S&P 500 Technical Analysis
The S&P 500 E-mini contract has broken down significantly through the triangle that I had drawn in this market, now looks like we are going to head back towards the moving averages. That being said, Wall Street always seems to find a way to get bullish, so one would have to wonder whether or not that narrative starts to take over.
Keep in mind that Monday is Presidents’ Day in the United States, so therefore the underlying index will not be open. What this means is that there will be limited electronic trading, but it is possible to trade some CFD markets, and of course some contracts at certain times in the day. Nonetheless, I would not read too much into the daily action on Monday, but I would anticipate that the 50-Day EMA underneath and the 200-Day EMA underneath should continue to be of importance.
Those support levels should continue to be important, therefore I think you’ve got a situation where you have to look at this through the prism of whether or not the market holds. If it does not hold that area, which is extensively the 4000 level, then I think we probably dropped quite a bit, perhaps down to the 3900 level, maybe even as low as the 3800 level. On the other hand, if we turn around and rally, which is basically what the market does over time, then I think the 4200 level will continue to be a major resistance barrier that we struggle to overcome. In that situation, a break out above there would obviously be very bullish.
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