Early reads on S&P 500 results this morning via futures markets for CFD traders are showing that upside momentum is being wagered on, but day traders need to remain alert for volatile possibilities.
As the S&P 500 index continues to flirt with record values, and early trading on CFD based future results show upside price action, day traders need to remain alert for the potential for a great deal of volatility developing later today. The U.S Senate is now discussing a huge spending bill and it is not going to be passed easily. It may eventually see both the House of Representatives and Senate pass the legislation, but already there have been signs of infighting which will cause near-term tests for investors.
The ability to the S&P 500 to climb to current levels which now shows the 6,200.00 level being traded and above, this is a rather remarkable considering the major index was near the 4,800.00 vicinity in the second week of April. Risk appetite has certainly increased in the past couple of weeks too, this after a recovery from the massive selloff which occurred from the third week of February until the second week of April.
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Recovery Upwards and Resistance
After regaining lost ground by the third week of May, the S&P 500 has been able to gain more momentum the past week. The Middle East conflict did cause initial worries in equities in mid-June, but the announcement of the ceasefire early last week took the S&P 500 back above 6,000.00 and it has seen trading lurk around this vicinity with reversals happening as short-term sentiment gets tested. This morning’s early rise should be treated with suspicion by speculators looking for quick hitting results.
Short-term trading in the S&P 500 is completely different than a mid and long-term approach. The daily gyrations in stock markets can be just as volatile as Forex and commodities. Leverage must be used conservatively. The S&P while potentially perceived as a long-term investment asset is a casino like landscape for speculators. The U.S budget which is being debated now, Friday’s jobs numbers and U.S tariff negotiations with a July 9th deadline will all affect short-term behavioral sentiment.
Risk Appetite and Quick Hitting Targets
Traders who want to pursue the S&P 500 for short term wagers need to have strict risk management in place. The index moves based on risk taking sentiment and produces a steady stream of reversals.
- While mid and long-term sentiment certainly affect the mindset of investors, there are enough large short-term players in the S&P 500 which can cause moderate to strong storms.
- Looking for upside may feel tempting, but traders should keep their eyes on developing news from Washington D.C which is likely to stir the pot today and tomorrow.
- Key resistance levels may produce some short-term profit taking movement via folks are engaged in quick hitting wagers in the S&P 500’s cash market.
S&P 500 Short-Term Outlook:
Current Resistance: 6,210.00
Current Support: 6,130.00
High Target: 6,225.00
Low Target: 6,005.00
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