(MENAFN- Daily Forex) The s&p 500 E-mini contract advanced above the 4000 level to reach the 200-Day EMA, and now looks as if it is trying to build up enough momentum to break out. You should keep in mind that the little bit of trading that was done during the trading session on Thursday would have been very thin, and of course in limited hours.
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The underlying index itself was not open, but futures and CFD markets were out there plugging away. Regardless, one of the things you should pay the most attention to is the reaction to the FOMC Meeting Minutes, which suggested that there were members of the federal reserve Open Market Committee that were willing to slow down interest rate hikes. Because of this, Wall Street is celebrating the fact that“cheap money” may be coming back. I don't think that's going to happen anytime soon, but it may lead to a short-term trade. After all, this is the type of setup that we see quite often at the end of the year, which is referred to as the“Santa Claus rally.”Market is Choppy
This rally is simply money managers trying to chase assets, showing their clients that they own all the right stocks. It's a game that they play at the end of the year because most money managers can keep their jobs if they are losing money in a market that's falling if they are owning the“correct assets.” It'll be interesting to see all this plays out, but I do think that we have a little bit of short-term momentum that is probably going to continue. On the other hand, if we turn around and break down then the 3900 level could be targeted, with a 50-Day EMA sitting just below there. Both of those could be very supportive , so if we were to break the role, then it's likely that the rally is over.
We are in very choppy conditions, and that will continue to be the case going forward. I don't like the idea of getting overly exposed in one direction or the other, and the later we get in the air, the more difficult it's going to be to start trading again. The question now isn't so much whether there's momentum, but whether or not we can break above the 4150 level.
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