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Christopher Lewis
US Stock Markets

The S&P 500 has pulled back a bit during the course of the trading session on Friday but has turned around quite a bit to show signs of support underneath. Ultimately, this is a market that I think continues to go looking towards the 3800 level, perhaps even higher than that. Based upon the previous consolidation area between the 3200 level on the bottom and the 3600 level on the top, we should see an extension all the way to the 4000 handle, which of course is a large, round, psychologically significant figure.

S&P 500 Video 18.01.21

That being said, I think that pullbacks will continue to be bought into, as the stimulus situation will certainly be supportive for the markets. I have no interest in shorting this market, because quite frankly every time you have tried to short this market you have lost money with the exception of a handful of incidents. The 50 day EMA sits at the uptrend line, and therefore I think there is a natural barrier underneath to keep this market afloat. We are entering earnings season bound, so that can have a major influence on what happens next and you will need to be very cautious about jumping in with both feet. Buying short-term dips with little bits and pieces probably will make the most sense longer-term, building up a bigger position.

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The candlestick for the session on Friday certainly looks as if there is plenty of support, so it only adds more credence to the idea of the market going higher.

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

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