S&P 500 pulls back to support during volatile Tuesday session

The S&P 500 fell during the Tuesday session early as the US dollar strengthened. The 2700 level looks as if it is trying to offer support, and I think at this point if we can get some type of stability, it could present itself as a value play. I also see support underneath there as well. · FX Empire

Christopher Lewis

Updated Tue, May 15, 2018, 10:55 PM

The S&P 500 has fallen significantly during the session on Tuesday, as the US dollar strengthened in the currency markets. However, we have found a significant amount of support at the 2700 level, an area that was previous resistance and of course is a large come around, psychologically significant number. Beyond that, the 2700 level has been important in the past as well. Because of this, I believe that we will eventually find value hunters, and if not here I think they will be found closer to the 2660 level, which is the downtrend line that made up the wedge that had recently been broken out of.

Any type of pulled back from here should be an opportunity to go long, on the first signs of support or perhaps even a bounce. I would be cautious about going long, but then only add as we go higher. I think that the market then eventually will continue to climb towards the 2800 level, perhaps even higher than that. Longer-term, I have a target of 3000 but I also recognize its going to take a while to get there. Ultimately, I think you need to look for value, and pay attention to the US dollar because it obviously has an effect on this market. I expect dollar strength during the summer, but if it rallies slowly, that should offer a path higher in stocks.