The S&P 500 has been very noisy overall during the week, but it looks as if we are finding support at the bottom of the Bollinger Bands indicator and have formed a hammer. That’s a very bullish sign, and break above the top of that market should send the S&P 500 much higher, at least to the 2800 level. Keep in mind that this market is very risk sensitive, as there are a lot of headlines out there that could move the market. Be cautious as there are a lot of headlines that could move the market, not the least of which would be a potential trade war between the United States and China.
If we can avoid that, I believe it’s only a matter of time before the market rallies, as we are most certainly in an uptrend. However, that’s not to say it will be volatile, which it obviously has been lately. I think that a lot of traders have gotten used to a lack of volatility, and that has been a major problem. Now the volatility has returned, those with a bit more skill will profit. I believe that the uptrend is still very much intact, at least if we can stay above the 2500 level. If we were to break down below that level, then I think we probably unwind down to 2400, perhaps even lower than that. Keep your position size small until proven correct though.