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Christopher Lewis

The S&P 500 initially tried to rally during the trading session on Wednesday but struggled at the 50 day EMA. At this point in time, the market broke down to form a bit of a shooting star and it is likely that we will continue to chop around in this area. Quite frankly, the US dollar strengthening works against the stock market as well, so it is likely that we are going to see a lot of volatility in this area, and I believe that the 3200 level underneath is going to continue to be important as well. The 3200 level has been resistance previously, and now should be massive support. If we were to break out and break down below the 3200 level, then the next thing that the markets will be paying attention to is the 200 day EMA which is closer to the 3130 handle.

S&P 500 Video 24.09.20

I do not necessarily think that this market is ready to fall apart to the downside, but it certainly looks as if it has a lot of work to do. With that in mind, I would be cautious and keep my position size relatively small as we will almost certainly see a lot of back and forth. If we were to break above the 50 day EMA though, then it would show that the market is ready to go looking towards the 3400 level. A break above there then allows the market to go looking towards the all-time highs that we had recently hit. I do think we are eventually going to go there, but we have a lot of work to do before that happens.

For a look at all of today’s economic events, check out our economic calendar.

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