Santa Claus Rally on hold as S&P 500 stock futures fall 1.5%
A combination of a delayed reaction to the Federal Reserve news, Omicron, and President Biden’s $1.75 trillion ‘build back better’ plan on hold at an impasse have caused S&P 500 stock futures to sell off 1.5%.
So where to now?
As you can see from the chart a break below the 4490 level would indicate a confirmed double top which would be bearish for stocks.
The stochastic momentum indicator pictured above as also issued a sell signal last week and has some way to travel before getting into the oversold area.
If the double top does indeed get confirmation, then the 200 day EMA becomes the next key support area at 4,329.
- Support: 4500 is a key support area…if broken we most likely fall a further 4% to 4329.
- Resistance: 4750 (previous resistance).
Happy Trading
Stephen