2018 will surely be remembered for the return of volatility in the markets…
If for a moment we forget everything about the economics and just look at the S&P 500 chart, we might notice that the price movements that happened back in February, are being somewhat replicated in this quarter.
Let’s make a quick comparison whilst looking at the chart (above)
Massive sell-off in early Feb – Massive sell-off in early Oct
Lowest intraday 2530 - Lowest intraday 2601
First recovery to 2788 (end of Feb) – First recovery to 2800 (early Nov)
Pull back to 2647 (early March) – Pull back to 2626 (end of Nov)
Second recovery to 2802 (mid-March) – Second recovery to 2811 (early December)
Second Pull back to 2554 (early April) - Second pull back to 2620 (early December)
Recovery up to 2941 (highest high of the year) – Recovery??
As we can see from the chart, sell-offs, pullbacks and the eventual recoveries were very much similar in both timing and price levels reached hitting similar support and resistance levels.
The question is, will we see a recovery up till the end of the year?
Time is running out and with 3 weeks left, and holidays in between, I personally think that it is a situation of now or never for the S&P. Based on what is mentioned above, I therefore think that there is more possibility of some sort of recovery with the index ending the year with single digit gains.
With this idea in mind, I am looking to LONG the index from these levels.
What is your idea?
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