The S&P 500 has pulled back significantly during the trading session on Thursday as we got a bit of panic selling in the middle of the day. That was not necessarily any particular news that I am aware of, I think it is just simply a scenario where we have seen traders take profit after a significant move higher. This was first seen in the NASDAQ 100, which was a bit overdone anyway. We have the earnings season coming next week, and that probably has some people spooked as well. With that being the case, I still think that we go looking towards the 3200 level eventually, but we may get an opportunity to buy the S&P 500 closer to the 50 day EMA, at least that is what I am hoping.
S&P 500 Video 10.07.20
On the other hand, is possible that we see a market that breaks above the recent highs at the 3230 level, which allows the market to go looking towards the 3400 level. All things being equal, this is a market that I think gives us an opportunity to pick up the S&P 500 on that dip. However, if we were to break down below the 200 day EMA which is closer to the 2980 handle, the market more than likely goes looking towards the 2800 level after that. At this point, despite the fact that we have sold off rather hard during the middle the day, we are still very much in the same range that we had been in previously, bordered by 3200 to the upside and 3000 to the down. Although this has been a bit of a shock in the middle the day, not much has changed from a longer-term perspective.
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