- It looks like the S&P 500 will continue to be a noisy market, but I do think that given enough time, we do have plenty of buyers.
- That being said, I would have to ask whether or not the market participants will try to sell off heading into the Federal Reserve and whether or not they are willing to be buyers of dips going forward.
- I think this is a situation where you are simply looking for 5,100 to hold, and if it does, then you will continue to use that as a short-term floor.
On the other hand, if we break above the 5,200 level, then it's likely that we go looking to enter more of a FOMO trade. There are plenty of buyers out there willing to step in and pick this up, so it would not necessarily be a huge surprise to see it bulldog through there. That being said, you also have to keep in mind that a lot of noise will be had late in the day, depending on what Federal Reserve Chairman Jerome Powell has to say not only during this statement, but also the press conference. You have to keep that in mind.
So I'm hoping that we get some type of pullback that we can take advantage of and find cheap contracts. Regardless, there's no way you can sell this market. And I believe at this point, you probably have a significant support level somewhere right around the 5,000 level that will obviously attract a lot of attention. Not only is that a psychologically significant number, but it is also where the 50-day EMA is hanging about. At this point, the 5000 level would be the ‘ultimate entry’ assuming that we get anywhere near there. I am not holding my breath for that but am keenly aware of that region.
The S&P 500 is an ETF
The S&P 500 continues to be driven by a handful of companies, and this is something that you should keep in the back of your head. This is a market that isn’t equal weighted, and therefore it is a market that behaves more like an ETF of 7 stocks than anything else. Make sure to watch all the usual suspects for guidance.
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