S&P 500
The S&P 500 has been very noisy during the trading session on Wednesday, as we initially rallied after it was noted that the Americans were not willing to step up the trade war, at least as far as banning Chinese citizens from investing in tech companies which would have been a major escalation. However, we have since rolled over again, and ended up forming a very ominous looking candle. We are currently hovering around the 50 day moving average, and more importantly, the 2700 level. That’s an area that does cause a certain amount of psychological importance, but I think that we are likely to see this market try to break down a little bit from here. Alternately, if we can break above the top of the candle for the day on Wednesday, this could be a buying opportunity that sends the S&P 500 to the 2800 level. I think we continue to move on headlines more than anything else.
Nasdaq 100
The Nasdaq 100 initially tried to rally on Wednesday but rolled over to reach towards the 7000 handle. That’s an area that of course is psychologically important, and that’s an area where I would anticipate seeing the lot of buying pressure. Beyond that, the we have the 50 DMA just underneath, so it’s likely that we will see some type of reaction. If we can clear and close below the moving average, I would then consider shorting this market for a move towards the 6800 level. Ultimately, if we broke above the top of the shooting star like candle for the day on Wednesday, and then becomes very likely that we are heading towards the 7200 level again towards the upside, and then possibly even the 7300 level.
