The S&P 500 has pulled back a bit during the course of the trading session on Thursday, as traders continue to freak out a bit after the Federal Reserve statement. At the end of the day though, the Federal Reserve is still very accommodative, so it is hard to imagine a scenario where the stock market truly needs to fall apart. Ultimately, this is a market that I think continues to go higher but we may have a noisy couple of days ahead of us. With this being the case, if we can break above the top of the candlestick for the trading session on Thursday, then it is very likely we will continue to go looking towards the highs again.
S&P 500 Video 18.06.21
Looking at this chart, even if we break down below the 50 day EMA, it is likely that the market could go looking towards the 4000 level underneath. The 4000 level also features a major gap, and as a result I think it will be important. That area should be essentially the “floor the market”, so I think there will be a certain amount of buying in that area. Ultimately, I would be very aggressive in that area but if we did break down below it, then I might be convinced to start buying puts, as you can then make an argument that the market can never be shorting, mainly because the Federal Reserve will come back into the picture and save everyone. We have seen this be the case for the last 13 years, and despite all of the drama during the last couple of days, that has not changed.
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This article was originally posted on FX Empire