The SP500 recently achieved a new higher high, reaching 4215.94 on May 19, indicating a bullish momentum ahead of the approaching Debt Ceiling Deadline on June 1. However, a significant sell-off ensued from that level as the market moved away from the premium territory it had been trading in.
As a result, there is a possibility that the price could target the sell side liquidity below the low of the second week of May, specifically the 4097.54 level formed on May 12. Currently trading around equilibrium and the previous week's opening gap, the SP500 has the potential to move in either direction. However, it is not expected to exceed the high of the month at 4215.94 or drop to the low of the month at 4049.19.
Considering the current price action, it is anticipated that the SP500 will trade around and potentially below equilibrium, which is approximately at the 4119.5 level. However, It would not be surprising to see it trade close to or below 4097.54 before reverting to equilibrium at least until Monday, May 29.
As we enter a new month next week and approach
the announcement regarding the Debt Ceiling, the price momentum is expected to
become more precise and clearer. Until then, significant moves in terms of
price action are not anticipated due to the prevailing uncertainty surrounding
the upcoming announcements.
Analysis and opinions provided herein are intended solely for informational and educational purposes and don't represent a recommendation or investment advice by TeleTrade. Indiscriminate reliance on illustrative or informational materials may lead to losses.
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