- With no economic updates made throughout the session, the S&P 500 saw virtually little action in the early hours of Monday.
- This mediocre momentum is still present.
The S&P 500 Continues to Look for Momentum
The S&P 500 Index has been extremely nonchalant in its movement during Monday's overnight and early hours of trade, and it's possible that it may remain that way, and the reason I say that is because, at least in an economic sense, there isn't anything on the market right now to move the markets. In the end, a lot of people will be searching for a catalyst of some kind in this situation, but we just don't have one.
To be honest, this market seems a touch stale. Therefore, longer term optimistic traders would probably accept, even welcome, a little retracement. We don't want to pursue the trade all the way through, after all. On Friday of last week, we managed to construct a shooting star. That, then, was your first indication that there might be a retreat. This might present us with a more affordable option to enter the market, as there is no real reason to chase trades in what is such an obvious trend at this point.
5,000 Will Remain Important for Psychological Reasons
As long as we can maintain above 5,000, which is the most visible level on the chart to watch right now, I think the S&P 500 is still in very solid shape. Remember that everyone is making passive investments in the same companies, and that the S&P 500 basically consists of just six or maybe seven stocks at this time. It's basically just an ETF as long as that remains the case.
Having said that, I do believe that we will eventually break above the 5100 mark, but in order to gain some value at this time, I'm hoping for a slight decline. It would be a very strong indication if we could break over the top of the shooting star from Friday. Not only do I think we reach 5100, but I also think we probably reach even higher levels. That's just the next obvious obstacle we'll have to deal with. Buying on the dips is a tactic I believe people will stick with in this situation.
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