S&P 500
The S&P 500 fell during the course of the day on Tuesday, testing the 2040 handle. The market has seen support there previously, so it’s very likely that it will find a bit of support there again. I think that the market will eventually rally due to the fact that the Federal Reserve has the FOMC Meeting Minutes coming out today, and that will more than likely show just how dovish the Federal Reserve is at the moment.
On top of that, we also have massive support at the 2020 handle, and of course the 2000 level below which I believe is essentially the “floor” in this market right now. Given enough time, I think that we will eventually find enough support to have a rally, and then perhaps reach towards the 2100 level. If we can break above there, we should continue to go much higher.
NASDAQ 100
The NASDAQ 100 fell during the day as well, and also found a little bit of support somewhere near the 4450 handle. I believe that this market will continue higher and that pullbacks essentially offer value. The FOMC Meeting Minutes of course will have an effect on this market but ultimately I feel that the Federal Reserve is probably going to continue to be dovish, and that will have money flowing into stocks and out of bonds.
Given enough time, I feel that this market goes to the 4725 level, and that’s my longer-term target. I believe that we will get there eventually, but there is going to be quite a bit of volatility between here and there. I think that short-term buying opportunities will present themselves again and again on pullbacks. I’m bullish of this market, I just don’t necessarily think that we can keep the momentum of that we have seen recently, so I believe that the gains will come on shorter bursts going forward.
