- The S&P 500 initially declined during Wednesday's trading hours, but it also appears to be very resilient as there are many buyers below and it has recovered quite well from Tuesday's challenging start.
- Given this, it appears that the market's general long-term upward trend is still in place.
The S&P 500 Looks to Take Back Momentum
In response to the selling pressure that had been evident on Tuesday, the S&P 500 managed to stage a brief rally in the early hours of Wednesday. There is still a lot of upward pressure on this market, and the 5100 level appears to be providing some support. But the 5000 level is probably also important support, even if we were to break down below that. That does seem to become a bigger floor than anything else, in my opinion, as the 50-day EMA begins to race towards the 5000 level. Naturally, the fact that it is at a 45-degree angle indicates that the upward momentum will continue. Although there will inevitably be a pullback, traders appear to genuinely want to buy dips based on their actions over the past day.
However, bear in mind that this is not a week for farm payrolls, so the following day or two may be relatively quiet, which likely prevents the market from falling too much. Naturally, the jobs announcement will make Friday extremely thin at certain points. However, as of right now, I believe the market will keep looking for reasons to rise, if only because the Federal Reserve should lower interest rates later in the year. Having said that, we need to wonder if they will act with the same vigor that Wall Street is projecting.
Having said that, Wall Street doesn't seem to think they are backing down all that much. Remember that the S&P 500 index is influenced by a small number of stocks, so track all the big names and the stocks that the market is talking about to gain insight into the direction the index is likely to take. That has been the situation for a while, and given the state of the market, I don't see it changing anytime soon.
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