On three separate occasions within the past three weeks, the 200-day moving average in the S&P 500 has acted like a brick wall, putting the brakes on any rally attempt.
The S&P 500 futures have returned to the 1094 region which is really the pivotal level for the index and leaves the issue of the near-term direction unresolved.
May was important, because the major stimulus efforts are coming to an end. Economists wanted to see how the economy would hold up without the government holding it up.
There will be two significant earnings reports out this week. Best Buy (BBY) will release their earnings before the market opens on Tuesday, and FedEx Corporation (FDX) will do so before the market opens on Wednesday.
With stocks holding at support of their prior "swing lows" last week, a subsequent move above the 20-day EMAs would not be surprising, and could generate some bullish momentum in the near-term.
The S&P e-Mini futures is exactly at the 1093 level which represents an area of possible resistance. The moves over the next couple of sessions will clarify whether the market is ready to rebuild back towards 1140 or whether the recent rally runs out of steam.
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