S&P 500: ‘Blow-off’ Phase in Progress
Markets

S&P 500: ’Blow-off’ Phase in Progress

DailyFX.com -

What's inside:

  • U.S. markets in 'blow-off' stage
  • No interest in getting blown away short, but buying here looks risky
  • Levels under consideration

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To start the week, the S&P 500 was testing the bottom-side of a trend-line running back to the Feb lows from last year; that line in a hurry become 'right here' to 'down there'. The recent advance after a painful chop through much of December and January is looking a lot like a 'blow-off' top in progress. We're not quite in a parabolic state, but it wouldn't take much more of a rally to put it there. With that said, it's hard to say when we will see a meaningful, trade-able top, but it's possibly on its way to a theatre near you soon. The time-frame of a 'blow-off' isn't isolated to one; there are short-term exhaustions, then macro. For now, we are mostly concerning ourselves with the short-term.

Being a 'Tommy Top Picker' isn't fun and often times expensive, so we'll wait for momentum to turn on the longs before digging in from the short-side. Buying at this juncture holds poor risk/reward, unless you are buying intra-day dips - which have been fruitful with their very shallow occurrences.

Looking upward, where could the market stall? Perhaps the under-side of the November trend-line around the 2060ish mark and climbing. But, again, these market melt-ups can be vicious, and until we see good price action indicating this move has run its full course we have no interest in being a hero here. On any decline from here we will look to the Feb '16 trend-line as the first area of potential support, currently around 2328 and climbing.

S&P 500: Daily

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---Written by Paul Robinson, Market Analyst

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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