The S&P 500 has been choppy during Friday trading, as we head into a weekend that could be full of headlines, and this is a market that will remain dangerous from the short-term perspective.
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S&P 500
The S&P 500 has been pretty noisy on Friday, but this is a market that is very undecided at the short-term time frames due to the fact that there is so much in the way of concern and destruction in the Middle East. Ultimately, this is a market that is likely to move on the latest headlines coming out of Iran and the United States, and everything that is said about the Strait of Hormuz will obviously have a bit of an influence.
It's worth noting that interest rates in America have drifted a little bit lower during the trading session on Friday as we have seen a little bit of position squaring heading into the weekend. The biggest problem that we have here is that on Monday, the markets could gap in either direction depending on what we get, and with the uncertainty out there, it's really difficult to get aggressive one way or the other.
Key Technical Support and Resistance Levels
Ultimately, the 50-day EMA is an area that people would look at through the prism of a technical support level, just as the 7,500 level above is significant resistance. If we can clear that area, then it's possible that we could go back to the top of the ascending triangle that we had been working with, sending the S&P 500 as high as 7,600 above.
If we break down from here and clear the bottom of the Thursday candlestick, we could be looking at a drop down to the 7,300 level. All things being equal, this is a very noisy and choppy market, and I think with everything that's going on in the world and the fact that we are in the midst of earnings season, you can expect more of the same. I do think that ultimately we're still more bullish than bearish from a longer-term standpoint, but you are going to have to deal with a lot of choppiness.