The S&P 500 Bounce - Ending at the 200 Day MA?
After a brutal start to the week the S&P 500 found some legs and has rallied the past few days. It didn't come unexpected as the index was a bit oversold - the question is where will this bounce run out of gas.
Floating in the Middle
The positive side is price is above that 2700-ish level and staying above that would be positive. However, just a bit higher we have the 200 day moving average.
The index spent the better part of two years above the 200 day MA. Now that the bears finally knocked price below it the likelihood that we just immediately retake it for the foreseeable future is on the low side.
You can see on the chart below that there was an attempt on the prior bounce we had. Price had broken the moving average for the first time and then briefly rallied only to fail a few days later.
The balance of power still leans with the bears in my opinion.
Conclusion
With all this said, I am keeping an eye on the 200 day MA as our upside target and resistance. We may get there we may not, but if price does flirt with it the odds are it will likely fail.
You never know what can happen though, so we need to be prepared for if price does rally. In that scenario then the prior top around 2810 becomes the next upside target.
Personally, I'm staying light on stocks and will keep an eye out for shorting opportunities if we flirt with the 200 day MA.
Need to learn the basics about bitcoin, the blockchain and wallets?
Free e-book: ScaredyCatGuide to Knowing What the Heck Bitcoin Is
Free e-book: ScaredyCatGuide to Knowing What the Heck Bitcoin Is
Agree with and the fundamentals also support the bears to be honest. I am looking to take advantage of the drop in implied volatility due to the recent spike to buy put spreads on either SPY or Tech.
Prudent move!
From my tuesday all in at the close. I took 100% off today. Gonna make the market prove it can get back above the 200 day and stay there