(MENAFN- Daily Forex) The s&p 500 has rallied during training on Wednesday, as we are now threatening to break above the top of the shooting star from a couple of days ago. This is obviously a very bullish sign, but there are a couple of things that pay attention to over the next couple of days.
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To begin with, we have the Consumer Price Index coming out on Thursday, and that of course will have a major influence on what happens next in the markets. When you look at the CPI, you get an idea as to what kind of trouble the US consumer may be in . Ultimately, you should pay close attention to the fact that the market has been paying close attention to the idea of what the Fed is going to be doing, as the market has shown itself to be very sensitive to interest rate policy. The market must pay close attention to the CPI because it quite often will give you an idea as to where we are going forward.Looking for a Clear-cut Signal
Beyond that, the 200-Day ema sits at the 4000 level, and of course will attract a lot of attention because we not only have the round figure there, but we also have the gap that formed several weeks ago, so that could cause a bit of negativity as well. With this, I think it's probably only a matter of time before the market runs into some resistance, but if that CPI number comes in cooler than anticipated, the way Wall Street has been behaving lately, it's very likely that the market will just take off.
On the other hand, if the CPI number comes in hot, it's possible that we could see the stock market plunge toward the 50-Day EMA. If we break down below the 50-Day EMA, it's likely that we see the markets then go looking to the 3800 level. That would take a bit of a shock though, especially considering that Wall Street seems to be in a“Perma bulls” mode. At this point in time, I'm looking for some type of clear-cut signal. Right now, it looks like we're going to continue to bounce around in this relatively well-defined range that we had been in. Breaking above the top of the shooting star does signify quite a bit of momentum though.
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