Christopher Lewis
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S & P 500 daily chart, January 03, 2019

The S&P 500 initially fell after very soft Chinese economic numbers early in the day, but we have turned around of form a bit of a hammer midday as it looks like the 2500 level is going to offer support. However, the 20 day EMA is above and sloping lower, perhaps showing signs of resistance. If we can break above there, the market probably goes to the 2600 level, which was previous support, and should now be resistance. Although the market looks a bit constructive at the moment, I think that it is only a matter of time before the sellers come back based upon the significant negativity out there based upon global growth, or perhaps a potential lack of.

S&P 500 Video 03.01.19

If we can break above the 2600 level, the market could very well go to the 2700 level after that. We need some type of bullish momentum though, not just a bounce that we have had so far. I think at this point, it’s likely that this bounce is probably due to traders positioning and buying their stocks for the new year. Ultimately, the major problems that are out there having gone anywhere, so I think you will get an opportunity to short this market from a higher level. If you are patient enough it should present itself in the form of an exhaustive daily candle. If we somehow break above the 2700 level, then I would say the move lower is all but over.

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