The S&P 500 rallied to kick off the trading session on Tuesday but continues to be very noisy and have a bit of a weight around its neck. Because of this, I think that short-term rallies are to continue to bring in sellers, and after the initial rally it seems like they are more than willing to jump in. I do think that eventually we find some type of footing, but it’s obviously at lower levels as the market can’t hold itself up for any length of time. With that in mind, it’s not until we get a couple of days of stability that I think you can start to think about the S&P from the long side. The 2550 level underneath makes sense, because it is the 100% Fibonacci retracement, something that we quite often will see after breaking below the 61.8% Fibonacci retracement level.
S&P 500 Midday Video 30.10.18
Ultimately, I think the 2500 level is also a candidate for potential support, as we have seen in the past, and of course the fact that it is a large, round, psychologically significant figure. Market participants continue to be very skittish, and quite frankly with the trade war negotiations almost nonexistent, that will continue to be the case. Selling the rallies has worked, but recognize that when the turnaround starts, it will probably be quite brutal and hectic as value hunters will certainly be coming into the market. Be cautious though and let the market prove itself if you plan on trying to buy anything.
