Day three: our potential US 500 trade

I felt the S&P could have staged a bit of a rally yesterday, given how oversold the index was on the hourly chart, and this has come to fruition.

The S&Pclosed the cash session at 1755, which is right on the former uptrend support drawn from the November 2012 pivot. If we see a close above this level tonight and I will look to close the short trade and potentially take profits. It’s also worth looking at the hourly chart (seen in the chart below), which tested and rejected the 38.2% retracement of yesterday’s 1794 to 1738 fall at 1760. A break above 1760 could also be well received by the bulls

In US trade we get the latest ADP private payrolls report (due at 00:15 AEST) and the services ISM survey (02:00 AEDT). Both are very important US data points and while the jobs report is expected to fall, the services survey is anticipated to grow at a slightly faster rate (53.7). This represents a real risk for the trade and good numbers here could push the market higher.

IG Charts

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