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Christopher Lewis
S & P 500 daily chart, October 26, 2018

The S&P 500 gapped higher at the open on Thursday, while some people look to value hunt. However, there’s no denying that the brutality of the selloff is only accelerating, so I think what we are looking at is an opportunity to sell from higher levels more than anything else. The 2700 level should be the first area of resistance, but even breaking above there doesn’t guarantee much until we get above 2800. There has been an enormous amount of technical damage done to the S&P 500, and it’s hard to believe that traders will forget that.

As a side note, many of the industry insiders that I’m speaking to are making note of the fact that it’s mainly retail investors that are buying stocks, not professionals. Because of this, I think it is only a matter of time before more of those professionals sell at higher levels to those retail traders again, thereby dumping off assets. I think that the technical damage done to the stock market is far too strong to think that we are simply going to turn things around at this point. Quite frankly, it would be extraordinarily bullish to overcome the 2800 level, something that I just don’t see happening without some type of catalyst. Traders are starting to complain about the Federal Reserve raising rates, and I think this is their way of trying to get the Fed to bend to their will. However, at the same time the president continues to berate the Federal Reserve, making it almost impossible for them to not raise rates.

S&P 500 Video 26.10.18

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