- The S&P 500 rebounded on Friday, and the general outlook remains positive. The market is just not shortable at this moment.
- This means that the most sensible approach to play this market is to either fight a little bit of value on pullbacks or chase momentum.
- I think this is an obvious market trend, but at this point in time, its difficult to have large positions on, or be over leveraged currently.
If you look at the S&P 500, you can see that we started off fairly neutral. However, I would say that the fact that we are not retreating following a strong gain on Thursday does imply that traders might be willing to enter the market on March 1st, which makes sense. For the larger amounts, fresh orders frequently need to be submitted. Therefore, there will usually be some activity on the first of the month. Even if we do fall back at this point, I have a feeling that there are a lot of buyers underneath who are eager to jump in and seize any advantageous possibilities. It's a buy in the dip market, to put it another way.
Big Figures Continue to Matter
Remember that this market usually trades from one large area to the next, and that there is certainly some psychology associated with the 5,000 level underneath. The 50-day EMA is presently at the 4,900 level; below it is the 4,800 level, which has obviously also been significant in the past. Therefore, even though there are only a few stocks that are actually driving everything, this market is ultimately impossible to sell because of its clear bullishness. You are aware of the way these marketplaces have operated for a number of years, so I don't see that changing. As of right now, individuals continue to consider chasing the newest, hottest trend. Stocks and cryptocurrency, of course, have contributed to this frenzy as well, but right now I believe we have a situation where everyone is looking for a return because they assume central banks will keep pumping money into the system in the future.
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