The S&P 500 initially pulled back a bit during the course of the trading week to find support underneath. Ultimately, the market looks as if it is going to break above the 4200 level and continue going higher, but we have not broken out to all-time highs yet again. If we can break out above the all-time high, then I believe that the market then will start to target the 4400 level. All things being equal, the market is very bullish and all things being equal I do not have any interest in trying to short this market. Looking at this chart, the 4000 level is massive support, as it is not only a large, round, psychologically significant figure, but it is also where we had seen a bit of a gap previously.
S&P 500 Video 07.06.21
The uptrend line of course offers a lot of support as well, so it is not until we break down below there that I would be worried about the overall uptrend, and even then, I might be willing to buy puts, but I would never short this market as the Federal Reserve will almost certainly step in and try to lift this market if nothing else. All things being equal, this is a market that I think continues to be a “buy on the dip” type situation as the liquidity measures being taken by the Federal Reserve will continue to be a major driver. Furthermore, we also have the reopening trade still in the forefront, so that of course helps push this market higher as well.
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This article was originally posted on FX Empire
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