The S&P 500 has rallied significantly during the trading session on Thursday to break above the 4000 level as traders jumped into the market to open up Q2. That being said, the market will not be open for Friday, or at least I should say that the cash market will not be open. The employment numbers in the United States come out as well, so that could cause quite a bit of headaches for CFD traders and of course futures traders.
That being said, the market looks as if it wants to go higher based upon the way that the market closed, especially considering that the jobs number was coming out on Friday and of course there would be no real way to react to it on Friday, at least not in the cash market. With this, I think this simply shows what we have seen more than once, the fact that the buyers will come in to pick up stocks no matter what. We are in an extreme uptrend, and I think that is the main thing that we need to pay attention to.
The 4000 level could be support, but more likely than not it will be found a little closer to the 3950 level. Underneath there, the 3900 level would be support, followed by the 50 day EMA. At this point, I think the market is simply going to be a “buy on the dips” type of situation, as we have seen for months. As long as the Federal Reserve is there to protect Wall Street, and that of course is the central banks first concern, it is difficult to imagine that stock markets would suddenly fall apart. Even if they do, the reality is that it is only a matter of time before Jerome Powell steps in to save the day.
That being said, if the 3800 level gets broken down below, then I would be looking to buy put options, but I would not short this stock market under any circumstance in the United States as it is so highly and openly manipulated. With all of the liquidity out there, it is almost impossible to imagine a scenario where we have a serious break down that lasts more than about a week considering what we have seen as of late.