S&P500: Rebound likely to hold as long as resistance at 1350 remains intact
After a week of heavy losses the S&P500 is pointing to risk appetite recovery to start the trading week. The vaguely promising meeting between US President Obama and congressional leaders on Friday buoyed hopes for a compromise with the weekend gap sending the S&P500 higher. At 1368 at the time of writing the market remains in undecided territory and this could be seen as a technical rebound in a bearish trend. With the RSI posting a bullish divergence the bulls will focus on resistance at 1371. A break above that area would expose the 1388 level. As long as key support at 1350 remains intact the market is unlikely to resume the downward trend. A break below that area would open the door for 1333. On the economic front, October’s US Existing Home Sales data headlines the quiet economic calendar today. Absent a sharp deviation from expectations, the release is unlikely to have a directional impact on the market.
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