Market Near Support Level

Last week the S&P 500 tested the 29 November pivot high on a weak up day, but it could not push higher. The S&P declined for the next 4 consecutive days. There were 3 down days out of 5 for the Dow and Nasdaq. The S&P and Dow ended the week down -1.65%, while the Nasdaq declined -1.51%. 

Despite the market weakness, there is reason for cautious optimism. The S&P and Dow have reached their respective 50 EMAs, and the 50 MA is generally an area of support. There are many stocks which have also retraced to their 50 EMAs, and this could lead to a number of ProTrend setups if the market can find support and rebound.

Next week the Fed meets (starting Tuesday) and they could announce tapering of the bond-buying program. Many commentators believe this will be bearish for stocks. Others believe that the tapering has been expected, so it may already be reflected in the current market. Next week may be pivotal for the future direction of the market. As always, we'll watch price and take our signals from the market and not the commentators.