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Christopher Lewis

The S&P 500 has pulled back a bit from the 50 day EMA to kick off the week, as well as the psychologically important 2800 level, and the 50% Fibonacci retracement level. In other words, this is a confluence of several technical analysis indicators that people pay attention to. If that’s going to be a case for the bears, the next question will be whether or not we can break down below the 2640 level. A move below there could accelerate things to the downside, sending the market down towards the 2500 level.

S&P 500 Video 14.04.20

Ultimately, we may chop around the 50 day EMA, trying to figure out whether or not we have enough momentum to continue going higher. The Federal Reserve has liquefied the markets and is essentially willing to buy anything that isn’t nailed down, so that’s part of what’s been moving the market. At this point, there is the old adage “Don’t fight the Fed”, but the question then becomes whether or not this is simply a bear market rally. Clearly, the economy is going to have a significant blow to face due to the fact that everything has been shut down. If we can break to the upside, then it’s possible we go looking towards the 61.8% Fibonacci retracement level, which is near the 2950 level, and of course the scene of a gap. I anticipate that if we do get a move to the upside that’s about as far as we go in the near term. One thing to pay attention to is that it was only the Americans trading the E-mini contract during the day.

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