S&P 500 continues to grind higher on Monday

The S&P 500 went back and forth during the trading session on Monday, with an upward grind. If we can break above the 2680 level, the market then will more than likely test the 2700 level. If we can break above there, then I think the market should continue to go higher, as it gives you an opportunity to start buying based upon value. Pullbacks should be buying opportunities, as the S&P 500 has seen a nice basing pattern over the last several sessions. A break above the 2680 handle gives the impression that the basing pattern has completed and triggered a buying opportunity.

If we do break down from here, I suspect that the 2640 level should be very supportive. If we break down below there, then the market goes to the 2580 level next, and then possibly the 2550 level. I think that the overall uptrend is defined by staying above the 2500 level, so I think that the breaking below of that level would be crucial and send a mass shudder through the market. Ultimately, this is a market that I think does try to go higher, but it is going to be very noisy, so I would be cautious, and I would keep my position size rather small. Once we can break above the 2800 level, then I think the market will go towards 3000, but that’s obviously a longer-term call. As you can see on the chart, I think the market is trying to form some type of ascending triangle as well.

S&P 500 Video 16.04.18