- Continued buying pushes the S&P 500 into resistance
- Further gains could be hard to sustain in the short-term given the sharp rise into overhead levels
- Short-term support and resistance levels noted
Yesterday, the market tacked on additional gains to Tuesday's impressive rally; support levels highlighted for the S&P 500 (FXCM: SPX500) weren't even close to being seen. But the market will now have its work cut out for it if new 2016 highs are to be seen.
The trend-line off the 2015 highs registers in the 2095/100 vicinity (yesterday's peak was 2094.83). A pullback or consolidation at the least is a likely scenario at these levels given resistance has been approached following a ~70 handle push in only about a week's worth of time.
Aggressive short-term traders may look to play a pullback from the short-side if a failure at the before mentioned resistance zone takes hold, but until we see a swift reversal in price action and sentiment it will likely be prudent to cover into weakness at this time. 'Would-be' longs will likely be best served waiting to see how the S&P reacts off of resistance. A consolidation/pullback period over a day or two might be all that is needed before seeking out the next levels of resistance.
Near-term resistance comes in by way of 2095/2100, while above there we will look to the 2016 high at 2111 and Nov '15 peak at 2116. The first level of support clocks in at 2085, which has already held in overnight trade, beneath there nothing substantial until 2072 and the trend-line off the 5/19 low.
Head's up on data: U.S. Durable Goods Orders for April is due out at 8:30 EST/12:30 GMT time. Analyst are expecting it to tick lower to 0.5% from 0.8% in March. Excluding transportation, the figure is expected to increase to 0.3% from -0.2% prior.
---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter @PaulRobinsonFX , or email him directly at firstname.lastname@example.org.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
Learn forex trading with a free practice account and trading charts from FXCM .