S&P500 recap for 05.10.2015
The US stock market has rallied nearly 5% from the panicky selloff after non-farm payrolls and now it's threatening the best closing level since the August rout. Several technical signs that warned a rally was coming.
- The inability to make new lows in the first hour of trading on Friday;
Market participants were surprised by the non-farm payrolls report and stock futures fell but after the open, the market held its ground on three attempts to push lower. When it began to climb 45 minutes after the open, that was a tentative signal to buy.
- The August low of 1867 held earlier in the week, reaffirming it was strong support. The fall back below 1900 on Friday offered an attractive risk-reward trade with stops below 1867 hinged on good support.
- The calendar drove excessive stock market selling in late September as hedge funds performed quarterly windows dressing. There were factors helping to prompt a reversal, including quarterly rebalancing.
Still on the upside 1985.3 remains a strong resistance and a sell zone which continues to suppress the price down when it tries to reach it and move over it. The range in which S&P500 on the daily is very choppy and aggressive and it will continue until the firm and final outcome of the FEDs intentions about future rate hikes. This applies for the USD/JPY as well as the overall USD strength in the future.