The S&P 500 rose on Tuesday, as we continue to see buyers in the New York stock markets. At this point, we are continuing to squeeze. Can we break higher?
S&P 500
The S&P 500 rallied during the trading session on Tuesday to test the $7500 level. This is an area that's been important for some time, and I think a lot of traders will be watching this very closely.
With that being said, the market is likely to continue to see a lot of choppiness in this area, as the $7500 level is an area that's been important a couple of times, and of course, it is a large, round, psychologically significant figure. That being said, if we can break above there, then the market is likely to go looking into the $7600 level.
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Market Compression and Long-Term Trends
Short-term pullbacks are typically a buying opportunity, with the 50-day EMA at the $7353 level offering a short-term floor. It's worth noting that stock markets are compressing, and I think that could lead to a major move to the upside, but I also recognize that you have a situation where if we get some type of external negativity via headlines, that could send the market crashing back to the 7300 level pretty quickly.
Regardless, we had spent several months rallying, and I think what we have here is a situation where the market is trying to digest a vertical climb from the end of March that had seen roughly a 1200-point gain. That's a huge move in the S&P 500, so the fact that we have spent a couple of months, particularly in summer, which is somewhat range-bound most of the time anyway, grinding sideways is not a surprise. Nonetheless, I think we are starting to see a bit of a move to the upside, and I think it could eventually open up a move to $8000.
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