Tomasz Wisniewski
Axiory Global Ltd.
It is fascinating that we are so close to the all-time highs percentages on indices giving us a sense of such a huge uncertainty on the market. With almost every tick down, sellers are celebrating the new bear market. Most of that is generally just wishing not trading and is mostly betting on possibility than probability, but we all know that in trading it’s the probability that wins.
With that being said, let’s talk a look on the SP500, trying to be as much objective as we can, taking into consideration only the chart and the story behind it. First thing you see is the rise from the end of the year, which ended with establishing the new all-time highs. Many will call it a Santa Rally and they will not be mistaken. We can see, that it allowed to break the crucial horizontal resistance around 4740 (orange). Just for a while though, which actually can be worrying as it makes a false bullish breakout (yellow). False breakout usually tends to give strong signals in the opposite direction, so in our case, to the downside.
There is an important resistance (orange) but there is also a support. The crucial one is the dynamic up trendline (black), connecting most recent higher lows. It helped the buyers a few times and can help them again.
We are currently locked between the horizontal resistance from the top and the dynamic resistance from the bottom. As long as we stay between them, there is no clear trading signal. The breakout of the 4740 resistance, will give us another mid-term buy signal and the breakout of the up trendline, will give us a signal to sell, as for now, the best option seems to patiently wait.
Trading FX/CFDs on margin bears a high level of risk, and may not be suitable for all investors. Before deciding to trade FX/CFDs you should carefully consider your investment objectives, level of experience, and risk appetite. You can sustain significant loss.
Recommended Content
Editors’ Picks
AUD/USD: Next upside target is the 200-day SMA
AUD/USD managed to stage a firm comeback after reaching new YTD lows near 0.6350, regaining the 0.6500 region ahead of the key interest rate decision by the RBA early on Tuesday.
EUR/USD: Extra gains need to clear the 1.1000 barrier
Another dreadful day saw the Greenback retreat to seven-month lows and EUR/USD surpass, albeit briefly, the psychological 1.1000 hurdle in quite an auspicious start to the week.
Gold struggles around $2,400 as concers ease
After falling below $2,370 earlier in the session, Gold recovered back above $2,400 in the American session. The persistent USD weakness and the sharp decline seen in the US Treasury bond yields help XAU/USD limit its losses for now.
Bitcoin could repeat post-COVID style rise: Bitwise
In a memo to investors on Monday, Bitwise Chief Investment Officer Matt Hougan noted that the recent crypto market crash has provided an "opportunity" for Bitcoin to replicate a similar move to its rise post-COVID lockdown.
Stocks start crashing: Will the Fed pivot or panic?
It's no longer a question of whether the Federal Reserve will cut interest rates. It's a question of how soon central bankers will cut and how big they will go. Last week's ugly economic reports on manufacturing and employment helped trigger a mini-meltdown in the stock market.