The S&P 500 has pulled back initially during trading on Thursday but has bounced a bit in order to form a slightly more positive looking candlestick than originally thought during Asian trading. The S&P 500 continues to see a lot of volatility as it rocks back and forth and now that it pierced below the 2800 level, it shows that we are seeing quite a bit of noise, which suggests that the volatility is going to continue. That being said though, the fact that we have bounced also suggests that we are going to go looking towards the top of the range again. If that is the case, then the 200 day EMA comes into focus. The market continues to be very noisy, but ultimately if we break down below the candlestick for the trading session on Thursday, then it changes everything.
S&P 500 Video 15.05.20
A breakdown below the candlestick on Thursday should send this market down towards the 2640 level given enough time. I still believe that the rallies are to be sold at this point, but clearly the market is not ready to break down over the longer term. I believe that we have a long range forming that will continue to test the boundaries of both buyers and sellers, but eventually once we get the resolution to that argument, this could be a rather big move. In the time being, I believe that we are simply going to look at this as an opportunity to trade back and forth. Heading into the weekend, I would not be surprised at all to see a relatively neutral Friday, but one must keep their eyes open for just about anything as volatility increases.