News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Mixed
Oil - US Crude
Mixed
Wall Street
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Mixed
GBP/USD
Mixed
USD/JPY
Mixed
More View more
Real Time News
  • Wow. Paleontologists estimate that 2.5 billion T Rexes existed in all of time. It's estimated that 108 billion humans have existed thus far. Let's see if Elon Musk fancies himself John Hammond to balance those numbers
  • EUR/USD and GBP/USD are both testing resistance levels of note, with Cable putting in a massive move to start the week. Get your market update from @JStanleyFX here:https://t.co/hUpHKARmBt https://t.co/kF1Xvf8x2U
  • 10 out of 11 S&P 500 sectors ended lower, with 66.9% of the index’s constituents closing in the red. Consumer discretionary (-1.14%) and information technology (-0.88%) were among the worst performers, whereas real estate (+0.29%) registered a small gain. https://t.co/BhAokfrkcH
  • What are some key takeaways for trading gold? Get your free insight here: https://t.co/lnxaQOsgid https://t.co/uc8ptamQ72
  • RT @KyleR_IG: With the @RBAInfo meeting minutes today, I had a look at a few $AUD/USD correlations. It's clearly been a commodity price an…
  • The US Dollar is looking increasingly vulnerable to ASEAN FX, with USD/SGD and USD/THB breaching key support. USD/IDR is eyeing a Rising Wedge, USD/PHP may face February lows. Get your $USD market update from @ddubrovskyFX here:https://t.co/7rSQztIR8z https://t.co/PUNeByV2Ls
  • EUR/USD rocketed higher during early trade, reclaiming the 1.20 handle $EURUSD https://t.co/G04a5892IB
  • @ddubrovskyFX 'The Four Candle Phenom'
  • AUD/USD appears to be on track to negate the head-and-shoulders formation from earlier this year as it clears the opening range for April. Get your $AUDUSD market update from @DavidJSong here:https://t.co/kG7JGNLyve https://t.co/XB5eu2zH53
  • @JohnKicklighter One Bear Pennant coming right up! https://t.co/RVTxa123bH
S&P 500: Fake-out Breakout Could Spell Trouble

S&P 500: Fake-out Breakout Could Spell Trouble

Paul Robinson, Strategist

What’s inside:

  • The S&P 500 remains amid the historically tight trading range
  • Failure to break to the upside increases likelihood of a down-side break
  • Bearish factors still in play

Recently, we discussed the risk of seeing the painfully tight trading range in the S&P 500 result in an initial fake-out once it was broken.

From yesterday’s commentary: “In overnight trade the S&P moved above the top-side of the range set at 2174/78, but is now falling back to retest. A hold here will be important as a drop back inside will increase the likelihood of seeing a move to the low-end of the range in the 2155/60 area or worse.”

It wasn’t long into the U.S. session, yesterday, we saw the S&P 500 drop back inside to the middle of the range after trading briefly above it.

In overnight trade, there was a push higher back to the top of the range at the 2174/78 band, but resistance proved to be just that as sellers emerged. The low-end of the range is clearly exposed and a probe and break of support could soon unfold.

Given how elongated the range had become and the fact the market’s first attempt to break to the upside was a failure, suggests that the next extended move could come on a break of support in the 2155/60 area.

S&P 500: Fake-out Breakout Could Spell Trouble

Still supporting the case for the down-side is the fact the market continues to hold sideways while the percentage of stocks in the S&P 500 doing so continues to trend lower.

Additionally, the VIX remains very depressed and due for a bump higher. Yesterday, we discussed August as a month which kicks off a season of higher volatility, but even if that is to be put on hold until later, a small kick higher in the VIX can be expected, even if short-lived.

Thirdly, the propensity over the years for the market to decline back below the previous record high shortly after making a new one remains a tendency we believe will play out.

For more details: Failures following record highs (here), bearish volatility and breadth (here).

S&P 500 w/VIX & %Stocks >10-day MA

S&P 500: Fake-out Breakout Could Spell Trouble

The market is searching for direction, and as each side of the market gets tested, eventually one or the other will gain control. Buyers had their chance to gain the upper hand, now it is the sellers turn to see if they can take over.

Learn how to improve your skills in taking an idea from concept to execution in our trading guide, “Traits of Successful Traders”.

---Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at @PaulRobinsonFX.

You can email him at instructor@dailyfx.com with any questions or comments.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES