- Observing the S&P 500, it is evident that we have somewhat retreated in order to breach the 5,000 mark.
- All other things being equal, there will probably be plenty of value seekers eager to enter the market and take advantage of anything akin to the S&P 500 being on sale.
Below the market, we'll have plenty of support, particularly near the 4925 level and possibly even the 50 day EMA, which is sitting just above the 4500 level. Recall that only a small number of stocks influence the S&P 500, therefore you should focus on the Magnificent 7, as they are the subjects of much attention, along with the Federal Reserve and its monetary policy.
In actuality, the index moves in lockstep with those large stocks. I do believe that we are currently operating more or less in a feedback loop where we just keep grinding higher. However, as I mentioned earlier, I believe there will be a lot of value seekers out there if we do see a drop, at least down to 4,800. That's 200 points to the south of our current location. You're just searching for opportunities to purchase, buy, and buy again if that's the case.
Ultimately, this is a Market of Just a Few Stocks…
In the end, I do believe that we will surpass the peak and maybe aim for the 5100 level, although one would have to question how much longer this can continue. That is difficult to say, considering we have gained almost 24% since Halloween of last year, which has been pretty much straight up in the air. That is a ridiculous profit. That's a fantastic year in a matter of months. Considering that, I do have reservations regarding sustainability, but nothing currently indicated by the data points to a rapid shift in the market's trajectory. All you can do with this at this time is search for buying opportunities in this market as there’s obviously so much in the way of bullish momentum and “FOMO” out there that people will be paying close attention to and trying to benefit from.
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