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Christopher Lewis
S&P 500 daily chart, October 14, 2019

The S&P 500 has rallied quite nicely during the trading session on Friday, as we have broken above the 50 day EMA. Ultimately, the 3000 level has offered a significant amount of resistance, as the round figure of course attracts a lot of attention. That being said, the highs are closer to the 3025 handle, so if the United States and China strike a deal it’s very likely that we will make an attempt to get there. It’s whether or not we can break above there that’s going to be the crucial part.

S&P 500 Video 14.10.19

What’s going to be interesting is not necessarily the immediate reaction, but where we end up after that announcement. It’s also very likely that the announcement of terms or whatever happens won’t happen until after the markets close. Because of this, the real action will probably be first thing Monday morning in Asia through the Globex.

Further making things much more of a minefield is the fact that next week begins earnings season. In other words, we could get a lot more volatility, not less. That being said, if we get some type of significant selloff, it’s likely that the 200 day EMA will offer support as it is so highly correlated to the uptrend line. A breakout to a fresh, new highs of course would be a massively bullish sign.

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