SPY (NYSE:SPY) is still locked in a range. 280 which coincides with its 200-day moving average seems like a short-term support. 290-295 is a short-term resistance. Last week, the index finished below its 10, 20, and 50-day moving averages again. Until it closes above 295, all long setups need to be held on a short leash – take partial profits often.
Keep in mind that the market indexes are lagging indicators. We are likely to see strong breakouts in individual stocks before SPY (NYSE:SPY) goes back above its 50-day moving average.
If 280 doesn’t hold, the next potential support is near 260.
Sentiment is what drives prices in a short-term perspective but it is always good to have a clue about the macro background. Interest rates around the world continue to be extremely low, even negative – mostly because central banks are highly accommodative. Many companies are still reporting strong earnings and are relatively optimistic about the future. A potential lack of a trade deal with China has probably been at least partially discounted because the it is a theme that has been in the headlines for almost a year. These are all major factors that should turn any 10-20% corrections into a buying opportunity.