Day traders likely remain a bit jittery about pursuing the S&P 500 for a couple of reasons. One, the index continues to traverse near apex levels, which some speculators may believe is a reason why a selloff will occur as others pursue profit taking. Two, the Iranian war continues to create a cascade of non-clarity and muddled outlooks causing folks to be anxious about putting money into the broad marketplace.
However, as of this morning in futures trading the S&P 500 is higher again and traversing near the 7,229.00. Yesterday’s action in the S&P 500 did see limited selling, but by the stop of trading in the cash market the price was focused on the 7,200.00 mark. To put the climb of the S&P 500 in perspective and its ability to incrementally move upwards, the index was around 7,150.00 last week.
Nervous Traders and Traction to Higher Ground
While noise is a constant for the time being with various loud storms coming from happenings in the Middle East, financial institutions seem to show a rather strong desire to put their cash into the S&P 500. Not every day has been a winner – yesterday was a loser regarding upwards momentum, but betting against the trajectory higher likely hasn’t been profitable for speculators who believe the S&P 500 has to run out of power.
Having attained its flirtation with the 7,200.00 mark in recent days, Friday’s apex ratio was around 7,270.00 for reference, traders are faced with a decision regarding outlook. Certainly there are reasons to be nervous about current conditions in the S&P 500, but not participating in the markets since the end of March has proven to be a miscalculation by speculators who have been overly conservative. Once again, the S&P 500 has proven that it has the ability to shake off fears of higher realms and not look backwards.
Yesterday’s Losses and Hopes for a Sustained Reversal Higher Today
Again, there are no guarantees, but the S&P 500 has shown that it can climb in early trading via futures today. The past handful of weeks have been a severe test of emotions for all traders big and small.
Yes, noise from the Iranian war persists and this is not about to change.
However, it does appear that financial institutions are able to digest one day of poor news and outcomes, and then turnaround and shrug off nervousness and look for buying opportunities.
Traders looking to buy the S&P 500 cannot be blamed.
Friday’s highs may be too ambitious, but the index has shown an ability to create price velocity.
Risk management and cashing out winning trades for those without big accounts is important.
Patience and a bit of stubbornness may be a solid combination for speculators.
S&P 500 Short-Term Outlook:
Current Resistance: 7,234.00
Current Support: 7,218.00
High Target: 7,265.00
Low Target: 7,194.00