Potential signal:
- If we break above the high from Monday, I am buying with a stop loss at the low, with a target of 7880.
The S&P 500 has been strong on Monday, as we are looking at this as a very strong market currently. The market continues to pay close attention to earnings calls and news out of the Middle East.
S&P 500
The S&P 500 has looked very strong during the Monday session as we're all pretending that the situation in the Middle East has been solved. That's fine. It's hardly relevant. The market has been bullish for a while, and now we are breaking out of a little bit of a consolidation area. Over the longer term, it'll be interesting to see how this plays out because we are approaching the all-time high, and that of course could beget further buying. After all, markets do tend to run on momentum more than anything else most of the time.
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Short-term pullbacks, I continue to look at as potential buying opportunities with the 7500 level as an area that I would consider to be support, followed by the 50-day EMA. If you extend the consolidation out, at least in theory based on the measured move, you could be looking at a move to 7900. That wouldn't surprise me because, well, the S&P 500 is in an uptrend, and that hasn't changed.
Bullish Momentum Targets Higher Levels
With interest rates dropping a bit during the trading session on Monday, that helps, and that has people buying more stock. Ultimately, we are in the midst of earnings season, and that is something to keep in the back of your mind, but really, this is a pretty healthy-looking chart. I just don't see a lot of negativity here. And as a result, we could be witnessing a significant breakout. We'll have to pay attention to how the market closes for the day, but it certainly looks good at the moment.
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