- The S &P 500 has pulled back just a bit during the trading session here on Friday as traders would have been away for the Independence Day holiday, but there was a certain amount of futures trading in Europe and Asia, which is known as the overnight extended hours.
- That was negative, but really who cares? This is a market that's bullish. It's going to remain bullish.
- What happens in very thin electronic trading doesn't really influence the market like Wall Street will.
Wall Street on Monday
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Wall Street does come back to work on Monday, and it will look at a market that has shot straight up in the air and it will be looking to buy dips. The Federal Reserve is expected to cut rates in September. That's part of what's going on here, but also the simple fact that the American economy, although slowing, refuses to roll over and die. The jobs number was 145,000 jobs added last month instead of the expected 111,000.
In other words, there's still plenty of employment. Furthermore, the jobs opening number earlier in the week was quite stout as well. So, the American economy, probably not going into a recession. You have to sooner or later ask the question; how many times would the Federal Reserve actually cut interest rates? I don't think they're that close to it.
September is a 90-ish percent probability, and that's basically what Wall Street's banking on. But remember, the biggest driver of price action in indices is simple momentum. They're not equally weighted, so it only takes a handful of stocks to really take off to drag the indices higher with it. Regardless, when I look at this chart, a move back to the 6,150 level is possible, but that looks to me like a buy-in opportunity. I think we will continue higher over the longer term.
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