The S&P 500 rallied roughly 1% early during the trading session on Wednesday, but fell from the highs as traders reacted to Trump's speech in Davos. At this point, the markets continue to test support.
The S&P 500 has rallied roughly 1% early during the trading session on Wednesday as the 6800 level has offered significant support. Ultimately, I think this is a situation where you are looking to buy dips, and you may have just gotten that dip after the Trump speech at Davos during the WEF meetings.
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Ultimately, this is a market that I think continues to try to find upward momentum, and given enough time, it probably will. After all, the United States economy is doing quite well, and the S&P 500 is the easiest way to place that bet in the markets. We are hanging around the 50-day EMA, an indicator that a lot of people will watch closely.
The 7000 Level
Really at this point, I think the 7000 level is worth watching as it is a large, round, psychologically significant figure and an area that is basically the all-time high. If we can clear that level, the S&P 500 likely goes much higher. If we fall from here, then I look to the 6,750 level or so offering support, and then eventually the 6500 level, which I think is the absolute bottom.
Ultimately, this is a market that I think continues to offer a buy on the dip opportunity, and every time you start to see headlines about the end of the world, we just turn right back around. The nonsense coming out over the spat between the Americans and the EU really has nothing to do with reality, and as you can see, money talks, and well, the rest walks.
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