Stock markets have been very bullish as of late, especially technology stocks. However, the S&P 500 is lagging just a bit, and at this point it looks like we are breaking out a significant consolidation area having said that, the market is likely to see a lot of noisy behavior, and it’s worth noting that the 4300 level has been an area that is significant resistance based on the previous action.
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- Looking at this chart, it’s likely that we would see a little bit of noise in that area.
- It’s probably only a matter of time before we see a little bit of a pushback if we get there.
- The market is likely to continue to see the area as a target, but if we break above there, then it’s likely that we could go higher, perhaps entering more or less a “buy-and-hold” situation.
With this being the case, I think it’s a situation where even if we do pull back from here, the bottom of the overall consolidation of the last couple of months, we would be testing the 50-Week EMA, and I think that is the bottom of the market right now.
In general, this is a market that I think continues to show a “buy on the dip” attitude, just as most stock markets do. In general, this is a situation where I think the buyers will continue to return due to the fact that there are plenty of narratives out there to get people excited. Remember, for Wall Street it’s all about the narrative, and right now that’s all about “artificial intelligence”, and the idea that the Federal Reserve may be forced to loosen monetary policy, as the banks in America have seen a lot of stress. Nonetheless, as things stand right now Wall Street continues to pound the idea of cheap monetary policy as being a potential driver of stocks to the upside. In general, this is a market that I think will find reasons to go higher, at least until we break down below the 50-Week EMA. If we were to break down below there, then it’s possible that we could go down to the 3800 level. The 3800 level course is an area that has been important in the past so that’s worth paying close attention to.
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