- The general mindset among S&P 500 traders is still to "buy on the dip," and Tuesday's session appears to be more of the same.
- This keeps happening over and over again.
- At this point, I don’t think there is an argument to make against the uptrend, and I think this is a situation where the markets are simply stuck in a loop.
The S&P 500 Continues to Offer Value
During Tuesday's early trading hours, the S&P 500 made an initial attempt to rise slightly, but to be honest, the majority of people are concerned about the inflation statistics. With the exception of the CPI, which was released early on Tuesday, and the PPI numbers on Thursday, this is a relatively quiet week for announcements. As a result, they are both relevant to inflation. However, at this point, any pullback will almost definitely present a buying opportunity, and I believe that 5,000 is currently your floor.
In the end, I believe we'll look for a way higher in this market, and we'll eventually reach 5,200, most likely this week. It's entirely arguable whether or not anything changes, and to be honest, the stock market is probably going to do better if the CPI and PPI numbers released later this week are lower. Recall that it is unrelated to the state of the economy. It is related to two specific things. The Magnificent Seven, who are the seven stocks that influence everything, are doing this.
Of course, there is also the question of whether the Federal Reserve will relax its monetary policies. As it stands, Wall Street welcomes bad economic data because it means that the customary handouts will continue. Our trend is up 45 degrees right now. Naturally, the fact that it's not as wildly overdone as it once was a very bullish indication. We're just being steady now while she moves.
My preference is to purchase dips whenever the chance arises, and thus far, it has proven to be a successful strategy. Having said that, it's also important to remember that the 5000 level is not only a significant psychological barrier, but the 50-day EMA is beginning to approach it as well. This provides yet another justification for the market to attract purchasers eager to seize on "value."
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