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.