The S&P 500 has broken to the upside during the day on Friday, reaching towards the highs again. If we can break out and clear that level, the market is very likely to continue going much higher. At this point, I think the market continues to be a “buy on the dips” scenario.
The S&P 500 has rallied quite significantly during the trading session on Friday, reaching towards the highs again. I believe that dips will continue to be bought, and as I record this it looks as if we are trying to break out to a fresh, new high. If we do, that’s obviously a very bullish sign but I also recognize that it’s going to be difficult to hang onto these games going into the weekend as people will be concerned about headline risk.
Overall, I think that the “risk on” attitude of market participants continues, so I prefer buying value when it appears. I believe that the 2800 level is now the “floor” in the market, so therefore I don’t think that we will break down below that level. If we did, that would be extraordinarily negative not only from the short-term perspective, but it would also breakthrough an uptrend line on the weekly chart. I don’t think that’s about to happen, as it would be such a significant melt down. However, it’s an area to pay attention to if we do start selling off again. Overall, I believe that the market is going to break the highs and go looking towards 2900. A break above that level sends the S&P 500 looking for the 3000 level longer term, which has been my target all year. I think the rest of the market agrees at this point.
Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.