The S&P 500 has pulled back initially during the Globex trading, but as you can see on the daily chart, we have turned around to show signs of strength again as the market seems all but destined to go looking towards the 3200 level. With that in mind, I like the idea of buying dips as they occur, because quite frankly with the Federal Reserve out there doing everything they can to pump out the asset bubble, it is difficult to imagine that stocks will sell off for a meaningful amount of time.
S&P 500 Video 08.07.20
Even if we do break down from here, the 3000 level should be rather supportive, as the 50 day EMA is right in that neighborhood as well. Not only is it a large, round, psychologically significant figure, but it is also where we have seen support in the past. With that, I like the idea of buying “hand over fist” in that area if we see some signs of a bounce, assuming that we can even get there. One thing is for sure, the market has been extraordinarily resilient, and it certainly seems as if 3200 is the main focus of the market right now. As long as the Federal
Reserve has the back of Wall Street, there is no reason to think that anything is going to change. Even with coronavirus numbers going up, the market seems impervious to anything remotely close to bad news. As my mentor tells me occasionally, “embrace the stupidity.” We simply cannot fight this type of momentum.
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