- The S&P 500 initially pulled back just a bit during the trading session on Friday, but as we have seen multiple times over the last week, the buyers come back in and try to pick up cheap contracts.
- I believe the situation here is that traders are looking to find a little bit of value down here in the 6200 region.
- And then again, in the 6150 region, this is a market that will continue to be very bullish in terms of the bullishness from what I can tell, but it is possible that we have a situation where the market just needs to work off some of the excess froth.
The market breaking down below the 6150 level opens up the possibility of a move down to 6050, but right now I just don’t see that happening. If we can break above 6,300, then I would anticipate a move to the 6,400 level followed by the 6,500 level.
One Way Trading at this Point
I have no interest in shorting this index and it’s very rare that I short indices anyways, especially in the U.S. Stocks only go up over the longer term and that’s because of the way the market is actually constructed. It is not equally weighted. So, it only takes a handful of the world’s favorite stocks to drive the S and P 500 higher. That being said, there are a lot of questions out there when it comes to the global economy and more specifically the tariff situation around the world. As Donald Trump continues to throw firebombs into the headlines because of this, I think you’ve got a situation where a little bit of caution probably goes a long way, but longer term, we are going from the lower left to the upper right, and that’s not a huge surprise.
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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.