Originally published by AxiTraders
Buy the dip.
That's the successful strategy that stock market players have employed for years now. It's worked as stocks rallied out of the financial crisis, it worked after the Brexit selloff, it worked on the Trump election funk, and it worked on every tiny little dip that US stocks had in 2017.
So far it has worked in 2018 as well - although volatility is much higher now and the market was not able to hold above the 61.8% retracment level of the February fall a week or so ago.
But at 2,726 this morning the S&P futures-based CFD is close to 200 points above the low of February and and 45 points off the low made in Asian trade yesterday after the announcement of the resignation of White House economic adviser Gary Cohn.
In doing that prices have now also filled the gap that opened up in the short time trade was closed yesterday morning.
Buy the dip is thus again reinforced.
The question of what next is an interesting one.
I've drawn a couple of tentative - two touch - trendlines in which might give us a guide. The upper line comes in at 2,761 while the lower line has support at 2,674. A break of either side might accelerate the move while a reversal would confirm the tentative line is one that traders are actually watching.
For me I'm happy to trade the break. But its price above the recent high at 2,789 or below last week's low at 2,646 which would see me add to positions and confirm a bigger move was afoot.
Right here and right now though my slow moving average, and yesterday's high in the 2,728 and 2,733 are offering decent resistance.
Have a great day's trading.