The S&P 500 rallied a bit during the course of the week, testing the top of the uptrend channel that I have marked on the chart. The 3100 level of course is psychologically and structurally resistive, because of that channel and of course the large figure. At this point, the market is likely to continue finding buyers underneath, and the 3000 level underneath will be a massive support level. The 3030 level of course would be an area where we could see some support based upon the fact that it was the previous five. All things being equal though, when you look at the chart you can see that the 50 week EMA has offered support every time the weekly chart pulled back to that level. Ultimately, I do think that the S&P 500 will go higher, but it may be getting a bit overstretched in the short term.
S&P 500 Video 11.11.19
Based upon the ascending triangle previously, the market could go as high as the 3200 level, but we need to see some type of value reenter the marketplace so that traders can take advantage of it. All things being equal, it is a nice opportunity to pick up value as the market trades “on the cheap.” In general, the market looks as if five weeks in a row of buying is finally starting to run into a little bit of trouble. If we were to break out above the 3100 level, then the market could enter and even more impulsive move, and perhaps reach 3200 rather quickly. At that point though, we would most certainly be overbought. Currently, I have no interest in shorting this market.
This article was originally posted on FX Empire
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