The S&P 500 got a bit of a bum premarket from both European and Asian traders, and of course there was some help with a stronger than anticipated J.P. Morgan earnings announcement as well. That being the case, the price action wasn’t exactly exciting during the day, and the Michigan Consumer Sentiment numbers missed as well. In other words, there is still plenty of things out there that are spooking investors.
S&P 500 Video 15.04.19
I also see a massive amount of resistance extending to the 2940 level, so it makes sense that traders do not want to hold a ton of risk going into the weekend. This isn’t to say that they are going to sell off massively, but certainly wouldn’t be surprising at all to see this market pull back. If it does, it’s very likely that the market will find buyers underneath. All things being equal, the market has been climbing the proverbial “wall of worry” for some time. Another reason that we probably won’t see much in the way of risk carried over the weekend is that the earnings season kicks off in earnest on Monday.
With that, I would read too much into the action on Friday other than we are continuing to meander in the same area. Yes, we finally broke the psychologically important 2900 barrier, but the reality is that the exhaustion potential extends all the way to the 2940 handle. Overall, the market continues to see an uptrend, but we have clearly overextended ourselves in the short term, at least as far as the environment that we are working in is concerned.
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This article was originally posted on FX Empire
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