The S&P 500 rallied right away at the open on Tuesday, reaching the 3885 level almost immediately. At this point in time, the market has used the 50 day EMA as a bit of a springboard, as we have bounced quite nicely. Furthermore, the uptrend line underneath has offered support, so this suggests that we are saving the uptrend, and going towards the 3900 level again, followed by 4000. 4000 of course is a large, round, psychologically significant figure, and of course an area that a lot of options will be focused on. This will more than likely trigger quite a bit of profit-taking, so I do think that breaking above the 4000 level will probably take a couple of attempts.
S&P 500 Video 10.03.21
When you measure the previous consolidation, between the 3200 level and the 3600 level, it measures perfectly for a move to the 4000 handle, so I think a lot of technically driven traders will be looking to get there. “Buy on the dips” has worked for most of the last 13 years, so as you can see it has been more or less traders looking for value in a market that has been force-fed liquidity. I do not see that changing anytime soon, so it would make quite a bit of sense that we continue to see traders jump in and take advantage of any dip to get stocks “on the cheap.” As far as selling is concerned, I have no interest in doing so as long as we are above the 200 day EMA at the minimum. The uptrend line underneath has held yet again, so this is a “buy only” market yet again.
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