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Christopher Lewis
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The S&P 500 initially tried to rally during the trading session on Thursday but as we reached the 200 day EMA, technical traders came in and started shorting. Beyond that, you should also keep in mind that the top of the gap was filled so we could very well be seeing an area that attracts a lot of technical attention. Furthermore, the 3000 level above is going to be massive resistance so do not be surprised at all to see this market rollover from here. I believe though that the downside is probably somewhat limited in the short term.

S&P 500 Video 01.05.20

It is earnings season so that of course will have its effect on what is going on and as a result you should pay attention to the 50 day EMA underneath. That is an area that could cause a little bit of dynamic support, as a lot of technical traders pay quite a bit of attention to it. That being said, it will be interesting to see how they choose to open up the month of May, as there will be new money being put to work. Expect this to be an area where we could see a bit of noise back and forth, as we are at a crucial level due to the gap, the 61.8% Fibonacci retracement level, the 200 day EMA, and then of course we have the 3000 level just above. With that, look for signs of an impulsive candle to trade but I suspect we may get a short-term pullback, but nothing too earth shattering.

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