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Christopher Lewis
S&P 500

The S&P 500 initially tried to rally during the course of the week but gave back the gains above the 3400 level. By dropping from that level, we have formed a very sick looking candlestick that suggests that we are going to go lower. If we break down below the bottom of the cancer for the week, it is likely that we go down towards the 3200 level. That is an area that should be rather supportive, so at this point in time it is likely that the market will find some type of support based upon the resistance that had been there previously. However, the 50 week EMA is starting to reach towards the 3200 level as well, so that could also be somewhat supportive.

S&P 500 Video 21.09.20

On the other hand, if we break above the top of the candlestick for the week, then it is likely that the market could go looking towards the 3500 level. All things being equal, this is a market that is still very much in an uptrend, so I have no interest in trying to get too cute with this, but I do recognize that a pullback makes quite a bit of sense. After all, the US dollar is starting to show signs of strengthening, and if it does it will more than likely continue to weigh upon the S&P 500. It does look as if volatility is starting to pick up again, and if that happens, we could see some negativity in the short term. Look at this chart, a little bit of a get back makes quite a bit of sense.

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

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