- The S&P 500 did initially rally during electronic overnight trading on Thursday, but it's since given back quite a bit of the gains.
- At this point, I think the market is still very much a bullish market, but we may need to pull back in order to find a little bit of value.
- Short-term pullbacks will continue to attract a lot of attention, and I would not expect much of a pullback, maybe 50 points.
Breaking above the 5500 level is of course important from a psychological standpoint, but really at the end of the day, this is yet more of the same action that we've seen in this market. I have no interest in shorting the S&P 500 and as long as maybe three or four stocks are doing well, so is the index. This isn't about the economy. This isn't about interest rates. Although there is an argument to be said that the Federal Reserve Monetary Policy will have a major influence on where we go. But really at this point in time, it's about what Nvidia is doing and a few other companies such as Apple, Microsoft, et cetera. So, with that, we now have an ETF of high end technology stocks called the S&P 500.
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Look for short-term pullbacks to get involved
Short-term pullbacks continue to be buying opportunities and I think at this point the 5300 level will be the hard floor in the market. The 50-day EMA sits just below there so I think in the worst-case scenario we could drop 200 points but quite frankly there's not a lot on this chart that suggests we can get anywhere near that either. With this I remain bullish, and I think a lot of traders are going to have to simply hold their nose and buy every time they get an opportunity to get involved. Ultimately, I think the stock market has become more or less a videogame, so you do need to be cautious, but it is still the best way to beat inflation for a lot of people around the world.
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