S&P 500

The S&P 500 tried to rally during the day on Friday but ran into a bit of a brick wall at the 2480 handle. By doing so, we formed a bit of an exhaustive candle but I think it’s only a matter of time before we see buyers return. This is a market that has been extraordinarily bullish, and every time we dip, it seems as if buyers are ready to come in. The 2500 level above will cause a certain amount of resistance, but eventually we will get up there to test that level. The 2400 level underneath should continue to be supportive, and it’s not until we break down below there that I’m comfortable selling for a longer-term move. In the meantime, I think a short-term pullback could happen, but it’s likely that we will continue to see a “buy on the dips” mentality.

Nasdaq 100

The Nasdaq 100 has broken out to a fresh, new high but the 6000 level has offered enough resistance to turn the market back around. Given enough time, I think that the longer-term uptrend should continue, but the 5900-level underneath will be the floor. We may have to go as low as that level to find buyers, but nonetheless I think that it’s going to be easier to buy markets on dips, as there has been so much in the way of buying pressure previously. The uptrend line has held over the longer term, and until it gets broken to the downside, I think that the market will continue to be attractive. Because of though, don’t put everything into the market in one shot, as the volatility looks to continue and of course the next couple of sessions will be during the quietest week of the year for volume.

You should also keep in mind that today is Labor Day, so the underlying indices will be closed. What you will be trading is the CFD of the futures market. They don’t necessarily have to line up perfectly, so be aware of that.

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