S&P 500 traders a bit cautious during the Tuesday session

S&P 500 traders were a bit cautious early during the day on Tuesday, as we await to see what Donald Trump is going to do about the Iranian nuclear deal. When I look at this chart, the technical setups are rather clear: we are in a symmetrical triangle, and towards the top of it trying to break out. · FX Empire

Christopher Lewis

Updated Tue, May 8, 2018, 9:56 PM

The S&P 500 has offered a bit of resistance just above based upon the downtrend line, as the symmetrical wedge continues to offer a lot of technical guidance. I think if we can break above the 2680 handle, the market probably goes to the 2700 level, perhaps even higher than that. If we do pull back from here, then the 2600 level underneath should be massive support based upon the uptrend line, and I think that if we do break down, the most important thing that you can look for is value. I look at short-term pullbacks as an opportunity to pick up that value, and I believe that eventually we will probably try to break out, even though we have a strengthening US dollar.

Interest rates are going higher, and that is a bit of a drag on stock markets, but economic numbers in the United States are much stronger than they are in place like Europe and Asia, so I think that the S&P 500 will continue to reflect that longer-term. It has been very volatile as of late, I think that market participants will continue to look at this market as one that has massive support at 2600, and if we were to break down below there then I think the uptrend overall gets broken and we could start falling. I do think that there is a lot of value to be had, but caution is also something that you should use.