S&P 500 rallies from support on Wednesday
The S&P 500 has rallied significantly after initially drifting down to the 2700 level, an area that has been important more than once. If we can continue to go much higher, perhaps reaching towards the 2740 level again. I think that longer-term we are looking at a move to the 2800 level, followed by the 2900 level and then of course the 3000 level. I like buying dips as they offer value, and we have cleared a major resistance barrier in the form of the symmetrical triangle, and of course we have proven the 2700 level to be important overall as it has not only been broken to the upside as resistance, but it shown support as well.
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Over the longer-term, I think that this is going to continue to be very noisy market, but quite frankly most of the trading that we have seen over the last couple of years has been a bit abnormal, as volatility hasn’t shown much in the way of struggle, so now we are starting to see signs of a real trading market, meaning that every time we see a pullback, it’s likely that value hunters will return. Until we break down below the downtrend line, I think that the market reminds us that it is a “buying the dips”, and a longer-term positive market. I believe that the market continues to be opportunistic on pullbacks, but I would keep my position size somewhat small as this volatility can get a bit nauseating at times.