Stocks Doing what They Do Best... Heading Higher!
Joe Perry October 4, 2019 3:40 PM
Not only is 2942 an important horizontal level, but it is also near the 61.8% Fibonacci level
After days of disappointing data, S&P 500 Futures (S&Ps) were down nearly 4.5% over the last few days. However, after the benign Nonfarm payrolls were released today, S&Ps continued the rally which began yesterday afternoon, while most of the USD currency pairs remained in tight ranges. Stocks fell yesterday and tested the rising trendline, which dates back to August 6th yesterday, and failed to break though it. Once they failed to move lower below the trendline, price reversed and bounced back to the all-important 2942, which has been a pivotal point for stocks since early in August. It is also the 50 Day Moving Average.
Source: Tradingview, Forex.com, CME
This afternoon, Fed Chairman Powell came out with comments noting that it’s the “Fed’s job to keep the economy expanding as long as possible.” Stocks took this as a signal that the FOMC is cutting at the end of the month and continued the charge higher. On a 240-minute chart, one can see that not only is 2942 an important horizontal level, but it is also near the 61.8% Fibonacci level from the highs before the ISM Manufacturing data to yesterday’s lows! If the S&P500 manages to break through this area of resistance, the index can be up to the downward sloping trending near 2980 very quickly. Above that is the pre-ISM data level at 2992. Support doesn’t come in until yesterday’s highs at 2912.50.
Source: Tradingview, Forex.com, CME
Towards the end of next week, China is set to come to Washington to discuss trade. Although there is data and Brexit talk that will be out before then, these talks can be a game changer for stocks (not to mention the US Dollar). If a deal is reached, stocks could test the highs near 3050. If no deal is reached and there is nothing in sight, they can be testing last year’s lows again under 2500.
Also, remain on high alert over the weekend for headlines and tweets surrounding the Impeachment Inquiry.
(As of the time of publishing, S&P 500 Futures are trading 2950, trying to squeeze every last short out of this market!!)
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.