S&P 500 Continues to Consolidate

The S&P 500 climbed to start the trading week on Monday, as we continue to consolidate just below the 50-day EMA.

Technical Analysis of the S&P 500

In the futures market, the S&P 500 has gained throughout the Monday trading session, with the 4100 level providing solid support. That so, the market will almost certainly continue to face resistance right above the 50-day EMA. The market has been all over the place in recent weeks, so it's not surprising that we're stalled at the present, particularly given the lack of clarity on earnings and the general economic situation.

Yes, things seem to be horrible, but at the end of the day, Wall Street is only concerned about liquidity difficulties and what the Federal Reserve will do. Someone somewhere is beginning the story about possible stimulus, which seems to be the only thing on Wall Street's mind. Between now and Friday, when the next inflationary statistic is out, I believe we will see an effort to gain traction.

The S&P 500 futures market is expected to aim to achieve the 4300 level if we break above the 50 Day EMA. That doesn't mean it'll be easy, and it certainly doesn't mean there won't be any setbacks along the way, if we ever get that far.

On the downside, if we break below the 4070 mark, we might see a move lower over the following several days, perhaps hitting the 4000 level. Having said that, I believe we will see more sideways grinds than anything else during the following several days. If you have a range-bound system, now is the time to put it to good use.