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Christopher Lewis
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The futures market in the S&P 500 gapped a little bit higher during the trading session on Monday as thoughts of stimulus continue to push the idea of stocks higher. At this point, the market is likely to go looking towards the 4000 level above, which of course is a large, round, psychologically significant figure. That level will probably cause some profit-taking, and it would fulfill a major move higher based upon the consolidation underneath. That consolidation was between 3200 on the bottom and 3600 on the top. That 400 points extrapolated from the breakout measured for a nice clean move to the 4000 handle.

S&P 500 Video 16.02.21

The 50 day EMA underneath is at 3766 and approaching the 3800 level. I think this becomes the new “floor the market”, instead of the uptrend line that is marked on the chart. I think a pullback is probably coming sooner rather than later but I also believe that we may hit the 4000 level before it happens. In fact, I think it will simply be a bit of profit-taking. Remember, the S&P 500 is only driven by about seven stocks these days, and at the end of the day it is not about earnings or anything like that, it is more about liquidity which of course is being thrown hand over fist at the markets. As long as there is cheap money out there, the stock markets will continue to go higher as has been the game for the last 13 years. I have no interest in shorting this market, but if I were to express some type of negative opinion, I would do it puts because you can at least keep your risk known.

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