The S&P 500 continues to be consolidating at the moment, but the scenario on Wednesday was a bullish one, as we have seen the Core PCE numbers come out cooler than expected, while the GDP numbers were better.
The S&P 500 initially dipped a little bit during the trading session to test the 50-day EMA on Wednesday but has turned around to show signs of life again. As we continue to see a lot of questions asked about what happens next with the Federal Reserve, markets are moving accordingly.
After all, traders are hoping that interest rates will eventually roll over. After the core PCE numbers came out lower than anticipated, traders got a little bit excited and started suggesting that maybe the Federal Reserve is not going to be as hawkish and aggressive with interest rates as once thought. Whether or not that is true is a completely different story.
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What I do see here in this market is a sideways market, one that is consolidating. The 7,600 level is an area that has been support, followed by 7,500. Above, we have significant resistance at the 7,800 level. If the 7,800 level eventually gets broken, and the chart looks like it may eventually attempt to do so, then it lets the S&P 500 continue to go higher.
In general, the economy seems to be doing better than a lot of people had thought. With ADP numbers coming out today and finalized GDP from the United States, it all looks like a strong economy, maybe with a little bit less inflation than we had feared. All things being equal, that is a bullish thing for the S&P 500, but we also have the jobs number on Friday, so that is worth paying close attention to.
I remain a buy-on-the-dip type of trader in the S&P 500.
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