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Christopher Lewis
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The S&P 500 continues to go sideways, but at this point in time that has to be thought of as somewhat bullish after the massive recovery that we had seen late in the day on Tuesday. In other words, it suggests that we are looking at a market that is simply trying to hang on to the bullish trend, but in general this is a market that probably needs to sit still until we get the noise on Friday out of the way. After all, the Nine Farm Payroll announcement is one of the most disruptive announcement out there.

S&P 500 Video 06.05.21

To the downside, the 4100 level looks to be supportive, and most certainly the 50 day EMA will be down by the gap just above the 4000 handle. The 4000 handle of course is a large, round, psychologically significant figure, and between that and the gap, and of course the 200 day EMA, this is a market where there should be plenty of buyers underneath. If we did break down below all of that then we probably go looking towards the 3800 level.

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In general, you can only buy the S&P 500 because it is far too manipulated via central bank liquidity measures. Furthermore, it is not an equal weighted index so there is no reason to short it if just a handful of the top stocks are rallying. With that being the case, I do think eventually we break above the 4200 level, then I think the market probably goes looking towards the 4400 level, and therefore I think what we are looking at is a scenario where we could see another 200 points to the upside, but we need to see an impulsive candlestick and a daily close above 4200 to make that move.

For a look at all of today’s economic events, check out our economic calendar.

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