The S&P 500 has pulled back a bit during the course of the trading session on Tuesday as we have reached the highs again. All things being equal, this is a market that I think is going to continue to see a little bit of interest near the 4200 level as well, so I think given enough time this is a market that does recover, and quite frankly I fully anticipate that it will break out above the highs yet again.
S&P 500 Video 09.06.21
The 50 day EMA underneath should continue to offer significant amount of psychological support if nothing else, and a lot of people actually use that as a potential trend defining indicator. If we break down below there, then the next support level will be the 4000 handle, where we not only have a certain amount of psychological support, but also where we have a small gap that should come into the picture to let the market as well.
All things being equal, this is a market that should continue to see plenty of buyers based upon the fact that so much liquidity comes into the markets and quite frankly nobody knows what else to do. The Federal Reserve is nowhere near trying to tighten things, so if we do pull back, people will look at this as a potential value play that a lot of people will be involved in. If we did break down below the 4000 level, might be a buyer of puts, but would not short the market due to the fact that every time the markets fall significantly, the Federal Reserve steps in to pick things up.
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