The S&P 500 went back and forth during the trading session on Monday but did show signs of life at the 200 day EMA. Perhaps even more important than that is the fact that we have stayed within the consolidation area that we had been in, and therefore it makes quite a bit of sense that we are simply going back and forth trying to figure out where we go next longer-term. The markets of course are still reacting to the US/China trade situation, which of course continues to be very erratic to say the least. Looking at this chart, the 200 day EMA and the 50 day EMA are both going sideways.
S&P 500 Video 27.08.19
All things being equal, this is a market that I think you should continue to see a lot of choppiness, and then I think a lot of people will be looking towards the type of sideways trading systems to take advantage of. Having said that though, if we break down below the 2800 level, it’s likely that we could break down significantly from that level. The alternate scenario is that we somehow break above the 2950 level, which could send this market looking towards the 3000 level, perhaps even the 3100 level.
All things being equal, I think that we get more choppiness than anything else in the short term. Because of this, and the fact that it’s the last week of summer, I suspect that the markets are going to be difficult to navigate and a little bit uncertain in either direction.
Please let us know what you think in the comments below