- With no economic updates made throughout the session, the S&P 500 saw virtually little action in the early hours of Monday.
- This mediocre momentum is still present.
The S&P 500 Continues to Look for Momentum
The S&P 500 Index has been extremely nonchalant in its movement during Monday's overnight and early hours of trade, and it's possible that it may remain that way, and the reason I say that is because, at least in an economic sense, there isn't anything on the market right now to move the markets. In the end, a lot of people will be searching for a catalyst of some kind in this situation, but we just don't have one.
To be honest, this market seems a touch stale. Therefore, longer term optimistic traders would probably accept, even welcome, a little retracement. We don't want to pursue the trade all the way through, after all. On Friday of last week, we managed to construct a shooting star. That, then, was your first indication that there might be a retreat. This might present us with a more affordable option to enter the market, as there is no real reason to chase trades in what is such an obvious trend at this point.
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5,000 Will Remain Important for Psychological Reasons
As long as we can maintain above 5,000, which is the most visible level on the chart to watch right now, I think the S&P 500 is still in very solid shape. Remember that everyone is making passive investments in the same companies, and that the S&P 500 basically consists of just six or maybe seven stocks at this time. It's basically just an ETF as long as that remains the case.
Having said that, I do believe that we will eventually break above the 5100 mark, but in order to gain some value at this time, I'm hoping for a slight decline. It would be a very strong indication if we could break over the top of the shooting star from Friday. Not only do I think we reach 5100, but I also think we probably reach even higher levels. That's just the next obvious obstacle we'll have to deal with. Buying on the dips is a tactic I believe people will stick with in this situation.
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