S&P 500 crashes and closes below 200 ema

As I wrote in my previous post S&P 500 might close below 200 ema on a daily chart and it did. This really accelerated the fall and the index went as low as 2011.60 today. Although some bounces are expected real support does not start till 1980-60 area. Bearish momentum is really strong. Bearish head and shoulders pattern on the weekly chart predicted the fall weeks ago. A lot of investors talked about it for a few years, but it looks that only now their worst predictions might be coming true. 

Despite the fact the fall to 1980 is highly unlikely today some fundamental data coming out from US might cause the index to continue falling lower till market close. You can see that other stock indexes have already joined the party and are falling too. Expect this process to continue till some fundamental data proves otherwise. By the way, US 30 has already broken its key support which was at 17000. If you are intending to go long, better wait for the market to show you when to do it. 

Possible risk event is: Markit Mfg PMI (AUG P) – Expected: 53.8, Previous: 53.8. 

S&P 500 daily chart

Forex news

This is the second post on the topic of Forex. I want to discuss the second best topic on Foreign Exchange market and that is Forex news. This is the driver of most strong market moves that are inspired by fundamental news releases. Most people would advise you against trading fx events and they might be right. Newbie traders get burned when they try to capitalize on Forex volatility and enter the market that is inspired by this or that macroeconomic event. Old and experienced traders know what it is to have an open position and get burned when market turns against you and you are in a loss of thousands of pips.

You can go to any Forex provider, find economic calendar on their page and check what important news events are scheduled for the week. Some of the most famous websites to do that could be dailyfx, Forex factory, investing.com, fxstreet, myfxbook, forexyard or forexpeacearmy. Choose the one you like most, or two and each Sunday check what events are to be released on the coming week.

What are some of the most important Forex news releases? The first would be interest rate decision. Most central banks do it once a month or once in two months. This is the key to fundamental analysis in currency trading. Quite often these are followed by press conferences where central bankers share their view of economy. In most cases these post release events are even more important than the events themselves.

Consumer price index would be second, because it measures inflation in a country and as you know inflation is very much connected to increasing or cutting interest rates.

Producer price index comes next as it directly influence consumer price index and might be a generator of inflation.

Retail sales, although not so important it does create big market moves from time to time. Employment indicators are of high importance as they measure the health of employment sector and of global economy on the whole. Non Farm payrolls should be mentioned separately as it is the biggest driver in employment numbers. By the way, it is coming this Friday.

Other less important, because they create less volatility are: consumer confidence data, durable good orders, beige book and a few more. Some data has no influence to the markets at all.

So, next time you think about opening a trade look at the calendar if there are no economic releases scheduled in the horizon.