S&P 500
The S&P 500 initially fell on Friday but we found enough support near the 2130 level to turn things around and form a hammer. I find this particularly interesting because I think that the real support is closer to the 2120 handle, meaning that perhaps the buyers are starting to become a little bit more aggressive. Remember, we had originally broken out above 2120, so therefore it should be rather supportive going forward. The fact that we formed a hammer only reinforces this concept and therefore I feel if we break above the top of the range for the Friday trading session, we will probably try to make a move towards the 2160 handle as we continue the overall uptrend. With interest rates in the United States looking less and less likely to rise anytime soon, this should continue to be very good for stocks overall.
NASDAQ 100
In the NASDAQ 100 we can see very similar circumstances, only we are towards the very highs and forming a hammer which of course is a very bullish sign. If we can break out above the 4840 level, I feel that the next move will probably be the 4900 and then a move to 5000 is all but assured which has been my longer-term target for quite some time. We’ve seen quite a bit of a sellers’ market of the last couple of days, but that’s been completely turned around. I think at this point in time the interest-rate expectations are very low, and that of course helps stock markets as the bond markets offer nothing in the way of returns. At this point in time I believe that fundamentals are essentially unimportant, and central bank policy is starting to take over everything in the stock markets. Granted, this tends to lead the bubbles that into very poorly, but at this point in time it does look like we are anywhere near that bubble popping. With this, I remain a buyer.
