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Christopher Lewis
U.S. Stock Indexes

The S&P 500 has gone back and forth during the trading session on Wednesday in a slightly bullish move, but at the end of the day it is thin volume so it is difficult to imagine a scenario where we can read too much into it, but at this point in time the one thing that is obvious is that we have been in an uptrend for some while now. The 50 day EMA is sitting at the 3600 level, and therefore I think that offers yet another reason to think of this as a “floor” in the market.

S&P 500 Video 31.12.20

To the upside, the 3800 level is a target for the short term, followed by 4000 which is based upon the measured move from the previous consolidation area. The previous consolidation area measured 400 points, and adding the 400 points to the 3600 level, you get a measured move to the 4000 handle. All things being equal, I have no interest in shorting this market, because stimulus will of course offer quite a bit of money going into the system, and people taking advantage of what has been the play for 13 years, simply following cheap money to get involved in the stock market.

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Do not get me wrong, I am not saying that the market can break down, but at the end of the day we are in an uptrend and that does not change into you break below the 200 day EMA at the very least, which is down near 3338 right now. We are nowhere near that, and it would take quite a bit of bearish pressure to change the overall attitude. I do recognize that thin volume can cause some issues, but the trend is firmly ensconced.

For a look at all of today’s economic events, check out our economic calendar.

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