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Christopher Lewis
Silver

The S&P 500 has initially tried to rally during the trading session on Tuesday but gave back quite a bit of the gains. While the market is still slightly bullish, the fact that we gave back so much in a short amount of time is a bit concerning. The market is going to struggle at the 50 day EMA but that is just above at the crest of the 50% Fibonacci retracement level. I think it is only a matter of time before we rollover, so I am watching this closely. I suspect that we probably have one more day of bullish pressure at best, before sellers come back in and start shorting again. It’s quite common to see the 50% Fibonacci retracement level offer selling, as we have had a massive bounce after a massive breakdown.

S&P 500 Video 08.04.20

At this point, I suspect that it is only a matter of time before we rollover, and at the very least come back down towards the 2600 level. I do anticipate that at one point or another we will see buyers reenter the market, as we continue to undulate based upon the most recent headlines. At this point, the market is likely to see a lot of sharp intraday moves, and therefore you need to be very cautious about your position size. Nonetheless, this is a market that I think does look like it is trying to reach the 50 day EMA initially, but after that it will be interesting to see what happens next. Because of this, you should keep your position size is very small.

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