S&P 500 shows signs of strength again on Monday

The S&P 500 has rallied rather significantly over the last couple of sessions, bouncing from an uptrend line. It now looks as if we are testing a major downtrend line, and perhaps reaching towards the 2700 level. If we can break above that level, the S&P 500 will continue to go higher, as we continue to find buyers jumping in this market at a major uptrend line underneath. The 2600 level is offering a hard floor currently, and I think that we will continue to see a lot of volatility.

However, does that mean much as changed in the big scheme of things? I don’t know that’s the case quite yet, but we do see a strengthening US dollar, higher interest rates, and of course concerns about the geopolitical outlook for the next several months. Regardless, the economic figures from Canada, England, and the European Union are all starting to pale in comparison to the United States, so although we may see a stronger US dollar, it also could favor a stronger US stock market. Ultimately, I believe that short-term pullbacks are going to be an opportunity for value hunters to get involved, and after the massive bullish pressure that we had seen on Friday, I think we will continue to see a “buy on the dips” mentality in the short term. If we were to break down below the 2590 level, then things could change.

S&P 500 Video 08.05.18