I believe that the key to where we go next is probably found near the 4200 level, so it looks to me as if the market has a lot of work to do.
I suspect that sooner or later the markets will get a rude awakening, but in the meantime, it’s likely that we will simply look at anything negative as being bullish, due to the fact that it’s all about hoping that the Federal Reserve comes and saves everybody. The idea is that the worse things get, the more likely they are going to get their handouts on Wall Street.
Unfortunately, that’s been the way the markets have behaved over the last 13 years, and I just don’t think it’s going to change anytime soon. The Federal Reserve has made this mess, and they are the ones solely responsible for the way the markets behave. We are reaching a crucial time where people will have to pay close attention to economic conditions, but we have already had a rather significant selloff, and perhaps Wall Street thinks that’s enough. Nonetheless, it looks like we are getting relatively close to an area that is massive resistance. I believe that the key to where we go next is probably found near the 4200 level, so it looks to me as if the market has a lot of work to do. It’s also worth noting that at the end of the day, we did see the markets give up some gains at the end of the day.
If we were to break above the 4200 level on a daily close, then it’s likely that the market could go to the 4300 level. The 4300 level is an area where we would see a lot of resistance, but a break above that level could open up the possibility of another 300 point move. It’s also worth noting that the 200-Day EMA is sitting right around the same area, so that looks to be like a difficult barrier. If we break down below the lows of the trading session on Wednesday, we could plunge down to the 4000 level.
Ready to trade the Forex S&P 500? We’ve made a list of the best online CFD trading brokers worth trading with.