- Although there was some quietness in the early hours of Monday, traders are still chasing trades, and the S&P 500 looks extremely robust overall.
- Without a doubt, this is an extremely risky form of trading, but in the end, it is impossible to short the S&P 500 anytime soon.
The S&P 500 Remains a “Long Only” Market
After gapping higher on Monday, the S&P 500 has since retreated a little, and it now appears like a pullback is imminent that you can take advantage of. In the end, I believe there is still a lot of upward pressure on this market, and naturally, the S&P 500, like the majority of other global indices at the moment, is being driven by a small number of stocks that are owned by everyone.
Put otherwise, the same corporations who have driven everything higher all along are doing so now. It's not a rally that's really popular. However, it could become the new normal. You frequently discuss how important it is to pay close attention to the stock market's underlying breadth, but perhaps this is no longer the case. It appears to be a novel paradigm. Regretfully, whenever a new paradigm emerges, it appears that the end is near.
In any case, we're clearly in a very strong uptrend, therefore in my opinion, this is a market where you want to purchase dips. I also see that all systems continue to push higher since everyone is still counting on the Federal Reserve to lower interest rates later this year. I believe that the 5,000 level is currently the floor in the market, but there is also the 50 day EMA below, at 4,913 and climbing, which may provide significant support as well.
Because everyone's target continues getting pushed higher and higher, no one seems to know where the S&P 500 ends up by the time it runs out of momentum. What does this signify? It appears that we are not too far along in this madness, even if we are currently experiencing it. That's why, no matter how overdone this market appears, you still have to hold your nose and buy every downturn going forward.
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