S&P 500/Dow - Tech Update Ahead of Holiday
- Resistance just in front for both S&P 500 & Dow
- Upcoming holiday puts capital preservation first on our minds
Yesterday - Another day, another gain for the market. We have entered the slow grind up phase of the rise which can be one of the most difficult to trade. It’s been a relentless rise the past few days, with the Dow making yesterday its seventh consecutive day of gains. It’s now running aground into a key trend-line off the May 2015 peak, which should make for an interesting spot for sellers if it is to pull back soon. It would be more ideal if the broader S&P 500 was pushing the same respective trend-line off the record highs, but for now it is up against a trend-line of lesser significance. This we went over yesterday.
It’s been a rocket of a rally off the 2/11 retest low. As my colleague, Kristian Kerr, pointed out yesterday, there are similarities between what we saw during the autumn rebound and the one which has unfolded in the past 5+ weeks. With those trend-lines in mind and critical resistance zones lying just beyond those lines, the timing is indeed becoming interesting. The easy part of the rise is definitely in the rear-view mirror.
S&P 500 Daily
It is a holiday shortened week with the US markets closed on Good Friday, while Europe is closed both Friday and the Monday following Easter Sunday. Given the lack of economic catalyst on the docket and vacation-week trading environment it is hard to imagine we will see aggressive selling develop between now and the weekend. It seems likely the market will remain buoyed into early next week at the least.
We are taking it slow this week, with preservation of capital on our minds. It doesn’t mean opportunity for the short-term trader won’t necessarily show its face, it just means limiting risk and perhaps doing a little self-reflection on recent events and your own trading as we head through and past the holiday may be the most prudent way to conduct ourselves.
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---Written by Paul Robinson, Market Analyst
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.