The S&P 500 as you can see on Tuesday broke much higher, clearing the 1990 level. The hammer that informed on Monday was a selling that we could see more buying pressure reenter the marketplace, and it must be said that it was formed right around the 1985 handle, an area that was once significant resistance. The market slammed into the psychologically significant 2000 level, and as a result I feel that this market should continue to grind higher.
The 2010 level above is significant resistance, so I need to see this market break above there to feel comfortable buying this market for the longer-term move. Pullbacks at this point time on the short-term charts would make me interested in going long as well. I have no interest in selling this market as it is obviously in an upward trend, and on top of that really there’s nowhere else to place money into the stock markets beyond the United States. Yes, European indices arising but in the United States we actually have growth. Huge difference.
Even if you don’t trade stock indices, this is one you should watch.
Even if you only trade Forex markets, if you do not watch the S&P 500 you are doing yourself a huge disservice. This is because this is an excellent place to get a read on risk appetite. The higher the S&P 500 goes, the higher other riskier assets go, such as the NZD/USD or the EUR/JPY pair. In fact, this market tends to move countercyclical to the US dollar in general, although not always.
Using this is a risk barometer you can play other currency pairs out there that offer a bit of exposure to riskier assets. I have even taken the S&P 500 and its attitude as a tertiary indicator as to whether or not I can buy the Turkish lira. With that being the case, recognize that there is the opposite of fact, as there are simply times when the United States is going to be preferred. Right now, that’s kind of the way it is and as a result all things American seem positive at the moment. While I do like using this as an indicator, I also like playing the S&P 500 in the binary options markets, or the CFD markets when available. Ultimately, I think this market continues to go higher.
