(MENAFN– Daily Forex)
- The s&p 500 pulled back rather significantly during the trading session on Friday, after attempting to break above the 4200 level.
- That being said, it looks like we are going to continue to see a lot of negativity here, especially after the jobs ever came out at 518,000 added in January, instead of the anticipated 188,000.
- This has people thinking that the federal reserve has a lot of work to do going forward, but I must admit that even though things look a bit ugly for the session, they could’ve been a lot worse.
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With this being said, we could very well see a little bit of a pullback, but I would also point out that the US dollar has a large part to play, and it certainly looks as if it is ready to take off. If we get a strengthening US dollar, then it’s very possible that could weigh upon the stock market.Volatility Ahead
The most obvious trait here is to buy the S&P 500 above the 4200 level, but we don’t have a whole lot of momentum suddenly, and we may need to pull back in order to build that out. The 4100 level is a minor area, but I think it’s much more important to pay attention to the 200-Day ema which sits right around the 4000 level. The downtrend line sits there as well, so it all ties together quite nicely for a short-term pullback. Does this mean that we are going to break down significantly? I don’t know at this point, but I do think that a pullback makes a lot of sense for both the buyers and sellers.
Earnings season is going on right now as well, and of course, there have been some dire warnings from some of the bigger companies. Because of this, I think we will continue to see a lot of volatility in this market, and you need to be cautious and cognizant of that possibility. The choppiness is something that we just simply are going to have to live with, so therefore you need to keep your position size reasonable and get out at the first signs of serious trouble. This is a great environment to block trading accounts if you are not careful, so the most important thing you can do is protect your downside in this environment.
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