The S&P 500 has initially fallen during the course of the week but has turned around to form a bit of a hammer, and as a result it is a very strong possibility that we will continue to see bullish pressure. That being said, if the market were to find buyers underneath, we will eventually take off to the upside. If we can clear the highs, then obviously that is a very bullish sign. However, you also have to keep in mind that if we break down below the bottom of the hammer from the previous week, then that would be very negative sign.
S&P 500 Video 23.08.21
If we were to break down below that hammer, then it is likely that the market is looking towards the 4200 level, followed by the 4000 level. The 4000 level would be a 10% correction, which of course is typical for market pullbacks. The market is not one that I would be a seller of though, I would be a buyer of puts if we break down. If we continue to see this type of behavior, it looks like we are simply going to continue to grind to the upside.
That has been the general attitude of this market for some time, and I think that will continue to be where we go going forward. Keep in mind that the Federal Reserve will do whatever he can to keep the markets going higher, so one has to think that there is a certain amount of the “Powell put” still in the markets.
For a look at all of today’s economic events, check out our economic calendar.