The S&P 500 fell initially during trading on Tuesday but recovered a bit to form a bit of a hammer. By doing so it looks as if we are trying to break out to the upside but we need to build up enough momentum to finally accomplish it. The 2890 level underneath is massive support so as long as we can stay above there I don’t worry too much about the overall trend. A breakdown below that market could send the S&P 500 looking for the red 50 day EMA on the chart.
S&P 500 Video 01.05.19
To the upside, if we can finally clear the 2950 level on a daily close, it’s very likely that we will go hunting the 3000 level. That is an area that a lot of Wall Street analysts are looking at for a target. With that being the case, and the entire market thinking the same thing, markets tend to find a way to get there. That doesn’t mean it’s going to be easy, but overall it looks as if the buyers coming in on the dips still believe in that figure.
We are halfway through the earnings season which has been relatively good, so as long as the Federal Reserve doesn’t come out after the two-day meeting and suddenly sound very hawkish. As they have acquiesced to Wall Street’s demands before, there’s no reason to think it will change.
Please let us know what you think in the comments below