Christopher Lewis
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US Stock Markets

The S&P 500 has pulled back just a bit during the course of the trading session on Monday, showing signs of a correction, but quite frankly that correction should be short-lived as we continue to see more upward pressure than down, and as the earnings season continues, there will be reasons to think that money flows back into the stock market on pullbacks. After all, comparisons to the previous year will be easy to beat, so therefore it is likely that we will see bullish pressure as a result. Furthermore, we are starting to see the US dollar struggle a bit, and that of course help stock markets as well.

S&P 500 Video 20.04.21

To the downside, I believe that the “floor the market” is near the 4000 level, as it is a large, round, psychologically significant figure, and of course where we have that massive gap that has not been filled yet. Furthermore, we also have the 50 day EMA approaching that level, so it all lines up quite nicely. As far as the target to the upside is concerned, breaking above the 4200 level opens up the possibility of a 4250 handle being printed before it is all said and done.

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Looking at this chart, it is obvious that it would be almost impossible to short this market, and quite frankly with the Federal Reserve out there willing to liquefy the markets at the site assent of trouble, I just do not see how you can short. However, if we break down below the 50 day EMA, I might be a buyer of puts options, but that is about it.

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

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