Since falling to a low of nearly 6,325.00 on the 31st of March, the S&P 500 has moved higher. Last week’s announcement of a ceasefire between Iran and the U.S sparked additional momentum higher. As of this morning the index is near 6,905.00 per early action in futures trading. This past weekend’s failure to negotiate a peace deal between Iran and the U.S has not caused bumps in the road. At least not yet.
The problem for day traders is that potential dark clouds still lurk over the global financial landscape. Short-term nervousness however has not stopped large players and institutions from jumping in and buying the S&P 500 in what appears to have been an accumulation level when lows were hit a couple of weeks ago. Outlooks for the S&P 500 long-term remain as they have always been – in a buy and hold mode for investors. Unfortunately speculators without deep pockets have to play a different game.
Near-Term Troubles and Opportunities
The S&P 500 is traversing within sight of values it traded before the Iranian war started. Day traders and even large players have decisions ahead today as they try to take the temperature of the marketplace and decide if short and near-term risk appetite will remain robust. The Iranian war could still spark, but the ceasefire which has nearly one week left on paper, has created enough room for optimistic outlooks regarding a White House deal among some investors apparently.
Although President Trump certainly speaks tough, he also shows a desire to make a deal which likely is spurring on some buying and the hope that the worst of the Iranian war is complete. Financial institutions have certainly seemed to bet on upside and the current realm of 6,900.00 is likely viewed as a positive level, one in which the elusive 7,000.00 realm remains a remarkably close target – even as anxiousness about the Iranian war looms.
Speculating and Catching Trends Short-Term
The S&P 500 is now within a vicinity in which speculators and investors will stop and think about what is going to happen in the short-term. The index has gained well since the end of March and seemingly has been able to dispel fears about negative outlooks for investors.
The prospect of a sudden news development continues to lurk over the global markets, but the S&P 500 (and even the Nasdaq 100) have been able to deliver solid near-term movement upwards.
Yesterday’s climb was rather astonishing considering rumblings of war continue to be heard from the Middle East.
Looking for upside via momentum in the near-term remains challenging if day traders are nervous.
Risk management is essential and trading tactics needs solid frameworks.
S&P 500 Short-Term Outlook:
Current Resistance: 6,910.00
Current Support: 6,880.00
High Target: 6,950.00
Low Target: 6,835.00