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Christopher Lewis
S&P 500

The S&P 500 initially tried to rally during the week but found enough resistance near the 50 week EMA to pull back and show signs of weakness. Furthermore, it is also where the 61.8% Fibonacci retracement level currently sits. At this point though, there is also significant support just below the 2800 level so as you can see this is a very messy market. It does look to me that the market is running out of momentum, and the rate of change is one of the most important things you can pay attention to. This is a market that will eventually show where it wants to go, but obviously it is much more difficult to go higher at this point than lower.

S&P 500 Video 18.05.20

The 3000 level above being broken would obviously be a sign that the market was ready to go much higher. Ultimately though, that is going to take a significant amount of momentum, and therefore probably some type of catalyst or event to happen. However, businesses are going to be functioning on about 50% capacity, and that of course is going to be exceedingly difficult for businesses to make the kind of money that they have in the past, so clearly valuation should need to come down.

Ultimately, I believe that the 2640 level is probably near where we are going to go in the next move, but we need to break down a bit below the 2800 level in order to see that move happen. If we do break above the 3000 level, then this market is highly likely to go looking towards the 3400 level over the longer term.

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