The S&P 500 was a bit noisy on Wednesday, as traders continue to think about the earnings season, geopolitical issues, and a whole host of other things – all in a longer-term uptrend.
S&P 500
The S&P 500 has been a little noisy during the trading session on Wednesday as we are starting to see buyers come back into the market. Because of this, I think you have to look at the S&P 500 through the prism of a market that has been consolidating, but longer term is in an uptrend.
We are breaking above the 50-day EMA, which of course is a good sign, and that suggests to me that perhaps it is only a matter of time before we get that big breakout. We are dealing with earnings season at the moment. I also believe that we are in a situation where traders are trying to sort out whether or not they can continue to see value on these dips, and so far, I think that does end up being the case.
Because of this, I think you have got a situation where you are looking for a reason to get long and find value as long as we can stay above the 6800 level.
Potential Targets and Resistance Levels
If we were to break down below the 6800 level, it could lead to a deeper correction, but quite frankly, we have just spent 2.5 months going in a 200-point range. If we can break above the 7000 level, then that opens up the possibility of a move to the 7200-level based on the measured move of this consolidation.
I am bullish and I don't have any interest in shorting the S&P 500 or any other index at the moment, but I also recognize there are a lot of questions out there about geopolitics and Federal Reserve monetary policy, so there is a little bit of fear, but given enough time, I do think we prevail.
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