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Christopher Lewis
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US Stock Indices

The S&P 500 has broken below the uptrend line initially during the trading session on Monday but has turned around quite nicely to show signs of strength again. This suggests that we are going to continue the longer-term uptrend, and therefore it does make sense that we would find buyers in general. The 50 day EMA of course attracts a certain amount of attention and now that we are getting past the “Wall Street Bets” situation in the market, I suspect that we will probably go back to the same gradual grind higher.

S&P 500 Video 02.02.21

Keep in mind that we are presently in the midst of earnings season, so that could be a catalyst to go higher or lower for the short term. Longer-term, we are clearly in an uptrend and there is no reason to fight that. I do believe that ultimately this is a market that finds reasons to go higher one way or another, so it does make quite a bit of sense to buy dips going forward. In fact, I do not have a scenario in which I am a seller until we break down below the 200 day EMA, something that is not going to happen anytime soon. With that being the case, I think that what we are looking at is a market that eventually will fulfill the longer-term target of 4000 given enough time. This is based upon the previous consolidation and the “measured move” of fulfilling the technical analysis that move suggested. It is probably going to be choppy, but ultimately, I do think that we continue to go higher.

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

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