Buyers and sellers are battling it out
The S&P index has moved to a low of 3038.15 and a high of 3075.70. We currently trade around with 3056 area.
Technically, the current level is right around the 50 hour moving average at 3057.52. The 38.2% retracement of the move down from the February 19 high also is near that area 3061.23. Buyers and sellers are battling it out above and below those technical levels. Traders will be looking for a momentum move in one direction or the other.
On the topside, the price close yesterday did reach above its 50% retracement of that same move to the downside at 3124.68. However the gap lower on the opening today ruin that bullish development. In trading on Tuesday, the opening also moved above the 50% retracement but it to failed.
So the battle is on with the 3057 – 61 area as the battle zone for the both the bulls and the bears intraday. If we see more momentum above that area the bulls are taking control. Conversely if the price starts to dip below the area, be aware for the sellers to exert more downside momentum.
What we know is volatility is increased. Flows come and go. Stories get told. It's hard to determine what the next move will be. It is hard not to see earnings growth slow as a result of the coronavirus. However there is much money still sloshing around and fear may be overblown (it really is still too soon).
As a result if clues can come from the technicals, use them. The price action tends not to lie (even if the story line does change). That doesn't mean markets don't get whipped around, but in this environment it is important to look for momentum moves as a trader.
