The S&P 500 went sideways initially during the trading session on Monday, but then broke down significantly as trade war for errors continue to be a major issue, and of course the rhetoric coming out of the President’s mouth in the United States doesn’t help the situation either. He has been picking on Amazon as of lately, and that has put the tech markets down. I think at this point though, it’s only a matter of time before the buyers come back into the market, unless of course trade fears intensified due to something that the Chinese say.
I believe that there is a massive support level near the 2500 level underneath, so if we were to break down below there, we could sell off the S&P 500 quite drastically. The alternate scenario is that we break above the 2600 level, and that should send this market towards the 2640 level after that. If we can break above 2650, the market goes even higher, perhaps reaching towards the 2680 level, followed by 2700. I think that you need to keep the position size rather small and add once the market moves in your favor. The volatility has returned to the financial markets, which for a trader is a great thing, but it also means that you need to be very cautious about putting money into the market to rapidly. I think the next several sessions will be very interesting, and needless to say – dangerous for those who aren’t careful.