- The S&P 500 slipped on Monday despite early strength, with traders largely waiting for the upcoming Federal Reserve press conference.
- Support levels near 6,800 and the rising 50-day EMA remain key as the broader uptrend stays firmly intact.
The S&P 500 pulled back a bit during the trading session on Monday, despite the fact that the pre-market trading looked somewhat positive. With that being the case, I think we have a situation where we are going to continue to go back and forth and wait for the Federal Reserve to give its press conference, as traders will be waiting to see whether or not the Fed is likely to become aggressive with its interest rate cuts or if it is going to be a little bit more measured. The more dovish the Federal Reserve is, the better it will be for the stock market because Wall Street loves free money. The 6,800 level sits just below, and that is an area that's been important multiple times. And at this juncture, we have the 50-day EMA at 6,738 and rising. That could be a bit of support as well.
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As long as we can stay above the 6,500 level, I think the trend is intact. And ultimately, you'd have to ask the question as to whether or not we are just simply grinding away sideways, trying to work off some of the excess froth from most of the year. After all, it was back in April when we essentially went straight up in the air and then found a 45-degree angled uptrend line to follow until the beginning of November.
This has been a very steady and measured bullish market during the year. So, working off some of that excess is not a huge surprise. There is talk, of course, about the so-called “Santa Claus Rally”, but keep in mind that the year has been so strong. It'll be interesting to see whether or not that actually ends up being the case. The market is one I have no interest in shorting, regardless, and I do think that short-term pullbacks probably offer value that people will take advantage of.
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