S&P 500 rallies in “risk on” move on Tuesday

The S&P 500 pulled back initially during the day on Tuesday but found enough support underneath to continue to push this market to the upside. I believe that if we can clear the 2680 handle, the market should continue to go much higher, perhaps reaching towards the 2700 level. A break above there frees the market to go much higher, perhaps the 2750 level followed by the 2800 level. I think that longer-term we are still going to see 3000 hit, but it is going to be very difficult. The alternate scenario of course is that we break down below a massive support level, which I see as the 2500 level underneath.

If we were to break down below that level, I’m not sure where the downtrend would end, but most certainly it would bring in fresh money to the selling side. Headlines continue to be a major driver in this market, mainly coming out of China. Forward expectations of profits in the corporate world should continue to be positive, so I think that there is an underlying strength of this market, if we can avoid the geopolitical concerns around the world. Expect volatility and be careful with your position size as it is crucial in situations where volatility has picked up. Even though it feels like the world is coming apart at times, we still have clearly defined support levels at the 2500 level.

S&P 500 Video 11.04.18