The S&P 500 has rallied significantly during the trading session on Thursday to break above the 4400 level and the 50 day EMA. That being said, the market is likely to continue to see a lot of noisy behavior, but I do think that it is probably only a matter of time before we continue going higher, as the market has had a nice pullback.
The pullback was exactly what we needed, and therefore it makes quite a bit of sense that we would see the market turn around eventually. This has been a classic pullback and therefore I think what we will continue to see is the value hunters coming into the market. Keep in mind that we are also at the beginning of earnings season, and it has been fairly strong for the banks over the last 24 hours.
S&P 500 Video 15.10.21
Underneath, I see the 4250 level as an area of massive support, and I think a lot of people will be paying close attention to it for a potential value area. Breaking down below there could open up a put buying opportunity, but that is about as negative as I would get. Looking at the chart, I think that we are more likely than not going to go looking towards the highs again, and as long as earnings season ends up being relatively stable, I think that is the path of least resistance. If we were to break down below the 4250 level, then I would be a short-term put buyer aiming for the 200 day EMA or so. I never short this market as you know, it is far too manipulated.
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This article was originally posted on FX Empire