- The S&P 500 has been quiet in the early hours of Wednesday as traders are starting to look forward to the Friday non-farm payroll announcement.
- This, of course, will be a major influence on where we go next, so do keep that in mind.
In the short term, when I look at this chart, I see several different things going on at the same time. To begin with, we obviously are very strong to the upside, and with this being the case, it is a market that you have to be looking for long positions. The ADP employment numbers came out fairly strong, and as a result, that has the markets are looking forward to the Friday official numbers, which, of course, traders are hoping for some type of number that forces the Federal Reserve to get a little bit more aggressive with its interest rate cuts.
The Technical Path to 7000
The technical levels that I am watching without a doubt will be the 6800 level. That is a bit of a line in the sand for the S&P 500. The 7000 level above, I think, is inevitable. The question, of course, is whether we will get there right now or if we have to wait a while. I suspect it happens quicker than most people think, but even if it does not happen this week, I would be looking for next week to be challenging that. After all, it is just 50 points above where we are as I write this article.
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The bulk of trading right now is position starting, meaning that money managers are starting to put on their positions for the year for clients, and therefore, I think you will see a little bit of churn and perhaps a little bit of rotation from one sector to another.
As a result, I think this uniquely puts the S&P 500 at an advantage over a lot of other indices simply because there are more stocks involved. I have no interest in shorting this market, and you can even make a little bit of an argument for an ascending triangle that just got broken to the upside, which could potentially measure all the way to the 7300 level. That would be a longer-term target, but it certainly would not be out of the question.
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