- The S&P 500 has gotten hammered after the jobs number came out much weaker than anticipated in the United States.
- So, with that being said, the market is now absorbing that information, but it is worth noting that we are still in a very positive trend.
- The question now will be more or less a situation where I think people are going to be paying attention to the idea of whether or not we get interest rate cuts.
There is a consensus now that we will probably get 50 basis points between now and the end of the year, and that might have traders buying stocks. You just don’t know. There’s also a bit of a surprise in this, in the sense that the first day of the month is typically somewhat bullish as traders put on new positions for their clients.
Buying Dips Could Return Quickly
So, we’ll have to wait and see how that plays out, but I like the idea of buying any signs of strength after a sell-off like we have here, but we could continue to go a little bit lower, perhaps down to the 6,150 level, which for me is actually an even better spot. Not only is it a previous all-time high, but it is where the 50-day EMA resides. If we turn around and break above the 6,300 level without doing that, then I think you’ve got a situation where the market continues to go much higher. I do believe eventually that happens. The question is, do we plunge a little lower and then bounce, start buying that, or do we just turn around? It would not surprise me in either situation because quite frankly, once the markets have settled down, they really haven’t gone anywhere. So, one can almost sense that the buyers are out there hoping to get involved.
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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.