The S&P 500 went back and forth during the course of the week, as we are getting towards the extreme highs again. Ultimately, the market is likely to see a lot of noise in general as we worry about the idea of stimulus, which of course is good for stocks as we have seen over the last 12 years. That being said, it is likely that we will continue to see a lot of noise in general, and now the 3600 level above continues to be massive resistance. To the downside, the 3400 level underneath is likely to see massive amounts of support, and every 100 points underneath.
S&P 500 Video 19.10.20
Looking at this chart, the market is likely to continue to find buyers given enough time, and as a result it is simply a matter of waiting for value underneath. I do believe that longer-term traders will continue to look for the market dipping and offering the ability to go higher. However, even if we break down at this point, I think it is only a matter of time before the Federal Reserve would jump in and lift the markets as much as they can.
That is the way this market has been functioning for the last 12 years or so, and I do not see anything changing anytime soon. If we were to break above the 3600 level, then the next obvious target would be the 4000 handle. Because of this, I do believe it is only a matter of time before you can pull back, buy little bits and pieces, and then build up a larger position as most money managers have been doing.
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