S&P 500 Index Chart Analysis

S&P 500 continued its strong rally since a few weeks back and retraced back to the 50% mark of the down move. Price has gone past the 10 and 20 EMAs, and is now near the 50 EMA and also the 2800 round number. The aforementioned factors point to the current price area as a key zone of interest.

With the Covid-19 situation showing signs of peaking in the West, it seems traders/investors are starting to be less bearish, fueling the market move up. That said, the measures required to contain the virus could lead to follow on effects – rises in unemployment, increased loan defaults and a permanent dent in consumer demand.

The coming week should give an indication of where the balance in the market will be. If price breaks above the 50 EMA and holds there, it will encourage bulls to enter and shorts to cover their positions. Else if price makes its first lower low, it will present a set up for bears to get in on the break of the lower low.

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