The S&P 500 initially tried to rally on Monday, but has since seen some volatility as headlines from the Middle East continue to be a problem for risk appetite.
S&P 500
The S&P 500 initially tried to rally on Monday, but has given back a little bit of the gains as geopolitics and headlines out there continue to cause headaches. After it was announced that the United States and Iran might be inching closer to a 60-day deal again, the Iranian military came out with a long list of essentially threats, suggesting that pretty much any move by the United States would be met with force. In other words, the war isn't going anywhere, and it's likely that it will continue to be a problem.
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That being said, the longer-term chart on the S&P 500 looks good despite the fact that interest rates are rising during the day on Monday. This is a market that has recently broken out of an ascending triangle and looks like it is dropping a bit to find a support level that it can get involved in.
Technical Support and Fed Expectations
I still see a chance where there are value hunters looking to get involved, perhaps closer to the 7,700 level, maybe the 7,750 level. And ultimately, unless something changes catastrophically, it's likely that there will be a resurgence sooner rather than later.
It seems to me that most of the fear-based trading is coming out of Asia and Europe, while most Americans seem to be willing to look past it. Whether or not that ends up being the case at this point remains to be seen, but I certainly wouldn't get short of this market. It is far too strong, and I think it is in an uptrend as traders try to price in the idea of the Federal Reserve maybe not being as hawkish as once thought and certainly not doing as many interest rate hikes.
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