S&P 500 Nears Top of Range Before Potential Taper
The S&P 500 has climbed for seven straight months. But it may face some near-term challenges as September gets underway.
The main pattern on today’s chart is the resistance line running along the highs since mid-April. Notice how prices have stalled once again at this area.
Next, consider the type of candles at the top of the range: August 31 and September 1 closed well below their highs of the day. The next two sessions had spinning tops, followed by another solid bar on Tuesday. That suggests a lack of conviction/price acceptance at the highs.
Third, MACD is turning negative. The 8-day exponential moving average (EMA) has also started to fall (see our custom script Moving Average Speed). Notice how dips in the 8-day EMA preceded market drops at other times like mid-August and mid-July.
Finally, there’s something of a news vacuum with few major events (or earnings) before the Federal Reserve meeting on September 22. That could potentially keep buyers on the sidelines and allow a pullback if sellers get active.
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The main pattern on today’s chart is the resistance line running along the highs since mid-April. Notice how prices have stalled once again at this area.
Next, consider the type of candles at the top of the range: August 31 and September 1 closed well below their highs of the day. The next two sessions had spinning tops, followed by another solid bar on Tuesday. That suggests a lack of conviction/price acceptance at the highs.
Third, MACD is turning negative. The 8-day exponential moving average (EMA) has also started to fall (see our custom script Moving Average Speed). Notice how dips in the 8-day EMA preceded market drops at other times like mid-August and mid-July.
Finally, there’s something of a news vacuum with few major events (or earnings) before the Federal Reserve meeting on September 22. That could potentially keep buyers on the sidelines and allow a pullback if sellers get active.
TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
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