S&P 500 Banging At 2000 The Key Resistance

$SPY

The S&P cracked the psych mark at 2000 Friday

Traders’ reaction to the NFP data was cheerful as they saw the 242,000 NFP figure flash on their screens but then realized wages were weak (down 0.1% M-M), so they sold stocks and the S&P faded.

Then the markets recovered as traders bought the dip because they figured that the Fed may hold off raising rates again this year.

Then the weaker Buck helped to lift Crude Oil prices to new weekly highs. This, then helped trigger the kick-back rally.

Confusion reigned, and profit-taking took hold, as traders sold the bounce.

The S&P has reached a Key resistance mark at 2000. This psych mark is strong support turned strong resistance.

It is also the 61.8% Fibo retracement mark of the most recent drop converges. My work shows that the rally could easily end near term here.

But, should the S&P hold above 2000 on a daily closing basis then there is a good chance we will see even higher levels in the new week, possibly the 200-Day MA at 2019, the 78.6% Fibo retracement at 2050 or even the Bearish trend line at some stage. I

Given the recent Bullish price action the rally could extend.

The technical mark at 2000 is very important.

The MAs are in the wrong order and the index has been making lower highs and lower lows recently, meaning that the long-term trend may have turned Bearish.

This will be confirmed if and when the S&P breaks pivotal 1800 mark.

In the near-term, traders will proceed with caution, especially if the index turns lower again as the resistance at 2000 holds.

Technical analysis is a method of forecasting price movements by looking at purely market-generated data. Price data from a particular market is most commonly the type of information analyzed by a tech trader.

Have a terrific weekend.

Paul Ebeling

HeffX-LTN