The S&P 500 rallied significantly during the week, breaking above the 2700 level again, and wiping out most of the losses from last week. That’s a very strong sign, and I think that we will continue to go much higher, perhaps reaching towards the 2900 level above. That was the most recent resistance barrier, and I think that if we can break above there, we will finally go to the 3000 level which is the longer-term target that I have. It’s obviously a very significant barrier, and that should cause quite a bit of resistance. Ultimately, I think that the market will try to get there, but it’s going to take a significant amount of momentum to continue to push above there.
The 2500 level underneath is massively supportive, so I think that the market will remain in an uptrend if we can stay above there. That’s not to say we can pull back, obviously we can, but I think that the overall attitude remains bullish, so I have no interest in shorting as the market looks very healthy and after this recent selloff, a lot of the “hot money” is gone now, which is necessary always a good thing. Slow and steady wins the race, and that’s exactly how I suspect that this market will continue to look at things. Currency markets continue to sell off the US dollar, and that of course offers a bit of a tailwind for this market as well, making US exports cheap.