S&P 500 Technical Analysis – Maybe a Pullback, but Strength to Persist
What's on this page
S&P 500 Highlights:
- S&P 500 could pull back here, but…
- A dip likely to lead to higher prices
- Jan gap-fill, record highs could come soon
For longer-term trading ideas, Q3 forecasts, and a library of educational content, check out the DailyFX Trading Guides.
S&P 500 could pull back here, but...
So far July hasn’t disappointed in delivering a rally, and while it hasn’t been a rip-roaring, buckle-your-seatbelt type move, it’s been steady and unrelenting to anyone who has tried to take the other side of it. Will it last, and if it does, what is the best way to climb aboard?
Buying into rallies, especially the past few months, hasn’t been a tactic without pain. Since April, each time after rallying for a couple of weeks or so the market has managed to shake the tree before moving higher. And while we may still have some more to go on the top-side and a little more time for the so-called ‘summer rally’ to keep on keeping, the prudent approach appears to lie in waiting for a dip or consolidation.
There is decent support just below, which, if tested a bit more thoroughly, could offer a solid platform (consolidation) for buyers to establish a position. If support fails to hold and a drop below last month’s high unfolds, it doesn’t mean the rally is over, it just means we’ll need to be patient in waiting for it to show that it wants to trough first. Each push since the spring has seen the prior higher high undercut by dips, so it would be no surprise to see it again before climbing higher.
If we see a powerful move lower, then we’ll be less inclined to be so sanguine. But in the event the market continues to act as it has, or at least relatively well on a dip; looking higher, there isn’t much preventing the S&P from filling the Jan 30 gap (2853) and testing, if not breaking, the record high (2872).
Check out this guide for 4 ideas for Building Confidence in Trading
S&P 500 Daily Chart
If you’d like to listen in on live technical analysis on global equity indices (and commodities), join me every Tuesday at 9 GMT time.
Resources for Forex & CFD Traders
Whether you are a new or experienced trader, we have several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.
---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.