The S&P 500 as gone back and forth during the trading session on Tuesday as the 200 day EMA has offered a significant amount of resistance. Ultimately, the market looks highly likely to continue seeing choppiness in this area as it is a mass of technical issues just waiting to happen. After all, the recent high is sitting just above and of course we have the 200 day EMA. Furthermore, the 61.8% Fibonacci retracement level is in the same neighborhood, and we have a couple of neutral candlesticks in a row. This is likely to continue to be a major barrier, extending all the way to the 3000 handle.
S&P 500 Video 13.05.20
Adding more concerns to the scenario is that we are in the midst of earnings season, and that of course will continue to cause a lot of issues on its own. Ultimately, I do think that we will see the market go looking towards the 2800 level again but would be the first to admit defeat on the short side if we broke above the 3000 handle. Quite frankly, the market has gotten far ahead of itself yet again, so it makes quite a bit of sense that we will see some type of pullback or at the very least some type of bounce around in this consolidation area as the rally is running out of steam at this point. The question now is whether or not this range is distribution, or is it simple consolidation on the way for continuation?