S&P 500 falls but find support for the week
The S&P 500 broke down significantly during the trading sessions that make up the week, and we turned around form a nice-looking hammer. The hammer of course is a very bullish sign and I think that it’s only a matter time before we break out. If we can clear the 2740 handle, the market is very likely to go towards the 2800 level after that. We have recently bounce from a major uptrend line, and this looks like a continuation of the overall attitude to the upside, and I think that eventually we will reach towards the 3000 level. However, that doesn’t mean that there won’t be significant pullbacks, and that won’t necessarily preclude this market from sensitivity to geopolitical situations. However, the hammer looks as if it suggests that we are going to go higher, and I also look at the currency markets and noticed that the US dollar is about to fall as well.
Your capital is at risk
A falling US dollar typically will put upward pressure on stock markets, and I believe that if we can stay above the uptrend line underneath, the market will continue to be in and uptrend, which means of course we can’t sell. When you look at the last three short-term dips on the weekly chart, they are all higher than the previous one. The next major area above is 2800, and I would anticipate seeing a major struggle in that area, but eventually we should overcome it, as we have in the past as the uptrend continues to be the main driver.