The S&P 500 pulled back during the trading session on Thursday, reaching down below the 3450 handle. That being said, the market is very likely to see even more weakness, because we had gotten far too ahead of ourselves. The 3400 level was the scene of a major breakout, and the fact that we would pull back to this area and perhaps trying to reestablish that area as important. The market pulling back to that area will more than likely attract a lot of attention, not only due to that area of “market memory”, but also has the 50 day EMA.
S&P 500 Video 16.10.20
There is a lot of noise all the way down to at least the 3200 level, which is now looking very likely to be the home of the next 200 day EMA. At this point in time, there is a lot of noise in that area, so I have no interest in shorting, but I do recognize that there is going to be a lot of interest and perhaps buying pressure underneath. After all, it is only a matter of time before there is a reason for Wall Street to start celebrating again, although one thing that you can take a look at is the fact that there is a theoretical “double top” form, but I think that at the end of the day will be a big deal, mainly that the market is pulling back in order to work off some of that parabolic move that we recently had.
I think a couple more days of softness is ahead, only to get involved to the upside yet again. I will be on the sidelines waiting for value.
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