S&P 500 Forex Signal: Gives Up Initial Gains

Potential signal:

• I am buying the S&P 500 and 6300 if we get to that level, with a stop loss of 6200, and a target of 6425 above.

The trading session on Wednesday has seen an announcement of more tariffs on various countries around the world coming out of the United States, although it must be thought of through the prism of the fact that most of these countries are not major trade partners with the United States. When you are talking about countries like Algeria, Iraq, and the Philippines, or not talking about massive trade. Nonetheless, it did make the market a little bit nervous, but at the end of the day, I don’t necessarily think that this is a big deal.

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Technical Analysis

The technical analysis is somewhat sideways at the moment, but that makes a lot of sense considering that the markets had shot straight up in the air for what seemed like ages, and this of course means that the market is probably going to continue to look to the upside over the longer term. However, you do have to work off some of the momentum, and I think that’s what’s going on right now. Short-term dips at this point in time should continue to see a bit of support near the $6200 level, followed by the 6150 level. Anything below starts to really challenge the overall uptrend, with the 50 Day EMA sitting just below the 6000 level as a potential support barrier as well.

One thing that is worth noting is that we are in the dead of summer, and volume is starting to drop. This of course can lead to a lot of choppiness, which is exactly what we have seen over the last couple of days, and quite frankly that might be the norm for a while as traders try to sort out whether or not tariffs are going to end up being a big deal, or if it’s going to be more of the same that we have seen previously. There is a certain amount of risk premium out there, and of course you also have to keep in mind that when there is a lot of global concern, money flows to New York, not out of it. Because of this, we will probably continue the uptrend regardless of what happens, despite the fact that we may get the occasional plunge lower.

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