The S&P 500 has gone back and forth during the trading session on Friday, hanging around all-time highs. That being the case, the market does look very bullish but the fact that Friday was rather quiet makes quite a bit of sense as the market will be a bit concerned about hanging onto risk heading into the weekend as a headline could come out to shake things up.
S&P 500 Video 17.02.20
All things being equal though, we are a bit overextended, so I think at this point we are likely to go back and forth in the short term, and therefore the 3400 level above is thought of as massive resistance. The hammer from the previous session probably offer support so I expect more sideways movement than anything else. Even if we do break down below there, it’s likely that the 3300 level should offer support. Beyond that, the uptrend line should offer support as well, so I think given enough time to get a pullback you can probably look for some type of value. After all, US stock markets continue to attract a lot of money, simply because US companies are going better than many others.
If we do turn around a break above the 3400 level, then it’s likely that the S&P 500 will suddenly target the 3450 level and eventually the 3500 level. I do think we get there eventually, but a pullback makes quite a bit of sense or at the very least it’s likely that we go sideways in order to build up inertia.
Please let us know what you think in the comments below