The S&P 500 rallied a bit during the trading session on Monday, as tax reform seems to be all but a certainty now. That of course should help corporate profits, and this of course helps the index. I believe that short-term pullbacks are buying opportunities, and that those buying opportunity should present themselves several times. The 2700 level is the next target, and I think we will eventually break above there. I think that the 2650 level underneath is the “floor” in the market, and it’s likely that we will continue to see plenty of reasons for the market to rally, not just tax reform. Quite frankly, it appears that algorithmic traders are jumping into the market every time we pull back, as we cannot keep losses going for very long.
The 2700 level will offer a bit of resistance, but eventually I think we break that area to the upside as well, because quite frankly there’s nothing more significant about 2700 other than the fact that it is a large, round figure. Volatility continues to be an issue, but quite frankly it should present plenty of opportunities on the pullbacks. If we were to break down below the 2650 handle, then I think that the market could start to breakdown rather rapidly. With the lack of liquidity over the next couple of sessions, be aware that we could get erratic moments in the stock markets. The volatility continues to be an issue, but quite frankly this is a nice opportunity as we continue to see buyers jump in. The “Santa Claus rally” is in full effect.
S&P 500 Video 19.12.17
This article was originally posted on FX Empire