- The S&P 500 gave back a little bit on Monday morning, but it still finds buyers below to show strength and turn things around.
- Never forget that six or seven stocks are driving this market in the end.
- This is a dangerous precedent but may be more common now because of the passive investing crowd.
The S&P 500 Sluggish but Positive
Early in Monday's trading session, the S&P 500 gave up a little bit, but it later recovered and began to show signs of life. By doing this, it appears that we have a situation in which you will always be able to find great deals. Despite the fact that this market is still very turbulent and noisy, there are still a lot of people who are willing to invest in it. Remember that there will be a lot of people looking at this as an opportunity because value hunting will be prevalent in the market.
Remember that there are only six or seven stocks that are moving the whole S&P 500, as I can't help but notice when I look at it. Therefore, the S&P 500 should conclude as a bull market as long as the usual suspects are performing well. I believe that 5,000 will ultimately become your floor in the market at this point. Consequently, I believe you have to approach this by simply seizing value whenever it presents itself. I believe that many traders are placing their bets on the possibility of loose monetary policy in the future, since it would be like rocket fuel for stocks.
Having said that, we are in a classic buy on the dip setup and an ideal 45 degree angle uptrend. This indicates that there is a good deal of interest in continuing to push this trend higher and that it isn't overdone as of late, which will inevitably lead to the adage "buying begets more buying." The last few years have seen the stock markets primarily driven by momentum, and it appears that this year will be no different. The momentum continues to be based on the latest thought on interest rate cutting, and of course the latest mania that Wall Street is following – in this case the AI stocks/story.
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