Market consolidation at the top, with Trumps inauguration just 9 days away what could we see happen this week.
The S&P500 e mini futures has been consolidated at the top of the market for the past three weeks. Market consolidation is where Price has established a range from 2228 to 2275 with sellers testing the bottom of the range on a one day break of support at 2240. If the buyers keep it above this price we could see a test on the highs and a move up to the next area of resistance at 2300.
Market Consolidation -what does it mean?
Market consolidation occurs when there is no clear trend. Buyers and sellers are waiting for a decisive commitment to give direction to the markets. The volume has been steadily decreasing for this week as institutional investors are waiting for their hint to either buy or sell the market. In essence the market is wanting a sign to sell or buy.
The Trump rally has markets moving from the low of 2000 to this present high of 2275. There is 9 days left until the inauguration so we could either see consolidation with no price action or some volatility as earnings come out. The present pattern is looking good for a continuation to 2300 and a possible move to highs projected to 2355.
The 200 moving average is at 2130. The chances of it breaking to hear presently, are slim.
Today we have closed higher on the S&P500 and are very close to breaking the highs. Lots of great opportunity in the market. Be careful out there if you are not used to trading. Volatility can quickly enter the market. Always remember to manage your risk first. Never bet it all. Always trade with a stop and a target.
Trade your plan, Trade what you see.