The S&P 500 fell during the trading session on Monday, reaching down towards the 2850 level, an area that has been resistive in the past, and of course has a lot of importance as it is a large, round, psychologically significant number. Longer-term, the market looks likely to go much higher, reaching towards the 2900 level, and then possibly even the 3000 level. A breakdown below the 2850 level suggests that we are going to go down to the 2800 level, which should be even more supportive overall. I certainly wouldn’t be a seller of this market, it is far too strong and therefore it is simply a “buy on the dips” scenario that we would be looking at. 3000 is a long-term target, but the way this market has been going, it’s likely that we will get there much quicker than originally thought.
The NASDAQ 100 pulled back towards the trading session on Monday, testing the 7000 handle in general. It is a bit of a messy area, but obviously we are in a strong uptrend, and I think we are going to continue to go higher. The uptrend line should continue to hold this market on, and I believe that we will continue to see buyers get involved in this market on the dips, as it is so strong. I would have no interest whatsoever in selling this market, especially if we can stay above the uptrend line. The 7100 level would be the initial target, and perhaps even break above there. I expect a lot of noise in the meantime, but certainly that the algorithmic traders will continue to come back into the market and pick it up every time it drops short term. In fact, it’s a one-way market currently.