S&P 500 Midday Technical Analysis October 31

The S&P 500 rallied stringently during the trading session on Wednesday, but I think this is more of a relief rally as none of the overall underlying factors have changed. I believe that we will see sellers between here and 2750, so at this point I look at signs of exhaustion as an opportunity to short. At this point, we should see the 2700 level underneath as support, but if we break down below there, I think that the market then drops down to the 2650 handle.

S&P 500 Midday Video 31.10.18

At this point, expect volatility but I think it’s a bit early to look at this as the “all clear” sign for buyers to jump back into this market longer-term. We have seen this scenario play out previously a couple of times this year, and I would also point out that the shooting star on the hourly chart does suggest that perhaps we are starting to get to that area where sellers could return. Ultimately, this is a market that is going to be very difficult and erratic, so quite frankly keep this position size small or perhaps even stay out altogether. The CFD market is probably the best vehicle to use, as the futures markets are far too volatile and expensive to be bothered with. While the momentum to the upside has been impressive, quite frankly I think that this is a market that is setting up for another trap for buyers, and therefore I like the idea of shorting on signs of exhaustion more than anything else.