(MENAFN- Daily Forex) The S&P 500 bounced upwards yesterday after Friday's steep loses per White House rhetoric signaling that China trade policy remains under the microscope and a target for stiffer tariff penalties.

• The S&P 500 is near the 6000.00 level in early futures trading on Tuesday morning. In the wake of steep declines on Friday when President Trump made a sudden remark that China will face heightened tariff fees, the S&P 500 recovered well yesterday as investors looked for discounted values after the bloodletting on Wall Street. Day traders looking to take advantage of Friday's selloff who participated in yesterday's rebound may be feeling good about themselves. However conditions remain dangerous near-term.
• After attaining record apex levels on Wednesday and Thursday of last week, Friday's selloff per President Trump's surprise statement also helped folks looking for an excuse to potentially cash in profits if they were merely near-term speculators. However, after yesterday's bounce back upwards, judging what sentiment will bring forth today and tomorrow is not quite as easy. Fast trading should be expected today.

All-Time Highs and Nervous Sentiment

The U.S government shutdown remains in full effect. While financial markets are certainly trading without much of a reaction as the political game between the Democrats and Republicans plays out, there are lingering worries about potential damage to the U.S economy because of the shutdown. The S&P 500's gains yesterday brought the index to within highs of nearly 6,675.00 yesterday, but the strong buying turned into selling again.

This morning's early action in the S&P 500 futures has the 6,600.00 level in clear sight as a psychological level. Traders should also note that even as the major index sees some headwinds early this morning, that most of this is taking place without the participation of U.S investors quite yet. Speculators may want to wait until the return of large financial institutions in a few hours to see what develops. Even though sentiment appears nervous, the S&P 500 still remains within its higher mid-term elevations.

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Support levels should be monitored today. Day traders who are conservative may decide to sit and wait out the current market conditions until momentum trades start to be demonstrated as U.S financial institutions begin to participate.

• While the S&P 500 has been able to establish a significant run higher the past handful of months, the near-term may remain challenging.
• Positive doses of impetus are needed and some investors might want to see sustained trading above the 6,650.00 level to develop before they decide to jump back into bullish stances.
• Traders looking for downside to build traction should also be cautious and use risk taking tactics wisely.
• The S&P 500 below the 6,600.00 may be viewed as discounted by some investors.

S&P 500 Short-Term Outlook:

Current Resistance: 6,614.00

Current Support: 6,595.00

High Target: 6,670.00

Low Target: 6,575.00

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