The S&P 500 fell during trading on Friday, reaching down towards the 2600 level underneath. That is an area that is a large, round, psychologically significant number, and of course has shown signs of support in the past. By bouncing the way we have, the market looks likely to show signs of strength underneath, and if we can break above the 2680 handle, I think that the S&P 500 will continue to go higher. However, keep in mind that the market will probably continue to be very noisy, as there are a lot of moving pieces around the world right now. Not the least of which of course will be the noise between the United States and China, but I also recognize that there are a lot of concerns with valuations.

I think that given enough time, it’s likely that the overall attitude of the market should continue to go higher, but if we were to turn around and break down below the 2560 level, the market will probably unwind down to the 2500 level. A breakdown below there would change the entire attitude of the market and send the sellers in hand over fist. My base case scenario right now is that we should continue to find buyers though. I would be very cautious with my trade size, as headlines crossing the wire could be a major source of frustration if you are over levered.

S&P 500 Video 09.04.18

This article was originally posted on FX Empire

More From FXEMPIRE:

• S&P 500 has significant week, as we find support below.

• Alt Coins show signs of weakness yet again this past week

• NZD/USD continues to bounce around the 0.7250 level

• The British pound rallies against the Japanese yen after initial fall this week

• DAX falls initially during the week but find buyers

• EUR/USD falls during the week only to find buyers