S&P 500 Technical Outlook: Dip-buyers Left Waiting
- S&P 500 trading to new record levels, breaks through one line of resistance
- Another eyed lined of resistance lies ahead, only viewed as minor in significance
- Pullback entries may be short and shallow; must be nimble
What big factors are expected to impact the S&P 500 during Q3? Find out here!
The other day we were discussing the move to new record highs in the S&P 500 and the preferred approach of not paying up, instead choosing to wait for a pullback first. Between the Friday breakout and now the market didn't experience much of a pullback, actually on a closing basis there has been no decline at all, just a pair of new record closes. On an intra-day basis, though, Tuesday saw the market try and dip back below the prior all-time high recorded in June, but by days end the market recovered back above. It was a shallow ‘no dip, dip’.
Yesterday’s move higher showed not only good buying interest, but was also enough to push the S&P beyond the first line of resistance we had marked in by way of the March top-side trend-line. No issues at all pushing on through. We’ll look to see how the market responds to it on any dip which may unfold from here. The move higher now brings the underside of the November slope into play. As stated the other day, both of these overhead lines given they are running with the direction of the prevailing trend, are not viewed as the most steadfast forms of resistance. But potential resistance, nevertheless. With that said, if the market is ready to launch higher in a similar fashion as it did during February we may see the S&P tear through the November slope with relative ease.
But again, to reiterate, not a big fan on this end of paying up into momentum; choosing, rather, to buy on dips. This means those traders looking to get long may have to be nimble and establish positions on intra-day dips and single-day declines (Keep in mind the March top-side trend-line as first potential support.) Overall, risk reward at this moment is not the most compelling.
S&P 500: Daily
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---Written by Paul Robinson, Market Analyst
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.