The 7,000 level above continues to push the market back down, as we are working through the earnings season.
S&P 500
This is Christopher Lewis taking a look at the S&P 500. The S&P 500 is a video that I had to make today because quite frankly we are at a very important level. The 7,000 level above remains very important and of course we were somewhat lackluster during the trading session on Tuesday and this, for me just increases the likelihood that 7,000 will be a game changer for the momentum in this market.
That being said, it is worth noting that we have had a bit of a lackluster session as volume has dropped and we just cannot break out. However, we are in the middle of earnings season and that is going to continue to be very important. With that being the case, I anticipate that sooner or later we get that anticipated bullish announcement and it sends things higher.
We do not know if it happens right now and as the market has behaved so far, you will have to assume that it is still a buy on the pullback type of situation with 6,800 being heavily defended.
POTENTIAL BREAKOUT TO 7,200
On a daily close above the 7,000 level with decent volume, I think that opens up the possibility of the S&P 500 running to the 7,200 level. This is an index that had been very bullish for quite some time and then basically right around New Year's we have just stayed in this 200-point range.
This will not last forever and as a general rule, eventually the S&P 500 goes higher. Going through earnings season could be that catalyst; it is quite often one of the biggest ones. I think we are just in a situation where traders are waiting for some reason to get excited.
The Federal Reserve is anticipated to cut a couple of times this year; that is part of what led to us getting here. Now, we either need more dovish talk out of the Fed or some really great earnings calls to get the ball rolling.
Potential signal: I am a buyer of this index on a DAILY CLOSE ABOVE 7,000. I would also be looking for a reason volume day. I would have a stop at 6,900 below, and aim for 7,200 above.
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