S&P 500: Short-term Techs Ahead of Yellen Speech
- S&P 500 attempted to break support, but bounced modestly, DT scenario still in place
- Picking spots carefully in this slow summer tape
- Yellen speech today in Jackson Hole may turn out to be a non-event, but we need to be prepared regardless of expectations
The double-top formation on the short-term chart is still in play, but until support gives way in the 2168/72 vicinity, then the market will remain buoyed. In Thursday’s session, the S&P 500 attempted to break down below support until it found minor sponsorship for a bounce. The push higher off support has been weak thus far and doesn’t indicate a strong willingness by the market to hold, however, until it breaks it will remain what it is – support.
Yesterday, we discussed the unsustainability of momentum in the light volume, low volatility summer trading environment. That is best to fade key levels rather than anticipate their break or chase once they have broken. With that said, a clean decline through support doesn’t give the ‘all clear’ to the shorts just yet; again, it’s not a good environment to chase. Instead, we would rather adopt a ‘break-retest-fail’ approach.
Today, Janet Yellen will be giving a speech at Jackson Hole. By now, pretty much everyone is aware of this and expectations are somewhat dampened for Yellen to say anything which might cause the markets to go haywire. But even with that being the case, it is our job to still anticipate the unanticipated.
We are continuing to tread cautiously until market participation returns and volume and volatility picks back up. But little ‘dink-and-dunk’ trades off support and resistance levels are presenting themselves for the nimble short-term trader (day-trader).
Dull markets are an excellent time to hone one’s skills. Check out one of our many free trading guides designed to help you do just that.
---Written by Paul Robinson, Market Analyst
You can follow Paul at @PaulRobinsonFX.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.