- The S&P 500 initially fell overnight in the electronic hours, but it looks to me as if we are trying to recover a bit.
- Ultimately, this is a market that has been in an uptrend for a while and probably is a little oversold in the short term.
- This is a market that I think will continue to see a lot of noise, but at this point in time, I suspect that the path higher is still the easiest one as far as I can see.
The 5100 level above is currently sitting right as resistance just above the market. And of course we have the 50 day EMA there as well. So, with that being the case, I think you have a situation that if we can take out the 5100 level to the upside, the S&P 500 give us much higher. Underneath we have the 5000 level, which I think is a huge flaw in the market.
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The 5000 Level Matters
The 5000 level is a large, round figure that a lot of people will pay attention to. And I would assume there are a lot of options being traded in that general vicinity. There is a lot of talk about interest rates going higher in America, and a lot of people are freaked out about that. But at the end of the day, I think it comes down to earnings season as well. Remember, it isn’t only a matter of overall earnings, and it is about the big companies more than anything else.
Keep in mind, we are in the midst of that, and it's likely that will be the main driver in general, with this being the case. I like the idea of taking advantage of this dip. The S&P 500 has been very strong for a very long time, and I don't know if it will change anytime soon. Consolidation between 5000 and 5300 makes a lot of sense during earnings season, as a lot of traders will continue to hang out in this market, and this is a situation where eventually we get through all of that.
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