We know from past experience that Jan is often a trending month, and once a trend is established, all the investors rush to join the trend. Therefore, many of the investors who exited the market in December 2017, are trying to get back their long positions.
The S&P500 index futures closed today at 2769.50, or nearly 2770.have climbed sharply since Jan 1, 2018. The futures are now farthest from their support line, 70 points above the 20 day moving average, which is at 2700. Such a large move from the support line is not normal, and usually stalls for consolidation or correction. The level of 2750 has to be tested again for the current upmove to be reliable, so we have to work with tight stop loss.
However, we are not saying short the futures, we are just saying that the long side move has played very rapidly for various reasons, and it should stall between 2780-2800, and that traders should be very careful with long positions above 2780. The momentum of the current upmove should hit 2780.
[Bonus Trade] Buy S&P500 Emini Futures at 2770 for Target 2780 with Stop loss 2760.