Can S&P 500 make a new high today?

Since yesterday French first round election result news released, equities market has been respond with a gap up and follow by a follow through.

The question now lies…can this rally sustain?

Currently the price is challenging back 2390-2400 which is the key resistance area. Most market players now are watching this key level of price to see the development of the trend…will it form a double top, a false breakthrough and finally the uptrend is over and bend..or will the price continue to rally and make a new high?

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Currently we can see that the price rally is not supported by the volume. Back to the basic T.A 101, a good price movement rally should be supported by high volume, this show a healthy rally but if we check on volume that i circle in red, clearly is show an early sign of out of steam and those who long since last week have high chance to take profit at this stage as it is already hit 2% and more of the price/profit changes.

On top of that, there is a french election second round result on 7-8 May. Although Pro EU candidate Macron is leading the presidential election race, there is no indication that Le Pen will lose as the gap between their result is quite close.

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Currently there is some “liquidity dried up” situation happen as seller try to sell at a value sell zone and cause price move up in a fast manner to hit the next level of supply.

My take is that this rally will be short lived and is subjected to retest the 2350-2370 area (before gap up). However, we should monitor the volume closely, if there is indication of high surge of volume…high probability we will see equities market able to make a new high record.

Till then, stay safe and happy trading and investing!

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