S&P 500
The S&P 500 has rallied significantly during the day on Tuesday, as it wasn’t so much the distance traveled, but more the area that we are pressing up against. The fact that we did not back down from the 2800 level, it’s likely that we will eventually break above there. The uptrend line underneath should continue to hold, and if we can break above the 2800 level, it’s likely that we go much higher, perhaps reaching towards the 2880 handle, and then the 2900 level. Stock markets could pullback in the short term, but I think those will be thought of buying opportunities and therefore I believe that this continues to be a “buy on the dips” situation. I have no interest in selling this market, even though I’m the first to admit that we may be a bit overbought currently.
NASDAQ 100
The NASDAQ 100 initially trying to break above the 7300 level during trading on Tuesday but turned around at the 7300 level to form a shooting star. A breakdown below that shooting star could send this market lower, and possibly even as low as the 7000 level, but I think there is more than enough support underneath to lift this market eventually. The alternate scenario of course is that we break above the top of the shooting star from the trading session on Tuesday, which of course would be very bullish, and I think should send this market looking for the 7300 level over the longer-term. Although I think that we are probably going to drop from here, I do not like shorting, I think we will eventually find a reason to go higher.
