Christopher Lewis
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S&P 500 daily chart, February 06, 2019

The S&P 500 rallied a bit during the trading session on Tuesday, as we continue to grind higher. We are above the 2725 level as I record this, and it looks very likely that we will use the 200 day EMA as support which happens to coincide with the large come around, psychologically significant figure of 2700 level. At this point, I think short-term pullbacks offer plenty of value the people will be willing to take advantage of, perhaps reaching towards the 2800 level above.

S&P 500 Video 06.02.19

As we broke above the 61.8% Fibonacci retracement level, it’s likely that the market will wipe out the entire move, which means we could go as high as 2825. I don’t have any interest in shorting this market, at least not until we break down below the 200 day EMA significantly, or perhaps even lower than that. I think at this point it’s obvious that equities are going to grind higher due to the Federal Reserve taken a more dovish stance, although one does seem to feel that it’s likely we will eventually get a day of reckoning.

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I would keep my position size very small, because quite frankly there has been little in the way of clarity, and we have so many different issues around the world that could shock the market. The federal government heading towards a shut down again is a real possibility as well, so likely it’s going to be a sudden reversal that we see eventually, but right now there are no signs of it.

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