The S&P 500 found resistance at the 2400 level, just as it has found the support at the 2300 level. This is a relatively neutral candle, but quite frankly I think some type of rally will only end up being a selling opportunity. If we can clear the 2400 level, it opens the door to the 2500 level. This would not be a huge surprise to me, because we have sold off so viciously. However, I believe that after this type of move, it’s very likely that we will need some type of “dead cat bounce.” Even if it’s not that, it will be a relief rally, and it’s only a matter time before we start shorting. It’s not until we clear the 2600 level that I could be convinced to start buying for the longer-term, and I believe that there are so many concerns and disruptions out there that it’s only a matter of time before the sellers return.
S&P 500 Video 27.12.18
At this point, I think that rallies will make excellent opportunities, because we are so extended to the downside that it’s hard to start shorting here. Ultimately, I think it’s only a matter of time before something comes out that’s books the market again, and therefore if you are patient enough you should get a nice opportunity. In the meantime, with this low liquidity and holiday season it’s difficult to put a lot of money to work in either direction.