- The S&P 500 initially rallied a bit during the trading session here on Wednesday but then gave back gains to show signs of hesitation.
- Ultimately, this is a market that I think eventually will try to go looking to the 6,150 level, which was the major swing high.
- A short-term pullback at this point, probably finds quite a bit of support at $6,000, possibly $6,050.
So somewhere in that neighborhood, I’m looking for any pullback to be bought into. A bounce there gets me long in the market yet again, as clearly you can’t get short of this market. The Monday and Tuesday games of six alone were pretty massive. And Wednesday, I think, was just a little bit of a break after all markets cannot go in one direction forever. But really, I think what we got is a situation where you’re just waiting for value. There are a lot of concerns about the Middle East still, despite the fact that there’s been a ceasefire and you can see there was a little bit of celebrating over the last couple of days.
Can External Factors Calm Down?
Now we have to ask the question, will the Middle East stay calm? Well, we don’t really know the answer to that. And quite frankly, it’s not a safe bet. So, with this, I think we are just getting mainly to the top of an overall channel and perhaps looking to buy at lower levels. Somewhere around $6,000 I think would be the ultimate entry, but we’ll just have to wait and see. If we do rally from here and break above 6,150, then obviously traders will probably start chasing this market in some type of FOMO trading situation, as the market will more likely than not attract even more traders to the upside.
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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
