S&P500 – follow the direction
Uncertainty raises towards US market close on Wednesday evening. The S&P index slipped back below the 3000 level which says a lot about current weakness and as of writing this is trading at 2993 with a very slight bounce exactly where the light support line is.
The earnings season is underway and financials reporting being in the main focus so far. However, after the close on Wednesday we expect reports from Netflix, eBay and IBM – possibly market getting further directional clue.
Charts, however, still illustrate strong bullish move from the beginning of June. There is always temptation to try to catch the reversal and many traders will do so. I believe price still has room to slide further, however, I am a strong proponent of trading in direction of main trend, so I will refrain from shorting.
Instead, expect the index sliding towards 2970 which is a strong support and it is underpinned by 2950 support from below. This is an area where I will place my buy limit orders. Another – emergency limit order will be placed at 2905 support which is capable to contain downfall. This setup requires patience and as always in case of limit orders you may miss the trade if orders are not triggered – but this is a price we pay for safety.
Enjoy your evening !