The S&P 500 continues to see a lot of buyers, despite the fact that the market is overbought. The simple fact that we cannot fall at that moment speaks volumes.
S&P 500
The S&P 500 has been very choppy and hesitant to make any type of bigger move during the trading session on Tuesday. After seeing a massive move on Monday, I think at this point in time the S&P 500 is more or less trying to capture a little bit of momentum, as we have the 7,800 level perhaps offering a bit of a barrier.
Pullbacks could be value in this index
Short-term pullbacks at this point in time open up the possibility of buying closer to the 7600 level. If we were to break above the 7,800 level, then it opens up the possibility of the S&P 500 continuing to go higher. Short-term pullbacks at this point in time open up the possibility of buying closer to the 7,600 level. The 7,600 level is supported a little bit by the 50-day EMA as well, and previously the 7,600 level had been massive resistance, as market memory is just very ensconced there.
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Interest rates in America continue to be fairly high, and those interest rates are likely to be the main story here. Nonetheless, it's worth noting that the S&P 500 is a place that has seen a lot of foreign inflow, so that is part of the scenario as well.
Ultimately, I think anytime we pull back, it's worth looking at this market through the prism of, “Can I find value on those drops?” If we can clear the 7,800 level, then it opens up the possibility of a move towards the 8,000 handle. This is what I expect over the longer-term, but this is a situation where we may have a bit of concern.
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