Friday's S&P 500 Technical View

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Today marks the close of an interesting week in the equity markets; and while we think today will be a more quiet and orderly trade, we must acknowledge that the last three Fridays have seen very sharp moves.

Currently, the S&P 500 futures are trading at 2803.75. The fifteen-minute candlestick chart below covers this week’s price action.

While we are usually bullish, don’t want to buy at the market's current price.  The first reason for this is that price has been battling with the upper trend line in orange, currently at 2805. In addition, the light grey shaded region from 2808 to 2809.50 has served as resistance this week. In fact, we think that this area is worth a small short with a tight stop above the weekly Fibonacci extension target marked in red at 2810.50.

However, if this market shows weakness, we would want to be buyers at lower prices.  Our downside targets would begin with the blue lower trend line at 2796, which connects Wednesday’s low to last night’s low.  Our bullish posture would continue at the yellow lower trend line, currently at 2792.50, which connects the January 10th low to this week’s low made on Wednesday. This yellow trend line also concurs with the dark grey zone, which spans the area from yesterday’s 2793.75 low to last night’s 2791.75 low.  We expect this region to serve as support.



If price should break through this level around 2791.75, then our bias would become slightly bearish, and we would expect a test of Wednesday’s low marked in red at 2780.50.  Depending on factors we examine throughout the day such as time, momentum and volume, it is possible that we would consider buying a dip at that red line.

Today’s calendar is quiet and features three Fed speakers and Consumer Sentiment at 10:00.  However, none of these are expected to be market movers.

Raphael Bostic Speaks 8:45 AM ET

Consumer Sentiment 10:00 AM ET

Baker-Hughes Rig Count 1:00 PM ET

Randal Quarles Speaks 1:00 PM ET

John Williams Speaks 1:30 PM ET


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