The S&P 500 fell initially during the trading session on Thursday, only to turn around and show signs of life yet again. Ultimately, this is a market that I think will find buyers going forward and we will eventually build up enough momentum to break out to a fresh, new high. At this point in time, the market is likely to break that 3400 level and continue going towards the 3500 level. Granted, I recognize that the market is a little overdone and at this point it looks like we are simply “chopping wood”, or “killing time” before we find the necessary catalyst and/or momentum.
S&P 500 Video 21.08.20
Pullbacks at this point time should end up being buying opportunities, with the 3200 level underneath being the absolute “floor” in the market. As long as we stay above there, I will look for pullbacks as buying opportunities and have no interest in trying to short this market. The 50 day EMA sits in that same general vicinity so it also makes sense that we would find buyers there.
A break higher, I think the 3500 level will be a major psychological battle just waiting to happen, but quite frankly as long as the Federal Reserve has everybody’s back as they have, it is difficult to imagine that this market will sell off for anything significant, at least as far as time is concerned. (It should be noted that we could get the occasional violent sell off, but the sustainability of the selloffs would be questioned as the Federal Reserve will do whatever it takes to keep the market afloat.) I hate to be so cynical about this, but this is the market environment that we operate in.
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