We started the week with a big drop on Monday followed by a massive reversal to new all-time highs. After the pop in the S&P 500 (ES), the market and other major indices have moved lower. Federal Reserve Chairman Jerome Powell had little positive updates in the FOMC meeting causing a negative reaction from the market and sending prices lower.
Our main indicators we are using as a gauge for trend are the daily Ichimoku Cloud and the 50-day simple moving average (SMA). As long as the ES stays above this daily cloud, prices will likely keep climbing. Similar to the daily cloud, the 50-day SMA has been a focal point for price direction. So far this year, we’ve seen that every time the ES hits the 50-day SMA, prices hold above it. If we hold the 50-day SMA, we could continue to rally. If we break it, we should watch for it to hit the cloud. We’re seeing the same situation in both the Dow Jones Industrial Average (YM) and the Nasdaq (NQ), which is why it’s so important to focus on these two guiding indicators.
Watch the video above for key levels to watch and a review of our focused watchlist including ROKU, GOOGL, and SHOP.
Stay Focused!