- The S&P 500 initially tried to rally, but we have pulled back just a bit during the trading session on Thursday as the PPI numbers were lower than anticipated.
- Traders are starting to rethink the entire behavior that they had after the FOMC meeting.
- That being said the market does look very likely to pull back at this point, but I think the pullback more likely than not also attracts a lot of attention.
After all, the S&P 500 has been very strong for a while, and it does make a certain amount of sense that buyers continue to look at dips as a buying opportunity and perhaps value. The 5300 level underneath is a major resistance barrier that has been overcome. So now a massive amount of market memory probably comes into the picture. The 50 day EMA is reaching towards that area, and that certainly seems like a nice confluence of technical analysis that could help. On the other hand, if we do break above the highs of the candlestick from the Wednesday session, then it opens up a move to the 5500 level.
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My target is about to get crushed
The 5500 level is my target for the year and I think we're getting there much quicker than I had anticipated. With this, I remain bullish, I look at dips as buying opportunities and I have absolutely no interest whatsoever in trying to short this market because the momentum has overran any type of fundamental analysis. In an environment like this, it’s almost impossible to try to fight the momentum, and it’s probably worth noting that Wall Street tends to run on momentum more than anything else. As long as they believe that the Federal Reserve is going to start cutting rates later this year, then it makes a lot of sense that the stock markets continue to go higher, at least for the time being.
All that being said, you don’t want to get aggressive with your position size right away, and only add to an existing position in order to build up size. Volatility will continue to be a major issue, so please keep that in mind.
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