The stock market has been rather quiet during the trading session on Wednesday again as we continue to see the S&P 500 go nowhere.
The S&P 500 has been very quiet over the last several sessions, with Wednesday being no different than the last week or so. At this point, it looks like the 50-Day EMA underneath continues to offer support, and I think that is something worth paying attention to. If we do break down below the 50-Day EMA, the market could go down to the 200-Day EMA, which obviously would attract a lot of attention.
I have recently been thinking that the market was trying to form a massive “megaphone pattern”, but that has obviously dissipated, as momentum has dropped in general. With that being the case, I think we got a situation where the market is just looking for some type of catalyst. As it does not have it right now, it is just simply a matter of going back and forth in short term charts. If you are looking at this as a market to trade for short-term movement, that does make a certain amount of sense but it’s also worth noting that the market could find itself moving quite rapidly on news.
Either way, short-term trading is probably about as good as it gets with an eye on the 4200 level above as major resistance, and the 4000 level underneath as major support. As far as what to do next, it is worth noting the volume is rather light, and therefore it seems as if there is a lot of indecision out there just waiting to happen. In this type of environment, it’s best to stick to short-term charts, with smaller than usual position sizes so you can stay out of trouble.
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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.