With major US indices during a seasonal “quiet period” between earnings seasons and therefore the ate up hold, traders are likely to require their cues from technical developments
This week’s bloodbath within the crypto markets is garnering all the headlines, but yesterday’s big bullish reversal in global stock indices is that the more important development for many traders and investors.
Following a period of low volatility, markets were spooked by hotter-than-expected inflation figures and last week’s big hawkish shift from the Fed, resulting in the S&P 500’s worst week since February. The elastic band snapped back yesterday, with the index seeing a pointy 1.4% rally off support from the 50-day exponential moving average and therefore the bottom of the well-established bullish channel.
With major US indices during a seasonal “quiet period” between earnings seasons and therefore the ate up hold, traders are likely to require their cues from technical developments, a minimum of until next Friday’s Non-Farm Payrolls report, and from a purely technical perspective, the bias for the S&P 500 remains bullish. After two months of consolidating near record highs, yesterday’s price action created a “Bullish Marubozu” candle, signaling strong buying pressure throughout the day:Considering the strong support from the 50-day EMA and rising channel, also as a uniform floor at 40 within the RSI indicator, bullish traders could consider buy trades near current levels with stop losses below support within the 4150 area and a target somewhere in record high territory around 4300+.
This general technique, where you limit your downside risk while trading within the same direction of the established trend, can help put the chances in your favor over the end of the day , though a person trade can always still fail.