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Christopher Lewis

The S&P 500 initially tried to rally during the trading session on Tuesday but found the 3400 level to be a bit too expensive. Ultimately, pulling back from a large figure isn’t a huge surprise, and therefore it’s not a situation where I think selling is going to be easy to do, but the 3350 level underneath looks to be supportive, and most certainly the 3300 level would be as well. Furthermore, the 50 day EMA is rallying and it suggests that there should be longer-term traders getting involved, right along with the uptrend line.

S&P 500 Video 19.02.20

All things being equal, the market is in a significant uptrend, and therefore I like the idea of buying dips and not trying to short this market. Quite frankly, the Federal Reserve continues to liquefy the markets and keep loose monetary policy in the back of everybody’s mind, so it makes sense that the S&P 500 rallied. Beyond that, the United States shows growth, something that most other major economies don’t right now, and therefore it makes sense that people are throwing money at the S&P 500, especially from other sides of the planet where growth is virtually nonexistent.

Furthermore, I believe that the longer-term move to the 3500 level is still very possible, and for that matter likely. Ultimately though, I think we do need to pullback in order to build up enough momentum to go higher. The 3500 level will probably be reached sooner rather than later, and therefore I think that buying is still the best way to move forward. I have no interest whatsoever in shorting this market.

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