The S&P 500 initially pulled back during the trading session on Tuesday but turned around to show signs of life as we continue to see buyers on dips and of course continue to see this market open up the possibility of a longer-term move to the upside.
Ultimately, I think this is a situation where traders are looking at this through the prism of whether or not we can get to the 7,600 level.
If we do drop from here, the 7,400 level is support, right along with the gap that kicked off the week on Monday. Although it's worth noting that Monday was not actually a trading session for the underlying index, it was actually mainly driven to the beat of how the CFD market was going.
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Interest Rates and Macroeconomic Catalysts
Nonetheless, it looks like the dropping interest rates will continue to push the S&P 500 to the upside over the longer term. And unless we break down below the 7,300 level, I think it's very difficult to even think about shorting. And I do think that as we pull back from time to time, it should offer plenty of opportunity.
Keep in mind that there are still earnings reports that are coming out, and of course we get the core PCE Price Index number coming out on Thursday, which is a major influence on the Federal Reserve and what they look at as far as monetary policy. Quite frankly, with everything that's going on around the world, I think a lot of traders are starting to suggest that perhaps we are going to see looser rates down the road because of all of the inflation coming from the supply chain issues.
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