S&P 500 Trading Outlook: Hard to Buy, Even Harder to Short

What’s inside:

  • SP 500 continues to rise, buying not appealing but neither is shorting
  • Top-side channel line might provide support again on a pullback
  • Volatility likely to rise in meaningful way, just not today and not likely tomorrow either

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In the first couple of days to start the year, we noted that the SP 500 was extended but that momentum wasn’t worth fighting. At the time, the market was at the upper end of the channel starting back at the beginning of December, a channel which it has been exceeded in recent sessions, and even as late as Wednesday tested as support.

The view hasn’t changed, the market is extended and while it may be tempting for some to short it because it’s ‘too high to buy’ or simply overbought, ‘up here’ can become ‘down there’ quickly in as strong of a market as the current one. Initiating fresh longs doesn’t hold much appeal, but shorting holds even less. There will be a time for shorts, just not yet.

What is a trader to do? Another dip back to

Article source: https://www.dailyfx.com/forex/technical/home/analysis/spx500/2018/01/12/SP-500-Trading-Outlook-Hard-to-Buy-Even-Harder-to-Short-PRtech.html?DFXfeeds=forex:technical:home:analysis:spx500