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Christopher Lewis

The S&P 500 initially tried to rally during the trading session on Wednesday, as we reached towards the gap from Friday, but pulled back a bit. Ultimately, this is a market that seems to see a lot of noise and has gotten a bit ahead of itself. The question is whether or not we are forming topping pattern right now? It certainly seems to be losing momentum and I think that a lot of traders are looking at the jobs number with a bit of trepidation.

S&P 500 Video 07.05.20

The 61.8% Fibonacci retracement level sits right at the 200 day EMA as well, so that of course will come into play. On the downside, if we can break down below the 2800 level it is likely that the S&P 500 will go looking towards the 2640 level. The 2640 level is a significant level from the past, so I would anticipate a bit of buying pressure there. All things being equal though, if the S&P 500 finally decides to pay attention to the economy, it will start to see that there are a lot of negativity and therefore it is likely that we will see selling pressure sooner or later. It is worth noting that the 200 day EMA has offered massive resistance. By the end of the week, we could get a rather significant move, and I suspect that by the time Monday comes around we may have quite a bit more clarity.

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