Upon first glance this morning and the S&P 500’s ability to traverse over the 6,800.00 mark, investors and day traders who have not participated in the markets and stayed away from the news the past few weeks, might not be surprised. However, because of the Iranian war saga, almost all participants in the S&P 500 understand there are forces moving the markets and causing volatility.
However, with all of the dynamic price action and surges seen in the S&P 500 the past couple of weeks, remarkably the index is traversing above the 6,800.00 level this morning. Yesterday’s spike lower when the markets opened took the S&P 500 to a depth of nearly 6,575.00, but the recovery upwards was almost as equally fast.
Worries About War and Outlooks
Yes, investors who are the ones who largely move the S&P 500 based on their sentiment are vital in the marketplace. Nervousness early yesterday was a result of noise coming from the media that was hard to digest and understand in some cases for participants, but after a deep breath the S&P 500 and other assets started to recover. While worries about large scale war are absolutely realistic, day traders need to understand that the results in the S&P 500 are based on outlooks.
Short-term concerns must be weighed against the belief that things will get better. While that may seem a very simple sentence. The markets, including the S&P 500, operate on optimism. Why else would someone want to invest in an equity index? An investor needs to believe things will get better if they are buyers. Yes, the S&P 500 can be sold too (going short) in the marketplace. However, for the moment conditions seem to be more calm this morning.
S&P 500 Contemplation for Short-Term Bets
The recovery back to the 6,800.00 is important. The S&P 500 remains within the higher edges of its long-term charts. No, the S&P 5000 is not near record highs, but it is holding onto ground that is likely viewed as important by technical and fundamental speculators.
Day traders need to remain cautious, the markets remain dynamic and sudden news could spark volatility.
Looking for upside may feel natural, but choppiness may persist in the short and near-term.
Traders need risk management if they are pursuing positions in the S&P 500 today that is solid tactically.
S&P 500 Short-Term Outlook:
Current Resistance: 6,820.00
Current Support: 6,795.00
High Target: 6,870.00
Low Target: 6,765.00