The S&P 500 pulled back initially during the trading hours on Wednesday, but also seems to be very resilient as we have plenty of buyers underneath and have recovered quite nicely after what had been a rather tough Tuesday.
The S&P 500 rallied a bit during the early hours on Wednesday, fighting back against the selling pressure that we had seen on Tuesday. This is a market that continues to see a lot of upward pressure, and the 5100 level seems to be offering a little bit of support. But even if we were to break down below there, it’s likely that the 5000 level is significant support also. The 50-day EMA starts to race towards the 5000 level, so I do think that that does become a bigger floor than anything else. It’s a 45-degree angle, and that, of course, is a good sign for upward momentum continuing. Granted, there will be the occasional pullback, but it looks like over the last 24 hours, traders have shown that they truly want to buy dips.
But keep in mind that this is non-farm payroll week, and therefore the next day or two might be kind of quiet, which probably keeps the market from selling off too drastically. Friday, of course, will be extraordinarily thin at points due to the jobs announcement, but at this point in time, I think we’ve got a situation where the market will continue to try to find reasons to go higher, if for no other reason than the fact that the Federal Reserve should cut rates later in the year. That being said, we have to ask whether or not they are going to do it as aggressively as Wall Street is pricing in.
That being said, they are pushing back a little bit, but it doesn’t seem like Wall Street believes it. Keep in mind that the S&P 500 index is driven by a handful of stocks, so follow all the big ones, all the ones that everybody else is talking about, and you’ll get an idea as to where this index is going to go. That’s been the case for quite some time, and I just don’t see that changing anytime soon in this market.
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Chris is a proprietary trader with more than 20 years of experience across various markets, including currencies, indices and commodities. As a senior analyst at FXEmpire since the website’s early days, he offers readers advanced market perspectives to navigate today’s financial landscape with confidence.