The S&P 500 rallied during most of the week, breaking out to a fresh, new high and showing signs of strength yet again. This is particularly telling as to just how much better the United States is doing than the rest of the world considering that the rest of the world is selling off due to the coronavirus and a lack of growth. Perhaps the US companies should continue to be thought of as potential safety. Furthermore, the United States economy is growing much better than many of the others around the world so one would have to think that a certain amount of foreign demand continues to jump into this market.
It looks as if the 3220 level offers support, but even if the market was to break down below there it’s likely that the 50 week EMA, colored in red on the chart, should offer support as well. Pullbacks should be thought of as value, and I believe that there is even more support underneath at the 3000 handle. A breakout to the upside could send this market looking towards the 3500 level, a level that of course will cause a certain amount of psychological resistance, and probably a significant amount of profit-taking. As for selling, I have no interest in doing so until we slice well below the 3000 level, something that doesn’t look likely to happen in the short term. The market is in an obvious uptrend, so having said that it’s one that you should be shorting anyways as this move has been so explosive, despite the fact that there are concerns about China.
This article was originally posted on FX Empire
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