Near the 6,445.00 vicinity in early futures trading, the S&P 500 has been pushed lower the past couple of days, but it remains within its higher parameters and support levels may begin to look attractive to speculators.
The S&P 500 has seen a downturn since Friday, but this has happened after record highs of 6,495.00 were seen. Yes, the stock index has had selling develop, but the current values of 6,445.00 in the S&P 500 does not mean speculators should be selling with abandon. The S&P 500 remains within sight of record highs and the move lower the past day and a half can be compared to removing foam from a delicious drink which is waiting to be sipped upon again.
A speculator could certainly decide that now is the time to pursue selling positions of the S&P 500 and seek perceived support levels below technically. But considering the trend of the broad stock market the past handful of months and the notion that the S&P 500 remains within its highest realms, may cause even a bearish trader to be cautious about getting too ambitious regarding downwards momentum.
Looking for Higher Terrain via Support Levels
Day trading is vastly different compared to mid and long-term investing. Speculating on the daily gyrations of the S&P 500 is gambling compared to longer endeavors which simply seek the ability of the index to move higher incrementally over a period of time that allows for intraday dramatics to be forgotten. Speculators who are looking for short-term wagers need to find trends that take advantage of sentiment that is propelling the S&P 500 short-term, but they must also be lucky enough to get into a position at the right time.
The notion that the S&P 500 will reverse from its sudden downturn is logical, but figuring out where technical support levels will start to activate buying is never a 100% guarantee. The 6,440.00 vicinity looks like it could become sticky when a five day chart is considered as a support level, but cautious traders looking for the S&P 500 to start creating upwards traction may want to consider the 6,435.00 to 6,430.00 ratios also.
Near-Term Impetus for Sentiment in the S&P 500
Investors may continue to look at the Federal Reserve as a driver of sentiment in the broad markets. Besides the notion that long-term players in the S&P 500 are buying the index based on their belief that it is a solid investment, the Fed’s rhetoric in the coming days is likely to affect mid-term outlook regarding interest rates and yields – which creates momentum for the broad markets via asset allocation.
- Looking for upside from the S&P 500 is the favorable option, but timing when a consistent buying trend is going to emerge in order to take advantage, remains difficult for short-term wagers.
- Solid risk taking tactics need precise use of entry, stop loss and take profit orders to engage.
- Looking for the S&P 500 to surge with velocity is too ambitious, but looking for upside buying to emerge near-term could prove worthwhile considering the index’s performance the past handful of months.
S&P 500 Short-Term Outlook:
Current Resistance: 6,450.00
Current Support: 6,440.00
High Target: 6,478.00
Low Target: 6,427.00
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