The S&P 500 has broken to the upside during the trading session on Friday, as we continue to go much higher. Ultimately, this is a market that simply is running on Federal Reserve liquidity more than anything else. Add the fact that the jobs number was better than anticipated, now you have an explosive market just waiting to reach towards the 3400 level. I think at this point it is likely that pullbacks will continue to offer buying opportunities, as the market seems to be able to look past almost anything and everything. The jobs number of course only adds more fuel to the fire.
S&P 500 Video 08.06.20
The market does tend to get overbought and oversold, so now it looks like we are going to overshoot to the upside. If you do wish to buy this market, I would look for some type of pullback towards the 3100 level, showing signs of support or of bounce. I would be a bit cautious to buy this market all the way appear, because quite frankly it has gotten extended yet again.
This type of volatility normally increases the possibility of a crash again, so something tells me two months from now we will be talking about how the market got crushed. Needless to say, you need to be overly cautious about your position size, because quite frankly it is so far out of its head right now that you should be cautious about jumping “all in.” Yes, I know that there are a lot of amateur traders out there right now making a killing, but unfortunately, we see this happen quite a bit, where people make a ton of money only to lose it just as quickly based upon a sudden shift.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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