All things being equal, this is a market that looks very bullish. We had a very bullish move on Friday, reaching the all-time highs yet again. Your job is to simply look for value and take advantage of it. The best way to do that is to buy pullbacks as it’s obvious that this market is going to want to go much higher over the longer term. At this point, I believe that the 3200 level is going to function as a bit of a “floor” in the market, and most certainly the 3000 level will. The 50 day EMA is just over the 3000 handle, so that obviously would be a major area of interest if we were to pullback the 200 points to do that. I don’t see that happening, but if we get some type of extremely negative situation, that might give us the opportunity to take advantage of value trade down near that moving average.
S&P 500 Video 21.01.20
If we simply break above the top of the candlestick for the trading session on Friday, I would be a bit leery only because we are overextended at that point. It isn’t that I don’t think we can go higher, it’s just that the market is a bit overdone. I prefer to find value in these extreme moves, but clearly shorting this market is all but impossible. Even if you told me that the market was going to fall on Tuesday, I would still step out of the way and look for a buying opportunity. At this point, it looks like we will see more of the same going forward.
Please let us know what you think in the comments below
This article was originally posted on FX Empire