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Christopher Lewis
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The S&P 500 is currently looking at well supported below the 3650 level, and we have turned around to form a bit of a hammer early in trading. Ultimately, this is a market that looks as if it wants to try to take on the 3700 level again, thereby offering more momentum to the upside than down again. Keep in mind that the US dollar is falling due to the idea of more stimulus coming, and this is exactly what Wall Street likes to see. Ultimately, the 3600 level underneath should be a bit of a floor, just as the 50 day EMA at the 3530 level should be supportive as well. Longer-term, I believe that this market is probably going to take the “measured move” from the consolidation area we just broke out of.

S&P 500 Video 11.12.20

That “measured move” suggests that we are going to the 4000 handle, although I do not necessarily think that happens between now and the end of the year. With that being said, I believe that the market will eventually find reasons to get there, but it may take the occasional pullback between now and then. You should also keep in mind that the so-called “Santa Claus rally” will be kicking off of the next couple of weeks as the S&P 500 tends to rally significantly right before Christmas. Most of this is due to the fact that a lot of people are trying to pad their results due to the underperformance of some funds, and the fact that clients will want to see certain stocks owned in their portfolio that have done very well during the course of the year. In other words, it is window dressing.

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