The S&P 500 is rallying early on Monday, as we continue to focus almost solely on artificial intelligence, as has been the case for some time. With this, the market defies all negativity.
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S&P 500
The S&P 500 is showing quite a bit of bullish pressure during the trading session here on Monday despite the fact that yields are starting to rise a bit and of course a lot of people are worried about the hawkish pause from the Federal Reserve and geopolitical volatility beyond that.
The S&P 500 is showing a classic staircase type of rally where we just simply continue to grind higher. That being said, the 10-year yield in America is hovering just below the 4.40 level and that is an area that pressure equity valuations at least most of the time but currently the market is just paying attention to artificial intelligence more than anything else.
Classic Staircase Type of Rally
Short-term pullbacks offer the occasional buying opportunity near the 7,300 level. Breaking down below the 7,300 level then opens up an even more significant downward move to the 7,100 level. Ultimately, I do think that you have a situation where the S&P 500 is something that you buy on dips and of course it is a market that is very noisy.
Ultimately, we are somewhat headline driven over the longer term so don’t be surprised to see some type of sharp pullback. That being said, the sharp pullback should be thought of as a potential buying opportunity because let’s be honest here, that’s the way this game has been played for about 6 weeks now despite the fact that there is a war going on although we’re not even sure if it’s a real war anymore and of course global supply chains remain threatened. Buying on the dip has the only thing that has worked.