The S&P 500 rallied significantly during the trading session on Thursday, but give back some of the gains late in the day. While this is a very bullish move, I believe that we are still a bit overextended. With the massive resistance at the 2600 level above, I hesitate to start buying at this point. However, on pullbacks that might be interested, especially near the 2550 region. The overall attitude of the market remains bullish, so I don’t have any interest in shorting, but I also recognize that we may need to get past this area to have a more significant move. If we were to break down below the 2550 level however, that probably sends this market down to the 2500 level after that. I prefer the upside, so I will be patient and wait for a reason to go long.
The NASDAQ 100 broke higher during the day, slicing through the 6300 level again. We even trying to make a fresh, new high, but at this point I think that we will continue to see churning in this area, with pullbacks perhaps being buying opportunities. I think eventually we could go to the upside for a longer-term move, and that ultimately, we will see the 6500 level. However, we have been a bit overbought for some time, and it now looks likely that a pullback is necessary to build up the momentum needed to continue this move. The 6200-level underneath should be massively supportive as well, so even if we drop down to that level, I still think that there is plenty of buying pressure under there. In fact, I believe that the uptrend is very much intact until we were to break down below the 6000 handle. I expect volatility, but eventually the buyers will return.