Charting the S&P 500: Is U.S.-China Trade News the Catalyst for a 'Next Level' Move?
The index stopped right at previous resistance and needs a catalyst to keep it moving higher. Will Monday's news be what it takes?
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We have experienced strong momentum in the markets over the last couple of weeks, but only rallying to prior breakdown levels is not impressive. Further, volume levels have been low over the past few bars, which are still pink (means cautiously bearish).
With the markets still moderately overbought what is it going to take to move to that next level and back into the uptrend channel from the prior momentum move? Markets are rallying early Monday as the U.S. and China announced a 90-day suspension of most of the tariffs imposed in April. Will this be it?
The good news is that lower part of the channel is not too far off, around 2% higher to get back into that groove. Unfortunately, the momentum seems to be softening at this time, money flow is weak and the MACD (moving average convergence/divergence) remains bearish. This indicator needs a couple of strong weeks to turn bullish.
So, it appears the index is in a holding pattern here, we'll call it a "no mans land." Let's see a few more bars printed (weeks) and then we can have a much better assessment for where the S&P 500 is going.
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