S&P 500 off earlier highsThe major US indices have come noticeably off their earlier highs, following the positive start on the back of the weekend news of temporary tariff relief on technology sector.
The fact the indices could break out to test waters above last week's highs, suggests traders have not been convinced that they have had the all-clear just yet. Perhaps volatility will ease a little this week, but with earnings from tech giants to come in the next couple of weeks, on top of all the trade war saga, anything is possible. Traders must remain nimble.
It is all about the 5380 level now on the S&P 500. This is where it found resistance on Friday and now this level could turn into support. But if we break decisively below it again, then this could trigger a big of selling towards the next support at 5272.
However, the near-term trend has turned bullish following the big recovery last week. So, dip-buyers will be lurking. Let's see where we go from here.
In any case, more bullish price action is needed to completely nullify the bearish control. Specifically, the key resistance zone between 5490 to 5550 must give way before the bulls can be confident that we have see a major low last week.
By Fawad Razaqzada, market analyst with FOREX.com
