The S&P 500 initially pulled back during the course of the week, but then turned around to break above the 4000 barrier. Now that we are above there, the S&P 500 is free to kick off the next leg higher, but I think we could possibly get the occasional pullback. The Bureau of Labor Statistics announced that the United States added 916,000 jobs for the month of March, and as a result it suggests that we will continue to see the economy take off, especially as coronavirus vaccinations become much more common.
S&P 500 Video 05.04.21
To the downside, the 3800 level underneath will be massive support, assuming that we even pull back that far. I look at pullbacks as buying opportunities and it looks very likely that we are going to go looking towards the 4200 level above. This market tends to move in 200 point increments, as you can see looking backwards. We are in an uptrend, so obviously you have no real reason to short this market, but if we did break down below the 3800 level, then I might be a buyer of puts. That is because I can limit my risk, and perhaps make a big score in a short amount of time. At this point though, it does not look like the markets ready to turn around and I think at this point in time it simply going to be another buying opportunity every time we fall, as Wall Street is clearly trying to price in a major recovery in the United States for the second quarter. Beyond that, it is also worth noting that the second quarter has just began, and therefore a lot of money still has to be put to work.
For a look at all of today’s economic events, check out our economic calendar.