What’s inside:
- SP 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 SP 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…
SP 500: Daily
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—Written by Paul Robinson, Market Analyst
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