The S&P 500 has rallied significantly during the course of the trading session on Friday, reaching towards the 4500 level. We have broken above there and that of course is a bullish sign. At this point time, the market is likely to go looking towards the 4600 level as the Federal Reserve Chairman has said it a bit more dovish than anticipated, although the talking of tapering is still a real possibility between now and the end of the year.
S&P 500 Video 30.08.21
In general, his statement was relatively bullish, at least on the economy. That of course drives money into the S&P 500 as traders try to take advantage of the overall trend, which of course has been bullish for quite some time. The uptrend line underneath of course is a major support level right along with the 50 day EMA, so as long as we can stay above both of those is a sign that we should get long of this market and not bother shorting it. Breaking down below that level could of course open up the possibility of a further decline, but at that point in time I would be looking to buy puts, not necessarily shorting this market as the Federal Reserve will step in and do something to save it if it loses 10%.
Furthermore, banks have started the buyback program yet again, and therefore that puts a little bit of upward pressure on this market regardless. With this, I look it dips as potential buying opportunities as we continue to go from the lower left to the upper right.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire