What’s inside:
- S&P 500 holding confluence of trend-line support
- Will give trend and support benefit of the doubt until broken
- FOMC tomorrow could bring a bout of volatility
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Last week, we looked at the S&P 500 after holding support and had this to say: “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.”
So far, the shove from support hasn’t been particularly inspiring, and suggests some work will be needed if the market is to continue higher. A period of consolidation with an upward tilt would be a healthy development given the rise in to the nose-bleed section since bottoming in November.
What we will be watching – support, of course. As long as the intersection between the November & ‘cross-through’ trend-line from the February 2016 low keep a bid in the market, then it will be tough to be anything but neutral to bullish. But a slice through those lines and a drop below Thursday’s low and horizontal support at ~2353 will warrant a switch in bias as another leg lower off the early-month high kicks off.
Heads up: FOMC tomorrow may provide a jolt of volatility. The market is expecting a 25-bps rate increase, so ruling out a 0 or 50-bps move volatility will likely stem from the Fed’s language (as is typically the case). No predictions on this end, we’ll simply react to the reaction and go from there…
S&P 500: Daily
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---Written by Paul Robinson, Market Analyst
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