drop below the 3900 level, it’s likely that the market could drop down to the 3700 level. After that, I would anticipate that the S&P 500 could go looking to the 3600 level. On the other hand, if we turn around break above the 200-Day EMA, then it’s possible that we could take off to the upside, challenging the 4100 level, and then possibly the 4200 level. There is the possibility that this comes into the picture if we get the so-called “Santa Claus rally.”
I do expect a lot of volatility this week, so therefore I think that you need to look at this more or less through the prism of risk appetite, but that PCE number coming out on Thursday will have people freaking out if it comes into hot. In other words, the market is likely to continue to see a lot of issues, but I do think that we probably will see a lot of noise in both directions, so you will have to be cautious about how you trade. Position sizing will be crucial, because with the erratic behavior that we have seen, you could get hurt pretty quick.
Ready to trade our S&P 500 analysis? Here’s a list of some of the best CFD brokers to check out.