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.

Free Trading Guides
EUR/USD
Bullish
GBP/USD
Mixed
USD/JPY
Mixed
Gold
Mixed
Oil - US Crude
Mixed
Bitcoin
Mixed
More View more
Real Time News
  • Inflation? What? Where? Just about everywhere but the headline CPI figure and in places that actually hit American pockets. https://t.co/5I61Le3UNV
  • ...interest/concern specifically in the Repo Market (according to Google search is the highest since they have records back to 2004 https://t.co/J2sTOVZOQX
  • RT @lisaabramowicz1: The Fed isn't worried about repo disruptions heading into yearend. Repo operations have “gone well so far," and “pres…
  • Overnight lending concerns are currently as high as they were back in Oct 2008. This more a game of confidence than a Fed fire house, but Powell says they are not concerned https://t.co/rcszpKzlrH
  • US Treasury Yields Update: 2-Year: 1.613% 3-Year: 1.622% 5-Year: 1.636% 7-Year: 1.733% 10-Year: 1.790% 30-Year: 2.224% $TNX
  • $EUR: Euro Eyes Lagarde's First #ECB Meeting in Wake of the Fed Full Analysis: https://www.dailyfx.com/forex/fundamental/central_bank_watch/2019/12/11/eur-price-outlook-euro-eyes-ecb-meeting-lagarde-after-fed.html https://t.co/JhnjqczIRO
  • RT @TheStalwart: Powell says he's reluctant to describe the labor market as tight because you're not seeing rapid wage growth.
  • Fed Chair Powell: - Wages being held back by low productivity and globalization - Labor market may not be as tight as we thought it was #FOMC $SPX
  • Fed Chair Powell: - Review of policy framework will last until the middle of 2020 #FOMC $DXY
  • The US Treasury yield curve is flattening with confirmation that the Fed is now on pause https://t.co/zloqGpiYVz
S&P 500 Pulls Back to Support and Holds; Rip to New Highs or Consolidation Next?

S&P 500 Pulls Back to Support and Holds; Rip to New Highs or Consolidation Next?

2017-03-10 12:47:00
Paul Robinson, Currency Strategist
Share:

What’s inside:

  • S&P 500 holds eyed support levels, turns higher
  • This keeps the trend pointed higher as long as support holds
  • How the market comes out of a low will help guide us towards whether to expect a rip to new highs or a period of consolidation

Looking for trading ideas? See our Trading Guides.

The pullback off the highs in the S&P 500 has been a gradual process, with yesterday demonstrating characteristics of a short-term capitulation bottom. It wasn’t anything earth-shattering, but the ‘dribble’ lower over the past week ended in a relatively sharp drop and reverse in the afternoon session, suggesting the worst is over for now. The daily low came very near horizontal support from the end of February and a retest of the Feb ‘16 trend-line we have been working with the past few months. Also, very nearby is the trend-line running up from the November low. The market didn’t quite reach that point, but it may touch off on it at some point soon. Nevertheless, the stop and reverse from other noted support levels should be enough to keep a floor in for now. A break below yesterday’s low and the November trend-line would of course change this outlook.

How the market comes out of yesterday’s low should help provide us with insight as to whether we will see a strong resumption of the uptrend or entering a period of consolidation. A strong initial surge would suggest the former. However, a period of horizontal work would be a positive development for setting up a rally later on. For now, the bias is higher to side-ways at the worst, with clear support levels/lines in place to operate off of.

Heads up next week: FOMC rate decision on Wednesday could spark volatility. The market has already priced in a 25-bps hike, so it’s likely that if volatility is to stem from the meeting, barring a 0 or 50 bps move, it will come from the Fed’s statement and forward indications. A big NFP miss today may cast a shadow of doubt prior, but not looking like the most likely scenario at this time. (See the economic calendar for details.)

S&P 500: Daily

S&P 500 Pulls Back to Support and Holds; Rip to New Highs or Consolidation Next?

Created with TradingView

See the Webinar Calendar for a schedule of upcoming live events with DailyFX analysts.

---Written by Paul Robinson, Market Analyst

You can receive Paul’s analysis directly via email by signing up here.

You can follow Paul on Twitter at @PaulRobinonFX.

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

DISCLOSURES

News & Analysis at your fingertips.