We’re finally starting to see a bit of movement in the markets with tech stocks in the US leading the charge higher.
The large short position in US equity futures can push the market higher in the short term as resistance levels are broken through.
The key level I’ve been showing you in the S&P 500 futures is 4,327, which is about a hundred points above where the market is now.
There could be large stop-losses and momentum buyers piling in above there and I would expect to see a spike towards the next major resistance at 4,475.
There’s still more work to be done before the monthly trend will turn up, but for the moment, the weekly upside momentum is in control and more buying should be expected.
Making predictions in a market like this is incredibly difficult because we’ve had such a long period of sideways price action and the weekly and monthly trends are in opposite directions.
The best I can do is respect the weekly uptrend but remain wary of the resistance above due to the monthly downtrend.
Sometimes the crystal ball becomes incredibly cloudy, and I’d rather make bold statements about market direction when the probabilities are in my favour.
For now, my view is that we need to see the S&P 500 futures above 4,327 before becoming more bullish, and while the price remains below there, we need to remain wary that another bout of selling could emerge.
Click on the video above to watch my latest analysis of the S&P 500.
Until next week,
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Murray Dawes,
Editor, Money Weekend
