I think the fact that the S&P 500 didn’t fall with the outbreak of war suggests something that you should be paying close attention to.
S&P 500
The S&P 500 has initially fallen during the trading session on Monday, which is not a huge surprise considering that we have had military actions in the Middle East and it looks like it is going to be a pretty steady threat to supplies of energy and many other things, not to mention the fact that it has a general negative influence on risk appetite.
With that being said, it makes a lot of sense that we would see this as a market that would sell off right along with everything else. That being said, we've seen the S&P 500 turn around almost immediately and this tells me that there is still some resilience in this market that's worth paying attention to.
I don't have any interest whatsoever in shorting this market, especially after we've seen this reaction. Ultimately, I do think that the S&P 500 is going to do everything it can to break out against the resistance at the 7000 level.
POTENTIAL FOR A MOVE TO 7200
With that being the case, I believe that this market will continue to be one that is worth watching and I think that eventually, if and when we break above the 7000 level, it opens up the next major move higher. I think that major move higher could be all the way to the 7200 level at the very least.
With this being the case, I think you have to be very cautious but optimistic and quite frankly, if the markets won't fall apart due to a war, it's hard to imagine what will send them lower. I become even more bullish after this.