The S&P 500 went sideways during the week, selling on a slightly negative candle. We continue to see support just below at the 2450 handle though, and I think that market level will continue to attract a lot of attention. I also recognize that the 2500 level above is massively important, it makes quite a bit of sense that traders will try to aim for that large, round, psychologically significant number. The market is very likely to see pullbacks, but I think we are well supported down to the 2400 level and I essentially look at that as the “floor” in the market. Given enough time, I think the volatility picks up and then we reach above the 2500 level, which would be a very significant move.
Buying dips
I believe in buying dips when it comes to the S&P 500, so I think that it’s very likely that the bullish traders should continue to be encouraged, and therefore I am not interested in selling at all as I believe that we will not only reach towards 2500, but eventually smashed through their as the Federal Reserve looks to be very dovish going forward. We may get an interest rate hike or 2, but quite frankly that is a sign of a strengthening economy more than anything else. The market will eventually react to that, continue to drive the S&P 500 to the upside over the longer term. Ultimately, the market should find plenty of reasons to go higher as the earnings season has been reasonably good, which of course is the longer-term driver of stocks anyway.
S&P 500 Video 31.7.17
This article was originally posted on FX Empire