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S&P 500 Analysis: After Record Highs Attained a Slight Reversal Lower

By Christopher Lewis

Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex...

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As of this morning’s futures trading the S&P 500 is around 6,467.00. The index remains elevated after having hit record values last Friday, but producing a slight selloff since then which created a low of nearly 6,370.00 on Tuesday.

S&P 500 Analysis 04/09: Slight Reversal Lower (Chart)

Day traders who are disappointed that the S&P 500 was unable to continue its epic push higher after Friday’s record highs should take a deep breath. The ability to trade near the 6,525.00 vicinity on Friday of last week was rather impressive. Monday was the Labor Day holiday, which meant that some large institutions may have cashed in profits on Tuesday which might have led to lows around 6,370.00 being seen briefly.

As of this writing the S&P 500 is around 6,467.00 in early futures trading. The index has been able to climb back to its higher elevations in the past day and now is producing some choppy results, but within elevations that will not produce a lot of complaining from long-term investors. The S&P 500 now awaits tomorrow’s U.S jobs numbers which will impact trading sentiment today and going into the weekend.

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6,500.00 Attained and Now a Legitimate Target

Price velocity in the S&P 500 has been rather productive for day traders, if they have been on the correct side of direction. Tomorrow’s Non-Farm Employment Change will certainly cause volatility in the S&P 500 and broad markets. Insights regarding the Federal Reserve are wanted in greater clarity, investors will also be keen to see how hiring is being accounted for as the Trump administration enters the fall of 2025.

Short-term traders tempted to sell the S&P 500 and fight a rather solid trend upwards should be very cautious. The move higher in the S&P 500 although showing a reversal lower after apex values were seen last Friday, still remains the most tempting flavor to pursue. The 6,500.00 is a legitimate target by larger players and if the S&P 500 gets a dose of positive impetus in the near-term it would not be surprising to see the level conquered again and potentially sustained.

Speculating on the S&P 500 as Bullish Momentum Remains

Day traders should not bet wildly on upside momentum in the S&P 500, without looking at market conditions and knowing what is happening intraday.

  • Reversals in the S&P 500 are a constant threat for smaller traders because of a lack of ability to withstand the pressure of trades going in the wrong direction, particularly if too much leverage has been used and it starts to fuel money in an account being burned.
  • However, trying to ride on the coattails of large institutions remains a good way to try and bet on the S&P 500.
  • The bullish momentum demonstrated the past few months remains evident and wagering on more upside remains logical, but it must be done tactically.
  • The near-term will prove intriguing for the stock market as important highs lurk.
  • Will financial institutions react favorably to tomorrow’s U.S jobs numbers and drive the S&P 500 to new highs?

S&P 500 Short-Term Outlook:

Current Resistance: 6,475.00

Current Support: 6,458.00

High Target: 6,500.00

Low Target: 6,430.00

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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.

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