The S&P 500 initially fell during the week, testing the 2700 level for support. It found it there, and then bounce significantly to form a massive hammer, with both Thursday and Friday be an extraordinarily bullish. Because of this, I think that the market is going to go looking towards the 2800 level above, and that perhaps the 2900 level after that if we can get the break out. I recognize that the volatility will continue to be an issue, but it looks to me as if the longer-term buyers are willing to step in and pick up this market every time it looks a bit on the cheap side. Keep in mind that a lot of the selloffs have been reactions to errant words or politicians simply bloviating.
The fundamentals for the US economy are still strong, and as a result I think a lot of money is flowing into the United States, simply because it has nowhere else to go right now. Longer-term, I still have a target for 3000, where I would expect a massive amount of resistance. The market knows that there are interest rate hikes coming, but they seem to be measured and therefore I think will only have a limited effect on the economy as far as damaging earnings would be concerned. Although it’s shaky and dangerous at times, the S&P 500 looks bullish.
