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S&P 500: Bounced off the 50-week moving average for the 2nd time

As earnings season comes to an end, investors around the world are left to consider how a shifting macro environment will impact different asset classes and geographies. With volatility sitting at low levels, (not unexpected with sustained sideways action) the market seems vulnerable during what is historically one of the weaker months.

It was quite the week for the markets and after a tumultuous few days, all the major indices managed to close out the week in the green. Much of this helped along by a string of upbeat economic reports including a solid industrial production report and slightly higher-than-expected report on inflation, indicating some companies are starting to see pricing power.

The Index fell 0.44% since the start of the month but is up 2.10% year to date and is in a bullish phase. The S&P 500 went back and forward this week, tested for the 2nd time the 50-week moving average but promptly moved up and closed in the green near the high of the week. The bounce and close above the 50-week moving average on high volume is seen as bullish although the stochastic is showing a bearish momentum but holding above the 50 mid line.

Expecting an upward move to year highs at 2,133.50 on a break above a previous week high at 2,101.25 (scenario 1) or a break below previous week low at 2,046.50 could push the Index down to a weekly support at 2,014 (scenario 2).

Usa500 is a CFD written over S&P 500 futures.